Supporting Kedah's Legal Action to Secure Fair Lease Payments from Penang

Published July 29, 2026 at 11:31 PM UTC

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Key Points

Advocates support Kedah's legal action for fair lease payments.
Original 1791 lease agreement considered outdated.
Aim to align payments with current land values.
Seeks balanced financial relationship between Kedah and Penang.

Background History

The lease agreement between Kedah and Penang dates back to 1791, when Penang Island and Seberang Perai were leased to the British East India Company for 10,000 Spanish dollars annually. After Malaysia's independence, the lease payments continued, with the federal government increasing the annual payment from RM10,000 to RM10 million in 2018. Kedah has been advocating for a higher lease royalty, citing current land values, and is now pursuing legal action to address this claim.

Advocates for Kedah's legal action argue that the state is seeking a fair adjustment to the lease payments, reflecting current land values. They contend that the original lease agreement from 1791, which set the annual payment at 10,000 Spanish dollars, is outdated and does not align with today's economic realities. By pursuing legal action, Kedah aims to ensure that the lease payments are equitable and just, potentially leading to a more balanced financial relationship between the two states. This move is seen as a necessary step to uphold Kedah's rights and interests, ensuring that the state's resources are appropriately valued and compensated.