Penang Development Corporation board of directors to decide on controversial Byram industrial land deal, says Kon Yeow
GEORGE TOWN, Oct 11 — The Penang Development Corporation (PDC) board of directors will hold a meeting next week to discuss the controversial Byram Industrial Park land deal with UMECH Land Sdn Bhd, said Penang Chief Minister Chow Kon Yeow.
The PDC chairman said the board will reach a decision after the meeting.
“The state exco has taken note of the explanations from PDC regarding the project and we will hand it to the PDC board for decision next week,” he told reporters after launching the 42 Penang at UAB Building here.
He said PDC was ordered to give a briefing to the state exco regarding the land deal between PDC and UMECH Land.
“I have already replied. I did not say anything about suspension. I said the exco takes note of the explanation and will let the PDC board decide next week,” he said when asked if the deal with UMECH Land will be suspended due to the recent controversy surrounding it.
The Penang lawmaker explained that the whole process to acquire the land started in 2014 and went on until around 2018 and 2019.
He said PDC acquired 1,235 acres of land in Byram at the time and branded it as Batu Kawan Industrial Park 2 (BKIP2).
He said during the land acquisition process, there were collaboration efforts with Sime Darby as the owner of part of the land.
He said the land was also sold previously but the sale did not go through as the buyer offered to collaborate to develop the land, but it fell through.
“Both collaborations did not materialise due to the high costs of the infrastructure that had to be built, such as roads and a bridge to connect BKIP2 to Batu Kawan Industrial Park 1 (BKIP1).
He said the infrastructure costs were almost the same as that of the land.
“At one point, the development of the land was paused for a while because it was hard to get investors to go into this land,” he said.
He said PDC decided to shift its focus to Bandar Cassia Technology Park as an alternative to BKIP2.
However, PDC had already spent RM500 million to acquire the land so it could not leave the land without doing anything about it, he said.
He said this was why the land was promoted at Expo Dubai and was later offered through a business matching exercise when UMECH Construction showed interest.
Chow reiterated that the direct award of a project was not new for the state as it has done so for other projects, such as Aspen in Batu Kawan, Island Hospital and Stonyhurst International School.
“This is not a land sale but a collaboration with PDC, so PDC still has a role to ensure UMECH Land prepares an industrial development master plan for the land,” he said.
He said PDC will monitor the project and ensure that the plans presented by UMECH to the state planning committee is in accordance with the master plan.
“PDC still has a role to make sure UMECH develops the land as per the terms and guidelines of the agreement,” he said.
He said the PDC board approved the deal in February this year only on principle.
“Approve on principle’ means the management still needs to continue to negotiate with UMECH to make sure they meet all conditions,” he said.
He said the letter of award was only issued when all conditions were met and the joint development agreement with UMECH did not stop it from inviting its funder to collaborate with them.
He said the agreement was a collaboration between PDC and UMECH while Sunway Construction is the funder for UMECH.
“Sunway Construction is a famous company. It should give rise to more confidence in this collaboration,” he said.
He said the collaboration will increase the state’s industrial land bank by over 500 acres.
Chow also said the state did not lose anything as it acquired the land at RM10 per sq ft and sold it at over RM20 per sq ft.
“We did not lose anything. They need to spend over RM500 million to put in infrastructure and this is not including earthworks for the swampy land,” he said.
He said the development costs for the land could easily reach between RM60 and RM70 per sq ft.
The issue of the Byram Industrial Park’s direct award to UMECH Land by PDC was first raised by the Penang Chinese Chamber of Commerce (PCCC) last week.
PCCC president Datuk Seri Hong Yeam Wah reportedly demanded to know why the deal was not done through open tender.
He had also alleged that the land was sold to UMECH for RM646.02 million that the chamber claimed was significantly below the value of the land.
Yesterday, former deputy chief minister II P. Ramasamy told Chow to suspend the deal and launch an investigation due to the controversy surrounding it.
