GEORGE TOWN – Penang Chief Minister Chow Kon Yeow has explained the rationale behind state development agency, Penang Development Corporation (PDC), move to reject an RM 818million offer from an IJM-led consortium for the Byram land deal.
The consortium, which includes IJM Properties Sdn Bhd (60% stake), Aspen Vision All Sdn Bhd, and Mettiz Capital Sdn Bhd (40% stake), failed to meet several conditions outlined in the request for proposal (RFP).
Speaking during his winding-up speech on the 2025 state budget debate, Chow (Padang Kota – PH) outlined the reasons behind the rejection, emphasising that the consortium had introduced additional demands which PDC could not accommodate without incurring losses.
Chow, who also chairs PDC, said that the consortium had failed to comply with five out of nine key requirements in the RFP, including land use rules, ownership terms, and payment methods.
Regarding land use, Chow noted that the RFP required the land, divided into two plots, to be used for both industrial and commercial developments.
However, the consortium proposed that the land be used exclusively for industrial purposes.
Chow also pointed out that the consortium requested freehold ownership instead of the 99-year leasehold stipulated in the RFP, while offering RM818 million, which was below the RM836 million minimum revenue target set by the agency.
In addition, the consortium made several unreasonable additional demands, including increased access to PDC-owned land, assurances that key infrastructure would be in place, and a request for PDC to prepare a quarry site at Batu Kawan for the development.
The consortium also sought to bypass PDC approval for any changes in land transfer and company shareholding.
“Do we still remember the Umech Land Sdn Bhd case where we scrapped the (land) deal as the company did not inform PDC about the shareholding changes? This (is just the same case),” Chow remarked.
“Even though the offer made by the consortium was much higher than the offer made by Umech Land through a direct award, it should not be considered as it would cause losses to PDC later as well as infringing the agency’s governance principles,” he continued.
“Therefore, (PDC’s) offer committee’s meeting decided to reject the offer placed by the consortium based on the justification that it did not adhere to the main conditions of the RFP and would re-advertise the RFP based on new conditions,” Chow concluded.
Chow’s comments came in response to Lim Guan Eng (Air Putih-PH), who had questioned PDC’s decision two days earlier.
Lim argued that PDC could have earned an additional RM172 million over the RM646 million offered by Umech Land via a direct award.
The Byram land sale had previously stirred controversy after it was awarded to Umech Land through a direct tender last year. The deal was suspended in October following a change in the company’s shareholding.
In September, property developer Sunway Group announced that Umech Land and PDC had signed a joint development agreement to transform the land into an industrial park with a gross development value of RM3.5 billion.
Penang subsequently reopened the land for bids earlier this year, offering the opportunity for interested parties to co-develop it with PDC through a joint venture (JV). – November 28, 2024
