GEORGE TOWN – The master city developer of the Bandar Cassia township in Batu Kawan has come out to distance itself from the alleged controversy of the sale of land via direct negotiation by Penang Development Corporation (PDC) to Umech Construction Sdn Bhd.
Aspen Group, the catalyst behind the rise of Bandar Cassia where giant Swedish retailer Ikea is located, said that the direct negotiation between PDC and Aspen back in 2013 was vastly different and under varied circumstances.
Datuk M. Murly, who is the president and group chief executive officer, said it is not reasonable to compare the direct negotiation between Aspen and PDC in 2013 with the recent land sale of Batu Kawan Industrial Park II (BKIP2), saying they are fundamentally different.
“In 2013, the Batu Kawan land was a swampy area devoid of any development or proper infrastructure, and the construction of the Penang Second Bridge was still underway,” he said.
“At that time, the state administration and PDC were eager to develop Batu Kawan and envisioned Batu Kawan as the third satellite city of Penang.”
However, due to its undeveloped condition, finding interested developers or investors was a significant challenge.
“PDC was actively seeking a commercial catalyst that can bring in business opportunities for Batu Kawan, specifically the Ikea store, as a key commercial catalyst.”
Aspen, in collaboration with Ikano Retail (the franchisee of Ikea) as its joint venture partner, engaged in negotiations with the state government and PDC in 2013 and since then became the pioneer developer in Batu Kawan.
“The necessity of direct negotiation arose because they were not required to participate in any tender exercise as there were no direct or indirect competitors available for PDC to compare if an open tender were initiated with an Ikea store being the requirement.”
“The negotiations focused specifically on the Ikea store serving as the catalyst, along with an integrated shopping centre and a mixed-use development comprising residential, commercial, and other mixed-use components on a 245-acre land in Bandar Cassia, which is now Aspen Vision City (AVC),” said Murly in a statement.
Aspen acquired the land at the then prevailing market price, equivalent to the average rate of RM45 per square foot for a total consideration of RM483,951,600 (245 acres) in 2014 compared to BKIP2 that was reportedly sold at RM26.53 per square foot for a total consideration of RM646 million (558.96 acres) in 2023.
As part of the negotiation with PDC, Aspen was obligated to develop the land in partnership with its joint venture partner.
Furthermore, under the purchase and development agreement (PDA) with PDC, Aspen was restricted from disposing of the land without the consent of PDC, including any other catalyst developments within AVC, such as Columbia Asia Hospital, currently under construction.
It required prior approval from PDC, to which Aspen duly complied and obtained the necessary approvals.
Aspen was also restricted from changing its shareholding structure without the consent of PDC and has not changed its shareholding structure to this day.
Furthermore, Aspen did not flip the land or sell the shares of the company to any third parties, said Murly. – The Vibes, October 7, 2023
