GEORGE TOWN – The Penang Development Corporation’s (PDC) board, which sat yesterday to deliberate over the controversial land deal between them and construction giant Umech Land Sdn Bhd, has opted to cancel the joint development agreement (JDA).
Chief Minister Chow Kon Yeow, who is the PDC board chairman, took to social media to say that PDC viewed seriously corporate changes made by Umech, namely the sale of its share equities to another party – (master city) developer Sunway Group Bhd – without prior consultation with, nor notification to the state development arm.
Hence, the deal has been rescinded, Chow said.
“The board decided to end the agreement with Umech by issuing a three-month notice based on the 19 points inked for the JDA,” Chow said.
The decision came as Chow had faced mounting pressure from various quarters over how such a transaction could go through in a state which prides itself with the motto of competency, accountability and transparency (CAT).
The concerns raised by a few individuals, including the outspoken former deputy chief minister P. Ramasamy, Aspen Group and the Penang Chinese Chamber of Commerce were claims that the land sale was quoted at below market pricing.
They also questioned why the deal was done through direct negotiation despite Penang often advocating for open tender – the basis of the CAT culture.
Chow said that the initial process of the JDA was deemed above board when it selected Umech Land as the preferred partner.
This included the decision for the initial cash deposits followed by the payment instalments, said Chow, adding that it was transparent and in line with the PDC policy.
“The board also gave due consideration to the collaboration as rational and it will generate a positive impact to the cash flow of PDC, including from the aspects of commercialism and the growing the state’s economy.”
He underscored that the sudden emergence of a third party – Sunway in the Umech Land company – was unsettling to PDC and it viewed it seriously.
PDC has now been directed to advertise again through various media outlets a request for proposal (RFP) for the development of the Batu Kawan Industrial Park II.
The park was previously known as the Byram Industrial Zone off Batu Kawan.
Both PDC and Umech Land had entered into a joint development agreement where Umech Land paid a deposit of RM64.6 million, with the remaining RM581.42 million to be settled in four instalments.
The proposed industrial park would consist of factories, industrial lots and commercial components with a gross development value of around RM3.5 billion. – The Vibes, October 17, 2023
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