Controversy Surrounds Rejection of RM818 Million Bid for Batu Kawan Industrial Park 2
Background
The earlier sale of the plot of industrial land in Batu Kawan became controversial following claims it was acquired below the market rate. (Facebook pic)
Rejection of RM818 Million Bid
The Penang Development Corporation (PDC) has rejected a RM818 million bid by a tripartite consortium led by IJM Berhad to develop the Batu Kawan Industrial Park 2 (BKIP 2) in Byram. The bid was made via a request for proposal (RFP) exercise, but the PDC rejected the offer without providing a reason, sources revealed.
Pre-Qualification Process
A source familiar with the bidding process revealed that PDC’s pre-qualification process shortlisted seven companies and groups, but only the IJM-led consortium submitted a bid. "The RM818 million was the highest bid, surpassing the RM780 million reserve price for the land," said the source. "It was also RM179 million higher than a previously cancelled direct deal. After a year of the RFP process, the bid was rejected, and a new tender was called. This raises serious concerns about why the bid was dismissed."
Second RFP Exercise
In a reply at the Penang state assembly last Friday, Chief Minister Chow Kon Yeow, who also serves as PDC’s chairman, revealed that a second RFP would be called as the earlier bids did not meet five of the nine requirements set out. He did not disclose details about the bids submitted, the amounts involved, or the specific reasons for rejecting the proposals.
Cost of Retaining the Land
In another reply on the same day, Chow said the axing of a direct deal related to the same land had cost PDC RM100 million in profits and led to higher interest payments, as the land had been purchased through a bank loan. He said the cost of retaining the land had increased, putting pressure on PDC’s cash flow.
Controversy Surrounding the Land Sale
The BKIP 2 project has been plagued by controversy since it was launched in October 2023. Previously, the PDC sold the land in Byram to Umech Land Sdn Bhd through a direct deal at RM20.50 per sq ft, which critics said was far below market value. The deal was cancelled in October 2023 after property developer Sunway Group acquired a 70% stake in Umech Land through its subsidiary, Sunway Bukit Gambier Sdn Bhd.
Conclusion
The rejection of the RM818 million bid and the cost of retaining the land have raised concerns about the PDC’s handling of the project. The controversy surrounding the land sale has led to questions about transparency and accountability in the government’s decision-making process.
FAQs
- What is the current status of the Batu Kawan Industrial Park 2 project?
The project has been plagued by controversy, and the PDC has rejected a RM818 million bid by a tripartite consortium led by IJM Berhad. - Why was the RM818 million bid rejected?
The PDC rejected the bid without providing a reason, but it has announced a second RFP exercise. - What are the concerns surrounding the land sale?
The land was sold to Umech Land Sdn Bhd at a price of RM20.50 per sq ft, which is considered below market value. The deal was cancelled, and a new tender was called, but the controversy surrounding the land sale remains.