THE failed auction of a six-acre state land parcel near Gurney Drive will not affect the completion of the Air Itam–Tun Dr Lim Chong Eu Expressway, with the contractor now able to finance the remaining works using its own funds.
Chief Minister Chow Kon Yeow said the state government had not received a new request from Consortium Zenith Construction Sdn Bhd (CZC) to hold a second auction, as the company no longer faced cash-flow constraints and could complete the outstanding works.
He said the original auction was initiated at the company’s request to help generate cash flow to finance the remaining construction works under Package 2 of the expressway project, which connects Bandar Baru Air Itam (Farlim) to the Tun Dr Lim Chong Eu Expressway.
“The auction was held at the company’s request because it needed cash flow at that time.
“However, at this stage, the state government has not received a new request from the company to conduct another auction, as it is no longer facing cash-flow constraints and is able to complete the remaining works through its own internal funding,” he said.
Chow (PH – Padang Kota) was responding to a supplementary question from Lim Guan Eng (PH – Air Putih) during the State Legislative Assembly at the State Assembly Building today.
He said the expressway project had achieved more than 95% completion, with the main road construction works already completed.
The remaining works, including street furniture and other ancillary components, are expected to be completed by April 2027, before the Public Works Department (JKR) conducts a Road Safety Audit to determine whether the expressway is suitable to be opened to the public.
Lim had earlier sought clarification on whether the failed auction would result in a lower reserve price for the land, when a fresh auction would be conducted and whether the unsuccessful sale would affect payments for the expressway project.
In his earlier written reply, Chow explained that the public auction involved state land identified as PT858 (Plot 7A), Section 2, Bandar Tanjung Pinang, in the Northeast District.
The land was offered at a reserve price of RM313.632 million, equivalent to RM1,200 per square foot.
He said the auction was intended to help CZC obtain cash flow to finance the outstanding works through a land-swap arrangement.
Under the arrangement, the proceeds would be used to meet the value of the land in respect of works already undertaken by CZC, with any surplus to be shared between the state government and the company based on their agreed terms.
Chow said the actual proceeds would depend on the successful selling price should a fresh auction be held and approved by the State Authority.
On the reserve price and the possible impact of the failed auction on property values around Gurney Drive, Chow said he was not in a position to speculate on prevailing land prices.
He explained that the RM1,200 per square foot reserve price was determined based on the existing agreement and comparable land transactions at the time.
Among the transactions considered was the sale of a parcel of land by Sunway along Jalan Pangkor, near Gleneagles Hospital, which was reportedly transacted at approximately RM1,200 per square foot.
“If land along Jalan Pangkor could be successfully transacted at approximately RM1,200 per square foot, and the agreement had also stipulated the same value, we used that figure to determine the reserve price for the land concerned,” he said.
Chow added that the District Land Office and its appointed private auctioneer had carried out extensive publicity to attract potential bidders.
The auction, according to Chow, was advertised in Berita Harian, The Star, The Edge and Sin Chew Daily on Sept 7, 2026, 30 days before the scheduled auction.
Publicity was also carried out through the official websites of the Penang Lands and Mines Office and the Northeast District and Land Office, as well as through the Real Estate and Housing Developers’ Association Malaysia (Rehda).
However, Chow said participation in an auction ultimately depended on the interest and willingness of eligible bidders, which could not be determined or guaranteed beforehand.
He added that any further action concerning the land would be subject to the State Authority’s decision.
Story by Kevin Vimal
Pix by Law Suun Ting