Land sales, procedures for Umech Land aligned with the practices of PDC, says CM Chow


THE land sales process and procedures for Umech Land Sdn Bhd aligned with the practices of the Penang Development Corporation (PDC), whether through open tender, Request for Proposal, or direct negotiation, Chief Minister Chow Kon Yeow said.


Chow, who is also the PDC chairman, said no weaknesses or errors were present in the process or procedures.


“In the case of Umech, sales were conducted through direct negotiation, a result of promotional efforts undertaken by PDC at Expo Dubai 2020. The Expo Dubai 2020 took place from Jan 16 to 23, 2022.


“This company stood as the sole entity demonstrating a sincere interest in conducting business in Penang. Before participating in Expo Dubai 2020, announcements and promotions regarding the upcoming projects had been made.


“These projects had also received approval from the state executive council (exco) meeting and the Penang Development Corporation (PDC) Board,” Chow replied to an oral question by Lee Khai Loon (PH-Machang Bubuk) during the Penang Legislative Assembly session today.


PDC, in its statement on Oct 17, announced the termination of a joint venture agreement with Umech Land Sdn Bhd for the development of BKIP2.


Lee had requested a detailed chronology of the land sale for the development of Batu Kawan Industrial Park 2 (BKIP2), also known as Byram Industrial Park, by PDC to Umech.


Chow said the selection of Umech Land Sdn Bhd underwent a thorough and transparent process based on established criteria.


He said the issue arose when the stock changes by Umech Land Sdn Bhd, occurring before the signing of the agreement, came to light without any notification from Umech Land Sdn Bhd to PDC.


“Consequently, to prevent the recurrence of such incidents, PDC promptly made amendments to all offer letters (by incorporating clauses related to company stock changes before signing the agreement), ensuring that the same issue does not recur,” Chow said.


He highlighted PDC’s role and responsibilities in developing BKIP2, in addition to land sales, which include monitoring project implementation according to the agreed-upon schedule in the contractual agreement; collaborating in the assessment and selection of investors; collaborating in the approval process of development plans; and managing applications for property ownership and leases for investors.


Responding to the supplementary questions by Lee, Chow said the basis for setting the reserved price in collaboration with Umech Land Sdn Bhd has been established by the management and approved by the PDC Board through the proposal document for the BKIP2 development collaboration.


Lee presenting his questions.


Lee said that the reserved price of RM26.53 per square foot had caused uneasiness among several parties.


Chow said several factors, such as overhead cost, infrastructure cost, and loan interest, had been considered before it was approved.


Separately, Chow said the Penang government was facing the challenge of finding suitable land for industrial development.


“Nevertheless, it has been our policy to prioritise food security. The Penang government does not rezone agricultural land, especially paddy fields, for industry development.


“We need to focus on other types of land for industry development,” he said.


Earlier, Penang State Legislative Assembly Speaker Datuk Law Choo Kiang welcomed the newly appointed State Secretary Datuk Rosli Isa in his opening address.


Law also announced that Muhamad Fauzi Yusoff (PN-Sungai Dua) has been appointed as the Opposition Leader in the Penang Legislative Assembly.


Law also told the August House that the wearing of batik on Thursdays was encouraged, and the wearing of a tie (for those wearing lounge suits) was optional.


The second meeting of the first session of the 15th Penang Legislative Assembly would see 77 oral questions, 711 written questions, three motions, and one Bill being tabled.




Story by Christopher Tan

Pix by Alissala Thian and Siew Chia En