THE Penang Development Corporation (PDC) board of directors is set to convene a meeting next week to make a decision regarding the sale of land in Byram, south Seberang Perai, to UMECH Land.
Chief Minister Chow Kon Yeow, who is also the chairman of the PDC board of directors, said the state executive council (exco), in its meeting today, heard an explanation by PDC management on the land deal matter, including the acquisition of land there in 2014.
It was reported that PDC will receive a land entitlement valued at RM646 million for collaborating with UMECH to develop 559 acres of land located near the Pulau Burung landfill.
Addressing criticisms that the land was undervalued at RM26.53 per sq ft, Chow clarified that it was raw, undeveloped land without any infrastructure.
He said PDC’s mission is to encourage development in the state for the benefit of the people and one way is to get land ready to attract investors.
On top of that, Chow mentioned that PDC is burdened with significant interest payments from bank loans used to acquire land, making it financially unfeasible for PDC to be “sitting while our financial obligations keep running.”
In the case of the Byram land, he said its proximity to a landfill and past incidents of fire have made it challenging to attract investors.
He said UMECH showed interest in developing the land during a business match-making event held during an exposition in Dubai in 2022.
Chow explained that the company, in addition to purchasing the land, would need to invest a substantial amount in building essential infrastructure, including earthworks, piling, and bridges. He used the example of buying land for RM500 million and then having to spend another RM500 million on infrastructure.
Chow said PDC still has control over the development of the land as the company needs to adhere to guidelines and project approvals from the state planning committee when the land is developed.
He said in the past, PDC had also collaborated with Sime Darby for the development of the Batu Kawan Industrial Park 2 (BKIP2). PDC then acquired 1,235ha of land in Byram at RM10 per sq ft.
The sale of land to UMECH at over RM20 has allowed PDC to generate some profit. In response to claims that the land could be sold at RM80 per sq ft, Chow said the interested party should have acted earlier.
Regarding UMECH’s collaboration with Sunway Group, Chow stated that PDC did not object to the involvement of a funder as it was in accordance with their joint development agreement (JDA).
“Sunway is well-known in the community, listed on Bursa Malaysia. As a giant construction company, Sunway’s presence will give more confidence in the creation of industrial land, thereby creating more job opportunities,” Chow explained.
The Penang Chinese Chamber of Commerce recently raised some questions about the sale of land to UMECH, particularly regarding the absence of an open tender process.
In response, Chow pointed out that there have been instances in the past where the state government engaged in direct negotiations, citing examples like Aspen, Island Hospital, and Stonyhurst International School.
Asked about rumours that a top Penang Chinese Chamber of Commerce official has an interest in the Byram land matter, Chow said the individual will stand to benefit when the land is developed.
“There are people in PCCC who own land there. If the company spends a few million to build infrastructure, all surrounding landowners will benefit. So, they (PCCC) should not object. PDC will also benefit because it has some 500 acres of land there,” Chow said.
Story by K.H. Ong and Norman Sim
Pix by Siew Chia En
Video by Noor Siti Nabilah Noorazis