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Penang calls off Batu Kawan land deal

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bkip2-landdeal-cancelled

The Penang government has called off the sale of a plot of industrial land in Batu Kawan to a private company, following a change in shareholding in the purchaser’s company.

State agency Penang Development Corporation (PDC) said it has since given Umech Land Sdn Bhd a three-month notice, following a board meeting yesterday.

“The change of majority stake in Umech Land Sdn Bhd, to an extent the controlling stake, without PDC’s prior approval is a serious issue that the PDC board is unable to accept,” it said in a statement.

The land sale became controversial following claims it was sold below market rate, with the company later being acquired by a major property developer.

PDC said it would now open up the land to be developed through a request for proposal (RFP) for the Batu Kawan Industrial Park 2 project, which would be advertised soon.

It also reiterated that the earlier land deal with Umech was above board, with its cash contribution and payment schedule evaluated as transparent as per PDC’s policies.

“The board also took note that the collaboration was feasible and would have a positive impact on PDC’s cash flow,” it said.

The controversy arose when the Penang Chinese Chamber of Commerce (PCCC) said the plot was sold below market value to Umech Construction Sdn Bhd. It also found the directly negotiated deal to be unacceptable.

PCCC also alleged that a property developer had taken control of Umech and is now offering to lease out parcels of the land at high rates.

Chief minister Chow Kon Yeow has since defended the deal, saying the land had to be sold through direct negotiations, since there were no interested parties and it was a piece of raw land next to a landfill.

He said the directly negotiated deal was nothing new, with other parcels of Batu Kawan land having been given up this way too previously.

It was also reported that on Sept 27, Sunway Bhd announced that Umech Land had inked a joint development agreement with PDC to co-develop a 558.96-acre (226.20ha) land in Batu Kawan into an industrial park with a gross development value of around RM3.5 billion.

Source: FreeMalaysiaToday.com

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