IJM-led consortium’s bid for Batu Kawan project violated key conditions, says Chow

 

Chief minister Chow Kon Yeow said the consortium also made additional requests which went against the principles of good governance.

GEORGE TOWN: 

The Penang Development Corporation (PDC) rejected a bid by an IJM-led consortium to develop Batu Kawan Industrial Park 2 (BKIP 2) in Byram for RM818 million because of its failure to meet a few requirements, says chief minister Chow Kon Yeow.

Chow told the state assembly today that while four companies expressed interest, only one consortium – comprising IJM Properties Sdn Bhd (holding a 60% stake), Aspen Vision All Sdn Bhd and Mettiz Capital Sdn Bhd (holding the remaining 40%) – had submitted a proposal.

However, he said the consortium could not comply with five of the nine main requirements, including terms on land use, ownership and payment methods.

Chow also said the consortium made additional requests which went against the principles of good governance.

“If I were to allow this (bidder to win the project), it would be a clear violation of principles of good governance and transparency that we practise,” he said.

Thus, he said, PDC unanimously rejected the bid and decided to call for a fresh RFP with updated conditions.

Lim Guan Eng (PH-Air Putih) interjected and said  this was a missed opportunity for PDC at a time when it was facing cash flow issues.

Based on Chow’s reply, he said, it appeared that PDC’s RFP for the project left little room for flexibility.

“If the conditions are so rigid, then let’s not call this an RFP. Let’s call it a fixed tender, where bidders cannot deviate from any terms at all,” he said.

Lim also asked Chow what guarantee there was that PDC would receive a better offer in the future, especially given the state’s financial position.

On Monday, FMT quoted a source as saying that the bid, made by the IJM-led consortium late last year, was rejected without any reason provided.

Chow doubles down against consortium

Chow reiterated that the bidding consortium’s demands were unacceptable to PDC.

He said the bidder asked for freehold ownership instead of 99-year lease as per the RFP, priority access to more PDC land and certain infrastructure guarantees.

It also asked for a quarry in Batu Kawan to support the development of the land, as well as key infrastructure work to be ready and connected to the site near Bandar Cassia.

Chow said these requests were unreasonable and went against the RFP’s “as is where is” basis and could result in long-term financial losses for PDC as well as a lack of control over the project.

He said it was impossible to give up the site as a freehold land as there was a court dispute over its acquisition from its previous owners. - FMT