PDC rejected RM818mil Batu Kawan Industrial Park bid, says source

 

The earlier sale of the plot of industrial land in Batu Kawan became controversial following claims it was acquired below the market rate. (Facebook pic)

PETALING JAYA: 

The Penang Development Corporation has rejected a RM818 million bid by a tripartite consortium led by IJM Berhad to develop the Batu Kawan Industrial Park 2 (BKIP 2) in Byram, a source said.

The bid, made via a request for proposal (RFP) exercise, was made late last year.

However, the PDC rejected the offer without providing a reason, FMT has learnt.

A source familiar with the bidding process revealed that PDC’s pre-qualification process shortlisted seven companies and groups, but only the IJM-led consortium submitted a bid.

“The RM818 million was the highest bid, surpassing the RM780 million reserve price for the land,” said the source, who spoke on condition of anonymity.

“It was also RM179 million higher than a previously cancelled direct deal.

“After a year of the RFP process, the bid was rejected, and a new tender was called. This raises serious concerns about why the bid was dismissed.”

In a reply at the Penang state assembly last Friday, chief minister Chow Kon Yeow, who also serves as PDC’s chairman, revealed that a second RFP would be called as the earlier bids did not meet five of the nine requirements set out.

He did not disclose details about the bids submitted, the amounts involved, or the specific reasons for rejecting the proposals.

In another reply on the same day, Chow said the axing of a direct deal related to the same land had cost PDC RM100 million in profits and led to higher interest payments, as the land had been purchased through a bank loan.

He said the cost of retaining the land had increased, putting pressure on PDC’s cash flow.

The BKIP 2 project has been plagued by controversy since it was launched in October 2023. Previously, the PDC sold the land in Byram to Umech Land Sdn Bhd through a direct deal at RM20.50 per sq ft, which critics said was far below market value.

The deal was cancelled in October 2023 after property developer Sunway Group acquired a 70% stake in Umech Land through its subsidiary, Sunway Bukit Gambier Sdn Bhd.

The sale drew criticism from the Penang Chinese Chamber of Commerce and several backbenchers, who alleged that the land had been sold below market value and without an open tender.

The state government defended the sale, citing the land’s proximity to a landfill and its condition as “raw land”. After the public backlash, the state cancelled the deal and initiated the open tender.

FMT has reached out to IJM Berhad and the PDC for comment. - FMT