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GEORGE TOWN (May 16): The decision not to proceed with the IJM-Aspen consortium’s bid for the request for proposal (RFP) for the development of 559 acres in Ladang Byram/Changkat was made after taking into account the potentially significant financial implications for the Penang Development Corporation (PDC) and the state government, Chief Minister Chow Kon Yeow (pictured) said.
He said one of the implications was the requirement for PDC to provide major infrastructure connections to the proposed project, at an estimated cost of RM150 million.
Chow said the bidder, a consortium comprising IJM Corporation Bhd (KL:IJM) and Aspen Group, was also seeking freehold tenure for the land, with an estimated premium of RM144 million, as well as the provision of a quarry site in Batu Kawan involving an opportunity cost of about RM25 million.
“The bidder also applied for ‘first right of refusal’ on the remaining PDC land of about 500 acres (202.34 hectares), as well as proposing changes to the shareholding structure and land transfers without requiring PDC’s consent, which was deemed unacceptable as it involves strategic control of state land and carries the risk of speculation and property flipping.
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“Taking into account the overall costs and implications, the actual net value PDC will receive is only around RM500 million, and not RM818 million as depicted,” he said in a statement on Friday.
Chow said the value of the offer alone should not serve as the primary measure in determining the success of a tender, as compliance with the main conditions of the RFP was a mandatory prerequisite that could not be compromised.
He said the IJM-Aspen consortium’s bid in the 2024 RFP was found to have failed to comply with five of the nine main conditions set by PDC, including those concerning development requirements, land ownership, land transfer methods and the guaranteed profit sharing payment mechanism.
Chow said the decision not to continue negotiations was in line with good governance practices and compliance with PDC's standard operating procedures, as the main conditions of the RFP had not been fulfilled.
In this regard, he said the decision not to proceed with the 2025 RFP involving the Kwest Sdn Bhd-Kerjaya Prospek Group Bhd (KL:KERJAYA) consortium was due to non-compliance with several key tender conditions, in addition to a number of additional demands by the bidder.
Therefore, Chow said the PDC board decided to discontinue the 2025 RFP and to initiate a new tender process to protect the interests of PDC and the state government.
He said the decision was also important to ensure consistency in policy implementation, maintain institutional integrity and avoid any negative perception of PDC’s governance.
“The state government wishes to stress that the cancellation of the 2025 RFP did not result in any direct losses to PDC, as no development expenditure had been incurred, while ownership of the land remains with the state government and PDC as a stakeholder,” he said.
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