GEORGE TOWN: The state government has terminated the joint venture agreement between its investment agency Penang Development Corporation and UMECH Land Sdn Bhd.
PDC, in a statement, said it had conducted research into the UMECH Land Sdn Bhd issue and found that the selection process of the company, including the determination of cash contributions and payment schedules to PDC, was transparent and in line with PDC's policies.
It also said that the collaboration was reasonable and had a positive impact on PDC cash flow, both commercially and in terms of benefitting the development of Penang.
However, the PDC said the decision to terminate the project was made following a major change in the equity structure of UMECH Land Sdn Bhd, which has resulted in a change of controlling parties and leadership in the project.
It also said that the company had failed to officially inform and obtain approval from PDC, which was viewed as a serious issue and not acceptable.
"PDC has decided to terminate the joint venture agreement with UMECH Land Sdn Bhd by providing a three-month notice based on Clause 10 of PDC-UMECH Land Sdn Bhd Joint Venture Agreement," the statement said.
The statement said after the contract expired, PDC will advertise, using various media channels, through a Request For Proposal for a collaborative effort to develop the Batu Kawan Industrial Park 2.
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The RFP will be advertised by PDC in the near future to attract interested investors.
On Oct 3, during a press conference, the Penang Chinese Chamber of Commerce (PCCC) had raised questions about the selling price of the 226.2ha plot of land near the former Byram estate.
The PCCC alleged that the current market price of the industrial land was RM80 per sq ft and questioned the sales price and also the four-year term payment.
PCCC president Datuk Seri Hong Team Wah also questioned why PDC had sold the land to a private company without an open tender.
Chief Minister Chow Kon Yeow, in defending the sale, said it was done with due diligence and the price was based on the existing condition.
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The land is strategically situated about 4km from the second Penang bridge, offering excellent connectivity, and just a 20-minute drive from Penang island, as well as a 30-minute drive from Penang Port.
