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State Says No to RM818mil Batu Kawan Bid Over Costly Demands
GEORGE TOWN, May 22 – Penang Chief Minister Chow Kon Yeow has revealed that a consortium’s RM818 million bid for land in Batu Kawan was rejected after factoring in several costly conditions that would have significantly reduced the net value of the offer and placed a financial burden on the state.
Speaking at the Penang State Assembly today, Chow said the IJM Properties-Aspen Vision consortium’s proposal, though the highest offer on paper, was deemed impractical once the financial implications of the attached conditions were considered.
“While the offer was RM818 million, after subtracting the costs required to fulfil their requests, the effective value drops to about RM500 million – about the same as what Umech Construction had offered,” Chow said.
Key Conditions That Drove Up Costs:
- RM150 million in infrastructure upgrades to ensure project connectivity
- A request to convert the leasehold land to freehold, which would involve a premium of RM144 million
- Use of nearby PDC land for quarrying, with an opportunity cost of RM25 million
- A first right of refusal over 500 acres of adjacent land, potentially restricting PDC’s future development plans
- The freedom to change company shareholding or transfer the land without PDC’s consent
“These conditions would have imposed a heavy financial and strategic cost on PDC,” said Chow, who also chairs the Penang Development Corporation.
No Opportunity to Negotiate?
Lim Guan Eng (PH–Air Putih) criticised the decision, arguing that PDC failed to provide the consortium a fair opportunity to negotiate or revise its proposal.
“This was an open tender RFP. The norm is for discussions to follow the selection of the best proposal,” Lim said, citing the consortium’s Dec 2, 2024, statement that it had “earnestly requested the opportunity to present and explain its submission, but this was not granted.”
Lim also noted that the consortium had made clear that the request for freehold status and other enhancements were optional, not binding.
PDC Board Has the Final Say
Chow defended PDC’s position, stating that all proposals must comply with good governance and require board-level approval.
“If the terms go against those principles, we cannot accept them,” he said.
However, he did not address why further negotiations were not entertained.
Chow confirmed that PDC is currently reviewing new bids under a fresh tender exercise for the same parcels of land. If no suitable proposals are received, the state may consider developing the land internally through PDC.
The IJM-led consortium’s RM818 million offer, submitted in December 2023, was the highest bid but was ultimately dismissed in favour of what Chow described as fiscal prudence and strategic planning.
