GEORGE TOWN, October 4 – Penang Chief Minister, YAB Tuan Chow Kon Yeow, has responded to concerns raised by the Penang Chinese Chamber of Commerce (PCCC) regarding the sale of Penang Development Corporation (PDC) land in Bryam, Seberang Perai Selatan (SPS) to UMECH Construction Sdn. Bhd. (UMECH). In his response, he addressed six key questions posed by PCCC, providing clarity on the matter. Addressing questions about the tender process and opportunities for local companies, YAB Tuan Chow Kon Yeow explained that UMECH was selected as a collaborative partner for the Byram Industrial Park Project after expressing interest during EXPO Dubai 2020.
The challenges of attracting investors due to the site’s proximity to a landfill, garbage truck routes, high infrastructure costs, and other factors made promotion efforts difficult. The State Government, through YB Dato’ Abdul Halim Hussain, Exco for Trade and Industry and Entrepreneur Development, actively promoted the project through mass media and the Malaysian Investment Development Authority (MIDA). The selection of UMECH followed established procedures, including a thorough “due diligence” process. Regarding the market value of the land sale, YAB Tuan Chow Kon Yeow clarified that the cash contributions from UMECH to PDC were determined based on the current land prices in the area.
As the land was undeveloped, it couldn’t be compared to developed industrial land prices. UMECH was also expected to cover infrastructure costs of approximately RM500 million, including land filling, road construction, electric substations, sewerage treatment plants, bridges, and more. A payment schedule with installments was established to ensure maximum benefit for PDC. YAB Tuan Chow Kon Yeow highlighted UMECH’s financial performance, stating that the company had a paid-up capital of RM10 million and a 0% gearing ratio. UMECH had no records of bad debts or being “blacklisted.” Their ability to secure loans for the project was supported by credit facility letters from financial institutions.
Regarding the land sale procedure, the Chief Minister explained that the process couldn’t proceed as the land had not yet been transferred to UMECH. It was clarified that UMECH had conducted a feasibility study to gauge market response and was confident in the project’s viability. Addressing concerns about equity changes, YAB Tuan Chow Kon Yeow explained that the involvement of Sunway as the majority shareholder of UMECH was beyond PDC’s knowledge until after the agreement was signed. However, UMECH is obligated to notify and obtain PDC’s approval in case of any changes in the shareholding structure, but these changes occurred before the agreement was signed.
In conclusion, the Penang Chief Minister provided comprehensive responses to the questions raised by PCCC, shedding light on the process and decisions related to the land sale to UMECH Construction Sdn. Bhd. Further actions and clarifications will be discussed within PDC after reviewing UMECH’s explanation.
