Penang Development Corp rejects RM818m bid by IJM-led consortium to develop Batu Kawan Industrial Park — report

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

KUALA LUMPUR (Nov 26): Penang Development Corporation (PDC) has rejected an RM818 million bid by a tripartite consortium led by IJM Corporation Bhd (KL:IJM) to develop the Batu Kawan Industrial Park 2 in Penang, Free Malaysia Today (FMT) reported.

The offer was rejected and the state-owned development agency did not provide a reason, FMT said citing an unidentified source. During the pre-qualification process, seven interested parties were shortlisted but only the IJM-led consortium submitted a bid, the news portal reported.

“The RM818 million was the highest bid, surpassing the RM780 million reserve price for the land,” the source was quoted as saying by FMT. “It was also RM179 million higher than a previously cancelled direct deal.”

When contacted by The Edge, IJM declined to comment on the matter.

Meanwhile, The Edge is in the midst of contacting PDC to verify the information.

Last Friday, Penang Chief Minister Chow Kon Yeow, who also serves as PDC’s chairman, reportedly said a second request for proposal would be called as the earlier bids did not meet five of the nine requirements set out. He did not elaborate.

The development project has been under intense scrutiny since its launch in 2023.

PDC last year signed a joint development agreement (JDA) with Umech Land Sdn Bhd to develop a RM3.5 billion industrial project.

Under that agreement, which has since been terminated, PDC, as proprietor of the land, would have been entitled to RM646.02 million — an amount that was “derived from negotiations” with Penang’s development arm based on the market price in the vicinity of the land.

Sunway Bhd (KL:SUNWAY) emerged as a Umech Land shareholder via the subscription of a 70% stake on Sept 25 — two days before the JDA signing on Sept 27, 2023. Umech Land was originally a 70:30 joint venture between Karen Cheng Pui Kwan and Nathaniel Rajakumar.

The Penang Chinese Chamber of Commerce queried the state government for not undertaking an open tender for the project, claiming that the price tag of RM646 million, or RM27 per square feet, significantly undervalued the land.

PDC subsequently called off the controversial deal on Oct 17 last year, and issued a request for proposal for the project instead.

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