GEORGE TOWN: The Penang government defended its rejection of the RM818mil tender submitted by the IJM-Aspen-Mettiz Capital consortium for the proposed development of 226.2ha (559 acres) in the Byram/Changkat estate area.
Chief Minister Chow Kon Yeow said the Penang Development Corporation (PDC) found that the consortium’s proposal failed to comply with key conditions stipulated in the request for proposal (RFP), and it contained terms less favourable to the state agency.
He said the main concerns included conditions requiring PDC to bear substantial infrastructure and land premium costs, which contradicted the original RFP terms.
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"Based on the tender evaluation, PDC interpreted the proposal as containing variations... worse off than the original RFP conditions and not beneficial to PDC," he said in a statement on Thursday (May 28).
According to Chow, the consortium proposed that PDC provide infrastructure connectivity including electricity, water supply and telecommunications from the Bandar Cassia Expressway up to the Batu Kawan Industrial Park (BKIP) boundary.
He said the requirement would have cost PDC about RM150mil.
"The RFP clearly states that all infrastructure and utility-related works are the responsibility of the developer," he said.
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Chow added that the consortium also proposed granting the land freehold status, with alienation costs borne by PDC, while the developer would not be required to pay any premium for rezoning or land conversion.
He said the freehold premium alone was estimated at RM144mil.
"As such, claims that the developer would bear the alienation or premium costs are not true because there was no such undertaking stated in the tender submission," he said.
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Chow said the RM294mil financial burden arising from the two conditions alone justified PDC’s decision not to consider the proposal further.
He added that the RM818mil gross offer could not be assessed in isolation without factoring in the additional costs that would ultimately have to be borne by PDC.
The controversy arose following statements issued by Aspen Group Holdings Ltd and the Chief Minister last week over the land development proposal.
PDC maintained that the consortium’s bid deviated from the original RFP terms and conditions and therefore could not be accepted.
