GEORGE TOWN: Profit from the auction of a 2.43ha (six-acre) prime land parcel beside Gurney Bay to fund the remaining construction of the Ayer Itam-Lebuhraya Tun Dr Lim Chong Eu (Ayer Itam-LCE) bypass will be shared between the state and its contractor, Consortium Zenith Construction Sdn Bhd (CZC).
Penang infrastructure and transport committee chairman Zairil Khir Johari said the auction would not affect ongoing construction of the bypass, which is targeted for completion in April next year.
"The land is still under the state’s name.
"It has not been alienated, but it has been allocated.
"Construction work (of the bypass) is ongoing and there will be no stoppage," he said when contacted on Monday (Sept 7).
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Zairil said a target amount had been set for payment to CZC from the land sale, while any proceeds above that figure would be shared.
"The money can only be paid to CZC after the land is sold," he said.
The RM850mil bypass project had achieved 92.46% physical progress as of Aug 31, while financial progress stood at 81.69%.
Zairil said the project was being financed through a land-swap mechanism, under which land was transferred based on work completed by CZC.
"CZC has claimed land worth RM695.977mil so far, of which 4.7ha (11.6183 acres) worth RM427.657mil have been transferred.
"The remaining value of land claimed but yet to be transferred is RM225.768mil," he said in a statement earlier.
He said CZC had sought the state government’s assistance to monetise the land through a sale to generate cash flow and ensure the project could be completed by April next year.
The land, identified as PT 858 (Plot 7A), Section 2, Bandar Tanjung Pinang in the North-East District, is a prime development parcel next to Gurney Bay and Andaman Island.
The freehold plot has a reserve price of RM313.632mil, equivalent to RM1,200 per sq ft.
Zairil said the auction method differed from the normal process involving other parcels, where the land would have to be alienated to the buyer.
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"For the other parcels that they sold, we would have to alienate them to the buyer.
"But this time, we are selling it through an auction because it is such a prime piece of land and the state can obtain a share of the profit," he said.
The auction is scheduled at the district Land Office at Level 51 in Komtar at 11am on Oct 7.
Prospective bidders are required to pay a 1% deposit of the reserve price, amounting to RM3.14mil, before the auction's start time.
The bypass, a 6km toll-free dual carriageway, is intended to provide an alternative route and ease traffic congestion in George Town.
The project began construction in February 2021 and comprises elevated viaducts, ground-level roads and other structured sections.
Its completion target has been extended to April 12 following delays linked to financing and site logistics.
