State government and senior MPPP officials faced a barrage of questions over the Spice convention centre during a press conference on Tuesday.
I was among the journalists who raised these questions, and I jotted down some notes. I hope I got it down accurately, as the answers sounded vague and unclear in some places. Bear in mind, these are not actually quotes but just my paraphrased notes.
The replies were provided by state exco member Chow Kon Yeow, MPPP president Patahiyah Ismail and other senior MPPP officers.
Was this RM250m project approved in a full council meeting of the MPPP before the agreement was signed? If not, why not?
It was approved by the Lembaga Perolehan, chaired by YDP, along with the State Financial Officer and a few others.
It was tabled before a full council meeting. (This sounded vague. According to some MPPP councillors, there was no submission or discussion at a full council meeting for the details of the agreement of the project.)
If that’s the case, why were councillors not aware of the details of the agreement or not even given a copy of the agreement? Why did they have to request for a special meeting for more information?
Even the State Exco were not given a copy. The agreement itself need not go to full council; otherwise with so many agreements around, only a handful of agreement can be completed.
But we are talking about major outlay of Council money. Was the RM50m to be incurred by the MPPP and the other terms for Spice deliberated and approved by a full council meeting before the agreement was signed?
(No real answer given.)
At present, the agreement is only available for viewing at the MPPP office by appointment for two hours at a time. Will it be made public?
We have already created a first in the country by making the agreement open for public viewing. The public can also come back again for another viewing if two hours is not enough.
The agreement was only exhibited after it was a done deal. Why was the agreement not exhibited before it was signed?
(No real answer given.)
If there is nothing to hide, why not just put the agreement on the MPPP website?
(No real answer given.)
Who were the other bidders for this project? How can it be an open tender if it is restricted to only those with existing projects in Penang? Were all the bidders offered the 1500 units in extra density?
There was a call for open tender but there no were takers. So the open tender process was then ended.
We then commenced a ‘request for proposals’. We received three.
Could you give us the names of the other two, apart from S P Setia?
A company called Pico and the other was Taman Kasturi.
Who was involved in the negotiations on the state government/MPPP side?
(Answer wasn’t very clear.)
The assessment payment to MPPP is being waived for the sPICE convention centre, the indoor stadium, the Aquatic Centre and the car park? How much per year is the MPPP losing?
The property belongs to the MPPP; so that’s why assessment is being waived. (But if MPPP owns the land, why is it not entitled to any rentals? It is a Build-Operate-Transfer project for an initial 30 years and the MPPP won’t get any income for their outlay.)
Why is this project exempted from a Social Impact Assessment (SIA) study?
The SIA is a new thing and most of our projects don’t have this. We will have a traffic impact assessment (TIA).
Is the TIA report binding or merely for “academic purposes”?
(They didn’t seem too sure about this. I don’t think it will be binding as it will probably be done by their own consultants.)
You have a 6000-capacity convention centre with only 2000 parking lots and a limited number of parking bays for tourist buses. How are you going to cope with the extra traffic?
Road widening around the area will be required. The project will also be integrated into the Penang Transport Masterplan (They also mentioned something about transport interchange nodes. But I don’t think there has been any serious thought about all this.)
We will look again into the parking lots situation when the actual plans come up for approval.
Who is the traffic consultant and will the consultant be independent of the developer?
As this is an MPPP property/project, the MPPP will also be looking into the traffic aspect.
Why the need to give 1500 units in extra density to the developer?
We are getting a RM250m convention centre paying only RM50m (less repairs and renovation saved etc). The extra density is to allow the developer to raise funds for the project.
There is a perception that the terms are generous. How did you agree to the figure of 1500? Can we see your calculations?
You can assume any figure for the selling price of the extra apartments. We could also assume that it may cost RM300000, in which case they might raise RM200m (which covers the cost of the convention centre).
They can easily raise that amount, no problem, probably more. Surely you would have done your own calculations. Can we see your calculations?
There are also intangible and subjective benefits to the state while the project carries certain risks. The concessionaire is responsible for the risks.
If the project is financial viable, why give ‘compensation’ of 1500 units in extra density? Is there a business plan to show that this project is viable?
(No real answer.)
The MPPP development charge is being waived for the 1500 extra units. There is a reason why development charges are imposed. Why are they being waived in this case? And how much are the amounts waived? Please provide us with figures.
It depends on the actual projects and where the 1500 units will be built. They can only use these extra units for larger projects where there are 8000-10000 units. (Not very clear.)
On what basis are the higher plot densities being allowed? 120 units per acre? Aren’t these well above existing density guidelines? What is the maximum permissible under the Local Plan and are these densities in line with that?
The State Planning Committee has the power to decide the higher densities.
But the Local Plan was approved by the MPPP in 2008?
The Local Plan is not yet gazetted/in force so it remains a guideline. Under existing guidelines, low-and-medium cost housing is allowed 120 units/acre and the Local Plan also allows it. (But is this restricted only to LMC?)
Why is MPPP providing land free-of-charge for the low-medium cost housing? What is the estimate cost of the land?
The land needed is not as big as what has been speculated. Based on current density guidelines, only about 3.75 acres are needed and not 16ha as speculated. We want to ensure that affordable housing is built.
The hotel – this is the jewel in the crown of the project. How was the price of RM100psf arrived at for the sale of the land? Who did the valuation?
It is based on transactions in neighbouring sites. The valuation was decided by MPPP’s valuation department.
Why is the hotel and land not being returned to MPPP after 30 years? Why is it 99 years?
The land is being leased for that period.
Can you give us a total estimated cost for all the additional related costs (development charge and assessments waived, free land provided) on top of the RM50m to be incurred by the MPPP? What are the total costs (direct and indirect) to the MPPP?
(Vague answer. They are sticking to the line that “we pay RM50m and we get a convention centre, ‘people’s park’ etc worth RM250m which will serve the needs of Penang”.)
Final notes
Questions we didn’t get the time to ask:
Is this a flood-prone area? Have any studies been undertaken about the water-table in the area?
The developer will benefit from income derived from rentals of the retail outlets, convention centre, indoor stadium and car park. Will the MPPP be entitled to profit-sharing during the 30-year concession period? (I hear the MPPP is not entitled to any profit-sharing. What is the return on investment for the MPPP after spending or forgoing so much money?)
Are you setting a precedent by providing land for LMC for free?
The press conference, which began at 1.00pm, ran until 2.35pm, forcing the cancellation of a scheduled OSC committee meeting. Credit to the MPPP and state exco for facing the press.
But while appreciative of the opportunity to raise questions, I didn’t really get much new information except for the identities of the other parties who were supposed to have made proposals.
While it is arguable whether Penang needs another convention centre (I hear IJM will be building one?), what is of greater concern is how this deal is being pushed through the MPPP, the financial implications for the MPPP, the swap mechanism and the worrying precedent this will set for other possibly bigger swap deals in the future.
For the record, this is Chow Kon Yeow’s statement made at the press conference, before journalists raised the above questions:
Statement By Penang State Executive Councillor For Local Government And Traffic Management Chow Kon Yeow On Tuesday 27 September 2011 Made At The Media Briefing On The sPICE Project
The Penang Island Municipal Council (MPPP) has on 12 September 2011 make available the Concession Agreement for the sPICE project for public viewing and feedbacks.
The MPPP has not received any written feedbacks from any quarters. However the media has reported various comments and views made by several State Gerakan leaders.
We take this opportunity to address the issues raised on the sPICE project.
(1) sPICE Project Benefits Only The Developer
The State Gerakan Local Government Bureau Chairman Teh Leong Meng has said: “The deal benefits only the developer because the State Government must provide land for the developer to build the required 450 units of low medium cost residential units. Profits from the sale will be given to the developer despite the land being provided by the State Government. The State Government will have to allocate 16 ha. of land.
Reply:
The developer do not stand to benefit from the State Government’s directive to build the 450 units of LMC housing even though the land is provided.
The cost of building a LMC unit is more than the selling price of RM72,500/=.
The State Government has insisted on this directive so that more LMC housing units can be built and distributed to housing applicants.
Teh Leong Meng had tried to mislead the public that 16 ha. of land would be needed. Based on current density guideline, the State Government needs to provide about 3.75 acres for the purpose.
Anyway if the State Government is unable to provide the land, the developer will not be required to build the LMC units.
This clause is included because of the State Government’s commitment to fulfill the people’s need for LMC housing and not to benefit the developer.
(2) sPICE Project Violates the Local Government Act And Town And Country Planning Act
The State Gerakan has alleged that the LGA and TCPA have been violated.
Reply:
The State Government, pursuant to Section 9 (1) of the Local Government Act to attain a conference and convention services and exhibitions centre for the rate payers of Penang, has directed the MPPP to achieve this vision.
The MPPP has invited competitive proposals utilizing a standard Request For Proposal (RFP) from eligible persons and companies for implementing the Project and the MPPP received proposals from several companies, including the Concessionaire for implementing the Project.
Under the TCPA, the State Planning Committee has the power to amend planning guidelines and to allow additional density.
The SPC under the previous Government has granted additional density for LMC housing projects and other development proposals.
(3) MPPP Lambasted For Selling People’s Assets
State Gerakan Chairman Dr. Teng Hock Nan has claimed that the sPICE project will result in the people lossing RM487 million.
He claimed that as a result of the additional density of 1,500 residential units, the total saving on land cost will amount to RM450 million. Other loss include the RM27 million loss because the land for the hotel is underpriced and RM20 million land cost for the LMC housing units.
Reply:
The Concessionaire anticipates that the costs of the Project is at least RM250 million for the construction of the new sPICE building, the refurbishment and rectification works to the existing PISA indoor stadium and PISA Aquatic Centre and other external and ancillary works.
The Concessionaire shall be responsible for the financial arrangement as would be necessary to finance the anticipated costs for the Project.
In the agreement, in the event the actual construction and development costs expended by the Concessionaire for the entire project shall be less than RM250 million, then the Concessionaire shall adhere to any reasonable proposal for additional works as may be proposed by MPPP up to the value of such shortfall amount.
It is expected that the Concessionaire would have to raise sufficient fund to complete the Project and recover the investment over a period of 30 years.
It is also expected that the Concessionaire would exercise the right to utilize the additional density of 1,500 residential units to generate revenue to finance the sPICE project.
Whether the Concessionaire is to raise revenue of RM100 million or RM450 million (as claimed by Dr. Teng Hock Nan), it is part of the commercial aspects of this agreement and the Concessionaire is solely responsible for any business risks involved.
A investor who choose to put the investment sum of RM200 million into a low risk fixed deposit account for 30 years (the concession period) at 4% interest would receive a revenue of RM240 million.
This concessionaire is willing to take the risk of putting up the sPICE and recover their investment from their property development.
Conclusion
There have been allegations that the State Government and MPPP have granted the Concessionaire so much favours. There have also been allegations of corruption and malpractices. Those making the allegations should report to the MACC or Police for full-scale investigation.
For the State Government and MPPP, we have responding to the needs of Penang for an international convention and exhibition centre which would drive economic growth in the State.
Anil
You did good questionings and hopefully MPPP/Penang Gomen do not hide under carpet any matter pertainting to sPICE.
Once the matter sorted out clear n transparent, this would set new precedence not to take rakyat for granted.
I still feel sPICE (with allegedly scandalous handling sorted out) is needed to bring job opportunities and high spending tourists to spend money at shops/malls in Penang, so that uncles, aunties, grandpas and grandmas here are happy with money to earn lawfully and morally.
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PNB consider buying SP Setia.
Khazanah wants a stake of E&O.
nkkhoo.com to be absorbed by anil.com judging by the collaboration in the making; with nkkhoo’s exit strategy after GE13 ?
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Mutiara Insider
I am not so sure as Anil & nkkhoo have very contrasting characters that they can work together in the long run. May be they temporarily have common interests in grilling for more info about sPICE.
As for sPICE, I think Pakatan (especially DAP) is sincere in rejuvenating PISA for the benefits of Penangites. They could be over-zealous in getting things done fast that they overlook certain aspects in their negotiations for terms/agreements with SP Setia/Meridian. It’s learning process and they should be able to overcome any mistakes and continue to gain the faiths of the people.
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mu humble opinion : PR/DAP folks are not of businessmen background hence could be “new” to handle commercialism – unlike Gerakan/UMNO/MCA trilogy that can smells $ even in their sleeping mode. So sPICE likely a steep learning curve which believe PR/DAP folks can learn & move on with greater vigor & phase to continue to win the hearts of long suffering Penang folks.
Anil (self-claimed for MPPP RM50 million protection) has done good investigative reporting which can even uncover the BN’s assault strategies knowing GE is round the corner.
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Thanks Anil for this report. However it raises more questions. for example since this is a RFP, what were the criteria used for evaluation of the proposals. I think MPPP should not be so happy about getting “convention centre, ‘people’s park’ etc worth RM250m which will serve the needs of Penang” after 30 years as by that time MPPP would be handed over a ‘liability”, the buildings would be obsolete and cost even more to upkeep whereas the developer has collected all the cash from their ‘investments’,, and none of those responsible will be around to answer for the folly.
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hi just, this question about an obsolete building being returned to the MPPP was also raised by the journalists.
The reply was that even old buildings can be given a new look and its value enhanced as has been done in the heritage zone.
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We are now witnessing an old building in our parliment house that is to be refurbished once again.
In the meantime, a ‘temporary’ paliment house will cost rakyat RM25 million.
So by this BN’s logic, continuos refurbishment and renovation will not render a building obsolete, as it keeps the contractors in business and the buidling industry going
A building is therefore a means to generate economic activities?
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In normal design code, the minimum design life of a structure is 50 years unless the MPPJ request a higher standard. As for design life, go and figure out what it is. But one do not except the carpets walk by millions for 30 years to remain intact unless someone can supply one.
Before handing over, it is usual that any defects are made good unless when you loan a car to your mate, one is very kind to accept the car without one wheel or a big dent. Why no complains about Sinkapore returning the Johore WTP back to Malaysia in bad condition and a bloom to the contractors to repair the WTP?
Also how come Ah Soon Khor and the Third Force Khoo is not there to grill and char keow teow the State Government? Not interested in Spice when given an opportunity and prefer to be behind the web?
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It was a media conference, not a public hearing.
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Why should I be there? No need to cari makan? I am not a journalist too! Anil already help me questioning the issue on the waiver of development charges.
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Restoration is more costly than building a new one. MPPP may need spend RM500 million by the time.
LGE and his gang already not there to answer another grilling from your grandson.
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It is only a media conference and not a q & a time. So need not to grill and char keow teow.
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Anil, any building can be refreshed, it is question of costs. The federal govt can afford to maintain expensive govt buildings and pay huge sums for the rent of office buildings and even PM residence inPutrajaya. Can the MPPP afford to maintain a convention centre and keep it refreshed after 30 years. My question is whther a rigorous cashflow analysis, cost analysis of the project proposal has been undertaken by Govt appointed consultants? 250 million refers to Net Present Cost or the Capital Cost? As you pointed out the concern is financial exposure of MPPP to the tune of 50 million. Singapore doesn’t contribute any $$ to developers in their tender of sites, so dont mislead by using Singapore as an example.
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If every decision made by the government is to be accepted by every rakyat, then it is a do nothing government.
As long as the government is sufficiently transparent and seemingly clean with the way they handle public money, they should be left to do the job we elect them to after all that is to be said has been said.
We can make all the noises we want. Ultimately, the elected government will still have to made the decision.
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Then let BN takes back Penang for no question ask policies.
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Poor poor Anil finally you also being thumb down by the cyber troopers of the Kai Sue administration.
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Anil:
If there is nothing to hide, why not put the agreement on the MPPP website?
GK: PR = BN, LOL
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As pointed out by nkkhoo, slightly better than BN. This one can be grilled. Like the new initials, but you’ll always be Gherkin Khan to me.
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Rebranding exercise ??? No, i’m a brand new user…
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X files.
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The whole tender process is scandalous with no business feasibility study by a qualified party.
Pico and Taman Kasturi (may be) RM2 companies …
PR is slightly better BN on its “openness” to be grilled unlike BN who is running snack oil black box tender for its cronies.
If LGE wants to be different than BN, it’s better for him to re-visit LKY for a lecture on how to run a transparent and clean government.
In short, sPICE is another BN project under PR.
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fyi LGE (allegedly) has had private talk indirectly with LKY via Ho Chin (LKY’s daughter-in-law) during her last visit to Penang.
May be sPICE ideas came from LKY whereby sPICE is modelled after Suntec Spore ? (not to be confused with Suntec of Bayan Baru) with feng sui elements taken into consideration ?
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If that is the case, then LGE is total useless.
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LGE talked to Ho Chin? No wonder sPICE is so screwed up.
Ho Chin’s (tenure saw) Temasik (making) more than USD 10 billion (should be more..maybe USD30 billion) losses …
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Aiya that is the national service need to be done for the US big brother!
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Loser only making noises but when big win no beating the heart. In this case PAP Government is even worst than the penang state government what was claimed to be very good and doing wonders like building bicycle/bullock cart lanes and losing billions Uncle Sam dollars.
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Kiasu still have USD250 billion reserves.
Temasek Holding asset is still at S$ 298 billion now. It has revocered from S$ 181 billion in 2004 after Ho Chin resigned from the Temasek.
LKY made mistake in his own cronyism and learned the mistake by firing Ho Chin. (Anil, are you friend of Ho Chin? You seem like to delete and censure comments at your pleasure, that is freedom of speech.)
Malaysia did burn its finger in 90s after betting in foreign currency and the country almost bankrupt if no loans from Saudi Arabia.
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Comments are subject to moderation/editing based on the comment guidelines on this blog. Your comments are already off the topic of Spice.
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That is a relevant example of cronyism.
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How interesting… no one interested to submit in open tender? How convenient — precisely three proposals — mind you, not two not four not five.
hahaha… LGE, welcome to the XXX club!
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MPPP has to advertise open tender notice in the Star, no excuse for no tender.
I hope MACC digs into the scandal, and find out who are the Pico and Taman Kasturi. My gut feeling tells me they are RM2 companies.
Are these two companies ask for RM50 million and extra 1500 units?
MPPP (may) say the their RFQ documents are missing when more probes into this scandal.
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Always hope and never do. Good opportunity to do it with happy heart content to MCCA to send the CM to Sg Buloh or balek kampong in Melaka and to be closer to you
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FYI .. PICO is a Singapore based MNC with long experience in the exhibition industry and in no way a RM 2 company. I am one of the consortium partner at Taman Kasturi and we are in no way proxies of SP Setia .. we would have love to win this tender but unfortunately the council did not select our proposal for the new exhibition and convention center.
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Anil, Why so anti-development? If SP Setia is taking the financial risk to put up such a huge infrastructure, what is wrong in they making some money? They are not set-up to as an NGO or Non-Profit Organization!
Why don’t question the state of Penang Bridge or PLUS which will be handed over to the Govt after 35 years? That too will be run down?
Every building has to go thru’ re-furbishment. Dewan Sri Penang is over 35 years old? That too went thru’ regular upkeep. Its is good condition now.
Simple logic – if SP Setia does not maintain or upkeep sPICE, will it continue to attract EXPOs or exhibitions? NO
You guys keep screaming mismangement of awarding the contract, but its your opinion. Even if MPPP had invested RM1m there will still be people screaming Mismanangement. If MPPP found that investing RM50m now, for an infrastructure worth RM250 million what is the PROBLEM? Nothing hanky panky when they contribute for the betterment of the state growth of the service industry.
Just that the WHOLE point is many of you don’t want any EXHIBITION center in Penang, and just finding some excuse to run it down. Also all of you are quiet on the 1,500 units of LMC houses that is being built.
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We don’t know the breakdown of the 1500 units, what percentage of that is actually affordable housing.
The focus of the questioning is more on the exposure of the MPPP to the project and the process itself.
It’s not just RM50m. We also have to consider the assessment and development charges forgone.
It adds up to a significant amount considering that the MPPP raises only RM200m-plus in annual revenue. And what is the return on investment to the MPPP?
Amazingly, MPPP Councillors did not have enough info on the deal – even after it had been signed – and they had to get together and request a special briefing meeting.
Why not leave it to the private sector to build their convention centres? Why use public money?
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Hi SamG want to bodek LGe go to his office lah not in Anil blog!
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Off topic: made my day, this one: http://thestar.com.my/news/story.asp?file=/2011/9/29/nation/20110929171531&sec=nation
Which segments of society, I wonder?
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The above does not bode well for PR and will definitely give plenty of ammunitions to BN this coming GE13.
Penangites should understand that only PR with its CAT commitment allows the general public this press conference. With BN, it’s “we do what we want, none of your biz”. PR has been doing well governing the state so far and I personally feel that we should give them a chance to continue doing what is best for us and not go overboard by questioning their every decision.
If this project is really bad (which I don’t think so) then let them learn from their mistakes. BN has made lots and lots of mistakes and losses and we can’t do anything. Give them some breathing space to carry out this project as best as they can. That’s the least that we can do for the future of Penang.
Remember, WE ARE THE BOSS. We should have faith in PR for we put them in charge of our future. If and that’s “IF” they don’t perform, we can always change.
GE13 is around the corner. We should not provide ammuntions to BN to sabotage what PR has done so far for the good of Penang.
Penangites must always stay UNITED.
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What CAT commitment? You must be dreaming! Do you know who is the Chief Minister of Penang? Do you ever heard about this Heng Ong Huat? Heng Ong Huat IS NOW RUNNING THE STATE ADMINISTRATION !
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Anil:
I would like to help clarify some of the points raised by some commentors here:
- regarding the 1500 additonal units; these are NOT for LMC. Clause 4.3(b) states “there shall be no development charges, built up area control or selling price control imposed by MPPP on any such additional density utilized.” So they can build these at any price they want. What price range of houses would you build if you are a businessman given this open cheque??
- our analysis showed that the whole project will cost MPPP and the State a total of RM110million, NOT RM50 million as claimed by the State/MPPP. This includes revenue loss for the waiver of development charges, assessment, quit rent and land at no cost for the LMC housing. The State/MPPP failed to consider these as their revenue lost costs.
-MPPP claimed that they waiving assessment/quit rent from sPICE convention centre, inddor stadium, aquatic centre and carpark because the buildings belong to MPPP. But the developer is collecting revenue and rentals and there is no profit sharing agreement between the developer and MPPP. But then MPPP is not waiving assessment for the retail outlets. So why 2 different decisions?
- our analysis found that the developer stand to benefit more than RM1 billion from the sale of the 1500 additional units, 450 LMC units, rentals from the retail outlets, indoor stadium, aquatic centre, convention centre, car park and waiver form all the charges and fees. The developer’s cost for the sPICE project is only RM200million.
- Article 4A.1 states that the developer can sell each LMC unit at MINIMUM price of RM72.5K. With land at no cost to the developer, the construction cost of each LMC unit at current prices is not more than RM50K per unit.
- Under Article 6.2 of the Agreement, the developer charges RM68.2 million for the repair and refurbishment of the aquatic centre, indoor stadium and external ancillary works. The scope of work states that the work will be cleaning, repainting and repairing only, no tearing or rebuilding anything. RM68million for this? RM148 million is for piling and building the new sPICE centre.
- Schedule B of the Agreement states that the traffic impact assessment is “for purely academic purposes only. It shall have no bearing on the proposed road upgrading work”. So why do a TIA after all? The developer specially hired a “traffic engineer” to do this.
- the “road upgrading” works in the Agreement showed some widening of a few feet here and there near the entrances into the stadium. That’s the scope of the “road upgrading” works.
- YB Chow and the YDP justified that this is the first time in Malaysia they are making public the agreement. They also said that the previous govt. also relaxed and increased the plot ratio for some other developers. That is why we voted this state govt. in, to do things differently from BN. That is the rakyats’ expectations of this new state govt. They shouldn’t even claim credit for this.
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This is also first time in Malaysia the PR state government is giving unusual concessions to developers and totally ignore the state Legislative Assembly. Why there is no debate in the state Legislative Assembly on this scandalous concessions? Not only the municipal councilors are being by passed, the state assembly also being ignored. This is what the Heng Ong Huat suppose to do?
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It is BEST time to be a developer. Everything the developer build will sold like HOT cakes and all sapu by Penang Kia even if they are can double the min price will also sell off. The SPICe must like carnival everyday when Penang kia going there everyday from morning breakfast to boogie nights whereas other centres have to get house flies swapper as there are no business or even close down. If Pico and Tm Kasturi are RM2 companies, then form a RM10 company and submit proposal. Pico and Tm Kasturi should persist as the profit is there and getting a loan from any bank for this project no problem as it is a sure money printing project. Yes the Government is very stupid.
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For LGe’s pet project, the Kai Sue administration has opted to betray the poor by denying them affordable housing. The argument that the cost of building a LMC unit is more than the selling price of RM72,500 is virtually set the pricing of LMC beyond the affordability of poor Penangites. This scandalous issue finally exposed the true color of LGe administration which choose to abuse the power vested in it.
The permissible maximum development densities are outlined in the Penang Structure Plan, yet the Kai Sue administration choose to ignore it by wantonly change the development densities without provide any justification for it especially when there is no transit oriented development plan. How can the Local Plan and subsequent project approvals ignore the guideline on permissible maximum development densities of Penang Structure Plan? Why do we need a Structure Plan in the first place if we refuse to follow the plan? Why can’t LGe administration just follow the law?
How can the the exemption of development charges for the extra 1500 units comply with section 35 of the Town and Planning Act ? Does the Kai Sue administration has the gut or HOOD to justify it? How come the DEVELOPMENT action party always wanted to imitate the Bo Hood Party? The DEVELOPMENT action party also want to be another Bo Hood Party?
The CAT slogan is being ignored now and a new slogan of Heng, Ong, Huat is the war cry of the Kai Sue administration to mislead the people when giving unusual concessions to developers. What different does it make compare to the unusual concessions given to NS Highway developers and the unusual concessions given to IPPs?
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Once again the Kai Sue administration try to mislead Penangites on open tender. The RFP is not an open tender. The tender for the original PICC plan tak laku because even the developers know that it is a crazy ideas which no one bother to care about. The RFP can not be used as open tender as it did not set out the selection criterion. There is no way to compare the proposals. The Kai Sue administration can accept the RFP but should tender out the construction projects which it fail to do so especially after giving the developers such a scandalous handout.
Why there is no approval from MPPP? How can the Lembaga Perolehan give approval to the project when it should seek approval from MPPP for the project? The Kai Sue administration try to justify the abuse of power by claiming that it is a historical precedent for the public viewing of the agreement.
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The Bo Hood Party is most disappointing. The Kai Sue administration is afraid of being sue yet the Bo Hood party really has no gut to bring this Kai Sue administration to court. How can the Bo Hood party expect Penangites to vote for it when it don’t know what to do with this Kai Sue administration over this scandalous concessions? Zero KPI is what the Bo Hood Party has achieved. All the best it can do is echo what the Great Anil wrote in his blog.
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Spice or no spice I am lloking forward to move to Batu Kawan as Boon Siew Honda is building a RM200 million motorcycle plant (annual production of 350K units) to replace the old one at Mak Mandin. A job opportunity for me and my family.
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If you ask me who is the best candidate for Penang Chief Minister, it definitely not this Heng Ong Huat, it should be the Great Anil. Why the Great Anil should be the best candidate for Penang Chief Minister.
1) He is open minded. You can argue with him. If your reasoning is right he will accept it even sometime he does not like it.
2) He is keen to learn. Unlike the empty shouting of Heng Ong Huat, if you followed his blog you will realise that there is a lot of stuff he doesn’t know but at the very least he finally learn to pick up the knowledge.
3) He is honest and with great integrity. If you know him personally, you will know how much he hate to criticize the PR state governments. How much he would like to give chances and benefit of doubts to the PR state governments. When confront with scandalous issue, he will not bend his principle to accommodate any abuse of power.
How I wish that the Great Anil is our Chief Minister. We should lobby him to stand as a state assembly candidate in the coming election any how he is constantly jobless (he has no permanent job and income).
We must tell PR that we never vote for Heng Ong Huat as the Penang Chief Minister!
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If you want to bodek Anil, then pls contribute money to his coffee fund. Otherwise pls shut up.
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No substance…therefore he feels the need to fill up space with this drivel.
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I know for sure the publicity will be bad for SP Setia.
Unless and until their 1500 units quota is used up, every buyer of a SP Setia unit on the island will be on the alert about the building density of their projects as the 1500 units can be placed anywhere.
Hope buyers don’t forget easily.
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anil, though i respect your vigor for the truth and justice, you are obviously not doing justice to penangites. a convention centre will bring in foreign investments which will benefit everyone, especially to those entrepreuners in the electrical industry.
our factory industry will very likely flourish even more if penang is marketed and exposed even more internationally. let’s gauge what we’ll benefit first before running down the project.
no businessman is going to survive if there is no returns. setia is no exception. which businessman in their right mind would want to invest rm250m into something and hope to recover within 30 years? if we ordinary penang citizens cannot do it and if the state government dun have the full funds to do it, and some company can do it, why not let it be?
why keep on asking and asking and asking questions where the answers are obvious? definitely the concessionaire is going to ask for concessions since mppp can’t fully afford it? why are you harping on what the concessionaire gets?
it’s a barter trade, plain and simple. we cannot go on harping on what the other fella gets and not wanting to look at what we’ll get.
most of the bloggers here are missing the point. thank you.
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Thanks, Glen, I am more concerned with the process itself, the lack of transparency, and what MPPP stands to lose. The end does not justitfy the means.
What is the ROI for MPPP? That’s public funds/rate-payers money.
Most people would have no problem if any company wants to build and operate a convention using their own funds – that would assume they have a business plan that shows a convention centre is economically viable.
If Spice is economically viable, why the need for ‘concessions’?
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Thanks for the time and effort put into your research, Anil. There are several questions left unanswered despite the session being extended. Your concerns about the process is valid, albeit misguided at times.
The entire agreement is quite a detailed document. On top of that you are requesting various calculations and permutations for projected costs and returns.
Alot of these projections are subject to variations , such as financing costs, market rates on rental, materials, and over a period of 30 years!
We could go on and on.
Whilst it is the function of our councillors to give feedback and critique on such projects, I think it would be unfairly cumbersome to scrutinise and second guess every penny. Bear in mind the variables over time.
The total cost is large enough. The developer bears the main portion of these risks! 30 years. 1500 additional units allowed….but did you consider the time frame? Risks are high as well, even for well planned and feasible projects. It is overly simplistic to multiply 1500 units with current costs and claim that the developer stands to make X amount of money. Again, I stress there are always risks. Not every project will be 100% sold. Not every project will go smoothly without a hitch. These incur costs, and these RISKS are mitigated by concessions. Regards.
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I am seeing things from the perspective of the MPPP, and not of the concessionaire. What is the return on investment for the MPPP of RM50m outlay plus millions in revenue lost on assessment, development charges and rental income? I asked for the MPPP’s figures. Is that too much to ask?
Don’t worry about the developer. Work out how much extra income they can make from 1500 extra homes. They have done their maths. And obviously it looks good.
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PR idiots think wasting RM50 million is a peanut compared to RM50 billion for KL MRT.
Have you people ask why DAP Penang can get .. million(s in) donation in just three years?
They cannot buy RM500,000 office building for last 50 year before 2008, yet they can spend … million(s) on new office now.
The money is not falling from the sky, who else can donate million except the developer?
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…If you proof and concrete evidence, please report it to MACC. I am sure they will be more than happy to find cause to prosecute the DAP. In the meantime, your usual dose of innuendoes and empty accustaions is getting tiresome.
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Dear Anil,
point taken. But to be fair, any issue must be looked at in totality….and not just from the perspective of MPPP. If you do not consider the risk factors involved , the time frame of 30 years and the upfront costs for the developer, your outlook would tend to be skewed.
I agree that 50 million is no small amount for MPPP. However, the returns from this project will benefit the people of Penang in general by providing a world class facility and the refurbishment of the others like PISA , etc.
I agree that there are additonal outlays such as the assessment and developement costs that MPPP has agreed to forgo. But please also consider these are spread over the concession period. It is also contingent on the developer carrying out future projects that are compliant with regulations.
I note that certain readers here such as Ah Soon have been making half baked allegations regarding the increase of density (1500) . It would only be fair that the explanation by MPPP be given fair coverage as well.
Lastly, it would serve your readers well to acknowledge that the current state administration is serving under difficult relations with the BN led federal government. Lets not be naive. It has been proven time and again that this is limiting the options available. Thanks
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Question is that what if there are only one or two trade exhibitions held in this centre? Is MPPP is bearing the cost? If the centre is under used, is SP going to cajoled manufacturers held more exhibitions or expect LGE to be the Tradie man like Walls icecream man going round the world ring ring – coming to Penang all at Penang Government expenses?
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Dear King Kong,
if you care to look at the concession agreement, it is very clear. The developer bears:
1)Cost of construction. 2) Responsibility to operate/maintain the facility during the tenure of the concession.
Basically it means that if the SPICE is underused, the developer will be on the losing end because the upkeep expenses are still there. That was one of the risks involved in this venture.
The whole idea of having a world class facility like this is not just for trade shows. The exhibition hall can accomodate:
a) Future music concerts/ cultural events. b) Various exhibitions there are numerous posible events.
Since the developer is tied down by the concession period, the State Government and the CM would not need to push or sell SPICE per se. Instead, SPICE would be a selling point for Penang as a venue for world class events .
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are you against the concessionaire asking for concessions? or are you just interested in making sure that mppp knows what it’s doing?
thanks, anil.
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I am wondering why there were no takers for the original tender for the PICC.
If the project is economically viable, why the need to give ‘concessions’ or subsidies?
And I am concerned about how much MPPP is spending so much on this one single project when it has so many other priorities for basic amenities to the public and ratepayers.
And if the MPPP is spending so many millions, I wonder why quite a number of councillors were in the dark and had to ask for a special meeting for more information AFTER the agreement had been signed. This is not exactly CAT.
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for a start, the current tender is actually the second round of calling. this can be confirmed by going thru the old newspapers or if we want words direct from the horses’ mouth, we can cross-check with mppp officials.
in the first round of tender calling, NOBODY, i mean, NOBODY submitted. in a way, the state didn’t look that good back then. if the project was viable, some parties would have submitted.
the second time around, i believe the recalled tender allowed the tenderer the option to propose his own design, concept and concession terms. three submitted as you correctly reported. based on mppp’s judgment, the project was given to setia probably due to its design and large scale of doing times which will benefit penangites. and one of the concessions requested was additional densities which is basically empty air in the sky. if this helps fund the projet, why not let it be? the only chance a convention centre can fund its own construction is by doing just empty shell buildings eg. warehouse kinda structures. i am not saying that we should adopt this. mppp must have its own good reasons to accept setia’s expensive and iconic design with all those green park etc. high chance will be it will also turn out to ge a tourist attraction. as far as i know, there is no subterranean convention centre in south east asia. one thing’s for sure, without concessions, this design is not viable.
please bear in mind that mppp is investing rm50mil in the future of penangites. nothing is free. yes, we can argue that why dun mppp dun pay anything and in return, just give even more densities to the concessionaire? there will never be a correct answer. remember that this is a barter trade. both parties will try to secure their interests thru negotiations. we should allow mppp to do their job.
and as for the gerakan fellas, i am fuming mad that they’re mixing facts with fiction to pull down a project which will benefit all of us. real gutter-type politics. shame ….!
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Sorry friend the second round is not an open tender, it is a request for proposal. RFP and open tender are two different thing!
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i am aware and you are correct. but both are still categorized as tenders, and i’ve never mentioned “open” or “rfp”. thanks.
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Dear Anil,
perhaps you could also do some research on the tender itself. That could shed light on the costs and risks involved and why the first round was not well received.
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In any project with money, there is always an element of risk – losing money or getting return less than the bank term deposit. If SH Tan, Ah Soon khor or Nkkhoo can put in writing with bank assurance investors in a venture can get at least 4 % higher, then they should be supported.
The next question is what should the State government do in order to create jobs and raise the standard of living and lessen squatters or housing problems? 1. Do nothing 2 Keep money in the bank. 3. Spend money on beautification. 4. Like NKKhoo’s favourite PAP Government spending money on land reclamation to combine pulau Merlimau, Seraya to form bigger Pulau Bukom to become one of the world’s biggest oil refining and storage centre and oil prices are benched. 5. Negative with everything No, no no. Too risk and too bad.
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i am all for development.
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[...] Anil Netto, yang juga seorang aktivis di Pulau Pinang, telah membuat liputan sesi soal-jawab di mana kerajaan negeri lebih banyak mengelak daripada merungkai [...]
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