A few kind souls managed to view the actual agreement for the Spice convention centre and this is now presented here in the public interest.
The agreement proper can only be viewed by appointment at the MPPP office. No photocopies or snapshots are allowed. Those who view the agreement are only allowed to take handwritten notes within the two-hour time slot allowed. (Why not make public the entire agreement on the MPPP website in line with CAT and Freedom of Information? After all, the project is of public interest.)
Some questions arise:
- Have all MPPP councillors been given a copy of the agreement? Chinese press reports suggest rumblings of discontent among MPPP councillors.
- Was there a MPPP full council meeting to approve the agreement and the RM50m cost (to be absorbed by the MPPP) before the agreement was signed by the MPPP and SP Setia? When was the MPPP budget for this approved?
- Is the traffic impact assessment for academic purposes only?
- Why no social impact assessment?
- Am I seeing correct regarding the 1500 additional homes allowed to SP Setia in return for building Spice? Not only 87 units/acre but now 120 units/acre in some places? Are these densities higher than what is allowed under the Penang Island Local Plan, which has not yet been revealed even though it was approved in 2008?
- How much do all the assessment and development charge waivers plus the cost of the land to be provided for affordable housing add up to? These should be added into the state/MPPP’s cost.
- Is it true that only 2000 parking bays are to be provided even thought the capacity of the convention centre will be 6000?
- Why the haste in the approval of the Spice project? What happened to due diligence?
These are legitimate questions, but somehow I am not expecting any real answers.
Here are the notes from the agreement:
Signed on 19 August 2011 between Majlis Perbandaran Pulau Pinang (MPPP) and the concessionaire, Eco Meridian Sdn Bhd (Company Number 909427K), a subsidiary of SP Setia, with registered office at Setia Corporate Tower.
The agreement was signed:
- for MPPP — YDP of MPPP Hjh Patahiyah Ismail, Ahli Majlis Tan Hun Wooi and Setiausaha Perbandaran Ir. Ang Aing Thye
- for or on behalf of Eco Meridian Sdn Bhd- CEO/President Tan Sri Dato Sri Liew Kin Sin in the presence of Executive Vice President Dato’ Chang Khim Wah.
Concession agreement for the Build-Operate-Transfer (BOT) of the
- Subterranean Penang International Convention & Exhibition Centre and complimentary F & B outlets / offices
- Refurbishment and rectification works of PISA indoor stadium
- Refurbishment and rectification works of aquatic centre
Construction commencement date: 6 months from vacant possession
Project site: surrounding existing PISA i.e. Lot 11569, 11543 and part of Lot 7481, Mukim 12, Jalan Tun Dr Awang, Daerah Barat Daya, Pulau Pinang.
Area of site: 24 acres
MPPP is the owner of:
- Leasehold land held under Pajakan Negeri 3000 for Lot 11569, measuring 12,937 square metres, expiring on 23/12/2096.
- Freehold land held under Geran 60007 for lot 11543, measuring 22438 square metres.
- Leasehold land held under Pajakan Negeri 2827 for Lot 7481, measuring 67,520 square metres, expiring 20/1/2087
all of which are in Mukim 12, Daerah Barat Daya at Jalan Tun Dr Awang.
- MPPP contributes RM50 million
- Concession period: 30 years. Can apply for two more terms beyond concession period of not less than 15 years per term (both parties have expressed interest).
- Concession fee of RM1,000 for project for 30 years.
- Hotel site will be in part of Lot 7481 measuring 136,699.8 square feet (3.1381956 acres) sold and transferred to concessionaire.
- Additional density (means additional residential units to be added onto a development through the utilization of the development rights) – 1,500 units of residential units above permissible maximum density subject to Article 4.
- All assessment rates, quit rent for sPICE, PISA, indoor stadium, aquatic centre, car park (but not hotel site and retail outlets on project site) shall be borne by MPPP during the concession period. Concessionaire has right to apply/appeal to MPPP for waiver, exemption or reduction of assessment rates but MPPP is not obliged to grant.
Sale of Hotel Site
- Hotel purchase price: RM13,669,980.00 (RM100 p.s.f). Concessionaire had asked for RM60p.s.f.
- 99 year lease: category of land use “building”, express condition “hotel”.
ARTICLE 4 – DEVELOPMENT RIGHTS
4.1. MPPP unconditionally and irrevocably grant concessionaire and/or any of its related Corporation to the right to additional density of any development carried out within the island of Pulau Pinang over and above the maximum permissible density for the land, provided always that the total sum of such development rights utilized and spread over all projects within the island does not exceed 1,500 residential units.
4.2 Such development rights are only exercisable during the Concession Period and if the development rights are not completely exercised by the end of the Concession Period or prior to any early termination as provided for by this agreement, the balance portion of the development rights that remain unutilized shall lapse and will have no further effect, for the avoidance of doubt, the development rights are only exercisable by the concessionaire or its related corporation and not transferable.
4.3.a The Fast Track Consideration procedure shall be adhered to by MPPP.
4.3.b Exercisable during the Concession Period.
- No development charges, built-up area control or selling price control imposed by MPPP on any additional density utilized in such development for the additional density only. For avoidance of doubt such waiver shall only be in relation to the additional density utilized and accordingly all other units within the development shall be subject to current guidelines.
- No requirement by MPPP or concessionaire to provide for low cost or low medium cost housing in such development for additional density only.
- The utilization of development rights within any development land will be subjected to a specific ceiling cap on additional density / development rights:
|Category of land with permissible density based on existing guidelines
|Proposed final applied density (includes units arising for both development rights and current maximum permissible density)
Required to provide open space, must comply with local authority.
4.4 Development rights may be exercised either exclusively in one single development or in multiple development in Penang Island but always in accordance of the agreement.
Article 4A – Low Medium Cost (LMC) housing
4A.1 Concessionaire to build not exceeding 450 LMC housing units.
- Built up area not exceeding 650 square feet.
- Selling price to commensurate with the prevailing price at the point of construction but not lower than RM72,500 (under Housing Development Guidelines) provided State government provide a piece of state land (LMC land) at no cost to concessionaire within 20 years from the execution of the Agreement. Failing which concessionaire shall not be obliged to build it.
- Entire LMC must be constructed within five years from the date of LMC land being provided and delivered to the Concessionaire.
4A.2 Land must be suitable for development without requirement for excessive earthworks, piling or retaining wall. Entire 450 LMC must be on the same piece of land in reasonable matured establishment. 450 LMC units shall be carried out by the Concessionaire or by any related corporation.
4A.3 Shall not be entitled to build any other types of properties whatsoever on the LMC land unless consent is granted by MPPP.
4A.4 Proceeds from such sales shall be the sole entitlement of the LMC developer.
4A.5 The concessionaire shall be entitled to a corresponding exemption of the quota requirement to provide low cost or LMC in any proposed development to be carried out by the concessionaire or any related corporation within the state of Pulau Pinang.
Preparation of Drawings and Building Plans
f) MPPP shall waive all charges, fees, demands normally payable to obtain Applicable Approvals for the Project and construction of Project Facilities.
- If the Concessionaire fails to complete the Project Facilities within the Scheduled Project Completion date (unknown), the Concessionaire is to pay MPPP RM20,000 per day as penalty.
Intentions by Concessionaire and MPPP
MPPP Letter of Intent – Traffic Impact Assessment (TIA) is compulsory but not Social Impact Assessment.
Concessionaire’s Letter of Reply – TIA will be submitted for academic purposes only.
MPPP Letter of Intent – 1500 residential units and 450 LMC units to be built simultaneously.
Concessionaire’s Letter of Reply –
- within 20 years from the execution of the Agreement failing which concessionaire shall not be obliged to build it.
- Land for the LMC units must be provided by MPPP.
- If the provided land is bigger than necessary, the Concessionaire is entitled to build more LMC units.
MPPP Letter of Intent – specifies compliance of project to Green Building Index principles.
Concessionaire’s Letter of Reply – GBI principles shall be incorporated into the design. However the decision as to whether to submit and obtain GBI accreditation is subject to residual budget.
Specific demand in MPPP Letter of Intent – “Kos pembinaan sekurang-kurangnya RM250,955,249.00 (not including hotel building).”
Additional demands in Concessionaire’s Letter of Reply –
- A one-time Concession Fee of RM1000.00 for the entire 30 year period.
- The proceeds of all property sales to go to EMSB or SP.Setia related companies.
MPPP Letter of Intent – offer to sell at RM100psf
Concessionaire’s offer for land price in Letter of Reply – RM60psf
Finalised agreement – RM100psf
Breakdown of MPPP’s RM50 million ‘contribution’ to Concessionaire
1. RM10 million to be paid immediately after execution of Agreement.
2. RM5 million to be paid within 7 days after external road widening.
3. RM10 million to be paid within 7 days after repair/refurbishment of PISA.
4. RM10 million to be paid within 7 days after repair/refurbishment of Aquatic Centre.
5. RM5 million to be paid within 7 days after piling works for sPICE.
6. RM5 million to be paid within 7 days after basement construction for sPICE.
7. RM5 million to be paid within 7 days after roof construction of sPICE.
Anticipated cost of the project
|Refurbish and rectify PISA indoor stadium
|Refurbish and rectify aquatic centre
|External and ancillary works
Total construction cost
Consultancy fees (10%)