From ‘Stop PGCC’ to ‘Stop PICC’

The state government is pushing ahead with the controversial Penang International Convention Centre. Now who is going to be the lucky developer and main contractor?

See a Sin Chew report here.

In the interest of transparency, FOI etc and as public money is involved, the state government must provide us with the full details of the project, the full cost, the cost to the state/public, and the tender details. The full project value under the Build-Operate-Transfer scheme (see my earlier blog post – PICC and the risks of BOT) may end up much more than the RM50 million subsidy figure mentioned earlier (although the state had budgeted RM50 million for its share of the cost). And if the BOT financial projections fail to materialise, guess who could end up subsidising the PICC even further?

Politicians just love these big projects whose worth to the ordinary person on the street is, at best, questionable. But who profits the most? Probably the developers or contractors. And at whose expense? Of course, the politicians will try and convince us otherwise.

This precious RM50 million could have gone a long way in transforming the state if it had been allocated to projects that really benefit the ordinary people. After all, we have been complaining about even the federal government’s RM20 million allocation heritage conservation, for which the state government was bypassed. What about money for upgrading markets, improving pedestrian walkways and building more affordable homes? Aren’t these more important to the ordinary person than a convention centre? Such smaller projects – but spread around more people – could revitalise the economy and provide a more meaningful multiplier effect.

Since we have not seen any studies on the convention facilities (MICE) market, activist Tan Seng Hai took the initiative to prepare a study and send it to Penang state government and MPPP leaders. He summarises his findings as follows:

A study titled “Penang as an international MICE destination” was sent to the Chief Minister of Penang, YAB Lim Guan Eng and the MPPP President and copying all state excos and Aduns on 20 Sep 2010. (See the attached report here). Among the findings of this study were:

• there is an oversupply of convention centres in the region, particularly in Kuala Lumpur, Singapore and Bangkok;
• newer mega convention centres built in the region are like a city within a city with self contained services and the latest state-of-the-art infra structures and technologies;
• MICE customers look for adequate infrastructure and transportation linkages. Direct flight connections from major cities in the world is an important consideration for success. Penang lacks many of these success factors;
• good marketing strategy is critical for the success of promoting MICE packages internationally.
  The main focus of MyCEB (Malaysia’s Convention and Exhibition Bureau), a promotion arm of the Malaysian Tourism Board under the Federal Government, is to promote Kuala Lumpur as a MICE destination. Penang is not its priority. The Penang state government has limited resources to promote Penang internationally on its own.

The study concludes that Penang does not have the success factors to succeed as an international MICE destination. The Penang government is risking millions of ringgit to build a convention centre which has little chance to compete with other major centres in the region. At best, the PICC will be an expensive site to hold local expos like PC Fairs, Home Deco Fairs, Furniture Fair and other similar fairs several times a year.

This study is to put on record the risks the Penang state government is undertaking to build the PICC despite strong objections and concerns raised by many Penangites.

From the study:

City – No. of major convention centres – Major centres

Bangkok – 6 – Bangkok Convention Centre , Queen Sirikit National Convention Centre, Impact Exhibition
Convention Centre, BITEC.

Singapore – 6 – Marina Bay Sands, Suntec International Convention Centre, Singapore Expo, Raffles City CC

Kuala Lumpur – 9 – KLCC, Putrajaya ICC, Matrade Exhibition and Convention Centre, PWTC, Sime Darby

Convention Centre – Exhibition Space – Capacity

Singapore

– Marina Bay Sands 120,000 sq. m. 45,000 delegates
– Suntec City 10,600 sq. m. 10,000 delegates
– Changi Exhibition Centre 37,500 sq. m. 2000 delegates
– Singapore Expo Centre 100,000 sq. m. 19,000 delegates

Kuala Lumpur

– PWTC 23,504 sq. m. 3,800 delegates
– KLCC 9,710 sq. m. 9,500 delegates
– Putra ICC 135,000 sq. m. 7,800 delegates
– Matrade ECC 30,000 sq. m. 1,500 delegates

Bangkok

– BITEC 19,610 sq.m. 8,200 delegates
– Bangkok Convention Centre 6,179 sq.m. 6,000 delegates
– Queen Sirikit National CC 28,000 sq.m. 21,000 delegates
– Impact ECC 47,000 sq.m. 3,000 delegates

(Source: Various convention centres websites)

View full study (in .pdf format): Penang as a MICE destination

See the petition against the PICC. It is a bit out of date now, but the overall concerns are still valid.