From ‘Stop PGCC’ to ‘Stop PICC’

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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.

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K

Every tyrant and dictator always want a legacy to stroke their ego. For LGE, it is PICC.

K

The Cheap Minister has been flip flopping on the issue. First when the issue was raised, there were furious protests. Then the Cheap Minister had bcaktracked and said he won’t be using public money. So off he went to KL and Singapore with his begging bowl to get some private developers to fund it. Not unsurprisingly none showed any interests. I was at Singapore when the Cheap Minister was in town and he gave a … sales man talk about inviting investors to invest in PICC. Of course Singaporeans are no fools. None took up the offer. So now he’s… Read more »

DAP = UMNO

I was in the one which was held in HK.

I came out never dare to tell anyone I was from Penang.

It was THAT shameful.

LimBC

Anil,

At the same time, I see that they has been a very strong support from public to have the PICC to be build.
Thus far, the Pakatan State govenment is doing all the correct thing in Penang. Go Ahead Pakatan, you have my support.
What LGE says is correct, NGO can only object this, object that, when the state government follows and when the other side protext, this NGO will just keep quite.
End of the day, the state governement is responsible for the people not the NGO.

Anthony Tan

Allow me to share with you all a summary case study of the recently held World Congress of Accountants organised by Malaysia Institute of Accountants (MIA) at Kuala Lumpur convention Centre (KLCC). This world conference was bid by MIA in 2006. There total number of 4,050 attendees from 134 countries and 2150 from Malaysia converged in KL. This is a record for the number of delegates attending its congress that is held once every four years for its over 70 years history. Kudo to the MIA effort. About 6,500 hotel rooms in 5/4/3 star were used by the delegates and… Read more »

moo_t

Anil hit the bull’s eye. If the economy scale viable, why not private firm go build it? E.g. since the land quite expensive, Penang government may join venture and provide land under a long term agreement. OTH, private firms build and run the convention center, and profit from it to regain the capital investment.

K

moo_t

You DAP cybertroopers are unbelievable bunch. Even if LGE wants to build a nuclear power plant in the middle of Georgetown you will support it all the way.

When did LGE says this is a JV ? You are just making this up. What will happen is LGE will appoint a crony firm to build the PICC (may) fund… the entire cost via public coffers.

K

Anil Check the Penang budget for 2011. I was told that the fund for PICC has been allocated. Anyway there is no way any developer would want to take part as an investor. Of course there will be plenty of interests in this project as many contractors will be keen to get their grubby hands on the cherry. But no one will be interested in investing their own monies as the risks are high and the returns are uncertain or most probably nil. Anil you are right in saying that the costs could be much higher since there are a… Read more »

moo_t

Wow, being called cybertrooper. This is strange, since I ask those private who suggest build a new PICC, fund themselves. In short, I REJECT PICC funds by Penang state government.

I am not sure what kind of “cybertroper” segment I am in, since I am a nay sayer to the public funded PICC.

DAP = UMNO

Why use state/public funds?

Because people like you, Anil Netto, keep falling in the traps set by Lim Guan Eng.

Even a fraudulent election you also call it legit. Why not call this PICC a legit development also, Anil Netto?

moo_t

The main purpose of building convention center are mean for trade fairs, to bring businesses together and exhibit their product in a single place, a conveniences to allow business to “hunt” business opportunities under the same roof. However, Internet change the way of doing business. E-commerce middleman such as Alibaba, it create a huge impact and slow the trade fair growth rates. As some commenter point out, why not convert expand PISA capacity. Can you all go to google map and check the PISA surrounding ? It is “all f*ck up” location for large scale exhibition. But it doesn’t mean… Read more »

Scorpion

Stadium or convention centre, it still provides space to display their spoils to fools. Save the rakyat’s money, Pakatan. Don’t be too hasty!

As I See

I think Penang needs a Convention Center. Not one to compete with Bangkok or Sands S’pore. Smaller international fairs can take place in Penang. With SamG here.

KM

Practically, believe all would understand there is NO international class convention center at all in Penang. PISA? Yes, that’s Penang International Sports Arena. If anyone of you who visited PISA for whatever reason(s), that’s not a good / proper place to have conventions, its chicken or egg. Without a proper convention center, we cannot bring in major events (ie: exhibitions and concerts etc)

I support having PICC build for major conventions/ events in Penang, but, have to seriously consider the parking and traffic woes that the area will have to cope.

My one cent worth.

All the best PAKATAN government.

Kadir

PISA is an indoor stadium, not a convention centre.

moo_t

PISA already utilised for many trade fairs. Any indoor space can be used for many things, with careful planning and brainstorming.

SamG

Anil, If you check the kind of exhibitions in BITEC, it includes furniture fairs too. While the big players go there, there is still scope for smaller fairs to take place here. There are so many fairs all over the world. Just because there are a couple of major fairs in Europe, does not mean the smaller ones don’t go on. So, the question is which market segment of the Exhibition and Trade Fair Industry does Penang wish to capture? Need to make a start, and focus on the market segment. Don’t assume that Penang would be going for the… Read more »