GEORGE TOWN: The Penang Development Corporation (PDC) Board has decided to terminate a joint venture agreement with UMECH Land Sdn Bhd following calls to suspend the controversial sale of a PDC-owned land in Byram, in the Seberang Prai Selatan district.
PDC, in a press statement, also gave UMECH Land a three months' notice based on clause 19 of the PDC - UMECH Land Sdn Bhd Enterprise Agreement.
Explaining the matter, the PDC Board said it had examined the case of UMECH Land and found that the selection process of UMECH Land- including the determination of cash contributions- and the payment schedule to PDC was transparent and in line with PDC policy.
"The PDC Board also noted that this collaboration is reasonable and has a positive impact on PDC's cash flow, including from commercial aspects, and benefits to the development of the state of Penang.
"However, the change in the majority of the equity structure of UMECH Land to the extent that there is a change in the party controlling and leading the project that is implemented without notifying and obtaining PDC's official approval is an issue that is taken seriously and cannot be accepted by the PDC Board.
"Therefore, the PDC Board has decided to terminate the joint venture agreement with UMECH Land by giving three months' notice based on clause 19 of the PDC - UMECH Land Sdn Bhd Enterprise Agreement," it said.
The PDC Board said, after the termination of the contract, PDC has been instructed to advertise widely using various channels of mass media through a Request For Proposal (RFP) for a proposed collaboration with the PDC to advance the Batu Kawan Industrial Park (BKIP) 2.
"This RFP will be advertised by PDC in the near future to attract interested investors," it added.
Last Tuesday, former Deputy Chief Minister II Dr P. Ramasamy had asked Chief Minister Chow Kon Yeow to suspend the controversial sale of the PDC-owned land in Byram to UMECH Land.
He said the numerous issues arising were reasons enough for Chow, who is PDC chairman, to suspend the land sale and conduct a probe.
Among the issues were the choice of UMECH Land and the land price.
He said even though PDC negotiated with UMECH Construction, the said land was ultimately sold to UMECH Land.
He also said that a few days before the sales agreement, 70 per cent of UMECH Land shares were acquired by Sunway Bhd.
He said all these issues were never in the initial discussion and the Penang government and PDC knew nothing about it.
A day later, Chow said the state would leave it to the PDC Board to make a decision.
Chow has come under fire over the sale of the land after the Penang Chinese Chamber of Commerce (PCCC) raised questions on the awarding of the project through direct negotiations and why local companies were not given the opportunity in the project.
There were also questions raised that the land could have been transferred to a developer.
Since then, Penang Gerakan and Penang Muda have urged Chow to come clear on the matter.