Penang sPICE still a bad taste

GEORGE TOWN (Sept 30, 2011): Penang’s opposition coalition is still not satisfied with the state government’s explanation on the discrepancies surrounding the controversial RM300million subterranean Penang International Exhibition and Convention Centre (sPICE) project.

On Tuesday, State Local Government committee chairman Chow Kon Yeow and Penang Island Municipal Council (MPPP) president Patahiyah Ismail were grilled by the media over the seemingly lop-sided sPICE concession agreement.

Among issues addressed during the special media briefing was the requirement to build 450 low-medium cost (LMC) houses to be sold at no lower than RM72,500 per unit, as well as allowing the developer to enjoy a higher density by as much as 1,500 units, above the maximum permissible density, in any future project that it undertakes in Penang, as a condition for developing sPICE.

On the price of the LMC, Chow reportedly reasoned that the cost of building a LMC unit was more than the stipulated selling price, while the additional density was to allow the developer to generate revenue to finance the sPICE project.

State Barisan Nasional (BN) working committee chairman Datuk Dr Teng Hock Nan now wants to know if the additional 1,500 residential unit allowance for the developer was part of the tender.

He also asked if other property developers who tendered for the project were informed of the same terms as Eco Meridian Sdn Bhd (EMSB), a wholly-owned subsidiary of SP Setia Bhd, the developer for sPICE.

“Everybody (developers who tendered for the project) who came forward must know (about the additional density allowance), if they didn’t know this, then it is not fair,” he said in an impromptu press conference yesterday after attending the opening of the 25th Asian Association of Open Universities (AAOU) conference.

When reporters pointed out that the project was based on a Request for Proposal (RFP) and not an open tender, Teng said the basic principle of revealing such information to see if other interested parties could offer better terms remained the same.

“It is not right to give the density this way … our question is whether (the additional information on density was) included in the open tender document, to be fair,” he said.

An RFP requires companies bidding for the contract to submit costing and possibly financing proposals which is unlike the tender process which offers an allocated sum which companies would work around when preparing their proposals.

Teng, who has led the state’s BN charge in opposing the project, also cited the previous administration’s handling of the Jelutong Expressway (now Tun Dr Lim Chong Eu Expressway) in which he was the state Local Government exco.

He said the company which secured the contract to construct the expressway was chosen because it managed to offer 5,000 low cost residential units as part of the terms under an open tender.

He added that the terms were revealed to all interested parties then.

“The (current) state government should tell the truth,” Teng said, “why was it so urgent to sign the (sPICE) agreement before proper consideration, is there anything (happening) behind the scenes?” he asked.