No compensation for Penang gov't after failed Batu Kawan project

GEORGE TOWN: Eco World Development Group Bhd (EcoWorld) does not need to compensate the Penang government after its project at Batu Kawan failed to take off due to land issues.

InvestPenang director Datuk Lee Kah Choon said no compensation was needed as the 18-hole golf course component for the project was only at the Request for Proposal (RFP) stage and no agreement was entered into yet.

He said there was a difference in expectations between the developer and the state government which resulted in the Letter of Award (LoA) being rescinded.

He said the state will nonetheless conduct a technical study of the views by EcoWorld to determine if more land was indeed needed for the golf course.

"The land size will remain if we think there is no need," he said in a press conference after briefing reporters on the economic situation in Penang.

The LoA for the original RFP was issued to Eco World Development Bhd for the development of an 18-hole international golf course on 150 acres of land, leaving the remaining land available for mixed development, referred to as Eco Marina.

However, studies by Eco World found the golf course needed an additional 150 acres which adversely impact the viability of the project.

As a result, Penang Development Corporation (PDC) rescinded the letter with PDC general manager Datuk Rosli Jaafar reportedly saying the decision was a mutual one while a new RFP will be called in the future.

On the new RFP, Lee said the state was waiting for the right time so better returns can be tapped from the project as the property market now is slow.