Aspen clarifies RM818 mil bid for Batu Kawan Industrial Park 2

GEORGE TOWN (May 22): Aspen (Group) Holdings Ltd, a member of the consortium which submitted a bid for the Batu Kawan Industrial Park 2 (BKIP2) project, said the RM818 million bid is the full guaranteed cash return payable to Penang Development Corporation (PDC).

Speaking at a press conference, Aspen co-founder and group chief executive officer Datuk M Murly said there were no proposed deductions from the RM818 million bid.

He was responding to PDC’s assessment, which reduced the value to about RM500 million by treating certain proposed items — such as a RM200 million connecting bridge — as costs for PDC to bear, effectively lowering the perceived cash return.

Aspen is disputing the state's assessment. “This figure (RM500 million) is arithmetically and factually incorrect,” Murly said.

The disputed deductions include: an estimated RM200 million for a connecting bridge, roughly RM150 million for main infrastructure tapping points, an estimated RM144 million leasehold-to-freehold conversion premium, and an estimated RM25 million “opportunity cost” relating to proposed quarry operations.

In 2024, the consortium consisting of IJM Properties Sdn Bhd, Aspen's subsidiary Aspen Vision All Sdn Bhd and Mettiz Capital Sdn Bhd offered RM818 million for the BKIP2 project under a second round of the request for proposal (RFP), but PDC rejected the bid as it failed to meet several key requirements.

Chief Minister Chow Kon Yeow earlier this month reportedly said that PDC will open a third round of bidding for the project. Chow added that if BKIP2 still fails to attract a suitable strategic partner, PDC will review all options, including its financial position, project viability, and market conditions.

Murly highlighted that the consortium structured its bid based on a 42-month accelerated payment timeline using a formula provided by PDC. If based on a 48-month timeline, he said the minimum return would have been about RM836 million.

Aspen explained that a shorter timeline will enable PDC to receive the cash payment sooner, in line with the incentive structure encouraged in the RFP.

“This is not a shortfall. It is PDC’s own formula, applied correctly,” he said.

Murly also pointed out that PDC did not initiate any meetings, clarification requests, technical queries, or engagement discussions with the consortium after the proposal was submitted.

“The consortium’s request for a meeting to present and clarify the proposal was not accommodated, leaving it with no channel to respond to any potential queries,” he said.

Consortium to bear infrastructure costs

Murly stated that the consortium is committed to building the required bridge at its own cost.

Other than providing basic utility tapping points to facilitate construction commencement, he explained that the consortium does not expect PDC to absorb the infrastructure development costs within the site.

He also clarified that any leasehold-to-freehold conversion premium, if approved by the state authorities, would be paid by the consortium on top of the RM818 million bid, thereby representing additional revenue for the state rather than a cost to PDC.

As for the quarry proposal, Murly said it was intended as an additional revenue stream for PDC, with commercial terms to be mutually agreed upon, and not a deduction from the offer value.

He stressed that the consortium fully respects PDC’s authority as the master developer and landowner and accepts its right to determine the outcome of any RFP exercise.

“These clarifications are not intended to contest the outcome, but solely to clarify factual matters relating to the consortium’s proposal that have since entered the public domain,” he said.

Nonetheless, Murly expressed concern that continued public characterisation of the proposal in a manner inconsistent with the actual proposal documents risks creating an inaccurate narrative of both the bid and the integrity of the RFP process.

Aspen did not participate in any subsequent RFP exercises.

Murly proposes an independent review on the consortium’s submission alongside the relevant RFP documents and evaluation process.

“Such a review would serve the public interest, uphold the standards of transparency and accountability that Penang rightly prides itself on, and allow the facts to speak for themselves,” Murly said.

The RM818 million bid for BKIP2 has come back into focus after a heated exchange in the Penang state assembly between Chow and former chief minister Lim Guan Eng, who questioned why the state rejected the latest RM818 million bid for BKIP2.

The Penang government has been looking to develop BKIP2 since 2023, when it first signed a joint development agreement with Umech Land Sdn Bhd for a RM3.5 billion project, with Umech Land expected to pay RM646.02 million for the land. The deal later faced scrutiny after Sunway Bhd (KL:SUNWAY) acquired a 70% stake in Umech Land shortly before the agreement was signed, raising concerns over ownership changes and valuation. The agreement was eventually terminated.

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