S P Setia gets rights for additional density

GEORGE TOWN: The Penang government has granted Eco Median Sdn Bhd (EMSB), a wholly-owned unit of S P Setia Bhd, the rights for additional density in its developments within the island.

The additional density — an extra 1,500 residential units are to be utilised and spread over all EMSB projects within the island throughout a 30-year period. The provision is over and above the current maximum density permissible.

However, should EMSB be unable to source enough land within the island to absorb the extra 1,500 units, then EMSB shall forfeit these rights at no cost to the Penang Island Municipal Council  (MPPP).

The rights for additional density came as a sweetener for EMSB in return for the company developing the RM300 million Penang People’s Park under a 30-year build-operate-transfer model for the state government.

The brief summary of the concession agreement for the People Park’s project, signed between EMSB and the MPPP on Aug 19, was released by Chief Minister Lim Guan Eng yesterday.

Under the agreement, EMSB will also construct 450 low-medium housing units which shall not exceed RM72,500 in price with the state authority providing a piece of land for this purpose.

EMSB is among three companies that submitted bids for the People’s Park during an open tender called by the state government two years ago and the company had proposed a “subterranean New Convention Centre”, a new seven-acre (2.8ha) public park and an upgraded and refurbished Penang International Sports Arena and Aquatic Centre at the site in Bayan Baru.

The concession/lease period of the facilities to EMSB is from the date of signing of the agreement to a period of 30 years commencing from the concession period. EMSB is entitled to apply for a renewal of the lease for a further two terms of 15 years each in the event of an extension or further extension.

The People’s Park is scheduled to be completed within 36 months from the commencement date with EMSB liable to pay MPPP agreed liquidated damages for the delay in the project at the rate of RM20,000 per day of delay.

Under the agreement, MPPP and the state government will also have access to and use of the People’s Park facilities for all purposes necessary or incidental to its functions for a combined maximum period of 42 event days in a calendar year free of charge.

MPPP has also agreed to sell and transfer a piece of land being part of Lot 7481 to EMSB for the purpose of a hotel site with a leasehold title of 99 years at RM13.66 million or RM100 per sq ft.

Lim said as part of the competency, accountability and transparency (CAT) philosophy, the full concession agreement for the People’s Park would be available for public scrutiny at the legal office of MPPP from Monday.

When EMSB was named the winning bidder in January this year, Lim said three key requirements were considered when awarding the tender. They were pricing, best product quality and whether the park could be maintained to match world-class standards.

The People Park’s project has been hogging the limelight since 2009 when the state government first announced that the MPPP would spend RM50 million to build a convention centre with objections from various parties, including non-governmental organisations.

Many then said the council’s coffers should not be tapped for a project which they felt would end up as a “white elephant”. Doubts were raised if such a convention centre was really needed as several developers like IJM Land and Ivory Properties had already announced their intention to build convention centres within their respective developments namely The Light (IJM) and Penang Times Square (Ivory).