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Penang bares agreement details for new park

 | September 7, 2011

Municipal council makes good Lim Guan Eng's promise of transparency.

PETALING JAYA: The Municipal Council of Penang Island (MPPP) today made public the concession agreement for the Build-Operate-Transfer (BOT) of three public facilities known collectively as the “Penang People’s Park”.

The multimillion ringgit project will produce the country’s first international subterranean convention centre. It will be located in Bayan Baru and will be called sPICE (subterranean Penang International Convention and Exhibition Centre).

The project will include upgrades and refurbishment of the Penang International Sports Arena (Pisa) and the Aquatic Centre as well as the creation of a seven-acre green park on the convention centre’s rooftop.

Chief Minister Lim Guan Eng announced in January that the contract had been awarded to Eco Meridian (EMSB), a wholly owned subsidiary of SP Setia. The concession agreement was signed on July 19 and stamped on Aug 24.

Lim said MPPP would bear RM50 million of the project cost.

In today’s statement, MPPP said EMSB would bear at least RM250,955,259 of the cost and that SP Setia had made a corporate guarantee worth RM10 million to ensure performance security.

The 30-year concession period commenced from the date of the agreement. EMSB is entitled to apply for a renewal for two further terms of 15 years each.

MPPP expects the project to be completed 36 months from the commencement date. In the event of a delay, EMSB will be liable to pay MPPP damages of RM20,000 per day.

MPPP has also agreed to sell and transfer part of the site to EMSB for RM13,669,980 for it to build a hotel with a leasehold title of 99 years.

EMSB will also enjoy the right to build up to 1,500 residential units within Penang, 450 of which must not cost more than RM72,500 to the buyer. If EMSB is unable to source the required land for these 1,500 units within the concession period, then it will have to forfeit the right at no cost to MPPP.

EMSB will be required to furnish MPPP with monthly progress reports on the People’s Park project.

Upon completion of the project, MPPP and the state government will have free access to the facilities for a combined maximum period of 42 days a year.

MPPP said the park would fulfil Penang’s aspiration to be an international hub that attracts investors and tourists.


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