Singapore’s Temasek not withdrawing investments, says PDC

temasekGEORGE TOWN: Singapore’s Temasek Holdings is not withdrawing from its Business Processing Outsourcing Prime (BPO Prime) and Penang International Technology Park (PITP) projects, the Penang Development Corporation said today.

PDC director Lee Kah Choon said talks with the Singapore investor were still ongoing to “review plans, relook at the construction cost and composition of the projects” to ensure they would be successful.

“Everything is still ongoing and alive with our partners. They are not withdrawing at the moment.

“But it may be a problem if we still get negative news,” he told reporters at Komtar.

Lee was responding to reports yesterday quoting Penang Umno chief Zainal Abidin Osman as saying the indefinite postponement of the two projects suggested the investors were withdrawing.

Zainal had cited a report in The Edge Markets earlier this week, which reported that the BPO Prime project in Bayan Baru and the PITP project in Batu Kawan, worth RM11.3 billion combined, had been postponed because of the current property market conditions.

It was reported that BPO Prime – with two residential blocks and another two for offices – was expected to be ready in 2019 but had been “postponed indefinitely”, and that this would also delay the PITP project that was to start after that.

PDC, the state investment arm, is in a joint-venture with Temasek and Economic Development Innovations Singapore Pte Ltd to develop the projects.

Lee admitted that there was a slowdown in the residential sector, with locations such as Kuala Lumpur having an oversupply of condominium units, but that the situation was not so bad in Penang.

He said developers in Penang were still building and selling units in the state.

“Some reports, like the one quoting Zainal are making it seem like things are bad in Penang… as if investor confidence is not here, when the state actually remains one of the best places in Malaysia for investments.

“Things are not too bad here. It is not me just saying it. Have you heard of massive unemployment in Penang? In fact, we are still short of the right human resources,” he said.

Lee said Penang’s global business services (GBS) and shared services and outsourcing (SSO) sector had created 8,000 high-value jobs until the end of 2015.

Penang, he said, was now looking at an employment growth of at least 10%, with an estimated 2,800 new jobs to be created from reinvestments and new investments over the next three years.

In a move to house expanding GBS companies in Penang, he said the PDC was upgrading Mayang Mall in Bayan Baru to create 121,000 sq ft of office space with MSC (Multimedia Super Corridor) status by the end of the year.

“You can also see that the factories are operating. There are people who have never been to Penang to see this, so such (negative) reports can have an impact on the state,” he said.

Lee said the global economy might not be very encouraging and Penang as an industrialised state was facing challenges including the drop in the value of the ringgit and national policies such as that compelling all exporters to convert 75% of their proceeds into ringgit.

“Penang is trying its best to move forward while facing these challenges and hold on to jobs, and here we have to fight wild fire,” he said, referring to negative news on the state.

Chief Minister Lim Guan Eng said the Penang government placed importance on industries, and that investors who came to Penang must fulfill the needs of the state and its citizens.

He said it was untrue that investors were losing confidence in Penang.

“Investors are still confident. Penang being a GBS hub is not affected. This is just a postponement,” he said.

Lim cited news yesterday that the Employees’ Provident Fund (EPF) and developer EcoWorld Development Group were working together to develop two townships over 152ha of land in Batu Kawan. The projects have a combined gross development value of almost RM7.8 billion.

“So what is the problem? Penang is still attracting investors. If EPF is investing here, it shows that it has confidence in Penang,” said Lim, who is also PDC chairman.