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Lack of transparency and accountability in Penang sPICE

Although I support Penang should build a decent exhibition hall, but sPICE is turning into a scandal with these below questions.

– There is no EIA report on how to alleviate traffic and flooding problems in the Relau area.

– There is no ROI analysis to support Penang state government’s decision to inject RM 50 million fund from MPPP.

– There is no full council meeting to approve fund allocation from MPPP, LGE is overstepped his power on the MPPP’s authority.

– Eco Meridean Sdn Bhd is RM2 paid-up capital company.

Obviously, LGE is not preaching his own CAT principle. Talk is cheap for LGE because he is following BN corrupt practice.

Lim: RM300m Penang convention centre good value

Lim said the convention centre project is expected to cost MPPP only RM11.5 million. — file pic

Lim said the convention centre project is expected to cost MPPP only RM11.5 million. — file pic

GEORGE TOWN, Jan 16 — Penang Chief Minister Lim Guan Eng believes a new RM300 million international convention centre was a worthy investment in tandem with his administration’s goal of turning the state capital into an “international and intelligent” city.

He pointed out that the Penang Municipal Council (MPPP) would only be investing a net sum of RM11.5 million in the RM300 million project, through a public-private partnership agreement with developer SP Setia Bhd unit, Eco Meridean Sdn Bhd.

“In financial terms, MPPP is supposed to pay RM50 million for a RM300 million sPICE — a good exchange under any circumstances,” Lim said in a statement today.

The trained accountant noted that Eco Meridean was among the three firms that submitted a formal request for proposal in an open tender system for the project in 2009.

The project will create a “Penang People’s Park” that includes the country’s first subterranean Penang International Convention and Exhibition Center (sPICE), a seven-acre public park on the rooftop, a refurbished and upgraded Penang International Sports Arena (Pisa), a refurbished and upgraded Aquatic Centre and a four-star hotel with retail outlets and a spacious parking lot.

Lim also said the council was set to save some RM25 million from the refurbishment, repairs and upgrading work on Pisa and the Aquatic Centre by the selected firm.

“Further, SP Setia will also buy the portion of the land at current valuation to build a four-star hotel to complement sPICE and pay MPPP RM13.5 million for the land,” he said.

Lim said this meant that the net sum of MPPP’s investment in the project would only be RM11.5 million, a minute sum if compared with the returns the project would bring to Penang citizens.

For SP Setia, he added, the firm was confident that by managing and maintaining sPICE for 30 years, it would be able to recoup its investments through rentals and other related activities.

“This is a vote of confidence for Penang, that Penang will be a preferred choice for investors, tourists, young and talented residents who desire sustainable habitats,” he said.

Lim added that since the Penang Pakatan Rakyat government outlined its vision of transforming the state into an international and intelligent city, much business activity had been generated.

“The platform for the future is one of unbridled confidence that the state government is committed towards economic growth through good governance, integrity in leadership, public-private partnership, infrastructure works, balanced development for all and performance-based approach such as open tenders.

“In other words, the business of government is to get out of business, he said.

As an example, Lim pointed to the open tender system that was offered to companies bidding for the RM300 million project.

Before awarding the tender, he said, three key requirements were considered: best value for money pricing, best product quality, and whether it can be maintained to match world-class standards.

“sPICE fulfilled all three requirements and more. sPICE also provided a green structure and a new park with an area of 7 acres on top of its roof,” he said.

When announcing the project yesterday, Lim said that the PR government’s greatest concern was not in constructing iconic and mammoth structures just for building images but in ensuring that the environment and the state’s natural resources were well-protected.

“Not only is the design exciting, but [it also has] green features because we are bringing back something natural for the people of Penang.

“The centre will benefit everyone because the people gain a park… a unique park. Just imagine, you can have your kids running around this park. It is good for the environment.

“[Environmentalism] is not about just reducing the use of plastic bags but also in providing more green spaces for our future generations,” he said.

Lim had also said that the state government would gain great economic returns through the existence of a world-class convention centre.

“When people come here for the events, the hawkers will earn, the taxi drivers, hotels and we will also gain tourist arrivals.

“It is a magnet that will draw people in, and do not forget that trade business visitors spend more money than our ordinary tourists. We want to attract the big spenders to Penang,” he said.

The project, added Lim, would have a quadruple-win factor as the “MPPP wins, the company wins, the people win and the environment wins”.

Work on the project is expected to commence within three to six months’ time and should be completed in three years.

The nkkhoo.com comment board with Facebook account.
KS says:

Is the statement of investment justified from accounting or project management standpoint ?

What is Penang Government investment in this project ? RM50MM only ? How about PISA ? What is current value of PISA ? Should PISA be factor in as initial investment outlay beside RM50MM stated above ?

Selling of land to build 4 star hotel ? Will the hotel be handover after 30 years ? If not , wshould be cash flow from land selling be consider as saving.

Example :

Someone grandfather gave him a landed property which worth RM200,000. He need RM25,000 to renovate the house. A friend come to him and said , you just need to pay RM50,000 , he will refurbish the house , build an extention to current building worth RM300,000 but the friend will collect rental for the next 30 years to compensate for building RM300,000 extension.
The friend also propose to buy a portion of the land for RM13,500 to build a store , permanent own by him.

What is the initial investment ? RM50,000 ? RM250,000 or RM11,500 ?

Should the proceed from selling the land factor in as saving ?

Who value that the extension worth RM300,000 ?