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The Residents’ Association of Bandar Bayan Baru (RABB) refers with deep concern to the announcement that the signing of the concession to build the Subterranean Penang International Convention and Exhibition (sPICE) by the state government yesterday.

The people of the Bayan Baru township ultimately want the state and MPPP to look into and resolve the existing traffic flow and issue. Day in day out, we face traffic jams in and out of the Bayan Lepas FIZ areas and our township is affected as well.

Many vehicles jammed through our township back and forth the FIZ areas during peak periods and when there are big events held at PISA. Our Association is also proposing a Metropolitan Park for public recreation and activities. Many of the open land space is being rapidly developed to make way for projects like Bayan City (which includes Jaya Jusco), Quarter Mile, The One Residence and so soon the Sungai Nibong Kecil squatter village.

The infrastructure development needs to be sustainable. Gas emissions from thousands of vehicles to international conventions at sPICE would adversely impact our environment and quality of life. Land area here is scarce, where would all the cars be parked? Worse there has not even been a proper feasibility study, a traffic impact study nor an EIA study done up nor a proper dialogues with the local residents done up till now. So, why is MPPP and the state so adamant to push this project through?

This concession deal has been inked between MPPP and Eco Meridian Sdn Bhd (EMSB), a wholly owned subsidiary of SP Setia to undertake this project since August 19, 2011. That was some three weeks ago and the press only received wind of this news a couple of days ago. The discreetness in announcing this deal surely raises plenty of eyebrows.

This comes hot on the heels after revelations at a closed door dialogue earlier this year on the project that SP Setia Bhd, which is financing the bulk of the construction cost, will be allowed to build an extra 1,500 houses in the various projects it is undertaking within the island of Penang.

True enough, this criteria was inked in this deal, “over and above the maximum permissible density”. The state government's decision to give such a major concession to the developer has set alarm bells ringing with questions raised if the move will set a dangerous precedent which may come back and haunt Penangites later. Is this in line with the state’s motto of ‘Competency, Accountability, Transparency’?

Our Association also call upon the state to reveal at least five guaranteed world class projects and their respective revenue potential coming to sPICE that it is capable of drawing in to Penangites.

That way, Penangites would be able to gauge themselves the economic viability and ROI of sPICE. Then again, why not upgrade and refurbish the existing PISA infrastructure and sporting facilities into a world class facility to cater world class events?

The anticipated cost of this project to the developer will be RM300 million (which includes upgrade and refurbishment of PISA). Despite the costs, SP Setia Group will potentially earn even more from this deal. Income generated through the hotel and the sPICE rental can easily be in the millions of ringgit.

SP Setia is allowed an extra 1,500 residential units. Now we know SP Setia homes are well known to be of quality homes. Therefore, let’s do simple accounting example here (not taking into account the potential population density, traffic jams, environmental impact these ‘extra’ homes are bound to create) :

Out of which:

  • 10% are low-cost housing flats at 150 units (10%) x RM70,000 per unit = RM10.5 million
  • 40% are medium housing condo at 600 units (40%) x RM400,000 per unit = RM240 million
  • 40% are 3-storey landed houses at 600 units (40%) x RM1.4 million = RM840 million
  • 10% are high-end 3-storey penthouses at 150 units (10%) x RM2 million = RM300 million
The potential total revenue is at a total of RM1.39 billion! Minus building material, labour and the RM313.7 million etc. there is still quite a fair share.

Clause 7 of the concession says that a site within PISA for a hotel to be built is to be sold to the developer for RM13.7 million (based on an agreed price of RM100 per square feet) and leased for 99 years. Potentially this hotel also another huge money churner for the developer. Not to mention the rental collected from the F&B outlets within at sPICE.

The people of Bandar Bayan Baru and those staying close and around to PISA deserve better – they want the existing traffic woes to be resolved, not for more traffic to be brought in.

They want a better quality of live and a sustainable township and a proper Metropolitan Park, not a ‘rooftop park’ within the busy traffic swirling around the sPICE Complex. Have bicycle lanes, build friendlier pedestrian sidewalks etc.

We also invite the officials from the state and MPPP to come and view themselves the traffic congestion and parking issues whenever a big Northern region local fair such PIKOM PC Fair, Matta Fair, International Artistes Concerts etc. are held.

Put yourselves in our shoes first. A proper dialogue with the local township community here should have been held if the state and MPPP were serious about listening to the local people. Apparently, the state and MPPP have jumped the gun over and over again in making decisions on sPICE.

Is this a win-win situation for the community in this township or a win-win for the few?


Chan Kim Beng is honorary secretary of the Residents’ Association of Bandar Bayan Baru (RABB).