Penang Global City Centre – A project that ended in a whimper

Property News/ 28 November 2015 Leave a comment

1422_6_1000-asymptote-pgcc-6When the Penang Global City Centre (PGCC) was launched in 2007, it was touted as a major game changer to Penang. But it ended in a whimper partly because of its sheer scale which was not feasible.

The RM25bil PGCC project was to have been undertaken by Abad Naluri Sdn Bhd, an associate company of Global Oriental Bhd (formerly known as Equine Capital Bhd).

In return for developing PGCC, which was to be located on the Penang Turf Club (PTC) land in Batu Gantong, Abad Naluri was supposed to have built a new turf club in Batu Kawan – on Seberang Prai as a replacement.

According to reports, Abad Naluri submitted its tender to build the new race course for the PTC at a 250-acre site at Batu Kawan in May 2002.

In 2003, a preliminary agreement was entered into between PTC and Abad Naluri. The agreement would see Abad Naluri paying advances totalling some RM10mil to PTC to acquire the PTC land in Batu Gantong for around RM488mil.

The deal was supposed to see Abad Naluri building a race course in Batu Kawan for RM375mil, which it was supposed to deliver to PTC by 2007. The balance was supposed to be paid in cash to PTC.

Abad Naluri was given an extension of two years to complete the project after the initial deadline was not met.

In January 2004, the Penang Development Corp (PDC) entered into a master agreement to sell eight parcels of land in Batu Kawan, totalling over 1,000 acres, to Abad Naluri.

One parcel, measuring 300 acres, was slated for the new race course site. The purchase price for this parcel was said to be RM46mil.

In May, an agreement was entered into between PTC and Abad Naluri for the sale of the land in Batu Gantong on the island at RM43 per sq ft.

By 2005, layout plans for the Batu Kawan race-course were approved. In September the following year, Abad Naluri submitted applications for planning permission of PGCC on the PTC land.

In October 2007, then prime minister Tun Abdullah Ahmad Badawi launched the PGCC project despite the acquisition of the PTC land yet to be completed and work on the Batu Kawan race-course yet to begin.

Following the new state government taking over after the March 8, 2008 general election, the proposed PGCC project failed to take off.

Global Oriental’s stake in Abad Naluri had since been sold for RM2mil cash to Kiara Ikhtisas, a privately-held outfit in October 2008.

In July 2009, PTC terminated its agreements with Abad Naluri on grounds that the latter had failed to pay liquidated damages for delays in building the new turf club in Batu Kawan.

As for Global Oriental’s interest in Batu Kawan, in 2002 when turf club transfer was first conceived, PDC had agreed to sell 750 acres in Batu Kwan to Abad Naluri at RM3 psf. Out of the 750 acres, 300 acres had been earmarked for the development of a new turf club.

When the turf re-location did not take place, there were fresh negotiations between Abad Naluri and PDC.

In 2011, it was reported that a ‘compromise’ was reached between the two parties.

Based on a 2011 annual issued by Global Oriental (then known as Equine Capital) on March 21, 2011, Abad Naluri entered into a suplemental agreement with PDC to acquire 145 acres in Batu Kawan upon fulfilment of certain conditions.

In 2011 also, Equine Capital acquired the rights to develop 126.04 acres in Batu Kawan from Abad Naluri for RM16.7mil. It is earmarked for mixed development.

The compromise allowed PDC to undertake the development of a 1,400-acre industrial park in Batu Kawan.

Source: TheStar.com.my

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