An auction for a six-acre parcel of land near Gurney Drive, Penang, failed to attract any bidders on Wednesday, dealing a setback to efforts to raise funds for the long-delayed Ayer Itam road bypass project.

Representatives of the appointed auction agent, One Asia Property Consultants (PG) Sdn Bhd, waited an hour for potential bidders before closing the auction, according to a report by The Edge. The state government has yet to decide whether to hold another auction.

Known as Plot 7A in Tanjung Pinang Town, the land is located along Jalan Peter Paul Dason, which connects Gurney Drive with Andaman Island. The parcel carried a reserve price of RM313.632 million, equivalent to RM1,200 per square foot. Vacant land in the surrounding area is reportedly fetching more than RM1,000 per square foot in the open market.

The proceeds from the proposed sale were intended to help finance the completion of the Ayer Itam bypass, which links Ayer Itam to the Tun Dr Lim Chong Eu Expressway. Construction progress exceeded 90% as at the end of August, but the project has faced delays due to financing and site logistics issues.

The project operates under a land-swap arrangement, whereby land is transferred to the contractor, Consortium Zenith Construction Sdn Bhd, based on completed work claims instead of cash payments. The contractor had sought the state government’s assistance to monetise the land and improve cash flow, with completion targeted for April 2027.

Apart from the prevailing soft property market, uncertainty over the permissible plot ratio for a proposed mixed-development project on the site may have contributed to the lack of interest.

Plot ratios determine the maximum floor area that can be developed relative to the size of a land parcel. Development density on Penang Island is subject to state planning controls, given its limited flat land, environmentally sensitive hills and heritage considerations.

The absence of bidders leaves the state government to consider its next steps in unlocking the land’s value to support the completion of the bypass project.

Photo for illustration only

Penang’s proposed National Technology Financial Centre is unlikely to be fully implemented within the next two years, according to Chief Minister Chow Kon Yeow. He said the initiative would require time for further studies, coordination and the development of an implementation framework, noting that major national initiatives typically take several years to move from planning to implementation.

The National Technology Financial Centre was announced by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim in the 2027 Budget as part of efforts to promote more balanced development among the states, with Penang designated as the National Technology Financial Centre. Chow said Penang hoped to remain at the centre of the initiative, although details on its scope, including whether it would eventually involve other northern states, have yet to be finalised.

A proposed joint committee involving the Federal and state governments is also still under discussion. Chow said the initiative had already been in development, with the state engaging stakeholders and conducting studies since last year. Consultants were appointed this year to prepare a white paper for the Penang Technology Financial Centre, which is expected to help establish the groundwork for its eventual implementation.

Meanwhile, Khazanah Nasional and InvestPenang are set to establish a RM100 million Strategic Investment Fund to support semiconductor and advanced manufacturing companies during their early growth stages, particularly technology start-ups. The Penang government’s previously announced RM50 million contribution is expected to form part of the strategic investment arrangement, although the overall funding structure and implementation mechanisms remain subject to further coordination.

Chow said the state hoped to build on existing frameworks and investment incentives while minimising additional financial commitments from the Federal Government. He also pointed to the existing Silicon Design @ 5km+ initiative, which currently has seven incubators in Penang, as one of the platforms that could support technology companies as the broader initiative develops.

The Chief Minister added that the Budget announcement primarily sets out the Federal Government’s policy direction, while details such as project approvals, funding disbursement and implementation arrangements would require further follow-up. He stressed that the initiative had received approval in principle, but substantial work remained, including studies on its location, implementation framework and related mechanisms.

About Northern TechValley @ BKE

Northern TechValley @ BKE is a 176-acre freehold industrial park in Seberang Jaya, developed by Suling Hill Development Sdn Bhd. Located alongside the Butterworth-Kulim Expressway (BKE), the RM1.3 billion development is designed to accommodate manufacturing, logistics and other industrial operations, with access to the North-South Expressway, Penang Port and Penang International Airport. The development includes 1½-storey detached factories, with features such as high production spaces, loading facilities and management offices. It also incorporates green building measures, including rainwater harvesting, natural ventilation and energy-efficient design elements. The first phase covers more than 20 acres and comprises standard detached factories.

Find out more about Northern TechValley @ BKE

Penang stands to benefit from several initiatives announced under Budget 2027, particularly in industrial investment, water security and housing affordability.

Key announcements relevant to Penang include:

• Stamp duty exemptions for first-time homebuyers: Eligible buyers purchasing their first homes priced up to RM500,000 will receive full stamp duty exemptions on loan agreements and property transfer instruments. For homes priced above RM500,000 up to RM750,000, the first RM500,000 will be fully exempt, while the remaining amount will receive a 50% exemption. The exemptions apply to sale and purchase agreements signed between January 1, 2027, and December 31, 2030.
• RM20 billion in housing financing guarantees: Syarikat Jaminan Kredit Perumahan (SJKP) will provide financing guarantees to assist 80,000 first-time homebuyers, particularly self-employed individuals without fixed incomes. This could improve access to housing loans for eligible Penang residents.
• Stamp duty exemptions for abandoned housing projects: Full stamp duty exemptions will be granted to eligible rescue developers and original purchasers involved in abandoned housing projects from 2027 to 2030.
• RM100 million strategic investment fund: Khazanah Nasional Bhd and InvestPenang will establish a fund to support early-stage semiconductor and advanced manufacturing companies. This could strengthen Penang’s position as a major E&E hub, attract investments and create skilled jobs.
• 40-year water supply agreement with Perak: The long-term bulk water supply deal could help strengthen Penang’s water security, supporting future industrial expansion and population growth.

Construction of Grace Harmony, a 754-unit affordable housing project in Penang, has progressed to the podium level, although financing constraints faced by the developer remain an issue that needs to be resolved for construction to continue smoothly.

Penang State Executive Councillor for Housing and Environment Dato’ Seri Sundarajoo said this in a Facebook post following a meeting with purchasers of the Grace Harmony project, led by the Penang Muslim League (Liga Muslim Pulau Pinang).

Developed by Nova Land Development Sdn. Bhd., the project comprises 310 units of Rumah MutiaraKu B and 444 units of Rumah MutiaraKu C. According to Sundarajoo, piling works had been fully completed during his previous site visit, while construction has since progressed to the podium level, including the car park structure.

However, he said the physical progress needs to be supported by resolving outstanding issues so that subsequent construction works can proceed.

The Penang Housing Board (LPNPP) is also involved in coordinating and monitoring the project. A revised construction schedule is being used as a reference during meetings with the developer every three months to assess actual progress against the planned timeline and identify matters requiring attention.

One of the key issues discussed was the developer’s financing constraints. Sundarajoo said the developer had informed the authorities that it requires at least two to three months to arrange financing with its bank. The matter has been raised during discussions and requires further follow-up to facilitate the continuation of the project.

To improve communication with purchasers, Sundarajoo also proposed the establishment of a pro-tem purchasers’ committee. Representatives would be able to participate in site visits and follow the project’s progress more closely, while providing a more structured channel for purchasers to raise questions and feedback.

Sundarajoo acknowledged the concerns of purchasers who are waiting for their homes and urged patience while the outstanding matters are being addressed.

He also stressed that the developer needs to focus on resolving the financing issue, implementing the revised construction schedule and providing purchasers with regular updates.

Sundarajoo said he would continue monitoring the project, with the aim of ensuring construction does not come to a halt and safeguarding the interests of purchasers.

He expressed hope that the outstanding matters can be resolved and construction of Grace Harmony can continue through to completion and eventual handover to purchasers.