Was the Taman Manggis PPR land sold below market price in 2010?
LSS Report
The controversial Taman Manggis land fronts the Jalan Burma main road, diagonally opposite the New World Centre and Tune Hotel – certainly strategically located.
Jalan Burma is one of Georgetown’s main streets and leads from the popular tourist area of Penang Road, parallel with Gurney Drive for a while, before ending from the roundabout at the end of Gurney Drive.
When the DAP Penang government sold the 47,916 square feet. land previously allocated for public housing to KLIDC for RM232 p.s.f., many had said that this price was severely underpriced, with Penang Barisan Nasional saying it is worth at least double of that.
The Penang government however had defended the sale price saying it is slightly above the official JPPH valuation and done via “open tender”.
There are two things wrong with this excuse:
1) JPPH’s valuations are normally below market value and take into consideration the land use restrictions then (which the Penang government has not dared to release).
2) It was NOT an open tender
It was a RFP restricted to those with experience in managing a specialist medical centre and able to get license for a medical centre. This condition was CLEARLY stated in the RFP.
In fact, the RFP was titled “Cadangan pembinaan dan pengurusan pusat perubatan pakar” – which, of course, severely restricts the potential bidders for the land, as not many people will be qualified.
If it was an open tender to just sell land for any purpose, the bid prices will certainly be much higher as more people will bid.
An RFP is an invitation to enter into negotiations. When the successful party is chosen, they have been granted the opportunity to negotiate with the owner/developer for the work, but they have not yet been awarded the contract.
In contrast, a call for tenders (or open tender) is a more formal, detailed process that gives the bidders the assurance that if they put forward the best bid, judged according to the criteria set out in the tender, they must, in accordance with the law, be awarded the job.
A RFP would not be an open tender.
A RFQ (Request for quote) would be an open tender.
Surely DAP leaders would understand this simple distinction and know that it was not an open tender when the RFP for the Taman Manggis land was called.
The excuse then by the Penang government was this medical tourism project would create jobs and promote tourism. But six years later, it is still an empty land.
And there are now leaked documents showing the land restrictions have been upgraded by the Penang government after the tender – hence increasing the value – and even leaked S&P documents that suggest the company owning the land may already have been sold for as much as RM70 million since land prices today have appreciated a lot from 2010.
There are very few pieces of purely empty land on Jalan Burma left. Thus price comparison is hard to come by but I have managed to find two comparisons of sales during the 2010-2011 period.
One was an official JPPH record stating that a 20,268 square feet piece of land (half parking lot and half occupied by an old two story shop) was sold for RM13.5 million (RM661 p.s.f.), just three months before KLIDC was awarded the land, and a 47,916 square feet piece of land sold for RM11.5 million (RM232 p.s.f.) just 300 meters away.
And there is also a 2011 advert for sale for another piece of 22365 square feet old bungalow land also along Jalan Burma for RM894.25 p.s.f. at RM20.2 million with the seller clearly saying the value of this is in the conversion to commercial land and not the bungalow.
RM661p.s.f. to RM894 p.s.f. versus RM232 p.s.f.
It sure looks like certain pieces of land in Penang can mysteriously be sold at much lower prices – perhaps because they have bad feng shui or no swimming pool.
http://jpph.info/my-analysis.php?Key=13775
http://kksell.com.kksell.com/pages/a.php?action=watchme&id=213249
