PENANG DOES NOT NEED THE RM50 million PICC

Posted by Unknown On Tuesday, April 6, 2010 23 comments
One of my friends, SH Tan, has been very active in lobbying against the proposed RM50million PICC project. I salute his efforts as he has been writing to newspapers and even started the online petition against this project. As a concerned Penangite, I wish to highlight a few aspects of this project to raise awareness with the hope that the Penang government will not continue with its plans for this project.

image from HERE

The announcement of the construction of the RM50 million international convention centre (to be funded by MPPP) to be built at the PISA ground in Relau was made in November 2009 by the Penang state government. They called for tenders in December and this was closed on 12 January 2010.

At that time, the state government also announced that they would fast-track the project and aim for completion by the end of 2010.

Now what is of concern to many Penangites is that the MPPP reported in January that it expects to run a deficit budget of RM40mil in 2010. Later, on 27 March 2010 (online edition unavailable), the MPPP President Puan Patahiyah was reported to have said that she is not in favour to use council funds to build the PICC.

Earlier, on 3 March, the Chief Minister announced that the PICC project will go ahead and will use MPPP funds. There is a lack of transparency in the way the PICC is pushed through.On 13 March, LGE was asked to explain how the PICC tender was awarded.
Several quarters and organisations have objected to the state government against building the PICC.

There are a few reasons for this.
  • Currently, PISA is underutilised and only used for a few weekends a year for a few major expos.
  • With only 1800 available parking lots, it is quite impossible for the PISA and PICC to cater for large crowds.
  • Traffic dispersal plans for the Bayan Baru-Relau-Bukit Jambul-Sungai Ara area with the increased traffic volume from the new PICC and on-going residential/commercial development in these areas seem to be absent.
  • Plans for transport and accomodation required for an international convention centre do not seem to be in the pipeline as well.
  • In terms of facilities, there may not be sufficient working, storage and staging space for pre- and post exhibition required for an international level convention centre.
  • There will be two other bigger and newer convention centres in Penang i.e. the Penang Times Square Phase 3 and the IJM Light Waterfront which already have plans for convention centres. Thus it is apparent that upon completion, it is highly probable that the PICC will be a white elephant.
  • The MPPP does not have the budget. MPPP is running a deficit budget in 2010. It cannot afford to fund RM50mil for the PICC project.
  • Other more critical infrastructure projects that Penangites need merit attention and these include improving the traffic system, improve cleanliness, maintaining the parks, upgrading low cost housing like the Kampung Melayu flats and upgrading the Chowrasta market among others. MPPP says it does not have funds for these infrastructure upgrade projects. If so, why is it that they are willing to spend MPPP funds for the PICC? The government must use MPPP limited funds prudently.
  • Also, the consultant for the project design was engaged without a proper design competition called.
  • It almost seems that the project has been fast tracked without a proper feasibility study conducted. Why?
  • Do we really need the PICC?
You might want to read a Malaysian Insider article HERE written by the Penang Forum group on the same topic and another one HERE which came out in Business Times today.

Excerpt from Business Times:

For Penang to venture into the international trade and conventions hosting segment will demand a quantum leap, more investments, and the right professionals who can run the show, so to speak.

Instead of dipping into public funds for an enterprise, whose returns still remain a big question mark, all that is needed is for the authorities to turn to the private sector to undertake such a scheme.

Property developer IJM Land Bhd, which is developing the panaromic sea-fronting "The Light" project along the Jelutong Expressway, has already factored in an international convention centre into its waterfront development.

It is also learnt that other Penang-based property developers have expressed a willingness to finance and build other convention centres on the island, if given an opportunity to participate in certain projects such as land reclamation.

Why not leave it to these firms to go about drawing thousands of visitors to Penang and injecting billions of ringgit into the economy, if a convention centre is needed?


Penangites, please speak up. Do your part. MPPP funds must be used to meet the needs of Penangites and not the PICC which we certainly do not need!!

I appeal to Penangites and concerned Malaysians to sign the on-line petition “Campaign against building the Penang International Convention Centre” by visiting THIS LINK. Thank you very much!!

The above post was based on information I obtained from various sites, articles and teleconversations with SH Tan, a very patriotic and concerned Penangite!! God bless you SH Tan!

Please leave a comment to share your thoughts/views. Thanks!

23 comments to PENANG DOES NOT NEED THE RM50 million PICC

  1. says:

    Penangite Shahrizat chides Guan Eng for giving only RM100 to senior citizens.

    ~~ Malaysian Insider

  1. says:

    Anonymous Shahrizat forced her way into the cabinet through the backdoor, kakaka!

  1. says:

    Apa Nama Has Koh Tsu Koon anything to comment on the RM50million PICC?

  1. says:

    Unknown Dear Penangite

    There was a big hoo-ha when it was first announced with the other side giving all kinds of bizarre objections!

    Cheers

  1. says:

    Unknown Dear Anon @ 6.39pm

    Now that is perseverance of a different sort!

    Cheers

  1. says:

    Unknown Dear Apa Nama

    Surprisingly, he has kept quiet....Quite noble of him.

    Cheers

  1. says:

    Justice Hopefully, Lim Guan Eng knows what is best for Penang.

  1. says:

    Unknown Dear Justice

    I hope that he and his team know what is best for the state and the people.

    Take care and have a lovely rest.

    Best wishes

  1. says:

    ahoo If indeed the project can be privatised without utilising the MPPP fund, why not ? Unless the private sector that proposes such a scheme also wanted some lands, special provisions thrown in which is against the norm.

    In any case, the current state govt can't just make decision wantonly as the opposition parties are watching like a hawk. Finding the slightest mistake possible and going in for the kill. So, for now I will have to give the govt the benefit of doubt.

  1. says:

    Anonymous I beg to differ.

    The articles in the Star Online and The Business Times do not convince me that the idea is necessarily bad. Let’s leave the Bayan Baru MP’s rhetoric about the CAT issues aside and focus on the viability of the project. As I’m not a Penangite, and I do not have much technical information or statistics in hand on Penang’s tourism sector or the proposed PICC, so please treat this as my personal observations.

    First of all, in terms of investment, MYR50.0 million is not a lot of money.

    The MICE market can be a very lucrative division of tourism. In terms of ROI, MYR50.0 million can be recoup in a few years. The fact that Penang does not yet have a stand-alone convention center, gives the PICC a monopoly over the next few years. True, some of the big hotels in Penang do have their own exhibition halls, but those are limited in capacity. I would assume, if built, the PICC would be the biggest of them all.

    As for the fact that the MPPP had rung up a MYR40.0 million deficit is not a strong justification for not building the PICC. This project is not only an infrastructure, but it is also a business investment with a potential to provide the state government with a new revenue stream. Furthermore, think of the amount of cost that the state government will save, if all its meetings, seminars, etc; are now redirected to the PICC. It might also serve as a catalyst for more hotels to be built, thus creating employment and business opportunities in the hospitality sector.

    All the arguments about the PISA being under-utilized, the lack of parking space, travel dispersal, transport and other logistic issues are not brick walls that cannot be overcome. The other two “bigger and newer” yet to be built convention centers will be competitors just like any other business and the PICC should not be unduly worried. It’s all about sales and marketing and if the PICC is well managed, what is so scary about the competition?

    Before you sign that petition, I think you should, at least, look into the following:

    How big is the current and potential MICE market in Penang, in terms of revenue?
    How much does the state government spend annually on MICE events using facilities other than its own?
    How much will it cost the state government annually to operate the PICC?

    Until this is done and analyzed, you cannot say with conviction that the nett change will be negative.

    Please don’t be mad with me.
    StraightTalking

  1. says:

    Anonymous The Online petition's arguments are not strong enough.

    "What if they don't come because the PICC is not a mixed development with hotel, auditorium, limited car park etc." Why are you so sure?

    "PISA is under-utilized." The PISA is a sports complex, NOT a convention center.

    "No feasibility done". Have you done one to justify your objections?

    "No convincing traffic dispersal system". If we can build the Petronas Twin Towers and reconstruct its area traffic dispersal system efficiently, the same can be done at the PICC.

    "A deficit of MYR40 million". More so you should find new revenue streams to counter such deficits.

    "More so for the private sector to build". The fact that the private sector is keen to come in, is an indication that profit potential is high.


    StraightTalking

  1. says:

    Unknown Dear ahoo

    I believe the main contention is that MPPP funds will be used as there are other pressing needs.

    Secondly, if there is some sort of arrangement to accede land to developers in exchange for the development of PICC, the state stands to lose cos in the long run, the land given away will appreciate in value whereas the PICC could just be a white elephant.

    Thanks for sharing your views which I respect. Take care and have a good day!

    Shalom

  1. says:

    Unknown Dear StraightTalking

    Thanks so much for airing your honest views. It is always good to listen to both sides of the argument. Failure to do so would mean adopting a myopic approach.

    Of course I am not angry but glad to hear you sharing so openly and from a financial perspective too! I do apologize for this late response as I am busy with many chores today.

    You have raised some valid points but I surmise that the economic climate in Penang is quite dismal and the money could be used in other ways.

    However, if the project does take off and attracts $$, very good. Still, I do have some reservations...At the same time, I admit I am not expert in these matters and am only concerned about the way MPPP funds are being used.

    Thanks so much for sharing your views. I always welcome a diversity of opinions as long as there is no below the belt kind of barbs and I know you would never do such a thing.

    Take care and have a lovely day.

    Cheers

  1. says:

    SH Tan Ahoo:
    There are developers wanting to build the PICC in exchange for some benefit in kind (possibly prime land). Just like the Jelutong Expressway. The state govt has to be fully transparent about this and any negotiations must be at arms length. The developer will inflate up his cost and devalue the targeted land price for the exchange. Recall Matrade Centre in KL. If this goes good and well, the other risk will be the viability of the PICC. If the PICC fails, the state will have a piece of white elephant in its hands. However, the developer will be laughing its way to the bank. Hence, a full feasibility study is very much needed.

  1. says:

    SH Tan Straight Talking:
    RM50mil is not a lot of money?? When MPPP will be running a deficit budget of RM40mil in 2010 and there is a pending compensation claim of another RM60mil from Boustead after this new state govt revoked the approval of their project? Obviously you are not aware that the MPSP (the other local council in Penang)was near bankrupt not too long ago after they build a RM80mil HQ building. Simple Finance 101: you don't spend more than what you earn.

    Since you are not a Penangite, you obviously are not aware about the infra problems in that area. You don't build and solve the traffic and parking problem as an afterthought. It is such attitude that is why our cities are all in such a big mess.

    Again, your ignorance on the PISA facility. It was designed to be an international standard sports complex but the pool was built short of standards and is never used for any swimming competition. FYI: the pool is now closed because it is leaking. The indoor stadium was never a stadium and now serves as an expo centre to hold PC Fairs, Matta fairs and all those high end pasar malam type fairs. Outside the PISA, spaces are rented out for a car wash centre, a few furniture shops, a car accesories shop and a food catering business. This will still be there after the PICC is built. This makes this an "international" convention centre??

  1. says:

    SH Tan Dear MW:
    Thank you for posting and bringing up this issue. Aiyah....you gave me too much credit lah. I just want to clariy here that I am not DAP or LGE bashing. I earnestly want to see this state govt succeed by doing the right thing and doing it right. The biggest mistake we can ever make is to think that this govt. and its leaders can do no wrong. The day we keep quiet and stop complaining will be the day we go down the slippery slope of decline.

    cheers

  1. says:

    Unknown Dear StraightTalking

    You have raised some valid points.

    1. That the government should do a feasibility study

    2. More work for traffic dispersal-
    Penang is diff from KL in that space is limited and efforts to ease the jams have been mainly converting roads to a one-way system

    3. The government has to think of new ways to increase revenue. The current Penang govt has done quite a bit in the short time they have 'ruled'the state...

    4. The private sector wants to come in for other reasons - the bonuses....:-)

    5. PISA is actually ok for conventions...

    Thanks so much for your deep and analytical take on this issue even though you are not from Penang!

    God bless your caring heart.

    Take care and have a lovely day!

    Cheers

  1. says:

    Unknown Dear SH

    It is a pleasure...we are anak-anak Penang and this is the least I can do to help. In fact, this post is overdue! I did not post it earlier because others were writing on it so I thought I'd feature it now as the heat seems to be dying off :-). have to keep the ball rolling.

    I agree - this is not about pro- or anti- DAP/LGE or BN.

    This is about the rakyat's interests and we have to ensure watchdogs get the airing and impact that is needed.

    Keep up the great effort. Take care and God bless you and yours!

    Cheers

  1. says:

    ahoo Thank you SH Tan for your clarification. Indeed we cannot allow any govt for that matter to ever thinks that they can do no wrong. In any case you have also brought many issues related to poor investments or rather shoddy workmanship for the many projects by the previous state govt.

    As such why are these people (developer, local councillor in approving the projects, former CM etc.) not taken to task ? They must face the music since the amount involved should have been into the billions. Let Penangite set up a people's court to judge each and every development from now on. The pearl of the orient is just too precious for any costly mistake that will cost he tax payers many generations to pay back.

  1. says:

    Anonymous Dear SH,

    Like I said, I’m merely making a personal observation. Whether you have made the right assessment, or whether I have made the right assessment, we both don’t really know. Objectively any venture, big or small, public or private, should be carefully studied. At the end of the day, even if a venture has the potential to succeed, it will still be up to the decision makers to proceed or not.

    Different people have varying levels of risk tolerance. Some people may have USD100 million idling in their bank account but would not invest USD100 thousand in a business venture that has the potential of bringing in a 100% annual return, while there are some with USD100 million who will borrow USD200 million from the bank to go into a venture with a potential of bringing in a 50% annual return.

    Spending is not the same as an investment. Spending is an outright cost, while an investment has a profit potential. A parent who earns very little but takes a risk to get a big loan from the bank to send his children to university is not spending; it’s an investment for their children’s future although there’s no guarantee that their children will succeed.

    With this, I thank you for sharing your thoughts with me, as I remain,

    Yours sincerely,
    StraightTalking

  1. says:

    Unknown Dear ahoo

    Thanks for being a caring neighbour Perakian! Thanks also for your sound advice and observations. I am blessed to have you as a blog reader who readily shares your input so sincerely. Take care and do continue to be a blessing wherever you are.

    May you and yours be blessed always.

    Shalom

  1. says:

    Unknown Dear StraightTalking

    Wow!Thank you so much for your gracious and elegant response in true gentleman style.

    Thank you also for sharing with us another perspective of the issue. This is the beauty of an open forum. We share our views, listen and respect each other's opinions and strive for the common good in society.

    I appreciate your support, friendship and input - you have been a blessing! Take care and have a lovely evening!

    Cheers

  1. says:

    Anonymous Thank you for allowing me to participate in this forum.

    While we may differ in our opinions, I believe, just like so many others, you and I have the same intentions - to ensure our elected reps and councillors meet our expectations and aspirations and see that taxpayers' money are well spent.

    Cheers
    StraightTalking

Related Posts with Thumbnails
.