Critics Snipe In Wake Of Mega Penang Project

Source : The Business Times, November 23, 2007

IT COULD possibly be the largest single urban development in Malaysia. But disquiet is mounting over the mammoth RM20 billion (S$8.6 billion) project in Penang amid fears that it would make the north-eastern island less livable and give rise to environmental, traffic, and property oversupply problems.

The project, called the Penang Global City Centre (PGCC), aims to create a 'city of the future' on the current site of the 260-acre Penang Turf Club. The Turf Club is to be relocated to Batu Kawan on the mainland of Peninsular Malaysia and near the site where a second bridge to the island will be constructed.

The man at the centre of the slowly developing firestorm is Patrick Lim Soon Kit, who emerged from relative obscurity in 2003 to beat such established tycoons as T Ananda Krishnan - who conceived and began the Kuala Lumpur City Centre - to land the plum project.

Through his family-owned Equine Capital, Mr Lim, who has Indian, Chinese, Scottish and German roots, holds 25 per cent of Abad Naluri, a private company that won a tender to redevelop the turf club in 2003. The project was finally launched by Prime Minister Abdullah Ahmad Badawi in August despite having not received full approval from the state authorities.

Now, opposition is gathering steam. Even former premier Mahathir Mohamad singled Mr Lim out for criticism, dubbing him 'Patrick Badawi', an apparent reference to his closeness to the premier's family.

That could be a bit unfair where the Penang project is concerned. Mr Lim had begun looking to expand out of the Kuala Lumpur area and, in 2002, bought an interest in Abad Naluri after the latter had secured the development rights to a 750-acre piece of land in Batu Kawan. Only after that did Abad tender for the Turf Club land. He clinched the deal in 2003, while Dr Mahathir was still the prime minister. Moreover, the Turf Club land was only rezoned for commercial use in 2007, four years after Mr Lim won the tender.

It isn't clear if the dissatisfaction is widespread or confined only to a select group of 10 non-government organisations and a coterie of moneyed islanders whose homes in Jesselton Heights border the Turf Club. An October 'public forum' over the PGCC attracted a scant 350 people, all of whom were opposed to it. But the project's detractors have been given little, or no, coverage by the mainstream media and at least one state official said that even Penang Chief Minister Koh Tsu Koon was 'uneasy' about the development ahead of a snap general election that could be called by March next year.

Mr Lim is unrepentant about the fuss and insisted that he had been open about the project from the start, even holding a symposium on the matter. 'Let's face it, there isn't any one issue that has come up that hasn't been raised earlier in any other major development,' the Penang-born businessman told BT. 'Most big developments will have some sort of spillover.'

His critics have charged that Mr Lim's project is too dense: at its end, it would have 37 high-rise towers. 'What's allowed by the law is 30 units per acre but the area's carrying capacity is easily double that,' said the businessman. 'Certainly, 30 units an acre in places like Mon Kiara and Puchong in Kuala Lumpur is a luxury and, here, we are an island.'

Mr Lim has unveiled the first phase of his project which includes two fantastically shaped, futuristic towers of steel and glass that his critics have mockingly dubbed 'twisted snakes'. Mr Lim looks disbelieving. 'What are people talking about?' he asked. 'They are gorgeous and they cost a lot to design. I have shown everything, I have clearly outlined how the land will be used. Millions have been spent just to come up with the plan.'

He is resolutely bullish about the development. 'It's a rare thing to get an opportunity like this,' said the businessman. 'It will take 20 years to materialise. It will have high-end retail outlets, condos, medical centres, public places, and convention centres.

'Penang is already a brand name,' he continued. 'We think that it (the PGCC) will attract others and regional offices will spring up there. It will stand scrutiny and I am proud to be associated with it. We are going to create at least 20,000 jobs. The PGCC is an economic entity by itself and it will make Penang's economy more robust.'

Ultimately, however, the PGCC's fate will depend on whether Mr Lim can manage its funding. His flagship Equine Capital has a modest balance sheet and although Mr Lim insisted that he will do it with partners amid land sales, the funding of the gigantic project remains an issue.

The Kuala Lumpur City Centre did not founder during the Asian crisis only because it was bankrolled by Petronas, Malaysia's richest corporation, and Mr Krishnan, one of the country's wealthiest tycoons. And, even then, Mr Krishnan sold off his interest in the project to Petronas in 2001.

But Mr Lim remains supremely optimistic. 'The project is so attractive that it will fund itself,' he told BT.

The showpiece

# The project is estimated to cost RM20 billion.
# It will come up on a 260-acre site in Penang.
# It will include 37 highrise towers, including futuristic structures.
# It promises to create 20,000 jobs.