*Open letter to the Chief Minister of Penang: PICC and its unansweredquestions*
16 July 2010
Dear Chief Minister of Penang, YAB Lim Guan Eng:
Penang based NGOs and individuals are concerned about the recent media report that the Penang state government is pushing for building of the Penang International Convention Centre (PICC) at the PISA ground in Relau.Many questions and concerns have been raised on the feasibility of building the PICC there, yet these questions remain substantially unanswered.
To reiterate some of the many pressing questions about PICC (pertinent and critical points highlighted):
- What is the actual demand for conventions/exhibitions in Penang in view of the *oversupply of convention and exhibition spaces in Kuala Lumpur and this region? *This needs to be projected over the next five years, ten years and fifteen years.
- *Is there a marketing strategy to promote Penang as a MICE destination internationally* in view of the intense competition and oversupply of convention centres in the region? Or is the Penang state government dependent on the Malaysian Tourism Promotion Board and the Malaysian Convention and Exhibition Bureau (MyCEB) which are both Federal bodies?
- *What is the total projected development cost of PICC upon completion? Is RM50 million still the right figure? How will the project be financed and what is the cost per annum to MPPP over the term of the project’s financing?
- *What is the projected rate of return on capital for MPPP over the initial five years, ten years and fifteen years of PICC’s operations?*This is critical if the project is to be tendered out using a build, manage and transfer (BOT) model and MPPP being the ultimate owner of this project.
16 July 2010
Dear Chief Minister of Penang, YAB Lim Guan Eng:
Penang based NGOs and individuals are concerned about the recent media report that the Penang state government is pushing for building of the Penang International Convention Centre (PICC) at the PISA ground in Relau.Many questions and concerns have been raised on the feasibility of building the PICC there, yet these questions remain substantially unanswered.
To reiterate some of the many pressing questions about PICC (pertinent and critical points highlighted):
- What is the actual demand for conventions/exhibitions in Penang in view of the *oversupply of convention and exhibition spaces in Kuala Lumpur and this region? *This needs to be projected over the next five years, ten years and fifteen years.
- *Is there a marketing strategy to promote Penang as a MICE destination internationally* in view of the intense competition and oversupply of convention centres in the region? Or is the Penang state government dependent on the Malaysian Tourism Promotion Board and the Malaysian Convention and Exhibition Bureau (MyCEB) which are both Federal bodies?
- *What is the total projected development cost of PICC upon completion? Is RM50 million still the right figure? How will the project be financed and what is the cost per annum to MPPP over the term of the project’s financing?
- *What is the projected rate of return on capital for MPPP over the initial five years, ten years and fifteen years of PICC’s operations?*This is critical if the project is to be tendered out using a build, manage and transfer (BOT) model and MPPP being the ultimate owner of this project.
- What are the projected maintenance costs to be incurred by MPPP for keeping PICC up to international standard? Again, projected over at least a fifteen year period, with explanation of assumptions.
- *The PICC will be tendered out on a build, operate and transfer (BOT) model. What are the terms and conditions under this model? Will any state or public assets (eg. state land) be traded in to the private developer in lieu of payment to build the PICC? If yes, what are the details of the exchange and will it be made public?*
- What are the answers to the critics that argue that PICC will be built in a small adjacent plot of land next to PISA? In particular, what are the plans for traffic, including access, dispersal and parking?
- You recently said in a press conference that the private developer will be responsible for traffic dispersal plans. *Why is a developer tasked the responsibility of planning for traffic dispersal and not the MPPP’s Engineering and Planning Divisions or the Public Transport Council? Will the public and the affected neighbouring communities in Bayan Baru, Relau, Sungai Ara and Bukit Jambul be consulted in the traffic and planning studies?*
- Several private developers have indicated their plans to build convention centres eg. in the Light Waterfront and Times Square projects. These will be bigger, more strategically located and better supported by transport links and 5-star hotels. *What are the projections as to what will happen to the PICC when these new convention centres are completed?*
- You were reported to have said that PISA is “fully occupied” which is why there is an urgent need for a PICC. PISA is currently used for exhibitions in only about one in three weekends (for 3 days). For the rest of the time, PISA remains largely underutilized. *Is there data to show the “full occupancy” of PISA? How many days/weekends in a year is it booked for events?*
- What has been the net profit (if any) MPPP has made out of PISA since it began its operations? What are the projected profit figures over the next fifteen years? How much does it cost MPPP annually to maintain PISA and what is the projected maintenance cost over the next fifteen years? How much is planned to be spent on the upgrading of the PISA so that it will be of sufficient standard to complement PICC?
A thorough feasibility study to address all these questions needs to becarried out before a project of this magnitude and risk is to be undertaken. More so when RM50 million of ratepayers money is involved. Has such a study been done and if not, is there one planned? When will it be available in the public domain?
Many Penangites would argue that MPPP should concentrate on its core services of improving and maintaining basic services, transport and accessibility, public spaces, cleanliness, upgrading amenities of local
markets and seeing to low cost housing. How is it justified for MPPP to use its limited resources and a huge part of its budget to build and manage a convention centre? Wouldn’t it be more prudent for other agencies like the Penang Development Corporation (PDC) to undertake this project rather than MPPP?
Dear Mr. Chief Minister. You have been a consistent advocate of the Freedom of Information (FOI) and the Right to Information (RTI) both inside and outside Parliament. You have also actively promoted the state’s Competency, Accountability and Transparency (CAT) policy. We support you wholeheartedly in this, and therefore look forward to the publication of a full and comprehensive feasibility study on the PICC proposal. We believe it is through such public information and discussion that the best way forward can be found, not least for projects that involve millions of ringgit of public money and using limited MPPP resource.
- *The PICC will be tendered out on a build, operate and transfer (BOT) model. What are the terms and conditions under this model? Will any state or public assets (eg. state land) be traded in to the private developer in lieu of payment to build the PICC? If yes, what are the details of the exchange and will it be made public?*
- What are the answers to the critics that argue that PICC will be built in a small adjacent plot of land next to PISA? In particular, what are the plans for traffic, including access, dispersal and parking?
- You recently said in a press conference that the private developer will be responsible for traffic dispersal plans. *Why is a developer tasked the responsibility of planning for traffic dispersal and not the MPPP’s Engineering and Planning Divisions or the Public Transport Council? Will the public and the affected neighbouring communities in Bayan Baru, Relau, Sungai Ara and Bukit Jambul be consulted in the traffic and planning studies?*
- Several private developers have indicated their plans to build convention centres eg. in the Light Waterfront and Times Square projects. These will be bigger, more strategically located and better supported by transport links and 5-star hotels. *What are the projections as to what will happen to the PICC when these new convention centres are completed?*
- You were reported to have said that PISA is “fully occupied” which is why there is an urgent need for a PICC. PISA is currently used for exhibitions in only about one in three weekends (for 3 days). For the rest of the time, PISA remains largely underutilized. *Is there data to show the “full occupancy” of PISA? How many days/weekends in a year is it booked for events?*
- What has been the net profit (if any) MPPP has made out of PISA since it began its operations? What are the projected profit figures over the next fifteen years? How much does it cost MPPP annually to maintain PISA and what is the projected maintenance cost over the next fifteen years? How much is planned to be spent on the upgrading of the PISA so that it will be of sufficient standard to complement PICC?
A thorough feasibility study to address all these questions needs to becarried out before a project of this magnitude and risk is to be undertaken. More so when RM50 million of ratepayers money is involved. Has such a study been done and if not, is there one planned? When will it be available in the public domain?
Many Penangites would argue that MPPP should concentrate on its core services of improving and maintaining basic services, transport and accessibility, public spaces, cleanliness, upgrading amenities of local
markets and seeing to low cost housing. How is it justified for MPPP to use its limited resources and a huge part of its budget to build and manage a convention centre? Wouldn’t it be more prudent for other agencies like the Penang Development Corporation (PDC) to undertake this project rather than MPPP?
Dear Mr. Chief Minister. You have been a consistent advocate of the Freedom of Information (FOI) and the Right to Information (RTI) both inside and outside Parliament. You have also actively promoted the state’s Competency, Accountability and Transparency (CAT) policy. We support you wholeheartedly in this, and therefore look forward to the publication of a full and comprehensive feasibility study on the PICC proposal. We believe it is through such public information and discussion that the best way forward can be found, not least for projects that involve millions of ringgit of public money and using limited MPPP resource.
We eagerly await your response to this letter.
Yours Sincerely,
Tan Seng Hai
(Email: shtan0202@yahoo.com)
for the Coalition for Good Governance, Penang.
*(Note: The Coalition for Good Governance, Penang (CGGP) is a working group of Penang NGOs, community groups and individuals working for good governance in Penang. It was formed recently, to take forward issues such as transparency, accountability, local democracy, participation and social equity. These sorts of issues formed the core discussion at Penang Forum 2.)
*Copies to:
- MPPP President, Ar. Hajah Patahiyah
- All State Exco
- All MPPP councillors
- All Penang Island Aduns
- Media and Penang NGOs
--
Ong Jing Cheng
Suara Rakyat Malaysia (SUARAM)
Penang Branch Coordinator,
63B-01-07, University Heights,
Jalan Sungai Dua,
11700 Penang.
Tel / Fax: +6 04-6582285
Mobile phone: +6 012 7583 779
E-mail: suarampg@gmail.com
http://suarampg.blogspot.com/
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