Signing Ceremony Of The Agreement Among PDC, IGP AND TAIYO Resort (KL) BHD
SPEECH BY YAB CM ON THE SIGNING CEREMONY OF THE AGREEMENT AMONG PDC, IGP AND TAIYO RESORT (KL) BHD ON 22 OCTOBER 2010.
YB. DATO' MANSOR BIN OTHMAN
TIMBALAN KETUA MENTERI 1
YG.BHG. DATO' ROSLI JAAFAR, PENGURUS BESAR PDC
YG. BHG. DATO'EIRO SAKAMOTO, TAIYO RESORT (KL) BHD
YANG BERHORMAT-YANG BERHORMAT
WAKIL-WAKIL ISLAND GOLF PROPERTIES BHD
WAKIL-WAKIL TAIYO RESORT ( KL ) BHD
AHLI-AHLI MEDIA MASSA
TUAN-TUAN & PUAN-PUAN
Today marks another milestone for the State of Penang whereby we will be witnessing the Signing Ceremony of the Agreement among three (3) parties i.e. Penang Development Corporation (PDC), Island Golf Properties Bhd (IGP) and Taiyo Resort (KL) Bhd (Taiyo) for the outsourcing of the management and operation of Bukit Jambul Country Club (BJCC) to Taiyo for a contract period of 20 years. BJCC, featuring an 18-hole golf course, is currently being operated by IGP, a wholly owned subsidiary of PDC.
With the objective of making BJCC as the premier club in the State of Penang so as to attract golf tourism to the State, PDC and IGP have decided to outsource the operation and management of the Club. It is also envisaged that this outsourcing exercise will also improve and upgrade BJCC 18-hole golf course to a standard on par with other international golf courses. Initially the previous Chair of IGP wanted to grant the outsourcing agreement to a RM2 company. The decision of the previous Chairman of IGP who managed to convince the IGP board was considered inappropriate and contrary to the general principles of good corporate governance. As it was wrong to award a multi-million ringgit outsourcing contract to a RM2 company, a fresh retender was necessary.
In line with this, an open tender was called on 3 May 2009 for this purpose. Upon the closing of the tender on 1 August 2009, a total of 5 tenderers were officially received. After careful analysis and review of the tenders, it was decided that the tender be awarded to Taiyo, a Japanese company which is wholly owned by Taiyo Resort Development (M) Sdn Bhd. Taiyo main business activity is the development and operation of golf courses. The company has a paid-up capital of RM5 million and is currently the owner and operator of Kajang Hill Golf Club in Selangor.
Taiyo has given a financial commitment for a guaranteed rental of RM29 million over the next 20 years as well as capital investment cost of RM51 million for the improvement, upgrading and maintenance of BJCC golf course, clubhouse and facilities over the same period. In other words, the outsourcing contract was valued at RM80 million over 20 years. Imagine how the public would have criticized the state government if this RM80 million outsourcing contract had been approved to a RM2 company violating our CAT governance of competency, accountability and transparency. This outsourcing exercise will also involve the replacement of existing buggies with new ones every three (3) years. The company is also required to organize at least one (1) international tournament, preferably the Malaysian Open once every three (3) years upon the completion of the upgrading works of the golf course. Apart from this, all existing employees of IGP shall be retained and retrained by Taiyo in an effort to improve bthe services of the Club.
The signing of the Agreement today will witness a new deal among PDC, IGP and Taiyo whereby it is expected that more Japanese golfers will be attracted to BJCC, thus enabling IGP to generate strong revenue and thereby increasing its profitability in the future years.
This outsourcing agreement is not only a reaffirmation of principles of CAT governance that ensures the best price or value for money with the best quality or standards. It is also a confirmation that we can unlock the value of assets to maximize returns and achieve world-class standards with an experienced international operator.
For the state government, today is a celebration of open and competitive tender that can cut down waste and corruption, save cost and also brand Penang as synonymous with quality, safety, reliability, sustainability and integrity.