GEORGE TOWN, Aug 1 — The RM10.3 million contract to restore and upgrade two dilapidated godowns along Victoria Street here has been terminated as the state government lost the land in a court case, Chow Kon Yeow revealed today.
The Penang chief minister said the project manager, Penang Development Corporation (PDC), and the project contractor have mutually agreed to terminate the contract.
“We have to stop work on the project after we lost the court case and the land was reverted back to the former landowner,” he explained during a press conference today.
He said that by then, the contractor already demolished a section of the premises and installed a temporary roof at a cost of around RM1 million.
Chow added that the state already paid for the work done so far.
The state government had acquired the two godowns through the Land Acquisition Act with the purpose of setting up a heritage learning centre and the contractor started restoring the building in March 2017.
Chow said the state paid a sum to the landowner to acquire the premises but declined to specify the exact compensation.
The landowner went to the courts to challenge the state’s authority to acquire the premises for education purposes on the grounds that education was under federal matter.
“The court decided that the state does not have the authority to take over the land for education purposes so we had to adhere to the court decision,” he said, adding that ownership of the plot has returned to the previous owner.
Chow said the state is appealing the decision and the land owner’s lawyers have approached with offers of a settlement.
He said the state will negotiate for an amicable solution with the land owner but will continue with the appeal while this is ongoing.
The two godowns are Category II heritage buildings located within the Unesco World Heritage Site core zone.
Back in the 19th century, the godowns were facing the waterfront and were used as accommodations for new immigrants from China who were on transition to the tin mines in South Thailand.
The buildings were subsequently used as storage and distribution centres for goods in the late 1900s.
The state government had in October 2017 announced its plans to convert the buildings into a Multimedia Super Corridor-status space.
The then Penang chief minister Lim Guan Eng said the buildings were earmarked to be an extension of the Centre for Creative Animation Triggers (CAT).
The plans in project included increasing the floor space at the godowns from 847.11 square metres to 1,223.8 square metres.
The project was awarded via open tender to Image Facade Construction Sdn Bhd.