The land lease for MSM Malaysia Holdings Bhd’s sugar refinery in Prai will run for another 15 years, Bernama reported, with the plant staying in operation through the redevelopment of Kampung Manis beside it.
Railway Asset Corporation (RAC) chief executive officer Datuk Azhar Ahmad said the refinery is not part of the housing project and continues to operate on land owned by RAC. The lease, he added, will be formalised between the relevant parties.
“The lease agreement for the refinery will be formalised between the relevant parties, with a tenure set for 15 years,” he told reporters in Butterworth.
Azhar spoke after a signing ceremony and the presentation of Letters of Intent to recipients of the Rumah MutiaraKu housing units, a step that clears the way for site clearance and the relocation of Kampung Manis residents. Penang Chief Minister Chow Kon Yeow officiated at the event, and state housing and environment committee chairman Datuk Seri S. Sundarajoo attended.
The redevelopment covers portions of Lot 286, Lot 65 and Lot 67 in Bandar Prai, a total of 1.61 hectares, and includes the relocation of the residents living there.
The Prai plant is the larger of the two refineries MSM runs in Malaysia, and the site occupies 7ha of RAC land. The company supplies 24,000 tonnes of sugar a month and holds a buffer stock of 32,000 tonnes of raw and refined sugar, FMT noted. Building a replacement refinery would take an estimated RM4 billion in capital investment, while raising capacity at the Johor plant would cost more than RM1 billion.
The lease question has run for more than a year. The Transport Ministry had said it would submit MSM’s application for an extension to the Cabinet, after the Federal Land Development Authority asked the Penang government and RAC to consider another 30 years. Then FELDA chairman Datuk Seri Ahmad Shabery Cheek said the refinery’s strategic location supported the national sugar industry.
Sugar refining has taken place at Prai since 1964. The site sits near the port and railway tracks, a location that supports the company’s logistics for imported raw sugar and finished product.
Under the arrangement described at the ceremony, the refinery keeps its ground while the housing project goes ahead on the parcels marked for redevelopment. The 15-year term is shorter than the 30 years FELDA sought, and the formal agreement has yet to be signed.
