Hitch in plan to redevelop Crag Hotel on Penang Hill

A DEAL for a developer to redevelop one of the state's oldest landmarks on Penang Hill - Crag Hotel - appears to have stalled, due to an alleged exclusion of surrounding properties in the hotel's vicinity.

Business Times has learnt that although Sri Nisuh Sdn Bhd had been initially promised several bungalows adjacent to the historic hotel when the contract was discussed, the bungalows did not find their way into a draft agreement.

"It was promised that three bungalows adjacent to Crag Hotel would be integrated into a memorandum of understanding between the Penang authorities and developer," a source said.

"However, the said properties were excluded by the State Secretary in the draft agreement."

In May, the state government announced that Amanresorts International Pte Ltd would run the famous Crag Hotel on Penang Hill, which was one of the earliest hilltop homes and later turned into a hotel in 1929.

The hotel has been in a neglected and derelict state since 1977 after the International School of Penang (better known as Uplands School) vacated the premises and moved to George Town.

The project was reported to have been awarded in April to Sri Nisuh Sdn Bhd and the company was said to be investing US$12 million (RM38.04 million) to finance the project, which was to be completed within 30 to 36 months.

Chief Minister Lim Guan Eng was quoted at the end of May as saying that redevelopment project would take off after an agreement was inked between the developer and the state government two weeks after he made the announcement.

He said the Aman Group would be awarded a long-term contract tenure by the state to manage the property.

Three months ago, Amanresorts' Press Office media communications manager Anjali Nihalchand said that the firm would be forwarding its proposal to the state's Chief Minister Incorporated on September 5 for final approval.

When contacted yesterday on the status of the approval sought from the state authorities, Anjali said in an email that there were no current updates as "this is still at its very early stage and we have not got anything further to share at the moment".

State-owned Penang Hill Corp director Datuk Lee Kah Choon did not comment on whether approval had been granted yet to the developer of the proposed project. "This is a state project," he said in a SMS reply, "and you may wish to check with the State Secretary's office."

State Secretary Datuk Fariz Darus did not respond to an email enquiry from Business Times.

By Business Times