Bstead ... Aug10

After more than a year of negotiations, a breakthrough appears to have been achieved in the deadlock of talks between the Penang state government and Boustead Holdings Bhd over a dispute involving the Royale Bintang Hotel project.

It is learned that Boustead has also backed down from its initial RM60 million compensation claim from the Penang Island Municipal Council (MPPP) for having to scale down its Royale Bintang Hotel project from 12 to five floors.

It is learnt that a compromise has been reached and an announcement on the agreement reached between both parties will be announced within two weeks. The settlement could include a drastically reduced and “reasonable” compensation by the state government to Boustead for the scaled-down project.

The state government had directed the developer to scale down the project to meet Unesco’s 18m or five-storey height requirement in the core heritage zone of Weld Quay following George Town’s inscription as a Unesco World Heritage site on July 7, 2008.

It is learnt that the compensation, which was sought by Boustead and agreed upon by the state government, include the cost relating to the land.

There were no problems with the other three projects — Asian Global Business Sdn Bhd’s (AGB) Rice Miller Weld Quay Development in the core zone, E & O Bhd’s annexe building of the E & O Hotel in the buffer zone, and Low Yat group’s project in Jalan Sultan Ahmad Shah.

All four projects were approved before Penang was declared a Unesco World Heritage site on July 7, 2008. The 18m/five-storey height restriction contained in the dossier submitted to Unesco was put in place once the listing was made official.

Boustead’s initial plan was for a RM140 million development of a four-star hotel with 300 rooms. The developer had been given approval to build up to 51m before the Unesco listing.end of listed peers’ of 9.5 times to 11.5 times.