Nurul Izzah questions KTMB’s Bangsar land sale deal

Nurul Izzah suggests that KTMB jointly develop the land and use it as a source of recurring revenue. — Picture by Choo Choy May

KUALA LUMPUR, Sept 20 — Lembah Pantai MP Nurul Izzah Anwar is crying foul over the purported sale of prime land in Bangsar to Pelaburan Hartanah Berhad (PHB) at a fraction of its value, raising doubts that its heavily discounted price would be used to benefit the public.

“PHB acquired this piece of land with a discount of 80 per cent. Who would gain most from this? Would it be the developers or would this discount trickle down to the rakyat when it is time for them to buy or rent the properties?” she asked in a statement today.

The first-term MP was responding to talk that the 8ha parcel of land belonging to Keretapi Tanah Melayu Berhad (KTMB), located behind the former Unilever headquarters in Jalan Bangsar here, would be sold to PHB for just RM50 million, one-tenth of its market value of close to RM500 million.

PHB is a wholly-owned subsidiary of the government’s Yayasan Amanah Hartanah Bumiputera, a foundation initiated under the premiership of Tun Abdullah Ahmad Badawi in Budget 2006.

The foundation, with a RM2 billion initial capital, comes under the Finance Ministry and is aimed at helping more Bumiputeras to own commercial property in key urban locations.

The Malaysian Insider understands, however, that the offer for the land currently stands at RM200 million after it was raised from RM50 million due to protests from former Transport Minister Datuk Seri Ong Tee Keat and former KTMB chairman Tan Sri Lim Ah Lek.

According to a report in English daily theSun in August, the initial compensation that PHB offered to KTMB was RM50 million but the sum was raised to RM100 million when Ong sought for a more equitable figure.

The report claimed that Ong had continued to raise concerns over the revised figure, pointing out that it was still just one-third of the land value, which was almost RM300 million in 2007.

It added that Ong was finally forced into agreement when the sum was raised to RM200 million, due to pressure from the Prime Minister’s Office and the Finance Ministry.

It is believed, however, that there are currently more efforts today to reduce KTMB’s returns from the sale of the property, which is currently valued at nearly RM500 million.

The newspaper also reportedly spoke to Railway Assets Corporation (RAC) general manager Abdul Kadir Ab Latiff, who revealed that the compensation to KTMB would be more than RM50 million.

Nurul Izzah, however, suggested today that KTMB jointly develop the land and use it as a source of recurring revenue instead of parting with it entirely.

She pointed out that this would help KTMB, which is presently facing losses of over RM100 million, pull its balance sheet out of the red.

“The land would be better off being used as a source of recurring revenue for KTMB, since its original intent was for railway use.

“KTMB could jointly develop the land and have an equitable share of the proceeds. The rental of the property itself would provide a sustainable income for KTMB,” she said.

Nurul Izzah added that this would not only help KTMB solve its own financial woes but it could also help the people by lowering the prices of tickets and providing more efficient services.

She also questioned if the land, now owned by Yayasan Amanah Hartanah Bumiputera, would see its newly-developed properties being sold for Bumiputera ownership at heavily discounted rates.

“Would there be a restriction of ownership transfer to ensure that the properties in this prime land remain in the hands of the Bumiputeras?

“Once again, could state institutions and government land be used to enrich a selected few? I hope that this Bumiputera property policy is not subject to manipulation,” she said.

She listed down numerous possibilities of how the sale could be further manipulated to benefit a few select individuals like government cronies.

“During the property development phase, if it is not a lopsided joint-venture project with the government institution, then friends and families of these selected few will benefit as contractors either way.

“They are then awarded the project in either a direct negotiation or in an opaque tender process, with highly inflated cost, and in turn, subcontract the development out at a very low price, to maximise the main contractor’s profits,” she said.

The highly-inflated development cost awarded to crony development companies, she suggested, could then be used to obtain favourable government-backed loans.

“These crony companies will then sell the completed units to selected Bumiputeras at deep discounts,” she claimed.

Nurul Izzah said the Bumiputera owners would then be allowed to resell the properties at real market price and thus make huge profits from the difference in the value gap.

“And if the project ends up commercially non-viable and unprofitable, then a government bailout will definitely be the order of the day using the Bumiputera card as justification,” she said.

Nurul Izzah pledged she would monitor the development of the sale closely, saying that she hoped she would be proven wrong.

“The people deserve transparency and accountability from the government,” she said.

She added that in the next parliamentary sitting, she would propose a bipartisan caucus to monitor the implementation of Bumiputera policies with the view to producing an annual report for the public on the results and list of beneficiaries.

courtesy of Malaysian Insider