Petaling Jaya Utara MP Tony Pua has demanded an explanation from the government over what he sees as a huge discount for the sale of a parcel of land to 1Malaysia Development Bhd.
At the price the 495 acres of land in Sungai Besi was sold, he said, the government has effectively gave an astounding RM3 billion in subsidy to the company.
"At RM240 per square foot, the Sungai Besi land should be already worth a whopping RM5.2 billion. Despite its high potential valuation, the government has chosen to transfer the land to 1MDB for only RM1.6 billion or RM3.6 billion less," Pua (left in photo) said in the Parliament lobby today.
“We call upon the government to disclose in full the terms of the agreement on all land sales to 1MDB and explain why 1MDB has been given such preferential treatment.”
The site sold in June 2011 is where the RMAF Sungai Besi airfield is located and will be the location of the Kuala Lumpur International Financial District.
According to Pua, the RM240 per square foot estimation is based on a sale of a tract of land by the Penang government.
Pua said that an open tender sale for 101 acres of land, of which 65 percent needs to be reclaimed, had netted a sale price of RM1.6 billion or RM240 per square foot.
“There can be no doubt that the land in Sg Besi, surrounded by developed infrastructure, will be worth well in excess of the market price of land in Penang, given its unbeatable location in Kuala Lumpur,” he said.
Further, he said, other pieces of land in Kuala Lumpur are valued “in excess of RM500 per square foot”.
He added that giving preferential treatment to an company without an open tender also “crowds out investment from the private sector”, while big corporate discounts only hurt the government's ability to expand its welfare programmes.
‘Why has cost of KLIA2 doubled?’
On a separate matter, Pua asked Transport Minister Kong Cho Ha to explain how the cost of construction of the KLIA2 is expected to more than double, going beyond the RM4 billion mark.
If the minister does not explain to Parliament, Pua - as a member of the Public Accounts Committee (PAC) - will “formally request the PAC and auditor- general's office investigate the project” to find the root cause of the overrun.
The ministry should also explain why the deadline for project completion has been shifted from June 2011 to April 2012, as announced by Malaysia Airports Bhd managing director Bashir Ahmad.
Cost overruns, he said, will need to recouped through higher airport taxes and charges, “ultimately (hurting) our tourism industry”.
Or else, he said, the government will have to absorb the losses through “unnecessary subsidies...via soft loans, grants or drastically reduced financial returns from the project owner, MAB”.
“It is worthwhile to note that in early 2009, Sime Darby in partnership with AirAsia had proposed to build a new KLIA low-cost airport in Labu at a cost of only RM1.6 billion without costing the government a single sen.
“However, the plan was scrapped by the government partly because Malaysia Airports Bhd had promised to build a new terminal at KLIA for less than RM2 billion by June 2011.”
At the price the 495 acres of land in Sungai Besi was sold, he said, the government has effectively gave an astounding RM3 billion in subsidy to the company.
"At RM240 per square foot, the Sungai Besi land should be already worth a whopping RM5.2 billion. Despite its high potential valuation, the government has chosen to transfer the land to 1MDB for only RM1.6 billion or RM3.6 billion less," Pua (left in photo) said in the Parliament lobby today.“We call upon the government to disclose in full the terms of the agreement on all land sales to 1MDB and explain why 1MDB has been given such preferential treatment.”
The site sold in June 2011 is where the RMAF Sungai Besi airfield is located and will be the location of the Kuala Lumpur International Financial District.
According to Pua, the RM240 per square foot estimation is based on a sale of a tract of land by the Penang government.
Pua said that an open tender sale for 101 acres of land, of which 65 percent needs to be reclaimed, had netted a sale price of RM1.6 billion or RM240 per square foot.
“There can be no doubt that the land in Sg Besi, surrounded by developed infrastructure, will be worth well in excess of the market price of land in Penang, given its unbeatable location in Kuala Lumpur,” he said.
Further, he said, other pieces of land in Kuala Lumpur are valued “in excess of RM500 per square foot”.
He added that giving preferential treatment to an company without an open tender also “crowds out investment from the private sector”, while big corporate discounts only hurt the government's ability to expand its welfare programmes.
‘Why has cost of KLIA2 doubled?’
On a separate matter, Pua asked Transport Minister Kong Cho Ha to explain how the cost of construction of the KLIA2 is expected to more than double, going beyond the RM4 billion mark.
If the minister does not explain to Parliament, Pua - as a member of the Public Accounts Committee (PAC) - will “formally request the PAC and auditor- general's office investigate the project” to find the root cause of the overrun.
The ministry should also explain why the deadline for project completion has been shifted from June 2011 to April 2012, as announced by Malaysia Airports Bhd managing director Bashir Ahmad.Cost overruns, he said, will need to recouped through higher airport taxes and charges, “ultimately (hurting) our tourism industry”.
Or else, he said, the government will have to absorb the losses through “unnecessary subsidies...via soft loans, grants or drastically reduced financial returns from the project owner, MAB”.
“It is worthwhile to note that in early 2009, Sime Darby in partnership with AirAsia had proposed to build a new KLIA low-cost airport in Labu at a cost of only RM1.6 billion without costing the government a single sen.
“However, the plan was scrapped by the government partly because Malaysia Airports Bhd had promised to build a new terminal at KLIA for less than RM2 billion by June 2011.”
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