EPISODE 20: The USD10 million kickback

AASB was told that the matter can be resolved if they agreed to donate USD10 million to PKR as ‘election funds’. AASB was also asked to submit a ‘statement of claim’ for RM70 million for the construction cost of the market in the first phase, which the state will approve. The RM70 million will also include 'compensation' to AASB for the loss it will incur for forgoing the second and third phases.

THE CORRIDORS OF POWER

Raja Petra Kamarudin

This matter involves a privatisation project between the Selangor state government (Selangor) and a company called Azam dan Azan Sdn Bhd (AASB). The facts of the case are as follows:

AASB entered into an agreement with Selangor to relocate the old Selayang market plus a workshop and a multipurpose office owned by Majlis Perbandaran Selayang (MPS). The Agreement between Selangor and AASB was signed on 29th April 1997 with Supplementary Agreements signed on 18th August 1998, 23rd August 1999 and 7th March 2001.

This project is to be implemented in three phases. The first phase comprises of a block of shops, apartments and a modern market with a 30-year concession for the developer (AASB). The second phase has been earmarked for a 10-storey apartment block, while the third phase is a development of 23 units of shop-lots adjacent to the said land. The total land area is 9.8 acres.

The first phase was completed in 2009 with a condition that the road and the widening of the drainage system will be done in the second phase. This area is flood-prone but the drainage system can only be widened in the second phase of development, as the work will involve the relocation of the hawkers to the new site. Hence the removal of the hawkers from that location to the completed first phase is crucial to be able to proceed with the next phase of the development.

As per the Agreement, the Unit Perancang Ekonomi Negeri (UPEN), with the coordination of MPS, would relocate the hawkers currently occupying the land to the newly constructed market so that the second phase of development can proceed. Once that is done, AASB has three months to pay the premium for the second and third phases of the development. In fact, AASB attempted to pay the premium even before the eviction of the illegal hawkers but it was rejected by the state.

The hawkers refused to move based on the argument that the rental is expensive. The rental AASB is charging is RM200 to RM360 per month depending on the floor area. In fact, this matter had already been agreed by the Hawkers’ Association during their negotiation with MPS and UPEN.

Various alternative options were then proposed to solve the impasse. However, Selangor rejected all of them. The construction cost for the market was RM18 million. Based on a 30-year concession, AASB can recoup around RM9 million at the most. This loss was supposed to have been absorbed in the next phases of development.

Since 2009, nothing much has happened and it remained a deadlock. AASB’s lawyers made numerous attempts to resolve this matter with the state but with little success. It appeared like the state was trying to avoid solving the issue.

Finally, AASB had no choice but to try to seek a ‘political solution’ to their problems. Through one of the PKR Sarawak leaders, Baru Bian, AASB was introduced to the PKR Treasurer and Member of Parliament for Selayang, William Leong. After a few meetings, it was suggested that the matter be brought to the attention of the Menteri Besar, Khalid Ibrahim.

Baru Bian then introduced AASB to Tian Chua, the Member of Parliament for Batu, who is said to have the ears of the Menteri Besar. Tian Chua then took over the handling of this matter from William Leong.

AASB was told that the matter can be resolved if they agreed to donate USD10 million to PKR as ‘election funds’. AASB was also asked to submit a ‘statement of claim’ for RM70 million for the construction cost of the market in the first phase, which the state will approve. The RM70 million will also include 'compensation' to AASB for the loss it will incur for forgoing the second and third phases.

AASB was asked to not pursue the matter of the second and third phases of development any longer but to be contented with the RM70 million ‘compensation’ they will receive -- less, of course, the USD10 million ‘donation’ -- because the land is going to be given to a PKR leader to take over.

Hence, accept the RM70 million ‘compensation’, pay the USD10 million ‘donation’, forgo phases two and three so that the PKR leader can take over, or else receive nothing and make a loss.

Once AASB receives the RM70 million from the state, they are to pay the USD10 million donation as stipulated. AASB's response was: go to hell! They are prepared to sit it out and wait until after the next general election when Pakatan Rakyat will be kicked out of Selangor and the state falls back to Umno.

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