‘Property price hike in Sabah because of TM’

Sabah Developers say Telecom Malaysia is overcharging for providing basic infrastructure and this is affecting property prices.

PENAMPANG: Trouble is brewing between the Sabah Housing and Real Estate Developers Association (Shareda) and Telekom Malaysia Bhd (TM) over charges being imposed for providing basic infrastructure.

Developers claim that the telecommunications giant is passing off cost-sharing charges to all developers and buyers in Sabah and this has increased property prices in the state.

The association wants the federal and state cabinets to step in and determine a fair breakdown of the responsibilities.

Shareda deputy president Chew Sang Hai highlighted the matter during a specially convened press conference at its office here on Friday.

He explained that prior to 2007, in order to subscribe for a telephone fixed line facility, developers were requested by TM to provide basic infrastructure such as public utility manholes following which cables and other equipment would be provided by TM.

However this arrangement changed in 2007 when TM requested developers to share the cost for its installations before the supply of telecommunication cables.

“Their proposal was rejected by developers in West Malaysia and Sarawak and until today the status quo remains unchanged in both West Malaysia and Sarawak,” he said.

In Sabah however, a dialogue session was held between TM and Shareda on April 20, 2009 and  TM agreed to waive the cost-sharing if developers could provide a database of owners to subscribe for fixed line services in the initial period of three years.

This arrangement included 50% confirmed applicants with minimum of one fixed line and one broadband connection per unit for urban residential projects and three fixed lines and one broadband connection per unit for 70% of commercial projects.

The arrangement however is now discretionary and cost-sharing is the order of the day.

Shareda feels that forcing developers to be the marketeers for TM is preposterous and a gross injustice to the people of Sabah.

Chew said his association did not see how TM could take such a stand in Sabah and at the same time dispense with the policy in the peninsula.

“The question prevails as to whether the action taken by TM in Sabah is justifiable for the people of Sabah and developers to bear higher cost than our West Malaysia counterparts,” he asked.

TM, he said, had inevitably contributed to higher property cost in Sabah since the developers had no option but to pass the additional cost incurred to the property buyers.

The cost-sharing charges usually costs between RM1,000 to RM3,000 more per unit of property depending on location.

“TM charge us (and) we have no choice but to charge the house buyers. No one else in Malaysia are paying more (for the property),” he said.

He claimed that TM is making the developers in Sabah a tool to make faster and bigger profits by using the excuse of share capital contribution.

“Name us any business that you do not need any capital investment? The so called capital contribution is actually the capital investments ought to be invested and paid for by TM in order to provide the basic infrastructure before TM can receive payment charges from the end users.

“Such kind of capital investments can be recovered through a nominal factor built on to the billing to their end users such as registration fees, deposit payment or connection charges,” he said.

Since recently passing a resolution to name and shame TM, Shareda has also urged all real estate developers in the state not to pay the cost-sharing (Capital Contribution) bills issued by TM.

“It’s rather ridiculous … we have been very accommodating all this while. Enough is enough,” he said.

On legal implication of such a move, Chew said Shareda had prior to this conducted its own study on such concerns and found that there are no existing law which allows TM to impose such charges.

He further noted that unlike in the past house buyers  or end users could now source for alternative telco providers for telecommunication services.

He claimed that there was evidence of Shareda members being charged by TM more than RM5.3 million for a total of 27 projects.

Shareda has also appealed to State Ministry of Local Government and Housing to exclude TM representatives from the development council as well as issue Occupational Certificates as soon as developers had constructed the basic utility infrastructure for TM.