BE CAREFUL OF KIDNEYS KARMA, BUNG: EXPOSED - FELCRA'S BIG WHITE ELEPHANT

Developer WZR Group of Companies or WZR Property Sdn Bhd, is alleged to have gotten away with no penalty when they failed to deliver their part of the development contract with Felcra Berhad.

The development company was reported to have allegedly turned the deal around suggesting that Felcra Berhad (Federal Land Consolidation and Rehabilitation Authority) picked it up where the project was left off, reported Malaysiakini.

“In early 2015, the Federal Land Consolidation and Rehabilitation Authority (Felcra Berhad) was set to have a new headquarters without having to pay a single sen.

“All it had to do was allow developer WZR Group to fund and build a mixed development project, which included a 35-story office tower, a 43-storey residential tower, and a retail mall on its prime land in Jalan Sultan Yahya Petra (Jalan Semarak) in Kuala Lumpur.

“"Felcra's application to carry out a mixed development project costing RM550 million... and to be developed by WZR; is approved as Felcra does not have to issue any funds to bear the costs of the project," read a letter from Minister of Finance Incorporated on Feb 18, 2015, sighted by Malaysiakini.

“According to those familiar with the matter, Felcra would get 12 floors in the office tower as well as a banquet hall, while WZR would recoup its investment by leasing the rest of the office space and from the sale of the residential units,” stated Malaysiakini.

Universally in a development project, a development company that fails to deliver would have to pay a bond penalty, however in WZR Group’s case, it looks like as though the company had managed to manipulate Felcra into a different deal instead.

Responding to a report questioning the legitimacy of the “new deal”, PKR’s chairman of the Investment and Trade Bureau Wong Chen expresses his comments on how the project was even considered in the first place given the situation of the current property downturn.

“My biggest concern is the current property downturn. Why has Felcra decided to proceed with the development when the project is clearly not feasible for the WZR Group?

“With the downturn in the property industry, the best course of action would be to shelve the project, wait for the market to recover in order for the project to be viable again.

“Why the rush? With all these hasty decisions, Felcra would just end up with another white elephant project. The judgement of the board of directors are very questionable,” says Wong.

The Kelana Jaya MP also highlighted three issues that needs to be addressed in this dubious deal.

“Was there a performance bond issued by the WZR Group to complete the deal? If WZR walks out of the original deal, they must compensate Felcra for loss of opportunity. They have wasted one year of Felcra’s time and now they can just walk away?

“Since the property market is dampen and will get worse in the next few years, this is no longer a commercially viable project. How is Felcra supposed to get return in revenues?

“And how is Felcra going to fund this project? Are they going to fund it via their internal finances and do they have money to do so? If they are going to borrow, why can’t WZR borrow instead?” Wong questions.

Critics have also raised questions as to who is behind WZR Groups and why has the Felcra chairperson Datuk Bung Mokhtar Radin signed off the “lopsided” deal and is seemingly looking as though he does not mind even when the deal has now gone sour.

- http://www.theheatmalaysia.com.