Malay contractors, developers in dire straits

Some 30 Malay developers and contractors are at risk of collapse due to their involvement in the PR1MA housing project, according to the Malaysian Malay Chamber of Commerce (DPMM).

DPMM youth chairperson Mohd Ali Amin Abd Latif (photo above, centre) said more than 30 percent of Malay developers involved with the PR1MA project had invested hundreds of millions of ringgit in initial capital outlay.

The initial capital was spent to purchase land and initiate projects under the PR1MA housing scheme, which was created during the BN administration under former prime minister Najib Abdul Razak, but is now facing an uncertain future.

Initially, Housing and Local Government Minister Zuraida Kamaruddin had in May 2018 discussed the possibility of synchronising PR1MA projects with her own plans for affordable housing.

But she was quoted in February 2019 as having said that a due diligence report would be completed by June 2019 to see if PR1MA projects should be continued or not.

"More than 30 Malay developers and contractors are involved with the PR1MA project, and they have informed us of their concerns because after a year, PR1MA is still in dire need," Mohd Ali said at a press conference in Kuala Lumpur today.

"Of these, 15 developers or contractors have come to meet us. Many face financial problems and some have already faced action from the banks.

"Every developer has already spent about RM10 to RM15 million, so we want to get a PR1MA clarification on this issue," he added.

Besides building affordable housing for middle-income earners, PR1MA was also established to help Malay contractors become developers.

Real Estate and Housing Developers Association (Rehda) former president, Eddy Chen, was appointed chairperson of PR1MA Corporation after Pakatan Harapan took control of Putrajaya.

In view of this development, Mohd Ali said PR1MA should resolve urgent matters and clarify the position of the project.

If PR1MA intends to stop the housing project, appropriate compensation should be given to the developers who have issued the capital, he said.

"This current situation affects all parties - developers, contractors, suppliers and other related parties.

"Not only that, if the cash flows of the developers are problematic, their reputation will also be affected, and thus making it difficult for other projects to take off,” he said. - Mkini