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Thursday, October 28, 2010

The cost of Malay Pride


I wrote a short article on the proposed 100 storey tower. It drew more than 40 comments thus far. Some of the comments I didn't put up. One comment that represents the comments that I rejected, said that I wrote this article out of vengeful sentiments.

I am happy to say, that's not true. Vengeance alone cannot explain the consistency with which I criticize the issues that I do battle with. The language of a vengeful person is spiteful. Vengeful writers can't offer reasoned arguments.

The proposed construction of a 100 storey building on account of it being a symbol of Malay prominence is one built on a gravely mistaken notion. I stand by this statement. Because I think the construction of that kind of building borders on ridiculousness. It's built using money PNB makes capitalizing on funds meant and intended for Bumiputeras. It isn't built of government money is true, but still it's made on money earned by PNB on the funds it gets from the government to buy stocks on behalf of Malays. In that process it makes money.

Take the argument a step further. We built the PETRONAS twin towers at a cost of RM 1.3 billion. Ananda made a killing selling the land to PETRONAS at that time. Now, who owns the land on which this WARISAN MERDEKA tower is coming up? Somebody is making a killing there. It can't be cheaper than the KLCC land feet for feet.

Meanwhile, the rental of space at the food court goes at RM 130 per square foot. At the rate, not many Malays can afford to open up a food stalls.

A building that costs almost 5 times that cannot charge less than RM 130 psf for space as food court. We can't even speak yet of retail space for upscale items. The tower may be built by PNB but it shall never be occupied by Bumiputera operators.

The construction is shrouded in mystery too. We ask the government to secure the minutes that deliberated on the construction of the tower. We ask also for the publication of feasibility studies on the project.

I have proposed the construction of 5 units of 20 story tower. Maybe at a ceiling cost of RM 300 million each. Even at RM 500 million, 5 blocks will cost PNB only 2.5 billion. We can still save money there. Plus, we can have a spatial flexibility. We can place the 5 towers at various areas thereby acting as catalysts for further development.

I have also mentioned of rumors from the corporate world that 2 more of such towers are in the offing. One will be proposed by Jho Low and the other by the Naza group. The point here is, the WARISAN MEDEKA tower will serve as benchmark; future 100 storey towers can't be less that RM 5 billion. Imagine the margin the developers make, if the actual cost of any of the towers is less than RM 2 billion.

courtesy of sakmongkol AK47

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