Gov't plans to buy out Kg Baru, may need RM10 billion

The government is looking to buy out all the landowners in Kampung Baru in an effort to finally redevelop the Malay enclave in Kuala Lumpur.

As Federal Territories Minister Khalid Samad told a press conference in Putrajaya today, the buyout would ensure more organised and thorough redevelopment in the area.

It would also avoid only pockets of Kampung Baru being redeveloped, Khalid added, as would be the case if developers worked with landowners directly.

Additionally, he said the move will ensure that Kampung Baru retains its status as Malay reserve land, instead of developers opening up their potentially unsold properties to non-Malays.

Up to RM10 billion

But first, Khalid noted, Putrajaya must resolve the issue of funding.

"If everyone wants cash, and no one wants apartments (in exchange for their land), which is the worst case scenario, then it may need between RM6-10 billion," he said.

According to Khalid, the government is also exploring the option of giving landowners a mix of cash and in-kind payouts, such as in the form of apartments.

As to how funds would be raised, the minister said that one possibility is for the Kuala Lumpur City Hall to issue municipality bonds or sukuk.

Another option would be to establish a special purpose vehicle, which would take out a loan guaranteed by DBKL to finance the buyout.

All this, however, would hinge on negotiations with landowners and the kind of repayment they would want for their land, which sits in the heart of downtown Kuala Lumpur.

New masterplan

Khalid said the new "masterplan" for Kampung Baru would take into account past redevelopment plans.

He stressed the importance of redevelopment for the Malay enclave, saying that it should not remain a slum in the capital city.

"It is quite embarrassing to show foreign guests 'this is a Malay area' (in the heart of the city) that is like a squatters village, even though the land is very valuable, and the owners should be considered millionaires," he said.

Of the landowners met thus far, Khalid said, 80 percent are in agreement with the Putrajaya's plan.

The minister added that he is confident of getting all landowners on board if the government can work out a good deal.

He also noted that redeveloping Kampung Baru within the current term of government will serve as his own key performance indicator. - Mkini