Audit: Lada's property development management performed poorly

 

The Auditor-General's Report 2022 found that property development management under the Langkawi Development Authority (Lada) has not yet achieved satisfactory performance as some private development and investment projects could not be completed within the set period.

According to the report on the activities of federal ministries/departments and federal statutory bodies (Volume 1) presented in the Dewan Rakyat today, the return on investment by the board also did not meet successful targets.

Lada was also found to be weak in the management of land leases, leading to a failure to collect revenue and exposing it to the risk of land loss.

The report stated that a total of RM408.22 million was approved, and RM255.20 million was spent on implementing 20 development projects under the Langkawi Tourism Blueprint, the 11th Malaysia Plan (11MP), and the 12th Malaysia Plan (12MP) to provide tourism infrastructure and public facilities.

A total of 19 development concepts were also prepared in the Lada Land Development Master Plan (MasPlan) for the years 2016 to 2030, aiming to attract private investors to implement development projects on Lada land, making Langkawi a world-class tourist destination.

“As of Dec 31, 2022, only 11 (55 percent) out of 20 development projects have been completed, while for private investment projects, only three (20 percent) have been completed compared to 15 projects.

“The development plan for Lada's vacant land shows that only one out of 19 MasPlan and Investment Guide development concepts has been contracted and is in the implementation phase by the private sector. This has caused tourists and local residents to benefit slower than they were supposed to,” the report stated.

Meanwhile, the audit stated that tourist numbers in Langkawi went up fivefold from 780,176 in 1990 to 3.92 million in 2019.

However, it declined to 1.80 million and 1.09 million in 2020 and 2021 respectively due to the Covid-19 pandemic before rising to 2.58 million in 2022 due to the introduction of the tourism bubble programme.

Several actions recommended

To address the issues and ensure they do not recur in the future, the audit recommends several actions by the Finance Ministry, Lada, or the Public Works Department, including closely monitoring Lada’s development projects to ensure completion within the specified period.

It also recommends that land lease agreement management be carried out regularly and effectively to ensure Lada's and the government's interests in private investor property development activities, thus preventing the risk of revenue and property loss.

“Lada needs to improve the management of investment properties carried out directly by Lada or management and operations to ensure efficient property management and reasonable returns,” the report added.

Lada was established on March 15, 1990, as a statutory body incorporated under the Langkawi Development Authority Act 1990 (Act 423), and is an agency under the Finance Ministry that plays a role in developing and promoting Langkawi as a world-class tourist destination.

- Bernama