THE Malaysian government’s move to build a RM628 million (S$258 million) convention centre in Kuala Lumpur under a privatisation or build-for-land deal has raised concerns that such projects will be negotiated deals, despite a commitment to more open tenders.
Last week’s signing of a privatisation agreement under which the Naza Group was given the job of constructing the one million square foot Matrade Centre in exchange for 65 acres of state land has raised the hackles of opposition lawmakers, who believe that several other lucrative government projects could be handled the same way.
Given the estimated RM15 billion gross value of the project – comprising housing, commercial buildings, a shopping mall and a hotel surrounding the Matrade Centre to be built over 10 years – the opposition Pakatan Rakyat is asking whether a sweetheart deal was given to Naza Group unit Naza-TTDI.
Matrade is the trade ministry’s promotion agency. And its new convention centre is to be built on a half-hectare site in the Jalan Duta area, a stone’s throw from the popular Mont Kiara suburb. Realtors reckon that the site is worth RM225 per square foot.
The lack of an open tender has rankled, given that several other valuable state sites are to be privatised and developed under the 2008 Budget to boost government revenue.
They include Rubber Research Institute land in Sungai Buloh, 60 ha of land along Jalan Cochrane and up to 12 ha along Jalan Ampang Hilir in Kuala Lumpur. Prime Minister Najib Razak estimated that these sites could raise ’several billions’ – and pledged that they would be open to competitive bids by government-linked and private companies.
Quoting unnamed sources, a local newspaper has reported that Malaysian Resources Corporation and the state’s Employees Provident Fund have been approved to jointly develop some of the sites, though there has been no official word so far.
Dubbed by local media as the ‘AP King’ – owing to the number of vehicle import permits or APs – the late Naza Group founder Nasimuddin Amin is estimated to have received thousands of APs over the years from the trade ministry. If re-sold, each AP can fetch up to RM40,000.
Petaling Jaya Utara Member of Parliament Tony Pua said yesterday that the Naza group would have made hundreds of millions from the AP scheme, which under the latest review of the National Automotive Policy was extended to 2015 for open APs and 2020 for franchise APs.
Mr Pua called on Mr Najib to keep to his promise of more open tenders for government projects – a call that is sure to resonate with the public already sickened by a massive waste of state funds estimated at RM28 billion a year due to weak procurement procedures and non-competitive tenders.
Based on comments online, most Malaysians are unconvinced of the need for a new exhibition and convention centre, even if designed especially for large space exhibitors. ‘Another white elephant in the making? Did anyone in the government do a proper study of the exhibition business?’ one said.
Mr Pua’s parliamentary colleague, Liew Chin Tong, has pointed out that the RM600 million Putrajaya International Convention Centre only earns RM2.5-3 million a year and it will take 300 years to recoup the costs of building it, ‘assuming zero maintenance costs’.
Source: Business Times, 24 Nov 2009