MEDIA STATEMENT BY NURUL IZZAH ANWAR

ON THE SALE OF 8ha PARCEL OF RAILWAY LAND IN JALAN BANGSAR,

KUALA LUMPUR

Taken for a Ride

This RM400 mil 8ha site is located behind the former Unilever HQ along Jalan Bangsar is reportedly sold to Pelaburan Hartanah Bumiputera Berhad, now known as Pelaburan Hartanah Berhad (PHB), for a knocked down sum of RM50 mil.

Pelaburan Hartanah Berhad is the subsidiary of Yayasan Amanah Hartanah Bumiputera, a foundation initiated in 2006 with RM2 billion capital, to raise bumiputra property ownership.

This land, which could presumably be worth as much as RM500 per sq ft., hopefully when a full announcement is made would be better off being used as a source of recurring revenue for KTMB, since its original intent was for railway use.

KTMB could jointly develop the land and have an equitable share of the proceeds. The rental of the property itself would provide a sustainable income for KTMB. This is how the MRT services in Hong Kong and Singapore as well as the London Underground sustain their railway services for public benefit.

In return, this could not only turn KTMB’s balance sheets out from the red, but also subsidize the efficient services.

Since this land is now owned by the Yayasan Amanah Hartanah Bumiputera, can we assume that the properties developed would be sold for bumiputera ownership at a deep discounted price? PHB acquired this piece of land with a discount of 80%. Who would gain most from this? Would it be the developers or would this 80% discount trickle down to the rakyat when it’s time for them to either buy/rent the properties? Would there be a restriction of ownership transfer to ensure that the properties in this prime land remain in the hands of the bumiputeras?

Once again, could state institutions and government lands be used to enrich a selected few? I hope that this bumiputera property policy is not subject to manipulation.

Could the Bumiputera Property Policy, in light of the publicly available information of the PKFZ modus operandi, be manipulated as follows?

1) The selected few will use either a private company (as in PKFZ) or a bona fide official government policy institution, to justify buying privately or government owned land at a deep discount below market value. The difference is known as the ‘value gap’.

2) During the property development phase, if it is not a lop sided joint-venture project with the government institution, then friends and families of these selected few will benefit as contractors either way. They are then awarded the project in either a direct negotiation or in an opaque tender process, with highly inflated cost, and in turn subcontract the development out at a very low price, to maximize the main contractor’s profits.

3) The highly inflated development cost awarded to crony development companies may be used to obtain favorable government backed loans or as we learned with supposedly government guarantees for private bond issues (as in PKFZ) to finance the project.

4) These crony companies will then sell the completed units to selected bumiputeras at deep discounts. Despite the discounts, the prices of these properties are unaffordable for the majority of the rakyat.

5) The bumiputera owners will then be allowed to resell these properties at real market price in the secondary market (even forced on to government agencies to buy it for use as headquarters or branch offices) with huge profits from the difference in value gap plus property appreciation.

6) The profits will flow into private hands rather than to the bumiputera institutions. This is like robbing Ahmad to pay Ali (baba).

7) If the project ends as commercially non-viable and unprofitable, then a government bail-out (as in MAS) will definitely be the order of the day using the bumiputera card as justification. This is a form of a manipulated profit transfer mechanism or also known as economic ‘leakage’. Just like the transaction of the land belonging to KTMB in Tanjung Pagar, this current transaction by the present Government raises a lot of unanswered questions. It is a form of indirect subsidy or ‘tax’ for the benefit of the few which is quite unjust especially during a time when the subsidies for the rakyat are withdrawn. I hope I am proven wrong. I shall monitor this development in my constituency closely as the people deserve transparency and accountability from the government. Therefore in the next sitting, I am going to propose a bipartisan caucus in parliament to monitor the implementation of bumiputera policies with the view of producing an annual report for the public on the results and list of beneficiaries.

I hope that the people will join me in continuing to rightly demand the government for greater transparency and accountability. rakyat by lowering the prices of tickets and providing more.

 Nurul Izzah Anwar

land belonging to Keretapi Tanah Melayu Berhad (KTMB).