Friday, November 24, 2017

Ku Nan demonstrates “Malaysia Boleh” spirit by declaring Bandar Malaysia plans ‘approved’ even before master developer selection, to circumvent Cabinet luxury development ban.

Federal Territories Minister Datuk Seri Tengku Adnan Mansor has confirmed yesterday that the 1MDB-linked Bandar Malaysia and TRX would not be affected by the freeze on property approvals for condominiums, serviced apartments, offices and shopping complexes price above RM1 million.

He was responding to a question by PJ Selatan MP, Hee Loy Sian, when he said that the two projects had already received approval ‘in principle’ and could not be stopped from developing.

It is quite clear here that the government’s only principle here is to protect the interests of 1MDB. TRX and Bandar Malaysia are two of 1MDB’s largest assets that need to be developed if the fund wants any chance of staying afloat. They are also two of the biggest slated development projects in KL.

The amazing thing is, the Ministry of Finance has not even declared a winner to the tender for the master developer of Bandar Malaysia. The latest response from the Ministry of Finance last week is that there are 8 companies which have “expressed interest” in developing the massive 486-acres project. DBKL Mayor Tan Sri Mohd Amin had himself told Malaysiakini that they had yet to receive an application from Bandar Malaysia.

If exemptions from the freeze can be given just because of approvals had been given ‘in principle’, what worth is the freeze at all? Does this mean that other ‘planned’ high-end developments, which have yet to submit their planning applications, will also get exemptions?

These exemptions raise two worrying questions about the government’s planned freeze on high-end developments.

Firstly, it would mean that the effectiveness of the supposed ban on high-end project would be severely diluted.  Bank Negara’s report showed just how grave the supply and demand imbalance was, projecting 1-in-3 office spaces being vacant in the Klang Valley by 2021, if measures aren’t taken to control it. If this freeze on high-end developments is to be taken seriously at all, the government has to make sure it is fairly enforced across the board.

And secondly, 1MDB gets the special treatment which discriminates against all private businesses.

As per my previous statements on this issue, I reiterate that the purported ‘blanket ban’ against high-end projects with unit values above RM1 million is a hare-brained knee-jerk reaction which is faulty due to the unfair and substantial exemptions granted above.  In addition, the policy itself will not only fail to achieve its objectives because it is not properly targeted, it will create greater distortions in the market as well as turn away both domestic and foreign investors.
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