Friday, May 23, 2008

Khalid: Previous government undertook 62 risky projects - The Star


The previous state government had embarked on 62 joint venture projects worth RM36bil with private companies which the current government deems very risky.

Mentri Besar Tan Sri Khalid Ibrahim told the State Legislative Assembly Thursday that the joint ventures could result in the loss of close to 5,000ha of state land.

He said the previous government had provided the land for joint venture projects with private developers through state-owned corporation Permodalan Negri Selangor Bhd (PNSB).

He said the companies held a 70% stake in the joint ventures while the state only held 30%.

At a press conference later, he explained that the state was not protected as far as the issue of completion of the projects was concerned.

What made matters worse, he added, was that the deciding factor was not based on the companies’ capabilities and track records but on the “individuals behind them.”

Khalid said that after looking at the list of joint venture companies and the people behind them, he found that the companies and the people in question were not of any standing in the property development industry.

“If a company is made up of two people with a paid-up capital around RM100,000 when they are developing a RM20mil project, it may result in the state losing the land,” he said.

Khalid said the state government had also given a power of attorney to the joint venture companies, enabling them to deal with the land freely.

“When I saw them (the joint ventures), I thought, 'You must make sure that these developers are competent in the sense that the projects can be completed',” he said.

He said his concern was that the projects would not see completion.

“The value can only be realised upon completion of a project, what more a project which has not started at all,” he said.

Among the projects involved are a development project along the southern coast of the state and the construction of a shopping mall, offices and residential units in Section 14 here.

“The state does not want to lose some 12,000 acres of land,” said Khalid.

He added that he had shown the legislative assembly how severe the issue of state land being used for business ventures was.

He said the current government would have to decide on how it could ensure that the land used in the joint venture projects would be protected.

He added that the government would be setting up a review team to look into the viability of some of the 62 projects.

When contacted, former Mentri Besar Datuk Seri Dr Mohd Khir Toyo said the current government should simply cancel the joint venture projects if it was not happy with them.

Earlier at the state assembly, Dr Mohd Khir said that the land still belonged to the state as the land titles had not been transferred to the developers.

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