KUALA LUMPUR, July 3 — City Hall has defended its actions of appointing a new contractor to redevelop Plaza Rakyat which had been left abandoned for over 20 years.

City mayor Datuk Seri Ahmad Phesal Talib said the contractor who was selected by the Federal Territories Ministry and City Hall would make an announcement on the matter once documentations have been finalised.

“We are close to finalising the completion of an arbitration matter between City Hall and Plaza Rakyat Sdn Bhd (PRSB) and the appointed contractor will be named soon,” he said.

When asked why Ivory Properties Group Berhad, the contractor who had won a bid last year through an open tender to redevelop the project had been sidelined, Ahmad Phesal said the appointment was done in accordance to procedure.

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“PRSB did not get the approval from City Hall to appoint Ivory Properties to undertake the redevelopment project,” he said.

“In fact, the agreement was entered into by both parties during the period where City Hall and PRSB were in a legal tussle over the site.

“PRSB appointed Ivory Properties although they knew the matter was being mediated before arbitrators.”

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In a recent report, Federal Territories Minister Datuk Seri Tengku Adnan Mansor had said the findings of the arbitrator had confirmed that City Hall was lawfully entitled to terminate the agreement because of non-performance and breach by PRSB.

It was reported that City Hall would be able to reclaim possession of the site once a final award was issued.

On Tuesday, Bukit Bintang MP Fong Kui Lun had questioned why City Hall and the ministry did not recognise Ivory Properties.

He said it was unfair for the authorities to not give recognition to Ivory Properties as they had entered into a valid agreement with PRSB.

“City Hall has not done anything to revive the project which had been abandoned for 18 years. Why are they now telling us they have their own plans and will appoint their own contractor?” Fong asked.

Plaza Rakyat Buyers Committee liason, Steven Yong, said 211 buyers who have acquired lots in Plaza Rakyat have been left in a lurch for far too long.

“First, we were informed that Ivory Properties will be taking over the project and now we are learning that the appointment is not recognised and another contractor will instead be appointed by City Hall,” he said.

“We have been waiting for 18 years and there has not been any progress on the matter.”

Yong hoped that City Hall and PRSB would be able to resolve their legal issues as soon as possible to enable redevelopment works to begin immediately.

“The construction site is an eyesore to visitors and they have to hasten their decisions to do something about it,” he said.

Plaza Rakyat, which is a RM1.4 billion project comprising — a 79-storey building, a hotel, commercial lots and a service apartment — came to a halt in 1998, following the Asian financial crisis.