FEBRUARY 17 — The recent announcement by UDA Chairman Datuk Johari Ghani on the partnership with Ecoworld and EPF to develop the 19.4 acres of prime land in Bukit Bintang has thrown a lot of integrity and transparency issues up in the air.
The project called Bukit Bintang City Centre (BBCC) where the Pudu Prison once stood is projected to have a GDV of RM8 to RM10 billion.
One of the main questions that UDA has to answer is whether the appointment of Ecoworld was done above board and that no hanky-panky dealings took place prior to the decision.
UDA called for an open tender in September 2013 for proposals to develop the former Pudu Prison land.
However, the tender was then called off in early 2014 without any explanation.
The word on the ground at that time was that Ecoworld has been chosen to partner UDA to develop the prime land, even though Johari tried his level best to deny the appointment of Ecoworld at that time but the stink was too unbearable.
Ecoworld did not even take part in the tender and yet they were awarded the project through the backdoor “Malaysia-Boleh” style.
The brief in the tender was for UDA to hold a minimum of 51 per cent of the project.
Any developer bidding for the project also has to build a significant portion of affordable homes within the project.
In 2010 to 2011, UDA signed a deal with a China GLC – Everbright International Construction in a deal that would have seen UDA receiving some RM2 billion in cash upfront as well as profit staggered during the course of the project.
However, the recent UDA-Ecoworld-EPF JV deal will only see UDA netting some RM1 billion in development rights sold to the JV company.
The returns from the project have reduced by almost half, which makes the deal with Ecoworld not as attractive as the Everbright deal.
It is imperative that the Ministry of Finance institute some form of review on the deal to ensure that all proper procedures were adhered to.
If indeed Ecoworld did not participate in the tender, it is important that all the tenderers are allowed to propose a new bid in the same business model of the Ecoworld deal.
This will ensure that integrity, fair play and transparency take precedence, which also shows the seriousness of the government in combatting corruption and rent-seeking.
As the project is located in a very prime location with a GDV that is almost RM10 billion, UDA needs to ensure that the deal will benefit UDA in the long run rather than just a short term gain.
The role of EPF also needs to be scrutinised in this mega-billion deal.
It is known that EPF is cash rich and the rumour mill has it that EPF will bankroll the project, whilst Ecoworld drives the project.
This will make UDA the sleeping partner, EPF the financier and Ecoworld the driver as well as reaping the most profit with the least investment.
If UDA truly wanted to make sure that they are getting their money’s worth from the prime strategic land, they could have always partnered another GLC like SP Setia or UEM to ensure maximum profit.
However, the deal with Ecoworld seems like another way to ensure that rent seeking patronage deal lives on.
UDA receiving RM1 billion (RM1,183 per square foot) is a paltry sum compared to what it would have received if it put the land on open tender.
In May 2014, Tropicana sold their land on Jalan Bukit Bintang for RM448.4 million or RM3,280 psf which makes the Ecoworld deal at RM1,183 a very modest figure.
UDA could have easily gotten RM2,000 psf or a total of RM1.7 billion for the land if it sells on open tender with an extra RM700 million compared to the Ecoworld deal.
The Finance Ministry and the Public Accounts Committee need to review this deal and make known the whole process that took place, from the open tender that was cancelled and the whole deal with Ecoworld to be made known publicly.
Something is rotten in Johari Ghani-led UDA and the public demands answers.
* This is the personal opinion of the writer or organisation and does not necessarily represent the views of Malay Mail Online.
