02 September 2010

‘Unrail’ deal for KTMB

Terence Fernandez
sreports@thesundaily.com


KUALA LUMPUR (Sept 1, 2010): Keretapi Tanah Melayu Berhad (KTMB) is expected to get RM200 million for its prime land in Bangsar. It is still less than half the value for the 8ha property which was the former headquarters of Unilever Bhd, but far more than the RM50 million offered for handing over the land to Pelaburan Hartanah Bhd (PHB).

Even so, there are efforts to reduce KTMB’s returns for the sale of the property, now said to be valued at around RM500 million.

According to sources, former transport minister Datuk Seri Ong Tee Keat had approved transfer of the land to PHB last year but it is understood that fresh negotiations are on to reduce the figure.

theSun had on Aug 27 front-paged the deal where the land was acquired from KTMB for a fraction of its market value, raising concerns among several parties. One of them was Tan Sri Lim Ah Lek who as KTMB chairman in 2008 had raised the matter with then prime minister Datuk Seri Abdullah Ahmad Badawi.

Lim protested that the RM50 million compensation offered by PHB was far less than the market value of the property – which in 2007 was almost RM300 million.

PHB is a subsidiary of Yayasan Amanah Hartanah Bumiputera, created under Budget 2006 with an initial capital of RM2 billion to increase bumiputra property ownership.

It is learnt that when Ong became minister in 2008, he asked for a more equitable figure.

“PHB then offered RM100 million but Ong refused as it was only a third of the market value,” said a source, adding that it would not be enough to pull KTMB, which had more than RM100 million in losses, out of the red.

“Following this, there was pressure from all sides, including the Finance Ministry and the Prime Minister’s Office, on Ong to sign the deal, after which he agreed to approve it for RM200 million,” the source added.

When contacted, Ong was tight-lipped but admitted that he had reservations over the deal. “I had raised my concerns but was also reminded of the (then) prime minister’s commitment,” he said, declining to elaborate.

Railway Assets Corporation (RAC) general manager Abdul Kadir Ab Latiff had told theSun that the compensation to KTMB would be more than RM50 million but declined to say more.

The land had been eyed by various quarters for development. PHB, which had also purchased Dataran Perdana in Jalan Davis and the Rubber Research Institute land in Jalan Ampang, is expected to embark on a high-end mixed development project next year.

Transport Ministry officials declined comment.

Updated: 09:48PM Wed, 01 Sep 2010

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