Pemandu admits land acquisition only way to recoup MRT cost
By Yow Hong Chieh August 26, 2011
Pemandu chief executive Datuk Seri Idris Jala said that Singapore’s MRT operators, who rely heavily on fare box revenues, were considered an exception. — file pic
KUALA LUMPUR, Aug 26 — Putrajaya’s powerful efficiency unit has admitted that the Najib administration needs to acquire and develop land along the Klang Valley Mass Rapid Transit (MRT) route as it cannot afford the multi-billion ringgit project otherwise.
In a letter sighted by The Malaysian Insider, Performance Management and Delivery Unit (Pemandu) chief executive Datuk Seri Idris Jala told Associated Chinese Chambers of Commerce and Industry Malaysia (ACCCIM) president Tan Sri William Cheng that the government was pursuing a “rail-and-property” model as it would not be able to recover the cost of the first line between Sungai Buloh and Kajang through fares alone.
“For the government to manage the project efficiently and sustainably, fare box revenue will not be sufficient to finance the high capex and opex for the MRT network,” Idris said in the letter dated August 23, written in response to Cheng’s queries about the acquisition of Jalan Sultan land.
“Increasing the fares is not an option as the government wants to act responsibly by providing the rakyat with an affordable means of transport. Instead, the government is adopting a prudent approach towards a sustainable financial model for the MRT through a modified rail-plus-property model.”
The government has said a Ministry of Finance unit called Dana Infra will raise funds for the MRT, which is the country’s most expensive infrastructure project to date, but has yet to give any details of the funding apart from saying it will develop the land along the route.
The Minister in the Prime Minister’s Department pointed out that Hong Kong’s MTR Corporation, which has successfully applied the model to its Mass Transit Railway (MTR) network, would not have an “effective means of recouping the vast sums spent on developing the MRT” without revenue from property development as earnings from fares only made up 35 per cent of total revenue.
He stressed that Singapore’s MRT operators, who rely heavily on fare box revenues with minimal contribution from commercial activities, were considered an exception rather than the norm.
Chinatown traders see the Jalan Sultan land acquisition as a threat to the historic enclave. — file pic
But Malaysia would be using a modified version of the rail-and-property model with “some amount of land acquisition” as the Sungai Buloh-Kajang (SBK) line would traverse built-up areas unlike Hong Kong, which had access to several tracts of mainly reclaimed land that allowed for integrated station and property development, Idris said.
“The government is thus not acquiring land banks for the MRT Co. nor abusing the Land Acquisition Act for this purpose,” he assured, referring to the new project owner effective September 1.
However, Idris also revealed that land along the SBK corridor that will be developed by government-linked companies (GLCs), including the Rubber Research Institute (RRI) and Kuala Lumpur International Financial District (KLIFD) sites, would not go directly towards offsetting the capital expenditure for the MRT.
The minister added that he would let the Land Public Transport Commission (SPAD) respond to Cheng’s concerns over the land acquisition on Jalan Sultan in Chinatown, which traders there see as a threat to the historic enclave.
“These involve technical details such as the design of the alignment, constructibility, the need for station integration and so forth and why land above ground is acquired (in respect to the National Land Code) even if the MRT tunnels are below for safety and security concerns,” he said.
“On this score, perhaps we may also see a more positive development from the proximity of the MRT line to Chinatown where opportunities for revitalisation and restoration of the area would benefit the Chinese community in this part of Kuala Lumpur.”
Outgoing project owner Syarikat Prasarana Negara Bhd (Prasarana) has said it needs to acquire the land above the MRT tunnel that will run along Jalan Sultan and demolish existing buildings in the interest of public safety.
Both Prasarana and SPAD have also said the government has to acquire the land before any subsurface work can begin as Section 44 of the National Land Code 1965 states that property owners not only have the right to the plot itself but also the air above and the ground below.
But DAP publicity chief Tony Pua has accused the Najib administration of using the project as an excuse to hijack prime land in the capital for profit, pointing out that the National Land Code had been specifically amended in 1990 to allow for the acquisition of underground land without affecting surface property.
SPAD CEO Mohd Nur Ismal Kamal said this week that the regulator was currently working on a solution to allow traders to return to Chinatown lots being acquired for the construction of the MRT but said there was “no guarantee” that they would eventually be surrendered to the owners.
MRT Jalan Sultan land acquisition – who is telling the truth: Chua Soi Lek, Hamid Albar or Idris Jala?
“Flip flop in a matter of days” has become the byword for the present Najib government, whether on its mishandling of the Bersih 2.0 peacefull rally for free and fair elections on July 9 or the parliamentary select committee on electoral reforms.
There is now the latest addition to the Najib government’s “Flip Flop List” – the controversy over the Klang Valley Mass Rapid Transit (KVMRT) land acquisition of Jalan Sultan properties.
Only three days ago, the MCA President Datuk Seri Chua Soi Lek had announced that the government had backtracked from its decision to acquire the land and 31 buildings around Jalan Sultan in Kuala Lumpur to make way for the MRT mega project.
Chua said that after discussion with Land Public Transport Commission (SPAN) chairperson Datuk Seri Syed Hamid Albar, “an understanding and agreement” had been reached whereby as a “compromise”, the government will only acquire the strata title for the property 100 feet below ground required for the MRT tunnel, while the buildings, many of which are nearly a hundred years old, and land above ground will remain in the current owners’ hands.
However, the residents may have to vacate their property during the six months or so of tunnelling works, while the government will also be required to strengthen the heritage buildings should they be affected by the works underground.
“The cost of the strengthening and the compensation to the owners will be detailed later,” Chua said.
Chua’s announcement of government backtracking on MRT’s Jalan Sultan land acquisition did not survive 24 hours as the very next day, Hamid not only rubbished Chua’s talk of government strata title for the property 100 feet below ground but reiterated compulsory acquisition of Jalan Sultan’s land and 31 buildings.
Hamid delivered a greater shocker when he declared that there was no guarantee that the acquired Jalan Sultan properties would eventually be returned to the owners although the authorities were working on a solution to allow traders to return to their Chinatown lots being acquired for the KVMRT.
The Jalan Sultan traders were delivered another shock when it is revealed today that the Pemandu chief Datuk Idris Jalan had written to the Associated Chinese Chamber of Commerce and Industry Malaysia (ACCIM) president Tan Sri William Chen to justify the government pursuing a “rail-and-property” model as it would not be able to recover the cost of the first KVMRT line between Sungai Buloh and Kajang through fares alone.
The affected Jalan Sultan traders and the Malaysian public are entitled to ask – Who is telling the truth about the MRT Jalan Sultan land acquisition: Chua Soi Lek, Hamid Albar or Idris Jala.
The Najib administration must be reminded of its grandiose promises of various transformation programmes to act with transparency and integrity, and that it bears the onus to satisfy the affected Jalan Sultan traders and owners as well as the Malaysian public the responsibility to establish that the MRT project owner Prasana Nasional Bhd is not attempting to hijack prime land in Jalan Sultan, Kuala Lumpur affecting heritage shoplots for the ulterior motive of profit as the 1990 amendment to the National Land Code had specifically provided for the MRT needs of “underground railways” development.