Selangor will no longer embark on joint venture real estate projects with private companies as this practice had cost the state an estimated RM30 billion in revenue loss over the last 30 years, Mentri Besar Tan Sri Abdul Khalid Ibrahim said today.
He said the state government will also cork the practice of using government-linked companies (GLCs) to hand out contracts to cronies and political friends.
In a hard-hitting speech when tabling the Pakatan Rakyat-led state government’s maiden budget for next year at the State Assembly today, Abdul Khalid said wastage due to mismanagement has deprived the rakyat of what is due to them.
“The CEOs of the GLCs will be held accountable for decisions made by their companies and the practice of the Menteri Besar to absorb the blame for the mismanagement, as practised in the past, will cease,” he said.
“The services of these CEOs had been retained as we want them to answer for the misappropriation and irregularities detected in their companies. Since the Pakatan Rakyat (PR) took over on March 8, CEOs of these GLCs have not been able to rationally answer for the joint-venture projects they had entered into that were lopsided against the state.
“Their shameless answer would be that they did so under the instructions of the former Menteri Besar (Khir Toyo)”
Abdul Khalid revealed that these lopsided deals were detected in the State Secretary Incorporated, Pemodalan Negeri Selangor Bhd (PNSB), Perbadanan Kemajuan Negeri Selangor (PKNS) and Perbadanan Kemajuan Pertanian Selangor (PKPS).
“The CEOs involved will be given a chance to rectify the situation and recover the lost revenue due to misappropriation, failing which their services will be terminated and further action pursued,” he said.
Speaking of the estimated RM30 billion in losses incurred by the state over 30 years due to the 70:30 (for the state) profit-sharing ratio, Abdul Khalid said: “If the state were to sell the land or develop the area on its own, the profit accrued would have been seven to eight fold.”
Citing an example, he said the Canal City project deliberated by the former state government which involved the alienation of 809ha will only rake in cash returns of RM22 million for the state after more than five years, as opposed to RM170 million if the land is sold to the developer.
“If the previous administration had managed the state well in a transparent, fair and considerate manner, the per capita income of the state should be four times what it is today,” Abdul Khalid revealed.
Abdul Khalid, in accusing the former state administration of not being transparent, sincere and responsible, said: “The zero squatters policy was not intended to help house the squatters. This exercise was intended to vacate the lands involved so that the can be given to private developers who entered into joint ventures with the state. The squatters never received adequate compensation.”
He said to ensure that history does not repeat itself, the state has issued directives to all its assemblymen and representatives to refrain from influencing decisions on land alienation in districts and in tender processes at local authority and district levels.
“To make the tender process more transparent, the present government has directed that all tender panel meetings be open to the public,” he said, adding that such a move will be welcome and appreciated by investors.
The state is aiming to attract RM12 billion worth of investments a year and is confident of garnering RM35 billion worth of investments during the Ninth Malaysia Plan period, he said, adding that the Selangor State Investment Centre (SSIC) will be going on a more aggressive drive to attract investors.
“We are also looking at attracting new industries and the development of technology such as solar power among others.”
He said he hoped the money for the development of agriculture from Federal Government funds will be distributed fairly and not be stuck in a third person’s account.
Tan Sri Abdul Khalid Ibrahim stops joint venture real estate projects with private companies practised by previous Barisan Nasional to stem state revenue loss