By P. Gunasegaram
Nga Kor Ming may become new property czar
A new property czar is in the making. If a bill in parliament is approved, it will be housing and local government minister Nga Kor Ming who will head a powerful council overseeing, approving and selecting developers for all urban renewal projects.
The proposed Urban Renewal Act Bill (URA Bill) currently under consideration by Parliament places too much authority under the housing and local government ministry and other government agencies who basically decide how a renewal project proceeds.
This will cause more problems than the approval limits set for redevelopment of built properties which require between 51 and 80 per cent approval depending on the age and status of the property.
Much room for patronage and corruption
It gives considerable room for patronage and even corruption with little checks and balances built into the legislation.
While much has been written about approval limits and its potential for abuse, coercion and deprivation of minority rights, I will focus for this article on the powers that the government has, and the lack of clear safeguards for compensation and profit-sharing for existing owners.
Instead of vesting power effectively in the hands of the minister of local government and housing, a much better thing to do is to form an Urban Redevelopment Commission to handle this professionally and with set guidelines and an act of Parliament to govern it.
Instead the power for deciding redevelopment comes out of the double-barrelled single gun – the two barrels being the Federal Executive Committee (FEC) and the smaller State Executive Committee (SEC). The SEC must consult the big brother, FEC, always.
Now, here comes the killer. Under Section 5. (2) of the proposed URA, the FEC will have as chairman the minister. That at this point would be housing and local government minister Nga, the rising voice of the DAP and a strong advocate of the URA, which property developers love. He would steer the FEC.
Other members include one member of the State Executive Council for each State; the chief secretary of the ministry; the Director General of Town and Country Planning as
the Secretary of the Federal Executive Committee; the Director General of Federal Lands and Mines; the Chief Secretary of Treasury or his representative; the Inspector General of Police or his representative; the President, Mayor or Chairman for the local authority; not more than three members who shall be appointed by the Minister from among public officers; the Director of the State Economic Planning Unit; the State Director of Lands and Mines for the State which participates in an urban renewal project;one representative of the body appointed under subsection 8(1) or 14(1); and not more than two other members who have knowledge and experience in any field related to urban renewal.
Government controls council
It is obvious that the government and especially the housing minister fully controls the FEC. It has wide power of approvals and plenty of opportunity for patronage and even corruption – the minister not long ago estimated over RM300 billion worth of projects.
The FRC’s powers under Section 6. (1) include advising the SEC on the declaration of urban renewal and the viability of the project, certifying any approved developer and incentives, and approving qualifying developers amongst others.
This is important to note – the SEC must consult the FEC. It appears the FEC approves developers, even for state projects or any urban renewal project anywhere in Malaysia. That is a huge concentration of power in the hands of the minister and the concomitant power for abuse through patronage and corruption.
Here’s an example of what is involved. Housing minister Nga drooled in an article titled Urban Renewal Act: Finding a balance between progress and societal needs in June last year: “Imagine, if we can push for RM322 billion GDV (gross development value), how many jobs can be created, how much profit can be made?”
But the latest URA Bill makes no mention of compensation, profit sharing, where people will live while development is taking place, and other key factors. It looks like it is entirely in the hands of the developer on one side and property owners, including those who own low-cost flats.
How one-sided, there seems to be nothing in this legislation to ensure that property owners at any level are not diddled by unscrupulous developers and their agents who have a 1001 ways of getting the requisite 51, 75 and 80% approval limits through dubious means.
Set up property commission
The only way for such protection is to incorporate a full-time functioning property commission as I suggested here. Industry professionals will helm this and be guided by an act of Parliament which provides for independence, competence and incorruptibility, much like the Securities Commission for markets and the Energy Commission for energy.
As it is the government is usurping land and development control for itself, a move which can be abused for any number of purposes, including patronage, corruption and raising funds for future elections. The point is such powers must not be given because of their potential for abuse by current and future governments.
There are many areas in property yet to be resolved, including preventing the RM113 billion in abandoned projects as I explained here. A few strong measures would have curbed this, of which the main would be not touching purchasers’ money until the development has a certificate of fitness.
The URA Bill should be deferred and sent back to the drawing board. These six provisions at a minimum should be inserted before being presented to Parliament again:
- Set up a property commission as outlined earlier
- Increase approval limits to 90 percent of owners across the board
- Ensure no one gets a worse deal than others
- Alternative accommodation must be provided at developer’s cost
- When buyers want to opt out, a profit sharing scheme should be implemented
- Mediation must start at the beginning through the commission
Nga, by promoting this heinous piece of legislation, does a great public disservice to his nation, party and the many who voted Pakatan Harapan because they thought it would provide a better framework for governance than what we knew before under Umno.
Instead the Madani government is rapidly turning out to be as bad or worse than Umno by coming up with such legislation which includes the toothless Procurement Act which is now law, pushed through while attention was focused on the URA Bill.
How insidious is that!
P Gunasegaram dreads the next legislative change.
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