The State Government will get at least RM505 million more if it cancels the sale of the 267.15 acres of State Land opposite MJC New Township, Batu Kawa, Kuching to Standard Parade Development Sdn Bhd, a crony company of Sarawak Barisan National.

The State Government will get at least RM505 million more if it cancels the sale of the 267.15 acres of State Land opposite MJC New Township, Batu Kawa, Kuching to Standard Parade Development Sdn Bhd, a crony company of Sarawak Barisan National.
Background Facts of the Matter
By an Agreement dated 8-3-2014 between the State Government of the one part and Standard Parade Development Sdn Bhd (SPD) of the other part, the State Government agrees to sell 267.15 acres of State Land opposite MJC New Township, Jalna Baru Kawa, Kuching (Lots 128, 5489, 5490, 5491, 2301, 2304 and 5279 all of Block 225 Kuching North Land District) (hereinafter called “the Said Land”) to SPD at the price of RM115 million.
At such price, it is only RM430,000 per acre, when the market price of land in the vicinity is approximately RM2,000,000 per acre.

Other salient facts of the said Agreement are as follows:
  1. The price of RM115 million will be paid by SPD in kind, with 2 orphanage building in Lawas and Mukah and 1 SABATI building at Jalan Bako.
  2. Upon SPD signing the Building Agreement for the 2 orphanage buildings and commence construction for the SABATI Building, the State Government shall, within 21 days, issue title of document to the Said Land to SPD.
Basically, SPD needs only to incur a minimal sum of less than RM500,000, and it can get the title to the 267.15 acres of land worth at least RM500,000,000.
After I exposed this shoddy land transaction, Adenan Satem (the new Sarawak Chief Minister), in the April 2015 DUN sitting, openly challenged me in Dewan Undangan Negeri to look for a purchaser who is willing to pay RM550 million or more for the Said Land and that he promised he will then cancel the Agreement with SPD.
PURCHASER A to buy the Said Land at the price of RM620 million
So far, there are 3 purchasers who have indicated their willingness to buy the Said Land at more than RM550 million.  Their conditions are that the State Government must first approve their proposed development plan.  Otherwise, they are fearful that the State Government may later makes things difficult and impose ridiculous terms to frustrate their proposed development of the Said Land.
Today, I have in hand from the first of the 3 purchasers (whom I will refer to as “Purchaser A”) the proposed development plan and offer to the State Government.
The proposal by Purchaser A to the State Government are as follows:
  1. The Purchaser A will perform all the obligations on the part of Standard Parade Development Sdn Bhd (SPD) to perform under the Agreement dated 8-3-2014 between the Government of the State of Sarawak of the one part and SPD of the other part.
IN ADDITION
  1. The Purchaser A will pay to the State Government, 10% of the proceeds of sale of the property (including condominiums, apartments, shoplots, shopping centres, hotels) built in accordance with the Proposed Plan attached herewith together with the List of Property to be Built Thereon.  The total estimated proceed of sales based on the current market price is approximately RM4.9 billion.
Therefore, the State Government will get an estimated minimum RM490 million (10% of RM4.9 billion) in cash payment upon completion and sale of the property.  If the property prices increases over the years, the Government will receive more from the agreed 10% proceeds of sales.

  1. The Purchaser A will, at its own costs and expenses, build ONE primary school and ONE secondary school for the Government.  The estimated value of the two schools is approximately RM15,000,000.

The Proposed Development Plan referred to in Item 2 above includes the building and completion of the followings:

  1. 4-Storey Shopping Complex (with 2 blocks of 18 storey Hotel & Condominium)
  • Estimated sale price of RM830,000,000

  1. 2 Blocks of 18-storey Office/Soho Tower (Total area of 270,000 sq. metre)
  • Estimated sale price of RM1,350,000,000

  1. 600 units of 4-storey Shophouses
  • Estimated sale price of RM720,000,000

  1. 12 Blocks of 12-18 storeys Condominium
(900 units with average selling price of RM500,000 per unti)
  • Estimated sale price of RM450,000,000

  1. 29 Blocks of 18-storey Apartments
(4000 units with average selling price of RM350,000 per unti)
  • Estimated sale price of RM1,400,000,000

  1. 227 units of 2-3 storeys Terrace and Semi-detached Houses
  • Estimated sale price of RM150,000,000
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Total Estimated Sales Proceeds
Based on the present Market Price RM4,900,000,000

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Comparison of Benefits to the State Government

The following is a table of comparison of the benefits to the State Government from selling the Said Land to SPD on the one hand and selling the Said Land to Purchaser A on the other hand:

Standard Parade Development Sdn BhdPurchaser A
  • Two Orphanage Buildings and One SABATI Building worth RM115 million.
  • Two Orphanage Buildings and One SABATI Building worth RM115 million.
  • 10% of the estimated RM4.9-billion Gross Development Value at the present market price which will generate a revenue of RM490 million to the Government coffer.
  • One Primary School and One Secondary School worth RM15 million.

By the proposal of this Purchaser A alone, the State Government will derive a benefits which is almost 5 times that offered by SPD, or an extra RM505 million more than what SPD is offering the State Government.

Therefore, no sensible Government will reject such offer by Purchaser A, unless there is something hanky-panky going on between the BN leaders and SPD.

Adenan Urged to Walk the Talk

Since Adenan became the Chief Minister of Sarawak, he has been talking about good governance.

Sadly, this Agreement was signed by the State Government 9 days after he became the Chief Minister.  Therefore, he cannot disclaim any responsibility for the impropriety of such agreement.

The fact that the Said Land was sold to SPD at RM115 million and now there is a company who is willing to pay RM620 million for the Said Land is clear evidence of impropriety and smacks of some element of corruption in the dealing with SPD.

If Adenan is really sincere about “Good Governance”, he must cancel the Agreement for the sale of the Said Land to SPD, otherwise, his talk about “Good Governance” is mere lip service and no action.

The fact that Adenan has openly challenged to me in Sarawak DUN to find a purchaser who is willing to pay more than RM550 million for the Said Land means that Adenan has the power to cancel the Agreement with SPD.

Now that I have found a purchaser who is willing to offer RM620 million, will Adenan eat his words, or will he honour his pledge.

TWO MORE PROPOSALS COMING

I will forward the proposal and my letter to Adenan on Monday (8-6-2015).

I have also informed Adenan in my letter that there are 2 more proposals coming from other prospective purchasers and such proposals will be given to me in about 2 weeks’ time. I will upon receipt thereof, forward the same to Adenan in due course.

As this matter concerns hundreds of million Ringgit of public money, there should be no urgency for the Government to make any decision EXCEPT to immediately terminate the Agreement with SPD who has taken the Government and the people of Sarawak for a ride.

7-6-2015

Chong Chieng Jen
Member of Parliament for Bandar Kuching
ADUN for Kota Sentosa
Chairman of Sarawak DAP