FMT INTERVIEW KUALA LUMPUR: Malays are not responding to investments made by property conglomerate UDA Holdings Bhd, forcing it to depend on government contracts for survival, said its newly minted chairman Nur Jazlan Mohamed.
He said efforts to cement Malay property ownership, the reason why UDA was set up, in urban areas in Kuala Lumpur, Penang, Ipoh and Johor Baru are not materialising and UDA is now in a dilemma between balancing its accounts and realising its objective.
"UDA's development projects are not getting good response among the Malays and we are not making money from the investments we make," the Pulai MP told FMT.
"This forces UDA to depend on the financial resources of the government. UDA must make money and cannot just depend on government money alone," he added.
Nur Jazlan replaced Hilmi Abdul Rashid as UDA's new chairman on June 16.
The company's situation is made worse by the fact that the government has yet to decide if UDA is to become fully privatised or corporatised which has left the agency in doubt over the future of its commercial viability.
UDA or Urban Development Authority, started as a government set up in 1971, was tasked to oversee urban property developments, management and the leisure industry. It is also responsible for conservation of historic urban buildings.
It was recently awarded the contract to preserve the historical Pudu Prison's arch after the building was controversially torn down following the government's refusal to recognise the colonial-era infrastructure as a "heritage" site.
UDA can't do everything for the Malays
UDA was one of the major government agencies, before its incorporation in 1996, to help thrust the Malays into the commercial arena under the New Economic Policy (NEP).
The NEP, however, has been blamed for fattening the Malay largesse which in turn, weakened the commercial competitiveness of the race.
Components of the Najib administration have openly admitted to NEP's failure and prompted Prime Minister Najib Tun Razak to introduce the New Economic Model (NEM).
It is meant to be Najib's hallmark economic blueprint, tasked to steer the nation out of its wage-stagnancy crisis and turn Malaysia into a high-income nation. Abolishing Bumiputera quotas in several key economic sectors was one such measure.
But this has met fierce opposition from influential Malay groups like Perkasa.
Fearing voter backlash, Najib was forced to backtrack on his liberal economic proposals and said that Bumiputera quotas are here to stay.
This, observers noted, has tarnished the country's sixth premier's reform credentials.
UDA to go 1Malaysia way
However, Nur Jazlan's statement was a reflection of Najib's concerns - that the Malays are overly dependent on government contracts and exploiting the quota system for mass profiteering.
"UDA has no money to develop properties in urban areas like KL (because its investments are not making money). Malays buy houses or commercial properties with very low price but resell it for a profit to non-Malays," he said.
An example of this is UDA's project, the Bandar Tun Hussein Onn housing estate, in Cheras.
The UDA chairman said the housing estate was fully owned by Malays initially, but now 40% of the properties there are owned by non-Malays.
This has forced UDA to reconsider its business model.
Nur Jazlan said under the 1Malaysia concept, UDA "may have to develop urban projects with 60% targetted towards Malay ownership and the rest for non-Malays".
But Nur Jazlan is already anticipating a backlash, saying that he expected "certain quarters", presumably referring to Perkasa, to accuse UDA of betraying its objective.
"If we do that, they will say we have failed. To the Malays, please, you cannot depend 100% on UDA," he said, reasoning that UDA must maintain profitability in order to continue to help the Malays.
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