KUALA LUMPUR, Nov 25 — A growing controversy over a RM628 million project awarded to the Naza Group without open tender could put pressure on the government to rethink public policy, given previous failed developments such as the Port Klang Free Zone.
Naza clinched the deal last week to build a RM628 million convention centre for the Malaysian External Development Corporation, an agency under the Ministry of International Trade, in exchange for 2.8 million square feet of prime land owned by the government in Kuala Lumpur.
Analysts have estimated the gross development value of the land at RM15 billion. The award has raised disquiet with at least one business paper asking searching questions in an editorial over the weekend and with the Opposition up in arms.
On Monday, DAP lawmaker Tony Pua asked for the minutes of the privatisation to be tabled in Parliament. He said that the whole exercise should be re-tendered.
“Failing which, we demand that all ministerial papers relating to the project be declassified and tabled in Parliament to prove that all necessary due diligence has been conducted with no inflated cost to the government and no inflated profits to the concessionaire,” he told reporters.
Such scrutiny — especially from the local media — would have been unthinkable during, say, the tenure of former Prime Minister Tun Dr Mahathir Mohamad. But the results of the general election last year have seen a resurgent Opposition.
In addition, the revelation of the Port Klang Free Zone fiasco, where a development budgeted for RM2.5 billion escalated to over RM10 billion, has left the public angry over the sheer waste of the project.
More to the point, some analysts actually question the viability of the convention centre project, pointing out that the site does not have the critical mass — hotels, restaurants, etc — to sustain such a development.
The convention centre in Putrajaya, for example, has proved to be a colossal failure. Oppositionists have estimated that the project, built for close to RM700 million, would take 300 years, assuming zero maintenance cost, for the project to break even.
The most successful convention centre is the Kuala Lumpur Convention Centre which was built by Petronas near the site of the twin towers. It is booked solid for the next nine years but, even so, it took Petronas 10 years to go ahead because it felt that it would be difficult to get back its investment. — Business Times Singapore
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