Federal Territories Minister Khalid Samad said the measure was taken by the Kuala Lumpur City Hall to handle disputes.

Bukit Persekutuan, a 20-hectare plot of land near KL Sentral, was acquired in 2012 by SP Setia Sdn Bhd in a land swap deal.

The company, in return, agreed to construct a replacement facility for the National Institute of Health (NIH) in Setia Alam, Shah Alam.

The land deal was called into question by civil society group Selamatkan Kuala Lumpur, which alleged a lack of engagement with the local community.

The minister said his department was unable to halt the development in totality.

“We hope the residents understand that we cannot totally prevent the development which  is part and parcel of the agreement which the developer has fulfilled,” Khalid said during the International Conference on Greater Kuala Lumpur and Putrajaya here today.

He added that the NIH complex in Setia Alam had been built by the developer, saying it was now the government’s turn to allow the developer to exercise its rights.

“But we will try to ensure that the development is well planned and not too disruptive to the surroundings.

“The agreement was signed by the previous administration. We cannot completely deny the developers, but we will manage the development,” he said.

When asked about a moratorium mentioned by the Kuala Lumpur mayor last December, Khalid declined to comment.