A former second finance minister, Johari Abdul Ghani, said the government’s intended purchase of the Kg Baru land amounted to coercion.
All the landowners must agree to the offer, which includes a share-holding in a company that will redevelop the land. This condition amounted to a form of coercion, he said. “It would be illogical to expect 100% of Kampung Baru landowners to accept the offer,” he said in a media interview. “They should be given a choice of whether to accept the offer or not.”
On Thursday, Federal Territories Minister Khalid Abdul Samad announced the government’s “final offer” of RM1,000 psf to buy the Kampung Baru land.
The amount is made up of a combination of shares, cash, or developed property. The landowners are offered shares in the development company, called a Special Purpose Vehicle, to the value of RM150psf and for the remaining RM850psf a choice of cash, completed property, a combination of cash and completed units, and shares in the SPV.
Khalid also said that, as a last resort, the government might make compulsory acquisition of the land under the Land Acquisition Act.
Johari, a former MP for Titiwangsa, questioned if the government could guarantee the future prospects of the “Special Purpose Vehicle” development company.
“If you want to force people to purchase the SPV shares by using the value of their land, how will the government guarantee that the company will not end up like those land companies which have since closed down?”
He also questioned the background of the new company. “Who is the owner of the SPV? If the SPV is government owned, which agency will take control of it? Ministry of Finance or Ministry of Federal Territories? Where did the SPV come from?”
He also had doubts about the financing model of the new company. Khalid had said that the estimated RM6.7 billion required might be raised through bank loans. Johari said: “Will the government guarantee the loans made? Will this increase the government’s debt again? “Have they received the approval of the Ministry of Finance and Cabinet to secure these debts?”
He urged the government to provide accurate and transparent information to Kampung Baru land owners.