SHAH ALAM, 29 Aug: The value of land sold to Tropicana is at the best price, thus refuting allegations that it was sold below the market price.
The Chief Minister’s Executive of Communications, Shazni Munir Mohd Ithnin, said that the State Government managed to get a huge potential value from the sale of the land at a value of RM1.15 million per acre through the latest offer made.
“Menteri Besar Incorporated (MBI), through Permodalan Negeri Selangor Berhad (PNSB), as the Management of the Development Project, offered a cash sale on the Net Present Value of the land amounting to RM844,298,433, which is RM1.15 million per acre.
“The principles of Pakatan Rakyat (PR) in the management of assets like State Government property is to give the highest value to the asset by not selling vacant land but the sale of land and development plans,” he told Selangor Kini.
He said that this is different from the original plans of the Canal City development in 2003 under Barisan Nasional. PNSB will only gained about RM22.2 million only, with the overall cost of RM1.345 billion, while the overall profit for the RM74 million project is for a period of 20 years.
Previously, the Board of Directors for Permodalan Negeri Selangor Berhad (PNSB) in 2011 agreed to the Request For Proposal (RFP) to develop 1,172 acres of land as part of the Canal City project land, which was cancelled in 2010.
PNSB also issued a tender notice for the purpose and an Evaluation Committee consisting of professionals in specific areas of property development was established to examine the bid quote.
Shazni said that 13 companies bought the tender documents and six companies submitted bids between RM173 to RM1.297 billion.
“Among the companies are are Dijaya Corporation Bhd. (Tropicana), Pot Of Jewels Sdn Bhd, Glomac Bhd, Mah Sing Properties Sdn Bhd, Teo A Khing Design Consultants Sdn Bhd and SP Setia Bhd (Eco World).
“However, through the evaluation of the Evaluation Committee, two companies were shortlisted; Dijaya Corporation Berhad (Tropicana) and SP Setia Berhad (Eco World),” he said.
He said that after a special meeting with the PNSB Board of Directors on February 26, 2013, they decided to accept the recommendations of the PNSB Management to choose Dijaya Corporation Berhad (Tropicana) as the successful bidder with the most potential.
“It was chosen based on the minimum return of RM1.297 billion for a period of 20 years. The staggered payment plan for this development plan includes the land cost payable within 12 years of RM587 million, accumulated interest for 12 years of RM252 million, the total price of land (land cost + accumulated interest) of RM839 million and the development partnership at a rate of five percent per year on the GDV of RM8.64 billion; RM432,215,922 million.
“The development plan proposed by Tropicana includes the development of amenities and infrastructure on a land area of 424 acres from the 1,172, and the remaining 748 acres for residential and commercial development projects.
“The infrastructure and public amenities, when completed, will be submitted to the State Government. Therefore, we do not just receive returns in the form of cash, but also in terms of infrastructure development for the people,” he said.
He said that the decision was made on the basis of current price, returns and the gross development value (GDV).
On March 19, Tropicana reportedly sold 308.72 acres of land which is part of the development land of 1,172 acres to Eco World Development Group Berhad at RM470.67.
Therefore, there were allegations that the Sale and Purchase of Land and Development Agreement which was signed by MBI and Tropicana on April 2013 was negligent and the sale of the land was below the market price.
Tropicana also boasted that they received a profit of RM170 million as a result of the sale, however generally failed to see that the cost of building infrastructure was RM10 per square feet and certainly the sale of 308.72 acres of land at RM470.67 million takes into account that factor.
NS
