The case of Forest City and the Johor sultan

comments     Nigel Aw     Published     Updated

SPECIAL REPORT The astounding rate of development in Johor's Iskandar Malaysia region has proven to be difficult for any layman to keep up with, but among the myriad of projects, Forest City stands out.

A man-made island that will be close to 2,000 hectares, Forest City will be almost half of the size of Putrajaya, and will rise in the Johor Straits, southwest of Johor Bahru, where the second link to Singapore is situated.

Forest City has made headlines in recent weeks, from Singapore's border concerns to not having a detailed environmental impact assessment (DEIA) report and, potentially, having detrimental effects on the nearby port of Tanjung Pelepas.

The project is widely reported as a joint-venture between a top developer from China, Guangdong -based Country Garden Holdings and the Johor state-owned Kumpulan Prasarana Rakyat Johor (KPRJ).

For the purpose of this joint venture, Country Garden Pacific View Sdn Bhd was formed as the vehicle to make Forest City a reality.

CGPV is 66 percent owned by the China-based giant through Malaysian registered subsidiaries Country Garden Waterfront Sdn Bhd, Country Garden Danga Bay Sdn Bhd and Country Garden Real Estate Sdn Bhd.

The state government's share of the project, or more specifically KPRJ, is purportedly through Esplanade Danga 88 Sdn Bhd, which holds a 34 percent stake in CGPV.

However, upon closer scrutiny of Esplanade Danga 88 Sdn Bhd, Malaysiakini found KPRJ only holds a meagre 20 percent stake in the company that supposedly represents the state government's one-third interest in Forest City.

'Johor sultan's joint venture'

The largest shareholder of Esplanade Danga 88 Sdn Bhd, with a controlling stake of 64.4 percent, is in the name of Johor Sultan Ibrahim Ismail, thus effectively making Forest City a joint venture between Country Garden and the Johor monarch.

The remaining 15.6 percent stake is held by Daing A Malek Daing A Rahaman, a member of the royal court of advisers to the Johor sultan.

The Johor sultan and Daing A Malek are directors in Esplande Danga 88. Daing A Malek is also a director in CGPV.

 

The information is accurate as of May this year, according to a Companies Commission of Malaysia search by Malaysiakini last week.

How exactly Forest City will look like when, and if, it is completed remains unclear, but Johor crown prince Tunku Ismail Idris reportedly announced in May that it will include a new 50,000 capacity stadium for the state's football team.

Despite growing concerns over Forest City, the Johor government has constantly appeared reluctant to rein in the project.

However, pressure piled after Singapore lodged a complaint with Putrajaya over concerns that the project will affect the city-state's shorelines, thus bringing the federal government into the picture.

The state government finally issued a stop-work order on the reclamation works for the project last month pending a DEIA by the developer and discussions with the Department of Environment (DOE).

Strangely, the state government justified the absence of a DEIA by stating the reclamation work was only 49 hectares and in phases, one hectare shy of requiring the report.

'Circumventing EIA'

A land title search of PT4071, where the Forest City site is to raise, that was sighted by Malaysiakini shows that CGPV has owned 1,978.1 hectares of the area since Nov 8, 2013, with quit rent of RM8.3 million.

The area is stated to be in the district of Johor Bahru and the location is listed as Port of Tanjung Pelepas.

"The title already shows that the site will be close to 2,000 hectares.

 

"If you reclaim in parcels of 49 hectares to circumvent the DEIA, then it defeats the purpose of having a DEIA at all," said environmental policy researcher Chung Yi Fan.

The issue of EIA for major projects in Iskandar Malaysia is not new and the Johor sultan too had voiced about the need for it - just not by those who are in charge of the EIA.

In his officiating speech at the opening of the Johor state assembly on May 31, Sultan Ibrahim ( left ) stated that EIA is required for projects in the state, but went on to say: "But unfortunately, there are irresponsible quarters who use their power over the EIA as a weapon to prevent development that is not in their interest.

 

"Why are there quarters taking their own sweet time and deliberately delaying the approval? Such action obstructs the state's development and cause investors to run elsewhere.

 

"Johor is the right of Johoreans and only Johoreans know the situation and needs of Johor.

 

"Why should there be outsiders who try to interfere and teach us about what we should do in our own state?"

 

Sultan Ibrahim then called on the state government to take over jurisdiction of preservation of the environment, citing that it is closely related to land and water matters that fall under the state.

The Department of Environment, a federal agency, oversees all EIA matters.

'Port threatened'

 

The sultan also cited the projects by Benalec Holdings in the state, for which the EIA is still being withheld.

 

Despite the stop work order and demand for a belated DEIA, Pengkalan Rinting assemblyperson Cheo Yee How, who is among the earliest to raise concerns about Forest City, claimed work is still going on.

 

"It is still going ahead despite the stop work order," Cheotold Malaysiakini when contacted.

Aside from a potential threat to Singapore's shorelines, there are also concerns that the project could hurt the Port of Tanjung Pelepas (PTP), Malaysia's second busiest port.

PTP is operated by tycoon Syed Mokhtar Al-Bukhary ( right ), seen as a business rival of Sultan Ibrahim.

 

Worry that Forest City may cause the waters there to become shallower, thus making it difficult for ships to navigate.

This has even seen DAP leaders, such as Kluang MP Liew Chin Tong, coming to PTP's defence, despite his party being a staunch critic of Syed Mokhtar.

 

Forest City is among one of four major reclamation areas that are going on in southern Johor, in three of which the Johor royal family has a direct stake.

 

On Wednesday, Malaysiakini will look at these other deals in a four-part series to scrutinise the power players behind them.

JOHOR ROYALTY’S BUSINESS EMPIRE

 

Part 1: The case of Forest City and the Johor sultan      

 

Part 2: Johor crown prince a top millionaire at age 30        

 

Part 3: Of reclamation, sand and the royal company

          

Part 4: Royal businesses: Who is Daing A Malek?

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