The Selangor government is at the risk of losing billions of ringgit and thousands of acres of land due to risky joint ventures undertaken during BN‘s reign of the state, Menteri Besar Khalid Ibrahim revealed today.

Answering his first question ever at the state assembly, Khalid revealed that 62 joint-venture projects which involved a total 12,000 acres of land had failed.

khalid ibrahim selangor mb pc 260308 03 Khalid said that the joint ventures were high risk and promised low returns.

He also estimated that only six percent of the total joint ventures worth RM3.5 billion were successful.

According to Khalid, out of the billions of ringgit invested into these projects, the returns had been only about RM100 million.

At a press conference later, Khalid explained that the joint ventures were undertaken between state-owned companies such as Permodalan Negeri Selangor Berhad (PNSB).

He said the joint-venture partners for PNSB were decided by the government and that the investment arm’s officers knew little about the deals.

“When I come to know of the people involved, my conclusion was that these people are not of standing in the property development community.

“(Their) company is made up of two people with only a paid-up capital of less than RM100,000 and is allowed to develop a RM20 million project. Should they fail, the state will end up losing the land,” said Khalid.

Deals under review

He said that in such joint ventures, PNSB supplied state land while the private company partner - often with limited or no experience in property development - would be tasked with developing the land and given power of attorney over the land.

Should these companies fail to complete the project for any reason, Khalid said the agreements would leave the state with very little resource.

“The best case scenario is losing the land. I don’t want to imagine the state losing 12,000 acres of land and billions of ringgit along with it,” he said.

Khalid said that the state government would be reviewing all the deals soon and would seek the assistance of professionals in the property industry.

“My concern is the risk to the state - which is currently high,” he added.

Barricade row

In another development, Khalid said that the state government was of the position that the dispute over a barricade in Bandar Mahkota Cheras (BMC) was a legal matter.

selangor state bandar mahkota cheras petition 090508 02 He said while the state government was against the erection of the barricade, the matter can only be resolved between BMC developer Narajaya Sdn Bhd and highway concessionaire Grand Saga Sdn Bhd.

“We support the reopening of the access road and hope that the Works Ministry and the Malaysian Highway Authority would approve of this,” he said.

BMC residents have been repeatedly tearing down a barricade erected by Grand Saga used to block residents from entering the Cheras-Kajang Highway without having to pay toll.

Since taking over the state government in March, residents had been approaching the Pakatan Rakyat state government to help resolve the matter.

Khalid’’s announcement today comes as a surprise as he was expected to put his foot down on the long-standing issue after meeting the relevant stakeholders last week.