KDSB justifies selling land at high price

Kuala Dimensi Sdn Bhd (KDSB) today justified and defended the selling of 999.5 acres (400 ha) of land on Pulau Indah priced at RM25 per square foot (psf) to the Port Klang Authority (PKA).

In a statement, KDSB said when it purchased the land from Koperasi Pembangunan Pulau Lumut Bhd, in 1995, it was a piece of barren agriculture land with mangrove swamp and trees.

“There was no road access to the land, which was then flooded and there were no infrastructure on the uninhabited island,” it said.

“However, KDSB developed the land whereby it was converted from agriculture to mixed development (consisting commercial, industrial and residential) and the company managed to put up infrastructure like water and electricity, drainage and roads.”

“Besides this, there was reclamation done where on average the land expanded to 7.3 metres in height. Further fillings, compaction and conversion of the land was done to develop it.

“Hundreds of millions had been spent by KDSB on the development of the land,” the statement stated, explaining why the land value went up 10 times in three years.

“KDSB purely treated the development and improvement of the land as a normal investment and business dealing which any company which has the foresight and capital would have done. This was clealy a genuine business transaction by KDSB.

"All these hidden costs to develop the land on Pulau Indah, was never highlighted by the newspapers and the Internet where some of it termed the project as a 'damning project'," it lamented.

Purchase made after evaluation was done

The company maintained that PKA agreed to purchase the land from it only after proper land valuation reports by the Valuers and Property Services Department, the government valuers were done.

KDSB claimed that the payment was not made in one lump sum payment. It was structured and spread out with the sale price at RM25 psf.

“The sales price included all those development costs that has been put up by KDSB.

“The sale was a normal business transaction and there was no impropriety in the deal. After all, the transaction was concluded after proper evaluation by the government approved agencies and the qualified quantity surveyor of the land.”

KDSB regrets some media, without proper investigations and proper understanding of the background, had magnified and blew up the transaction to look like an improper deal.

“KDSB states that such articles in newspapers and also on the Internet does not reflect the true situation and were therefore, false, inaccurate and defamatory.

“It warned that the company and the persons whose names are mentioned in the reports, have instructed their lawyers as to the course of action to be taken.”

KDSB, claimed that it granted PKA a moratorium of four years of non-payment from 2003 to 2006, with no interest payable for the first two years' and the interests for the third and fourth year to be paid on the fifth year.

The company has been in the limelight ever since the deal came to light which saw the Port Klang Free Zone (PKFZ) project to be questioned due to its escalating costs and allegations of conflict of interests.

This has resulted in the project ballooning to RM4.6 billion from RM2.63 billion.

Transport Minister Ong Tee Keat has also instructed accounting firm PricewaterhouseCoopers to release its report over the PKFZ project this month, where he also announced the extension of Lee Hwa Beng as PKFZ chairman for another term.

Pricewaterhouse was asked to do the study on PKFZ in May last year.

However, the much-awaited report was not released on Wednesday as scheduled due to “technical reasons”.

In a statement, Lee explained that the delay has been caused by Pricewaterhouse , which has restricted access to the report.