Ten years after signing a deal for the transfer of about 1,000 acres (404.69 hectares) of riverfront land to a private company, the Kelantan government is still waiting for the payment of more than RM300 million.

NONE An audit into the deal also found that the land was transferred without the company involved posting the required RM15.91 million performance bond.

According to the Auditor-General's Report 2011, Kelantan in June 2002 signed an agreement with Syarikat Liziz Standco Sdn Bhd to develop land on the bank of the Sungai Kelantan.

The state agreed to transfer the land in exchange for RM389.09 million in infrastructure projects, land and cash.

As at November 2011, 716.8 acres (290.079 hectares) of land were transferred to the company but only RM45.68 million in land and cash was paid back by Liziz Standco, with an outstanding RM343.41 million still due.

The report says that the current value of the land in Kota Baru that was transferred to Liziz Standco is RM318.29 million.

The infrastructure projects, cash and land still due to the state from Liziz Standco are:

  • A mosque worth RM20 million (that was due in November 2005);
  • An RM25 millio indoor stadium for women (due November 2005);
  • Kampung Cina-Palekbang bridge worth RM150 million (due November 2007);
  • RM12 million for the state low-cost housing fund (due monthly from January 2005 to March 2006);
  • 13.23 acres (5.35 hectares) of land on both sides of the Sultan Yahya Petra bridge; and,
  • RM300,000 in cash compensation and stalls for famers.

Further, no proper feasibility study was conducted prior to the start of the project.

Land transferred but bond not paid

The report also notes that the river bank development is far behind schedule, with much to be done to meet its 2015 deadline.

NONE To date, only a retaining wall, esplanade, temporary bus station and a hypermarket have been completed.

The state Economic Planning Unit (Upen) has proposed an alternate solution to the state executive council, which will trim the Liziz Stanco debt to RM213.30 million.

However, the council on Sept 7, 2011, decided to hire a commercial audit firm to look into how to recoup the payment owed.

The commercial audit report cost the state RM37,100 and was ready in April 2012.

"We have sought the report on April 15, 2012, but have yet to receive it from the state," the Auditor-General's Report 2011 states.

NONE

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