KUALA LUMPUR – The 310% difference in compensation offered by the Lands and Mines Office, as compared with private valuations, has got Kg Sg Baru flat residents here in an uproar as they face the bleak possibility of an eviction under the Land Acquisition Act 1960 (LAA).
A resident who wanted to be known as Musa commissioned an independent assessor last June who appraised his 440 sq ft flat at RM1,480 per sq ft, according to documents sighted by The Vibes.
This is a far cry from the compensation offered by the Lands and Mines Office, which was RM470 per sq ft for owners of the four-storey flats. However, Musa is not privy to the report by the Finance Ministry’s Valuation and Property Management Department, which was completed prior.
Despite having a panoramic view of the Petronas Twin Towers, Musa’s flat, which is a four-minute walk from the Kg Baru LRT station and 2km from Kuala Lumpur Hospital, was valued at a measly RM240,000.
This included previous renovation work and a nominal fee for moving out.
However, Musa’s assessor suggested that he should have received close to RM700,000 – factoring in moving-out costs, temporary accommodation and renovation. This is almost three times more than what the Lands and Mines Office offered him last November.
Although the compensation for terrace houses in the same area has yet to be announced, one independent assessment sighted by The Vibes valued a single-storey terrace house at about RM1,500 per sq ft.
How did we get here?
Located a stone’s throw away from the iconic Saloma Link, Kg Sg Baru consists of seven blocks of low-cost flats and 98 terrace houses that sit on 5.23ha of leasehold, non-Malay Agricultural Settlement land.
In 2016, property developer Ritzy Gloss Sdn Bhd entered into a memorandum of understanding with a Kg Sg Baru residents’ association (RA) to develop the area through joint venture agreements.
However, some locals claim that the RA in question – the Kg Sg Baru Property Owners Welfare Association – does not represent the interests of the majority of residents.
Additionally, company director Abdul Hadi Ahmad, in an interview with the Federal Territories Ministry mouthpiece Wilayahku, said the RA invited Ritzy Gloss due to its track record in developing Kg Kerinchi.
The proposed development consists of luxury condominiums, commercial units and apartment blocks. Units in the proposed apartment blocks were offered to owners in return for their land titles.
Ritzy Gloss also promised to cover the cost of relocation during construction, and in certain cases – depending on the size of land in question – owners were also given a lump sum compensation.
Despite protracted negotiations, the offer had failed to attract the owners of 37 terrace houses and 72 flat units some five years on.
Following this, Ritzy Gloss applied to acquire 37 terrace houses and the remaining flat units under the LAA, while 34 terrace houses were excluded from the move.
In total, there are 98 terrace houses and 264 flat units.
Who is Ritzy Gloss?
Incorporated in 2005 with a business address at KL Gateway Mall, Ritzy Gloss’ nature of business is listed as property development, and its directors are Datuk Yasran Hussain, Aqmal Azam Ahmad, Tung Shao Yin, and Hadi – who incidentally is the father of Malaysian gymnastics darling Farah Ann Abdul Hadi.
Tung, with a registered address in Sri Petaling, Kuala Lumpur, appeared in the Panama Papers with a connection to British Virgin Islands-based company Medeva Venture Ltd.
There are five shareholders in Ritzy Gloss – Suez Capital Sdn Bhd (51%), Scenic Starhill Sdn Bhd (21.25%), Transworld Equity Sdn Bhd (12.75%), Yedor Holdings Sdn Bhd (10%) and Yeoh Ah Tu (5%).
While Yedor Holdings is a company held by Chong Mei Yien and Lee Siew Kuan with RM2 in paid-up capital, both Scenic Starhill and Transworld Equity are held by Suez Capital.
Where’s the development plan?
Meanwhile, local government expert Derek Fernandez told The Vibes that transparency and fairness are paramount when invoking the LAA for the purposes of redevelopment.
He said Section 3(1) of the act – the purposes for which land can be acquired – must be strictly adhered to as it is essential to inform landowners of the specific limb of Section 3(1) under which their land is being acquired and who would be the ultimate beneficiary of the acquisition.
While Fernandez believes it is questionable whether private land with an established development can be acquired for commercial redevelopment, in situations where an acquisition is justified, he said a landowner must be given adequate and fair compensation.
To achieve that, he said the development potential of the land, as enshrined in a development plan, ought to be taken into account.
From a standpoint of good governance, Fernandez believes this should be done before acquisition is commenced.
He added that such a plan must be passed under the Federal Territories Planning Act 1982 and gazetted so as to codify the land’s permitted use, or zoning, as well as its plot ratio.
Plot ratio is the total floor area of a development divided by the size of the land. For example, a 5,000 sq ft building built on a 5,000 sq ft plot will have a plot ratio of 1.
“If the development plan increases the plot ratio or development intensity for a piece of land, its value will also increase,” he said.
The primary body responsible for development planning in the historic Malay enclave is the Kg Baru Development Corporation (KBDC), an agency created by the KBDC Act 2011 with the mandate of “implementing policies, directives and strategies for the development of Kg Baru”.
In line with this, the KBDC in 2021 published the Kg Baru Development Master Plan 2040 (KBDMP), a comprehensive guide to development in the area for the next 20 years.
While the KBDMP establishes a framework for development in Kg Baru, it is itself based on the framework of other city planning documents such as the Kuala Lumpur Draft Structure Plan 2040 and the Kuala Lumpur Draft Local Plan 2040.
None of the plans mentioned above have yet to be tabled or passed in Parliament. This is verified by order papers to date.
Where’s the minister?
Besides procedural inconsistencies, some residents have also taken Federal Territories Minister Datuk Seri Shahidan Kassim to task, claiming that he is unwilling to decisively address the issue.
A lifelong Kg Sg Baru resident who goes by Yati recalled two meetings between the community and Shahidan at the start of the year.
In the first meeting, the minister promised to provide assistance until the developer and residents reached a win-win resolution. Shahidan then ordered the developer to provide residents with new options.
Following this, Ritzy Gloss offered the “harmony package”, a deal in which residents can purchase a 900 sq ft apartment unit in the new development for half the sum of compensation they were awarded.
However, Yati questioned the sincerity of this deal as the residents have yet to receive any written offer.
In the second meeting, Shahidan was urged to cancel the land acquisition but refused, offering instead to revalue the land for the owners.
While acknowledging that their calls for the postponement of the second terrace house land acquisition hearing were answered, Yati and another resident known as Bob believe this is merely delaying the inevitable.
“It still doesn’t deal with the problem,” Bob told The Vibes, adding that while residents still have the chance to negotiate with Ritzy Gloss, “the government’s refusal to cancel (the use of the) Act is forcing us to negotiate with a gun to our head”.
“Cancel the use of the act, then we’ll talk.” – The Vibes, May 16, 2022
