THE long-abandoned Plaza Rakyat project in Kuala Lumpur, which has been in limbo for almost 20 years, is set to be revived as a new contractor has been identified to carry out the rejuvenation work, Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor said.
The findings of the arbitrator involved in negotiations with the developer, Plaza Rakyat Sdn Bhd (PRSB), and Kuala Lumpur City Hall (DBKL) confirmed that DBKL was lawfully entitled to terminate the agreement because of non-performance and breach by PRSB.
However, the arbitrator have yet to issue the final award. When the final award is issued, which should confirm the termination, DBKL would be entitled to reclaim possession of the site.
“The Ministry and DBKL are waiting to move in and clean up the entire place and start working on reviving the project,” said Tengku Adnan.
Presently, there is an interim injunction against City Hall, preventing them from entering the site, until the final award of the arbitrator.
According to reliable sources within DBKL, the local authority had issued a conditional appointment to another company to revive the project, subject to the arbitration award, and the approval of the Government within a week or two.
“The new contractor cannot go in yet because of the injunction.
“We are on standy to mobilise and revitalise the place. But, we can only go in after the arbitrators authorise DBKL to retake possession.
“We are at the final hurdle now, and once that is settled, we can move in,” Tengku Adnan said.
The minister said several parties had showed interest in developing Plaza Rakyat, but the Government was adamant in picking the right one.
“We wanted the one with the best proposal that will benefit all stakeholders, including City Hall.
The deal will include the rights of purchasers who have been left in the lurch all this while. It will be a ‘win-win’ situation for everyone,” he added.
Tengku Adnan said PRSB owed the Land Office and DBKL millions in unpaid assessment and quit rent.
“They never paid the fees, the place was badly maintained until it has become a slum of sorts and a breeding ground for mosquitoes and snakes.
“We cannot allow this to go on,” he said.
“We are looking at ways to ensure that DBKL will not suffer losses and once this is over (arbitration), we are going in to clear everything out,” he said.
At the final award hearing, which is expected to be in the next week or so, the arbitrators will decide on the quantum of damages.
Apart from obtaining vacant possession of the site, City Hall will also be seeking payment of outstanding assessment and quit rent fees from the developer.
Meanwhile, StarMetro spoke to several of the original purchasers about the Plaza Rakyat revival plans, and many who are now in their twilight years are still hoping to get back their investments.
Retiree Steven Yong, 70, said all he wanted was for the project to take off so that he could get back his deposit.
“I paid a 20% deposit of RM300,000, 19 years ago. It was a lot of money back then for me.
“I put in all my life-savings for two units in Plaza Rakyat,” he said.
“Today, I pray that I will get something back,” he lamented.
Another buyer, who wanted to be identified as only Lee, said she had paid 30% of RM600,000 as down payment to purchase two shoplots.
“Fortunately, the bank had not released the balance 70% of the payment when the project stalled or I would be paying the loan and interest for a property that is not even completed,” she said.
Another stakeholder who went by the name of Danny said, “We want our money back, we are entitled to it. No more excuses, please,” he said.
StarMetro reported last week that the 17-year-old Plaza Rakyat project had become a health hazard, with ageing rebar and scaffolding at the development site in danger of collapse.
The mold-covered walls have turned black because of trapped moisture and water leaks from years of neglect, giving the building and its surroundings a pathetic look.
Pools of stagnant water everywhere, with rubbish strewn all over the place, have made it
a paradise for mosquitoes to breed.
The “dead” project, located next to the Pudu Sentral transport hub, has been abandoned for almost two decades and was supposed to be one of the first mixed-commercial development projects that was to be integrated with the transportation hub.
The original plan comprised a 79-storey office tower, 46-storey condominium, 24-storey hotel and seven-storey shopping centre.
The RM1.4bil project was 30% completed about 15 years ago when the developer, PRSB, ran into financial difficulties during the 1997/1998 Asian financial crisis that forced them to abandon the project.
The Government decided to terminate PRSB’s contract in 2010, 12 years after the company abandoned the mixed-development project.
Subsequently, PRSB went into receivership and came under the administration of a consortium of lender banks.
‘Land can be forfeited’