Lifeline for faltering RM2b project

  • Nation
  • Saturday, 09 Feb 2013

KOTA BARU: The Kelantan Govern­ment plans to extend its contract for the controversial RM2bil waterfront project here to 2020 with the private developer.

Sources said the state economic planning unit had proposed to Deputy Mentri Besar Datuk Ahmad Yaakob that the original 12-year contract be extended to prevent the project, much of which have been stalled, from failing.

Sources familiar with the report said the state had brought in an independent audit firm, Afrizan Tarmili Khairul Azhar, to study the problems in the project.

Among others, the firm recommended that the state draw up a fresh agreement with project developer Liziz Standaco Sdn Bhd (LSSB) “to prevent any misunderstanding and legal complication” in future.

The Star yesterday reported that most projects promised by LSSB had yet to be fulfilled although the contract expires on Aug 31, 2015.

The project, which started off as a river bank beautification project, was supposed to be the state’s most ambitious development since PAS took over the administration in 1990.

It was planned as four development zones (A to D), stretching some 10km on both sides of Sungai Kelantan.

However, although the project kicked off in 2003, the only development seen is the construction of a hypermarket and 195 shoplots costing some RM190mil. The rest of the land remains undeveloped although there have been earthworks and land reclamation along the banks.

The Malaysian Anti-Corruption Commission has started investigating the project, following reports lodged by various groups and comments made in the Auditor-General’s 2011 Report on the state.

Sources said state officials had met LSSB officials and come out with the following points of agreement:

> SET the cash contribution from LSSB to the state at RM115mil, to be paid in instalments over seven years;

> REDUCE the land size to 290ha (which is a third of the original 404ha given to LSSB);

> LSSB to pay RM13mil for a further 80ha near the Tumpat side of the river;

> THE state government to pay for half of the construction cost of the RM28.4mil approach road to the hypermarket project in Zone D, and;

> DRAWING UP a fresh agreement.

Meanwhile, sources said LSSB suffered a loss after investing more than RM300mil on the reclamation project.

A source added that actual construction works only started in 2007 although the agreement between the company and the state government was inked on July 8, 2003.

“The company made financial losses while waiting for the approval from all authorities because preliminary works had to be implemented first before the company officially takes control of the earmarked stretches along the river,” said the source, who declined to be named.

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