The Malaysian Insight

AS one of the richest states in the country, Selangor is an industrial powerhouse but it is facing a glut of abandoned commercial lots.

Since 2008 to 2017, the state government led by PKR, PAS and DAP has been trying to revive nine commercial projects, while another 105 housing projects remain idle.  

This brings the number of abandoned projects to 114. Their success so far since taking over the state is resolving 53 abandoned projects, which consist of five commercial and 48 housing projects.

State Housing Committee chairman Iskandar Abdul Samad said besides a weak economy, Selangor’s challenge is how to obtain sufficient funding to revive the projects.  

“In 2015, the state allocated RM20 million to revive the projects but the funds were only enough to revive two projects. We will need hundreds of million if we want to solve all the projects.”

Iskandar, who is also the Cempaka assemblyman, said while priority is given to the housing projects, the state is also focusing its efforts on commercial lots.

“We are not only focusing on reviving abandoned housing schemes but commercial areas as well, which include shop lots.

“It is the policy of the state government through the Selangor Housing and Property Board (LPHS) to find solutions for these projects and act as an intermediary.”

Among the LPHS policies in place to help a buyer is the setting up of joint action committees where buyers can coordinate with the authorities. Any action taken must have at least 85% buyer approval.

“We also have an abandoned project committee to help facilitate issues faced by purchasers. We will call all parties to help solve their issues.

“Another issue is that because the projects have been abandoned for many years, some even more than 20 years, the banks are unwilling to give out loans.”

The board also issues a letter of confirmation for the abandoned projects to enable buyers to restructure their bank loans or reduce their monthly payments.

Iskandar said the board can also talk to an affected liquidator and find ways to restart these abandoned projects.

“These discussions are held together with all the technical departments, like the land office, local councils, Syabas, TNB, IWK and other agencies, including the bank, to speed up the revival of the projects.

“If these projects have increased costs, LPHS will appoint a quantity surveyor to assess the cost of reviving these projects and ask the buyers if they want to continue with it.”

If the projects are making losses, Iskandar said the board will propose to the Ministry of Housing and Local Government a list of contractors and the ministry can decide whether to provide a special budget to continue.

“LPHS also can propose to the state government on enforcement actions that can be taken to ensure that the rights of the buyer are secured.

“Other than that, the land can be reclaimed by the state government if there is a violation of the provisions of the National Land Code of 1965.”

The abandoned projects are mainly in high-end commercial areas, such as Subang Jaya, Petaling Jaya, Klang and Selayang.

The state has yet to revive the abandoned commercial projects involving 1,784 units of shop lots and offices, one commercial block and eight industrial lots.

Despite the high number of abandoned projects, Iskandar said local councils will continue to approve projects if the developer fulfils all the requirements.

“We have instructed the local councils to monitor the progress of the developments. We can’t stop development in the state.

“As for the Selangor State Development Corporation (PKNS) projects, they will complete their projects up to 70% before they start selling the properties to the public. This is to ensure that there are no issues with the project.”

To date the state has resolved 53 abandoned projects involving 24,657 units that can be broken down to 39 licensed projects (20,002 units) and 14 unlicensed projects (4,655 units). – April 20, 2017.