KUALA LUMPUR, Nov 22 — The objective of establishing Kwasa Land Sdn Bhd has not yet been fully achieved nor in sync with the original plan set forth by the Economic Council, according to the 2022 Auditor General’s Report (AG’s Report) released today.
Kwasa Land is the master developer of Kwasa Damansara in Selangor and a wholly owned subsidiary of the Employees Provident Fund (EPF).
The report said that based on the original proposal of the Kwasa Damansara concept plan, development should have been implemented over a 15-year period, from July 2012 to 2027.
On November 8, 2021, the board of directors of Kwasa Land approved a review of the Kwasa Damansara development period through a study of the company’s strategic direction and extended the development period to 2047.
However, an audit review found that within 11 years, only about 2.10 hectares (ha) or 0.4 per cent of the total 536ha of land available for sale have been fully developed.
Meanwhile, 258ha (48.2 per cent) have not been developed by fellow developers and the remaining 275ha (51.4 per cent) have not started any development as of April 1, 2023.
Further review found that 10 developers have been appointed and given development rights for 260ha (48.6 per cent) of the total area of 536ha of land plots for sale.
According to the AG’s Report, some of the factors delaying land development under the administration of the Petaling Jaya City Council were beyond Kwasa Land’s control, such as the change in the land use zone conversion process from the Petaling Jaya Local Plan 2 to the Special Area Plan.
The conversion resulted in the approval of the planning permission only being obtained in 2021.
The next audit review found that the EPF had not received repayment of the financing principal or dividends from Kwasa Land’s profits since its establishment in 2009.
However, as of December 31, 2022, the EPF received a return of RM683.24 million in the form of financing interest payments by Kwasa Land along with RM472.45 million in capitalised interest.
Audit analysis of financial data as of Dec 31, 2022, found that the EPF had channelled funds totalling RM2.941 billion to Kwasa Land since its establishment in the form of cash (RM2.469 billion) and non-cash (RM472.45 million).
As a result, Kwasa Land has been urged to take proactive and effective measures to improve the development targets of Kwasa Damansara.
According to the AG’s Report, Kwasa Land needs to re-evaluate the Kwasa Damansara development model and ensure that the EPF receives a return on the investment made and provides a return to EPF contributors in the form of dividends. — Bernama
