Selangor MB rejects claims PKNS in dire financial situation, says cash flow better now

SHAH ALAM, March 4 — Selangor Menteri Besar Datuk Seri Amirudin Shari rejected claims that the Selangor State Development Corporation (PKNS) is in a dire financial situation.

Amirudin said PKNS had not incurred a debt of RM5.7 billion, as claimed by some, adding that it was in a good financial position.

“PKNS still earns profits from the main income of its operations. The cash flow of PKNS is also at a better level where it is able to pay all the liabilities of the corporation based on operations and not from sukuk earnings or loans made.

“PKNS’ sources of income from 2018 to 2022 are from building sales, land sales and privatisation. While PKNS’ main income in those years was from land sales, which amounted to about 60 to 80 per cent,” he said during the question-and-answer session in the Selangor state legislative assembly sitting today.

Amirudin was responding to a question from Selangor Opposition chief Datuk Seri Azmin Ali, who asked about the financial position of PKNS.

Azmin has been highlighting the topic since last week, where he questioned the financial decisions made by PKNS in his debate of the speech of Selangor Ruler Sultan Sharafuddin Idris Shah Alhaj.

Azmin cited a report titled “The Awakening” that revealed that the financial performance of PKNS in 2023 was in a dire state as PKNS was in a negative net cash position.

Azmin, who is Amirudin’s predecessor in the role of Selangor menteri besar, also asked for an explanation from the Selangor state government after PKNS sold the development rights of PJ Sentral which is expected to give a return worth RM1.04 billion, to Malaysian Resources Corporation Berhad (MRCB) with a value of RM270 million.

Azmin also cited a report from business paper The Edge on February 29 which said property developer Tropicana Corp Bhd was acquiring a piece of leasehold land in Kota Damansara for RM224 million.

Amirudin, who is also the Sungai Tua assemblyman, said the decision to sell the rights was to get out of the “cash flow trap”.

“Some of our experiences working with the private sector have not all recorded impressive profits. I take, for example, the areas that we have developed with a company, in the Tropicana area.

“We can see the development costs there are worth billions of ringgit, but the value of the cooperation we get is around RM160 million from the development value in the Kota Damansara area. So we no longer want to have an agreement like that.

“We don’t want what happened before to PJ Sentral and getting in a cashflow trap, which ultimately, has a negative impact on the financial position of PKNS,” he added.