Wednesday, May 16, 2012
Lazy Melayu Liberal business model
The debate on UDA Holding Berhad (UDA Holding)'s development of the former Pudu Prison land has been on going for quite sometime.
Malay rights group, Perkasa had criticised UDA Holdings Chairman, Dato Nurjazlan for his preference to take the lazy way of sub-"contracting" the project wholesale to a foreign group.
The sentiment then was that Urban Development Agency (UDA), a legacy institution of the late Prime Minister Tun Abdul Razak Dato Hussein was formed to spearhead Malay's entry into urban property ownership.
Though UDA is no more the agency it was before and the power of UDA was curtailed for it's own reasons, the objective remained. UDA has listed one of it's subsidiary, UDA Holding for fund raising purpose.
Nurjazlan was in the news last Monday in The Star's Business column to explain his dilemma. That column seemed to help prepare the ground for potential controversy in his decision to sub-contract the project to a China company. It triggered a property developer friend to comment.
His inclination towards neo-liberalism is obvious. And it is also obvious that he is a Melayu Liberal and typically is indifferent to national building aspirations.
It only enhance the stigma that Melayu Liberal are nothing more than the lazy native version of the liberalism movement that have moved its rights and freedom mindset from political liberalism to economic liberalism.
That thinking and attitude is not the way for a future leader.
Excuse of a Defiant
The Star's Business column article below:
Monday May 14, 2012
UDA’s dilemma on Pudu Jail project
It needs to follow directive but also needs to consider the best deal for the project
By JAGDEV SINGH SIDHU
KUALA LUMPUR: UDA Holdings Bhd is still evaluating proposals of all parties for the redevelopment of its Pudu Jail land and wants the preferred bid to be the one that is in its best commercial interest.
Even though the board has approved the proposal by Everbright International Construction Engineering Corp last year, the Finance Ministry (MOF) has directed UDA not to consider the company and instructed UDA to prepare a masterplan based on parcelling the land into three.
A special committee formed by UDA's board has included the development model proposed by Everbright in its evaluation to ensure that UDA's long-term commercial interests are protected.
On protecting bumiputra interest, UDA, under the Everbright proposal, will own a significant portion of the assets in the project and will ensure bumiputra contractors will be given the opportunity to participate in all stages from consulting, construction and retail space
Chairman Datuk Nur Jazlan Mohamed said the committee was at the initial stages of developing the masterplan but early indications were that the development model proposed by Everbright gave the best returns to UDA .
“On a commercial basis, Everbright's proposal is the best because it will develop the land as one piece. If the land is cut into three parcels, you know you will lose the value of the land,” he told StarBiz in an interview.
“But we have not come to a conclusion yet.”
MOF has asked UDA to divide the land into three one is for a bumiputra controlled party, another by a bumiputra company in a joint venture with others and the third parcel is open to a non-bumiputra company.
Under Everbright's proposal, the China company will fund the entire development of the land that has been called Bukit Bintang City Centre (BCCC). Its proposal comes with a committed funding of US$1bil and Everbright will take the construction and financing risk, build a contiguous retail space of 2 million sq ft, a car park and a convention centre and hand it over to UDA.
All that time, UDA will retain control of the land and Everbright will, after handing over the assets UDA needs in four years, develop its own properties on the land at its own pace.
Given the amount of commercial space that is planned in Kuala Lumpur, Everbright will have the muscle and foreign connection to handle the flood of floor space that will come on stream in the next few years.
The best option so far for the bumiputra developer will see UDA take on a lot of the risk Everbright is willing to shoulder. UDA, together with the bumiputra developer, must secure the funding for developing the project, which will lower the returns it will obtain.
That means the property will have to be injected into a special purpose vehicle and the ownership of the land will be charged to a bank to get the funding.
The land will have to be charged to the bank in order to raise the funding since UDA does not have the cash to fund the multi-billion ringgit project,
That will translate into lower earnings for UDA compared with the proposal by Everbright.
Furthermore, the floor space it will have to lease out to retailers once the project is completed under the parcelled-out proposal will also be smaller as the land would have been sub-divided among three different developers.
Nur Jazlan said the proposal by Everbright would mean that UDA stands to receive RM300mil to RM400mil a year in income from its property at BCCC, which is essential for a company that has just 400 arces that can be developed.
“The best solution is for UDA to have enough retail space to allow it to earn substantial recurring income to continue to have money to acquire land and grow as a developer.
“What is UDA's long term future and the Puda Jail land provides the only hope for UDA where if developed properly, UDA can get the right quality assets that can give it recurring income.
“That's why the decision on the Puda Jail land is not a normal decision. We need to develop the right quality assets to give us the recurring income for us to have a future,” he said.
Shopping centres need to be of a big size to attract the traffic to be successful. He said the retail space at the Puda Jail land will require a contiguous space in order to compete against the like of Pavilion and Mid Valley Megamall.
If the carved out proposal gives UDA retail space in three separate locations, Nur Jazlan said it would be hard to attract retailers and shoppers to the retail parts of the development.
“If it is not integrated, it will be hard to attract people. We won't achieve the rental yields.”
Nur Jazlan said the Government had not pumped money into UDA after it got listed in the 1990s and he did not think it would do so in the future. UDA has been asking for more land since it has been privatised but has yet to be allocated any.
Nur Jazlan said it was also easier to stratify the assets if the property was built by a single developer.
“It will be a problem if the land was parcelled out as you will be dealing with three different parties,” he said.
Nur Jazlan said it would not be easier to REIT out at a later date if the assets were jumbled up with different developers. - The Star
Sulking Tok Mat family
The article actually reflects Nurjazlan's stubbornness and defiance towards his superior, the Minister of Finance cum the Prime Minister himself. Such discussion on something undecided should not have been disclosed and made open.
More so, if Nurjazlan intend to negotiate. The Prime Minister Office would need to do some prepping.
Such action is not wise but reflects his immaturity. Instead of being a Chairman appointed by the Government to carry out Government policy, his behaviour is that of a sulking spoilt brat wanting things his way without respect for protocal and decorum and being indifferent to nation's agenda.
This reminded us of his late father, Tan Sri Mohamad Rahmat who have been sulking for several years before he passed away.
He wrote a book to criticise his former boss because he privately claimed he should be rewarded for his so-called "sacrifices" to the party and nation and was openly disappointed with Dr Mahathir's decision to sack him.
Don't accuse us of attacking the indefensible dead, because the same was said when he was alive but decided to ignore blogger like us as insignificant.
Sacrifice is sacrifice, thus there is no reward for sacrifice. There is only gratitude of others towards the person.
For that matter, Tok Mat and Nurjazlan owe Dr Mahathir gratitude for giving his floundering political career a second chance. It is ridiculous for him to not accept the termination of his political career.
Since Tok Mat's death, Nurjazlan have been expressing vengence against Dr Mahathir within his closed circle.
But Nurjazlan's sulking did not end there. He has problem with his Division too. He claimed the Division's office building as his family's. On the other hand, there are those that claimed his father donated it to UMNO.
It could well be Nurjazlan's way of threatening the Division against challenges against him. Keep him as head of Division or UMNO Pulai will be homeless.
Returning back to Nurjazlan's tantrum in The Star, our friend, whose held various levels of management position in many property development companies, including public listed ones questioned Nurjazlan's view and attitude.
Unlike Nurjazlan who rose to be Director of PLCs and Head of pulai UMNO Division by virtue of his father, our friend is well grounded in experience and rose out of his own effort and hardwork.
He found Nurjazlan's view to be bewildering and surprised that he could oppose to the Ministry's clear directive against preferring a China company to develop the former Pudu Prison land, to be known as Bukit Bintang City Centre (BBCC).
The nation building agenda and benefit for UDA Holding to give priority to Malaysian companies to develop is obvious and does not need elaboration.
Such statement and excuse should not have come from the Chairman of an establised property development company or a development agency with history that spans many decades more than many other active property developers within the industry.
UDA Holding was given the land, not just to be landowner but to play many other strategic roles in developing and contributing to nation building.
In his view, Nurjazlan was doing the lazy way of acting like a broker of development land. Not only are UMNO politicians being generally perceived as "broker" for quick gains, so-called educated Nurjazlan is playing the same embarassing role in his capacity as Chairman of UDA Holding.
Thus, what is the point of appointing him for his so-called experiance as Executive Director of UM Land Berhad?
By sub-developing it to Everbright of China, UDA Holding does not contribute any resources - be it money or expertise or management - into the development of the valuable large piece of urban land. Other than quick and safe monetary gain, it does not contribute to the future company capacity and capability. Neither does it benefit the local industry or serve any economic role the development was set out to do.
If UDA has nothing to add and contribute but only seek to own "some' of the property for free by riding on it's Bumiputera status and GLC ownership, it shows UDA has not gained and progressed from the years they developed the land plot which sits Sg Way Shopping Complex and Bukit Bintang Plaza.
Our friend felt that the Government should not give the land to UDA Holding to develop in the first place. The land should be given to other property developers in Malaysia who has the right attitude and aptitude to develop it themselves.
By Nurjazlan's talking of development risk in developing one of the last big piece of Government land in Kuala Lumpur City Centre, it shows Nurjazlan to be an unreasonably risk averse and incompetent.
Given the chance to other property developers, they would just grab it without making much fuzz and ludicrous complain of Government not pumping money to UDA since 1990s since it's listing.
All other GLC property development companies are not financially supported and aided to develop their land.
Lazy Melayu Liberals
As a public listed company, UDA Holding need to make reasonable return for it's shareholders.
On the other hand as Nurjazlan should be aware, if he has been keeping track with Government policies since Tun Abdullah Badawi's days, UDA was assigned more social obligation role, thus for oppurtunity to get the development right to the valuable land.
Nurjazlan should have known of this as he cannot argue that he is only serving the interest of shareholders. Even on that argument, the controlling shareholders of UDA Holding is the Government.
Off late, attitude like Nurjazlan seems to be spreading among many other GLC property development companies. Yet the CEOs are paid millions in salary and perks.
If not, why would UEM be doing JV with Sunrise to develop it's land? So is the case of Sime Darby taking over E&O and allowing existing management to continue to manage.
Also the case with PNB controlling intrest in SP Setia. There is a believe that TTDI was doing something similar.
The common factor in all these one can observe is the "Melayu" GLCs giving management control to "Cina" property development companies. But this is not another Malay versus Chinese rivalry but the issue of lazy natives taking the easy way out and doing nothing.
One wonders why the Malays being given position to do things are lazy at dirtying their hands. Might as well change this Melayus.
In the midst of neoliberalism ideas pervading the younger generation and penetrating Government thinking, as in the claim they do not need affirmative actions, what has happened?
Nurjazlan also used to make such bold claims.
The Melayu Liberal wants to think and preach along the Adam Smith of the world but being "given" a land to develop, they behave like the pro-affirmative action Malay asking for handouts.
At least, the tongkat Melayu wants to do something, wants to get out of the tongkat dependence and wants to see the Malay be at par with the other races and preparing to stop needing tongkats.
The Melayu Liberal advocated the abolition of government intervention in economic matters. No restrictions, no barriers, no tariffs, they said; free trade, meritocrasy and nature (another term for competition as once said by Tan Sri Azman Mokhtar) is the best way for a nation's economy to move forward and the Malays to develop.
In this and many cases, the Melayu Liberals are not as independent as one is led to believe they are.
Now it seems the liberal ideas of freedom and rights in politics and individualism in "free" enterprise, in "free" competition are merely being applied by Melayu Liberals for the capitalist's pursuit to feather their own nest as they wish without consideration for fairplay and the nation in mind.
Looking at the proponents of neo-liberalism amongst Malays like the Tingkat 4s, the Khairys (Air Asia, ECM Libra, etc), the ISIS, the Ethos Consultings, the Khazanahs, the GLCs, and last but not least, the Nurjazlans, neo-liberalism for these Melayu Liberals is only about easy money without responsibility and hardwork.
The Melayu Liberals are justifying their commission taking or bribery practices, lazy ways to refuse dirtying their hands, unashamedly abuse of power and self serving agenda behind pro-globalisation neoliberalism ideology.
And it is not because Nurjazlan is only half Malay.
The problem is that many Malay leaders, from both side of the political divide, bought the idea hook, line and sinker, without understanding its destructiveness.
* Edited 7:20 AM 17/5/2012
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