KUALA LUMPUR (Oct 7): Among the leading causes of abandoned projects in Peninsular Malaysia are weak financial positions of developers involved and weak project viability, said Housing and Local Government (KPKT) Minister Datuk Seri Reezal Merican Naina Merican (pictured).
The ministry had identified 79 abandoned housing projects involving 17,724 housing units in Peninsular Malaysia currently, affecting 11,824 buyers, Reezal Merican told the Dewan Rakyat.
Of the total, 65 projects were halted due to the companies’ weak balance sheets, the minister said. Other causes included failure to comply with standards and weak project management, while some developers cannot be located.
“And among the most important was that the viability of the projects was not solid,” he said during Minister’s Question Time.
Currently, 15 projects involving 2,830 units for 2,699 buyers are being restored, while 38 projects with 11,515 units involving 6,319 buyers are in the stage of getting the right mechanism identified to rescue the projects.
Another 26 projects comprising 3,383 units for 2,806 buyers are in static condition.
The projects carry a gross development value (GDV) of RM5.57 billion before accounting for depreciation due to extended construction delays and arrangements with liquidators.
Selangor has the highest count with 33 abandoned projects involving 10,974 units. Some 12 projects are in Kelantan involving 946 units, while Johor has nine projects with 285 units.
Responding to a follow-up question by Fong Kui Lun (Pakatan Harapan-Bukit Bintang), Reezal Merican said that only four developers had the financial strength to build the projects first and sell later.
In the last decade, the government utilised RM219 million in direct intervention over previous abandoned projects until the work was completed, saving 215 projects comprising 59,090 units in the process for 39,247 buyers.
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