Reviving abandoned projects: All stakeholders must pay — iPAM president

PETALING JAYA (Sept 10): All stakeholders must play a role in reviving abandoned projects, including contributing financially.

This was raised by Insolvency Practitioners Association of Malaysia (iPAM) president Victor Saw Seng Kee during a panel discussion at the Real Estate and Housing Developers’ Association (Rehda) Institute conference on Wednesday. The conference was held at Wisma Rehda, Kelana Jaya here on Sept 8 and 9, with EdgeProp as media partner.

“You need all the stakeholders to pay for it. All the stakeholders must find a way to contribute, each and every one. On this rescue project, making money depends on how you look at the whole thing and structure it. You’re going to look at all the components and work out how you can get everyone on board,” Saw stressed.

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Besides Saw, the session, titled “Financial Risks: Housing Laws & Strata Governance — What Banks and Developers Need to Know”, brought together OCBC Bank Malaysia managing director (real estate corporate banking) Mohammad Fadzli Ahmad, Rehda Malaysia vice-president Datuk Seri Charlie Chia Lui Meng and Housing and Local Government Ministry technical adviser Datuk Jayaselan K Navaratnam.

A key discussion point was the difficulty of reviving abandoned projects, with panellists emphasising that successful rescue efforts require cooperation among stakeholders and careful assessment of a project's financial viability.

From a banking perspective, Fadzli said lenders need to assess not only the viability of an individual project, but also the developer's other ongoing projects and their potential impact on cash flow.

“A good lender or banker should always think ahead and consider what could happen if a project fails. With every project and every loan extended, the lender should consider the potential risks and, importantly, what can be done if things do not go as planned. Thinking through these scenarios from the outset is what makes a good banker,” Saw concurred.

Regulations should improve process, not impose restrictions

The panel also discussed the potential evolution of housing regulation and the importance of balancing oversight with greater flexibility for compliant developers.

Jayaselan stressed that the purpose of regulation is to facilitate better management rather than simply impose restrictions.

“The purpose of the regulation is not to evaluate, but to manage. That is why I highlighted that, at the moment, the system is willing to work with us and recognise that if a developer is classified as P1 and meets the requirements, we will allow them to proceed. This is why we believe the system we have designed today is not too restrictive,” said Jayaselan.

The discussion further touched on alternative financing structures, faster fund disbursement, project-level assessment and closer cooperation between banks, developers and regulators. Panellists also considered the role the government could play in facilitating the revival of distressed projects, particularly through approvals and other processes, rather than necessarily providing direct funding.

Overall, the discussion highlighted the importance of financial discipline, stakeholder cooperation, effective regulation and project-level assessment in managing risks across the property development sector.

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