Eco World tipped to get Pudu Jail land for RM7b project

KUALA LUMPUR: Property developer Eco World Development Group Bhd is tipped to win the RM7 billion redevelopment project of the Pudu Jail land in Kuala Lumpur, a prized UDA Holdings Bhd property that bumiputera firms say should only be developed by them.

The Malaysian Insider understands Eco World is going into a 70:30 joint venture with UDA for the 7.85ha prime land that once housed Kuala Lumpur’s main prison, the 101-year-old Pudu Jail which shuttered officially in 1996.

“Eco World is getting the project, the announcement should be made soon,” a source told The Malaysian Insider, saying the site has been abandoned for the past few years despite being made an Economic Transformation Programme (ETP) project.

In 2011, China-based developer Everbright International Construction Ltd was to get the project with a RM2 billion investment with UDA, which has land but no money to develop projects. But several Umno members and Malay developers protested, prompting UDA’s only shareholder, the Finance Ministry, to order a new plan.

There is now disquiet over Eco World getting the project, dubbed Bukit Bintang City Centre, as UDA had called for a tender last September.

Sources said the results of the tender have not been revealed and there are rumblings that UDA should have considered all the bids before deciding on a directly negotiated contract.

“There are no details as to how Eco World got the project. We understand that the Finance Ministry made the decision, not the UDA board,” a source said.

The Finance Minister is Prime Minister Datuk Seri Najib Razak while the Second Finance Minister is Datuk Seri Ahmad Husni Hanadzlah — both of whom have oversight over UDA, which was set up to redevelop urban areas and increase Bumiputera participation.

Eco World has been scooping up big projects since its inception last year and has among its directors, experienced property man Tan Sri Liew Kee Sin, who resigned as developer SP Setia Bhd’s chief executive officer last April 30.

Liew was SP Setia’s group managing director from 1996 and turned the RM200 million company in 1998 into a multi-billion ringgit international property firm.

He quit just over a year after state investment company Permodalan Nasional Bhd bought over SP Setia, prompting rumours he would join Eco World as his son, Tian Xiong, is also a director and substantial shareholder in the company.

Eco World has embarked on a programme to expand its land bank and projects worth up to RM30 billion after a corporate exercise last year. Its joint-venture in the Bukit Bintang City Centre is expected to help UDA trim its debts and raise money for affirmative action projects.

UDA was set to get Everbright as its partner two years ago as the RM2 billion offer from the Chinese firm was three times the land value but politically-connected firms scuttled the deal.

Analysts said the decision over the Pudu Jail redevelopment will be yet another test of Najib’s commitment to economic liberalisation as the hardliners in Umno, Perkasa and Utusan Malaysia had once criticised UDA for allegedly abandoning the Bumiputera agenda by not appointing Bumiputera joint-venture turnkey investors for the project.

UDA, whose assets were estimated to be worth RM2 billion two years ago, is more than RM900 million in debt. It had an outstanding RM104 million land premium for the Pudu site that was due in September 2012. — The Malaysia Insider


This article first appeared in The Edge Financial Daily, on June 23, 2014.