Wee Ka Siong has urged the Ministry of Finance to explain a controversial land transaction involving a 75-acre strategic plot in Bandar Malaysia, claiming the deal would have locked the land for up to 30 years while generating returns of less than one per cent annually before it was eventually cancelled with RM46.6 million in compensation paid out.
The MCA president said the land forms part of the 486-acre Bandar Malaysia development, which is estimated to be worth around RM12 billion. Located in the heart of Kuala Lumpur, the area is situated near two MRT stations and only a few stops away from Bukit Bintang and Tun Razak Exchange.
According to Wee, the 75-acre parcel alone is estimated to carry a value of approximately RM1.8 billion.
“This is not land located in a remote area. It is a strategic commercial asset in central Kuala Lumpur,” he said in a TikTok video uploaded on Tuesday.
Wee alleged that the Ministry of Finance had signed a lease agreement on Nov 1, 2023 with Singapore-based Sim Leisure Group for a period of 15 years, with an option to extend the lease for another 15 years.
He questioned the rationale behind leasing a strategic asset worth nearly RM2 billion for up to three decades when the projected annual return to the government was estimated at below 0.8 per cent of the land’s value.
Under the agreement, he claimed the rental rate was fixed at a minimum of RM3 million annually, inclusive of assessment and quit rent, or five per cent of the project’s gross revenue, whichever was higher.
Wee argued that the annual rental translated to only around 7.65 sen per square foot per month, which he described as unreasonably low for prime commercial land in Kuala Lumpur.
He also criticised the reported 18-month rent-free period granted at the start of the agreement despite the land already being tied to the proposed project.
Expanding on the matter, Wee said projections by Sim Leisure indicated the development could generate RM68.8 million in revenue during its first year of operations. Based on the five per cent gross revenue sharing arrangement, Bandar Malaysia would only receive about RM3.4 million, equivalent to a return of roughly 0.19 per cent of the land’s estimated value.
He added that by the 30th year, the project’s revenue was projected to rise to RM283 million, with Bandar Malaysia expected to receive approximately RM14 million under the same formula. However, he pointed out that the figure would still represent a return of only around 0.76 per cent.
Wee further noted that the five per cent gross revenue rate was lower than the current Sales and Service Tax (SST) rate of eight per cent.
He said it was therefore unsurprising that the government eventually terminated the agreement, but questioned why taxpayers must now bear a RM46.6 million compensation payment barely a year after the deal was signed.
“Who negotiated this agreement? Who approved these terms? Why was land worth nearly RM2 billion tied to such minimal returns?
“And why must Malaysians now shoulder RM46.6 million in compensation following the Madani government’s own decision?” he asked.
According to Wee, the matter goes beyond a minor operational issue and involves decisions made at the Ministry of Finance level, warranting a thorough investigation.
