10MP injecting cash for KL 'ghost towns'

By Syed Jaymal Zahiid KUALA LUMPUR

The DAP's chief economist Tony Pua said the plan to develop the Kuala Lumpur financial district as well as other grand construction projects within the area as outlined in the 10th Malaysia Plan (10MP) is a waste of taxpayers' money.


Pua, the Petaling Jaya Utara MP, said this in support of a report by OSK Research which was published in an online news portal that said such investment was likely to create a commercial property glut.


The report said that the redevelopment of Kampung Baru could destabilise the property market around the KLCC area which is already suffering from a high vacancy rate of 17%.


“The temptation to rush into developments without any regard to the supply-demand dynamics can be very hard to resist in economic boom times.


"It will destabilise the entire market and can be calamitous to all market players in the long run,” said the report.


It stated further that the area would suffer from an overabundance of empty office spaces amid an influx of existing but yet-to-come spaces in the coming few years.


"It is very possible that the area would suffer from a property glut... this is typical of the economic framework where the 10MP is relying on the construction factor to push the economy," Pua told FMT.


The "construction factor", meaning injecting money into the economy through infrastructure developments, cannot generate income on its own, said Pua.


"It must coincide with other initiatives or you will end up creating more office spaces but having no one picking them up," he added.


Crony economics ala Mahathir


The redevelopment of Kampung Baru (right), the KL Financial District and the Sungai Besi Airport were unveiled under the 10MP by Prime Minister Najib Tun Razak in Parliament yesterday.


Pua said the projects reflected Barisan Nasional's bankrupt economic ideas where economic stimulation heavily depended on pump-priming activities.


"This is like what happened under the administration of (then premier) Dr Mahathir Mohamad. It is a simple way of fishing out projects to crony companies."


The first-term MP said much of the promised transparency under Najib's New Economic Model was invalidated by the lack of government assurance that all mega-projects in the plan will be sourced via an open tender process.


Pua argued that the cash should be invested in improving the deplorable education system and industries that ensures healthy competition and economic progress.


As much as RM230 billion will be injected into privatisation-driven activities under the new five-year plan, Najib's first as prime minister.


The sixth premier is facing a stiff test to revive the ailing economy amid opposition to his mass liberalisation efforts by internal and external political foes.