Abandoned project gets white knight
10/05/2008 NST By David Yeow

Marching and demonstrating at Parliament House would not help the situation in any way, says Datuk Seri Ong Ka Chuan Housing and Local Government Minister

KUALA LUMPUR: There is finally hope for about 2,000 house buyers in Puchong with Housing and Local Government Minister Datuk Seri Ong Ka Chuan promising that their five-year wait for the delivery of houses will soon be over.

"I am looking into the issue personally. I should be able to make a favourable announcement next month."

He appealed to the house buyers not to take any rash action. The house buyers had, two days ago, threatened to march to Parliament if their houses were not delivered within a year.

"Marching and demonstrating at e Parliament House would not help the situation in any way," said Ong, after launching Malaysia's first Architect Centre here recently.

"I am aware of the situation. We are currently in talks with a 'White Knight' developer to salvage the project," he said.

(White Knight developer is the industry term for a developer who takeover abandoned projects).

It is learned that the White Knight Developer in this case is IJM Corporation Berhad.

Ong said negotiations with the new developer had been quite positive and urged the house buyers to be patient for just a little while more.

"We have had two rounds of negotiations with the new developer, things are moving very positively. If our negotiation with the developer is successful, the house buyers will get their houses soon.

"Of course, there would still be a delay on the completion time, but this is better than not getting their house at all."

The issue, recently highlighted in Streets on Tuesday, revealed frustrations of house-buyers in Taman Lestari Permai, Taman Lestari Puchong, Taman Saujana Puchong 9E and Taman Punchak Jalil Phase 10A. All of which have been abandoned since 2003.

It was revealed that Talam Corporation Berhad had abandoned the project.

On compensation that the house-buyers are seeking, Ong said they could seek redress with the Housing Tribunal under his ministry. The tribunal can order developers to pay up to RM30,000 in payment for late delivery of houses.

Asked if action would be taken against the developer who had abandoned the housing projects, Ong said while he was sympathetic towards the house buyers, it was not his immediate priority to take punitive action against the developer.

"It is not that we don't want to take action against them but we rather try not to write off whatever little hope that is left for the project to be revived by the original developer." he said adding that the ministry's main objective was to deliver the houses to the people.

"Talam was previously quite a reputable developer. It is sad to see the state it is in now. They are also taking initiatives to look for a suitable White Knight developer to take over the project. So, I see some positive development."

On avoiding similar situations in future, Ong said that the government had amended the Housing Development Act three times recently, with the latest in December last year.

He said since the amendment, the number of abandoned projects had decreased.

However, Ong clarified the ministry was not only responsible for abandoned projects.

"The state government plays an important role as well, because they are the ones who approve land for building projects. That part is beyond the ministry's jurisdiction. But we will be working closer with state governments to tackle this issue," he said.

In an immediate response, National House Buyers Association secretary-general Chan Kim Loong said that while it was good to hear that the ministry was on top of the issue, he said the entire fiasco (in Puchong) could have been avoided if the ministry had been more alert.

"Section 7(f) of the Housing Development Act requires developers to submit biannual progress reports to the ministry. That acts as a safety net but the ministry did not follow that closely."

Chan believes that if the ministry had been more competent the problem could have been diagnosed and solved much earlier.

"Section 11 of the Housing Development Act also states that the housing minister can order a takeover of an abandoned project to protect the house buyers. The minister had not invoked this power in this case. He has to explain to the house buyers why he had not done this," said Chan.

Ong's brother, MCA president Datuk Seri Ong Ka Ting, was the previous minister.

To avoid future incidents of abandoned projects, Chan recommended that the concerned developers be blacklisted and their names published on the ministry's website.