HDC to the rescue

20/05/08 New Straits Times by Zoe Phoon

At long last, there’s light at the end of the tunnel for those who bought units in projects that were subsequently abandoned by their developers.

This hope, taking the form of a special purpose vehicle called the Housing Development Corp (HDC), will be the long-term solution to replace the current ad-hoc manner in which abandoned projects are revived.

The Ministry of Housing and Local Government (MHLG) secretary-general Datuk Ahmad Fuad Ismail said the creation of HDC has already been outlined in a working paper on the National Housing Policy to be submitted to the cabinet for approval after incorporating feedback from the industry.

Among its powers: To be able to acquire, take over and complete projects.

Ahmad Fuad said with HDC’s implementation, buyers such as those “trapped” in the stalled Saujana Aster Condominium in Precinct 11 of Putrajaya could finally find the panacea for their headaches.

“We are now only able to facilitate in rehabilitation efforts and keep buyers updated on the progress of revival efforts if they form an action committee to represent them,” he said. Ahmad Fuad pointed out, though, that the “involvement of many other stakeholders in the project” and that “revival efforts cannot focus on the interests of Saujana Aster buyers alone” are issues needing to be addressed.

“At the moment, discussions with (the developer) Arif Cerah Sdn Bhd and (the master developer of Putrajaya) Putrajaya Holdings Sdn Bhd have yet to be finalised ….

“Arif Cerah has to negotiate with its financier, CIMB Bank, for a haircut on its debts while Putrajaya Holdings has to obtain its board of director’s resolutions on the takeover of the project from Arif Cerah.”

Saujana Aster is one of five projects developed by Arif Cerah in Precinct 11. The others are double-storey terraces in Zone Two that have been completed, as well as the Garden Resort Amber double-storey terraces and Citrine double-storey semidees, all of which are only between 45 and 60 per cent completed, based on certification by architects.

Arif Cerah is wholly owned by Peremba Jaya Holdings Sdn Bhd, a 70:30 joint venture company formed by main board-listed PECD Bhd and Putrajaya Holdings.

Peremba Jaya Holdings is the developer of the 1,056- acre Precinct 11, the largest residential zone among the 20 precincts in the federal administrative capital. The precinct was envisioned to be ready by 2010 and accommodate a population of over 50,000 in 10,335 units.

Ahmad Fuad said his ministry’s Monitoring and Enforcement Division has been watching Arif Cerah’s projects since January 2006, when it first noted signs of delay in Garden Resort.

Since then, it had asked the company to submit revised work schedules, completion proposals and progress certification by its consultant architect.

The projects came to a complete halt in June 2007 as Arif Cerah said it was “facing financial difficulties”.

Ahmad Fuad said based on the Housing Development Accounts and sales records of the projects, slow sales of the public housing units and the developer’s weak financial standing led to the problems.

However, following several meetings between Arif Cerah, Putrajaya Holdings and representatives of the buyers, he is confident “a solution is on the horizon” and that “we hope to get confirmation on the date for work to recommence by May 28”