IJOK WAS TO BE ‘TEST CASE’ FOR DIRECT GOVT INTERVENTION IN RESOLVING PEOPLE’S ISSUES
Former Selangor menteri besar Tan Sri Abdul Khalid Ibrahim created a stir recently when he criticised the Selangor government’s controversial decision to settle its court case concerning a plot of land in Ijok against two developers. In an exclusive inter
QUESTION: Can you tell us more about the controversial piece of land in Ijok? Answer: Ijok was part of a Green Revolution Plan that involved 1,141ha, dating back to 1973. The state government had a forest reserve that was then used in the scheme to provide opportunities to the people to own land.
The reserve was then approved to become an agricultural zone. Each recipient was allocated 1.2ha of land. To assist would-be farmers, the Selangor Agricultural Development Corporation was requested to manage the huge tract of land in a similar vein to Felda.
(However), some “smart entrepreneurs” bought the land from these settlers, who were promised compensation, money and houses as their land would be used for housing projects, not agriculture. So, the settlers handed over their rights to the land to these people.
Q: When it comes to managing people’s assets, how would you have resolved land issues such as the Ijok case?
A: When I looked into the problem concerning the land in Ijok as menteri besar, I found that there were many abandoned projects in Selangor.
(The) developers said they wanted to develop the land, but what happened next?
The developers took loans from banks, launched the projects, people bought them and also took loans from banks. During the process, many developers, believing that they had yet to make a profit, closed down the projects. When that happened, the state recorded a loss over the land.
Secondly, buyers who had taken out loans would now have to repay the banks despite the houses not being completed.
When we (the state government) went looking for the developers, we found out that they had changed companies. And if we were to redevelop the land, we would need investments.
But the land could not be used (for redevelopment) because it has been mortgaged to the banks. The banks would not allow it as well.
Such problems occurred not only in Ijok, but also other places. When I became menteri besar, I knew of 20 such projects.
I took the project in Ijok as a (test) case, on how would I resolve the issue, revive the project and help landowners and house buyers.
I have no wish to aid developers that had “run away”. Had we solved this, the state would have had proper procedures, minimising risks of abandoned projects.
Q: Why did you choose to seize the land?
A: Even if I had told the developers to rework the land, they would say that they did not have the money. They would cry bankruptcy. Had I called other developers for the same purpose, they would not want to assume others’ debts.
If the debts fall on the state government’s lap, what is the government’s stake (in the project then)? Nothing.
If the buyers are told to complete their own houses, the problem is that they are not allowed to enter the property as it had been mortgaged to another party.
So, it was only fair for us to seize the land. When we hold power over the land, it means that we will have no encumbrances, but, of course, we have to repay those who hold interests in the property.
I did make seizures, but they involved only small plots of lands, about 2ha. But we had no problems from the developers. The state government exercised its power through the National Land Code.
Q: So, the state government at the time did pay compensation to all parties involved?
A: Yes, we did it according to legal procedures, at valuers’ value. Independent valuations were carried out.
We had to pay them, albeit with careful analysis, because if the land was worked on by developers, who did not even pay land premiums, we (the state government) can pay for the land at agricultural property prices.
We paid more than RM160 million. The takeover of the land was implemented only after the compensation was paid out.
There were only two problems left: the state’s authority in seizing the land and whether the people were compensated fairly. Those were decided by the court. The amount paid involved all stakeholders, including banks, companies and settlers in 2009.
Q: Did the two developers ask for a bailout?
A: They did. I told them they would need to fork out RM40 million in capital to fund the revival of their projects.
But these two developers had no money and did not dare request a full bailout.
When all suggestions could not be executed, I told them to find a better way. This took place in 2009, at a meeting at a community hall in Kuala Selangor involving almost 700 settlers.
I was there and brought along the state financial officer and land and mines director to explain the problems.
I made the demand in front of everyone, but the two developers could not fulfil it.
(Why the developers had no money) was because the land had been mortgaged and the money used for other unprofitable projects.