Dato’ Eric See-To
1. Value of House to the settlers constantly jumps.
It seems that every time a Pakatan politician opens their mouth to defend the Ijok Scandal, the value of the house to be given to the settlers in 2 years time jumps.
On 11 Feb 2018, Selangor MB Azmin Ali was quoted in the Selangor govt’s own portal SelangorKini to say that the compensation paid to the Ijok settlers is RM180,000 cash plus a house worth RM250,000.
Two days after our BNSC Press Conference on 14th Feb 2018, another article featured Azmin saying that the compensation is now RM180,000 cash and a house worth RM400,000.
However, yesterday and today (23rd and 24th Feb), both the Selangor MB office communications director as well as PKR MP for Subang, R.Sivarasa now says the value of the house given as compensation has now jumped to RM500,000.
So what is the actual value of those houses?
The developer building the houses itself has actually told us when it said the total the total construction cost for the 987 houses is RM246.7mil – or about RM250,000 each.
R.Sivarasa also confirmed this value when he said today that “RM250 million was retained by the buyer/developer to build the settlers homes.”
Granted that cost of construction does not mean selling price but property developers in Malaysia typically have gross margins of 20% – which is double of that in countries such as the USA.
Thus a house that cost RM250,000 to build would mean a selling price of RM300,000.
If this was a commercial project with the respective selling and cost prices, the 987 houses would have fetched RM296mil in revenue giving a profit of RM49.4mil over the cost price of RM250mil, which is a very decent profit for a developer.
It is simply not possible for the sales value of the house to be RM500,000 as it would mean the developer’s margin is 50% and it would have made RM250mil extra on a cost of RM250mil.
I would not put it beyond the Pakatan Selangor govt to deliberately mislead the settlers on the value of their houses as compensation as part of their effort to defend against this escalating scandal while trying to convince the settlers that they were not cheated.
If you use RM250,000 as the house value plus the RM180,000 cash, each settler was compensated RM430,000 for their 3 acres of land – or RM3.29 per square feet (psf).
Even if you use PKR’s vastly inflated RM500,000 as the house value, each settler gets RM680,000 for their 3 acres of land – or RM5.20 psf
This is hardly fair as the listed company paid the Mahathir-era crony companies an average price of RM12.34 psf to buy the 2,200 acres of land for RM1.18 billion.
Due to the rapid growth of highways and the Ijok town, comparable agriculture land there are seeing asking prices of RM30psf to RM65psf.
In any case, it seems the Selangor Govt does not care much whether the settler’s compensation is fair as the MB’s office has already said yesterday that it is not their concern.
“We live in a capitalist society where property rights are tradable, usually for large sums of money. In this case, the former owners only got around RM95,000 per acre. Whether this is a good or bad price for them is not a concern of the state.” said Yin Shao Loong, the Strategic Communications Director of the Selangor Menteri Besar’s Office.
In the end, the settlers got RM300mil while the two crony companies got RM880mil – but then this is apparently not a concern of the state govt as it is “capitalism”.
Source: Eric See-To