To protect the interest of original buyers, the government will only allow the Plaza Rakyat project to start once the issue of compensation to buyers is resolved, said Deputy Federal Territories Minister Datuk Loga Bala Mohan.
He revealed that a clause aimed at safeguarding the original buyers has been inserted in the sales and purchase agreement between the Kuala Lumpur City Hall (DBKL) and the project’s new developer, reported The Star.
In October 2015, Profit Consortium Sdn Bhd, the new developer of the project, had signed a sale and purchase agreement to take over the abandoned project for RM740 million, of which RM40 million is set aside to resolve compensation issues.
Of the 211 original buyers, 104 had been issued offer letters by Profit Consortium since January and the process is still ongoing.
“DBKL is the one approving the plans and we will ensure that the new developer fulfils their obligations to the original buyers of the project,” said Loga Bala.
“Having said that, the buyers should be reasonable in their claims and not expect the impossible,” he said, noting that former buyers should receive what they had initially put into the project.
Loga Bala made the statement following reports that some of the original buyers wanted to be compensated based on the current market price, which should not be the case as DBKL and the new developer had no legal obligation towards them.
“They must understand that DBKL has already sold the land and has no further rights to it.”
“You can still purchase a unit from the project today but at the current market rate; the RM400,000 can be off-set against the new purchase price,” he explained.
Abandoned in 1997, Plaza Rakyat was 30 percent complete when Plaza Rakyat Sdn Bhd (PRSB) ran into financial problems during the 1997/1998 Asian financial crisis.
The government terminated PRSB’s contract in 2010 or 12 years after the mixed-development project was abandoned by the company.
Meanwhile, Profit Consortium had revised their previous plan for the 6.2ha site, with their latest proposal featuring five skyscrapers, revealed Loga Bala.
The new developer plans to build a 96-storey tower, comprising 50-storey service apartments, 26-storey hotel and 10-storey office space. The others will be 70-, 60-, 58- and 52-storeys high.
Image sourced from The Star
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