Friday, 8 January 2021

What Ails Prasarana Malaysia Bhd (“Prasarana”)?

 

Prasarana is a wholly-owned unit of Ministry of Finance. As at end 2019, Prasarana had total assets of RM1.3 billion with total liabilities at RM35.38 billion.  (Possibly with impairments of RM30 billion the assets recorded is significantly lower (The Edge, Aug 5, 2019)). Accumulated losses stood at RM42.41 billion. For 2019, it suffered an after-tax loss of RM3.61 billion. Recently, its CEO was suspended for “insubordination”. He was appointed only in July 2020. The insubordination was in respect of not investigating MRCB-George Kent for the construction of LRT3. That was presumably a Board directive. Prasarana has a “colourful” Chairman – Datuk Seri Tajuddin Rahman, the MP from Pasir Salak.

The Edge (Dec 28, 2020) revealed that Tajuddin, who was appointed Chairman on May 11, had sought the termination of the contractors of the transport-oriented development at the Dang Wangi light rail transit (LRT) station. Prasarana may also move its office to this new development. The project going on at the LRT station is Latitud 8, a mixed-use commercial development with a gross development value (GDV) of RM1.2 billion. According to reported documents, Prasarana may have to fork out as much as RM80 million to terminate the joint land development agreement (JLDA).

The companies involved in the construction of Latitud 8 include public-listed Crest Builder Holdings Bhd and its 51%- unit Intan Sekitar Sdn Bhd. The remaining 49% of the company is held by Detik Utuh Sdn Bhd.

Detik Utuh’s shareholders are Tindakan Juara Sdn Bhd (40%), Obata-Ambak Holdings Sdn Bhd (35%) and Vignesh Naidu Kuppusamy Naidu (25%). Tindakan Juara is 35% owned by Sri Rahayu (Tajuddin’s daughter), 35% by Datin Seri Rohkiah Abd Samat and 30% by Firdaus Tajuddin. Rohkiah is Tajuddin’s wife while Firdaus is his son.

Rohkiah and Firdaus were appointed to the board of Tindakan Juara in early 2007, about four months after the company was registered. Sri Rahayu was appointed to the board in February 2010.

Crest Builder and Detik Utuh won the bid to develop the 2.72-acre or 1.09ha tract on the site of the Dang Wangi LRT station at end-March 2012. Prasarana, which owns the land on which the development was slated to take place, was to receive RM46.64 million or 21.2% of the project’s estimated GDV of RM220 million. Since Tajuddin, who is Member of Parliament for Pasir Salak, Perak, was appointed Chairman of Prasarana in May this year, it would indicate that he and his family were involved in the project even before he held the position.

According to Crest Builder’s annual report for FY2019, the Latitud 8 development has already commenced the main building works. The launch of the development was slated for end-2016, according to news reports, but it never happened. In 2019, there was talk of a change and a resubmission of plans to the local authorities. Earlier, the plan was for a single block of 43 storeys, with 17 storeys of office space and 418 SoHo units on top of the offices, as well as a retail podium, all located above the Dang Wangi LRT station. News reports published in 2019 say construction was halted, with the date of a relaunch of the project in 2020.

There are inconsistencies, conflicts of interest and huge liabilities/ accumulated losses that may never end for Prasarana. Shouldn’t there be a complete audit, overhaul, restructuring of this massive public sector entity? Prasarana needs professionals and transport experts to determine its future not politicians with vested interests!

 

Reference:

 

1.     Newsbreak: Prasarana chairman Tajuddin exerting his authority, 28 Dec 2020, The Edge

2.     Newsbreak: Impairments at Prasarana for FY2018 could exceed RM30 billion, 5 Aug 2019, The Edge

3.     Newsbreak: After Prasarana’s sound and fury, the chairman has to go, 5 Jan 2020, Free Malaysia Today

 

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