11/01/2009 The Sun

KUALA LUMPUR (Jan 11, 2009) : The government has given its commitment that housing projects launched this year will not be abandoned following the enforcement of new laws and the introduction of a special purpose vehicle soon.

Housing and Local Government Minister Datuk Seri Ong Ka Chuan said, however, the challenge for the government is to instil confidence in developers and buyers to ensure the industry continues to be active despite the unsupportive economic situation.

“For this year, we are very sure that houses launched will not be abandoned,” he told reporters today at a ceremony to hand over keys to owners of 37 houses under Phase 4 of the Jalil Sutera housing project that was abandoned in 2005.

“Under the new law, it is not easy for projects to be abandoned because you cannot siphon the fund out from the housing projects as there is this project account which is jointly managed with the ministry.

“They (developers) have to submit the account twice a year in June and December to the ministry so that we can see how they manage the account, so that no fund will be siphoned out for them to buy luxurious cars or airplanes and all money collected from buyers will go into the project account to build houses,” said Ong.

In 2007, the Housing Development Act 1966 was amended to protect the interest of buyers by empowering the minister to issue directions to a licensed developer to safeguard purchasers’ interest, make other appropriate general directions and investigate developers’ affairs.

Ong said while it was not an easy task, the government aims to achieve zero-abandoned projects by coming up with a plan to set up a special purpose vehicle similar to the Pengurusan Danaharta Nasional Bhd (Danaharta). It will be placed under the responsibility of the Perbadanan Perumahan Negara (National Housing Corporation) which will be established and supervised by the ministry as a revival agent for abandoned projects.

“It would also create a special fund to recover the projects and provide expertise in legal, technical and financial fields as well as in land administration and management matters,” he said, adding the ministry was still studying the matter and expected to achieve some positive development by June.

“By having this vehicle, we can revive many housing projects. The problem is, many people are involved in legal process and are being sued. So, we hope to overcome the legal complications by creating a vehicle like Danaharta,” he added.

Ong said 126 projects involving 35,262 houses have been revived either by the original developer or “a white knight” while 29 projects (15,155 units and 9,346 buyers) were in the process of revival.
Another 115 (37,308 units and 23,483 buyers) projects were still abandoned but with potential to be salvaged.