Batu Caves condo cancelled: Who suffers?

Artist rendition of the now-scrapped Dolomite Park Avenue condominium.

Artist rendition of the now-scrapped Dolomite Park Avenue condominium.

The Nut Graph

WHEN protests arose over the controversial Dolomite Park Avenue condominium being built near Batu Caves, Prime Minister Datuk Seri Najib Razak had this to say: “I give you my assurance that if Barisan Nasional (BN) takes over Selangor, we will cancel this project.” Selangor Menteri Besar Tan Sri Khalid Ibrahim has gone one up on Najib and announced on 24 Jan 2013 that the project would be cancelled to safeguard the public and protect the environment.

It is easy for politicians to promise a solution to a problem, especially as a condition for being voted into power, or to be seen as being sensitive to voters’ complaints. But often, the issue is more complex and the promised “solution” causes even more problems. What are some of the ramifications of cancelling or stopping a project once development approval has been granted?

Costing public money

In all this talk of cancelling the project, politicians have left out an important group that would be severely affected – the buyers of the condominium units. These buyers would have paid a down payment, secured a bank loan, and signed a sales and purchase agreement. These would only have taken place with the necessary approvals from the local council for the project.

Usually, local councils would be slow to cancel any approved development because the ramifications are immense. If the development approval was correctly granted, the council would potentially have to pay compensation to the developer and buyers for the cancellation. This means that keeping the promise to halt the project may result in a large sum of public money being spent to pay off aggrieved parties. Harming the public’s purse would also not be popular politically. This, then, leads one to wonder what will happen after the general election, and whether such promises will then be dropped for the next politically expedient pledge.

Under the Town and Country Planning Act, it is the state planning committee that is legally empowered to order a stop to the project. The order would be published in the government gazette, mentioning the state planning committee meeting that affirmed the order. As Khalid made no mention of the law being invoked in his announcement to cancel the project, it is still possible for the government to back out later and say he acted prematurely.

Buyers beware

There is, however, the option of arguing that the documentation and approvals are not in order due to fraud or corruption, and finding a way to absolve the council from paying any compensation. But even if there is a valid legal reason to stop the project, this still leaves buyers in a lurch.

Take the case of the purchasers of the Taman Petaling Utama Block E low-cost flat, which started construction in April 2004. It was meant to house 276 villagers from several demolished squatter villages in PJS 1. Sales and purchase agreements were signed with bank loans approved for 262 buyers, as the remainder failed to qualify for the bank loans. The project was supposed to be completed in May 2006.

On 2 June 2006, the Petaling Jaya City Council (MBPJ) received a solicitor’s letter sent on behalf of the owner of a house located next to the project. The house owner objected to the project and had obtained a court injunction from the Shah Alam High Court dated 9 July 2004 that prohibited construction of the project pending the case hearing.

Since then, the buyers have had a tough time trying to resolve their predicament. On 23 July 2007, they met with MBPJ officers to discuss the problems, assisted by the office of then Petaling Jaya Selatan member of Parliament Datuk Donald Lim. Promises were made, but no action was forthcoming. On 8 March 2008, the Selangor government changed hands to the Pakatan Rakyat.

From 2008 to 2010, the buyers had several meetings with MBPJ and their new elected representatives, and more promises were made to resolve the problems. When still no solution was found, the buyers staged a protest at Selangor Menteri Besar Tan Sri Khalid Ibrahim’s office on 15 Nov 2011. Khalid reportedly promised an answer within a week. He said: “We need to discuss with the developer and other agencies to resolve the matter. These things will take time.”

Several options were proposed, but it is now 2013 with no building in sight. Meanwhile, the buyers are still servicing bank loans with only a sales and purchase agreement to show for all the money they are paying. It will be five years soon, from the time the present PR government came into power, but it doesn’t appear like the problems will be solved before the next general election.