Sabah Housing Board Scam

SPECIAL REPORT
by Selvaraja Somiah

On 28 September 1994, the Sabah Housing and Town Development Authority (SHTDA) signed a joint-venture agreement with a private developer, Sri Kepayan Indah Sdn Bhd, to embark on a property development project. This was towards the end of Tun Sakaran Dandai’s tenure as Sabah’s Chief Minister. (Sakaran retired as Chief Minister on 31 December 1994 and was made the Governor or Yang di-Pertua Negeri the following day).

The proposed development, the Kepayan Ridge Project Phase 16 & 17, located at Kepayan Ridge beside the new Penampang Bypass, comprised of 41 acres of residential property and 8 acres of commercial property, which included low-cost houses and shop lots. Under the terms of the joint-venture agreement, Sri Kapayan Indah would pay SHTDA RM5 million, which was the value of the land.

This project, just like Elite Consortium Sdn Bhd’s ‘underwater city’ (Atlantis: Sabah’s proposed new city below the sea), never got off the ground.

In 2000, the joint-venture agreement with Sri Kepayan Indah was terminated as it had failed to commence work plus had failed to pay SHTDA the agreed amount of RM5 million. By then, Datuk Osu Sukam was Sabah’s Chief Minister.

The State Ministry of Local Government and Housing then instructed SHTDA to engage a valuer to revalue the land and CH Williams & Talhar came out with a new valuation of RM29 million. SHTDA then tendered out the land and seven bidders made a bid for it.

SHTDA decided to accept the offer of the company that bid RM35 million.

In mid-2002, SHTDA submitted the name of the selected developer plus all the tender documents to the Ministry. Under the Sabah Local Government Ordinance, the Ministry is required to obtain State Cabinet approval for tenders above RM10 million.

After a lapse of more than six months, the State Ministry of Local Government and Housing directed SHTDA to reject the RM35 million tender and instead re-award it to the original developer, Sri Kepayan Indah, whose contract had since been terminated. SHTDA was also asked to revise the terms and conditions of the contract.

Under these revised terms and conditions, Sri Kepayan Indah would pay SHTDA RM10 million, not RM35 million, based on a price of RM4.10 per square foot -- that is, less than a third of the price offered by the highest bidder.

This was towards the end of Datuk Chong Kah Kiat’s tenure as Chief Minister and just before Datuk Seri Musa Aman took over on 27 March 2003.

Now, the questions that beg answers are:

1) Why was Sri Kepayan Indah Sdn Bhd, whose contract had already been terminated, reinstated instead of being fined and blacklisted?
2) Who are those behind Sri Kepayang Indah; the Directors and Shareholders; and how come they have so much clout with the Sabah government?
3) Why did SHTDA select the lower price of RM10 million from a delinquent developer when it could have instead obtained RM35 million?
4) Was the State Cabinet aware of the RM35 million bid recommended by the SHTDA?
5) Who issued the directive to SHTDA to reject the RM35 million bid and reinstate the delinquent developer at the much lower price?
6) Were the tender documents for the RM35 million bid forwarded to the State Cabinet at all?

Prime Minister Abdullah Ahmad Badawi has declared he will take a strong stand against corruption. Is Pak Lah aware of this matter and is he going to rectify this obvious abuse and transgression of the powers-that-be in Sabah?

Sabah Chief Minister Musa Aman has similarly declared he would rectify all mistakes made in the past without fear or favour.

This is what Musa said on 21 July 2004:


“The fight against abuse of power and corruption, promoting integrity, transparency and accountability in the public and private sectors should be carried out by all stakeholders, including the Government, private sector and NGOs.”


Will Musa now order an immediate enquiry into this matter and prove to the public he runs a clean and transparent government and that he has nothing to hide?

For that matter, the issue of the Umno Sabah building has still not been resolved to date -- notwithstanding the statements Umno Sabah has issued saying that everything is above board. Is it above board? Or is Musa protecting someone close to him? And is this man Datuk Seri Salleh Said Keruak who was Sabah’s Chief Minister from 27 December 1994 to 28 May 1996?

The land that the Umno building is being built on is owned by Accodon Sdn Bhd, a company owned by Musa Aman’s brother-in-law, M. Sapawak @ M. Sapawai Bin M. Tussin. And it was during Salleh’s tenure as Chief Minister that Accordon was given the land.

Clearly, Salleh and Musa are allies. Salleh helped Musa when he was Chief Minister. Now it is Musa’s turn to help Salleh.

And that was why Musa nominated Salleh for an Umno Supreme Council seat in the recent Umno General Assembly. And that was why Musa recommended Salleh for a Federal Minister’s post (but Deputy Prime Minister Najib Tun Razak chose Datuk Mohd Shafiee Apdal instead; the man who is trying to oust Musa and take over his job as Chief Minister, of course with Najib’s strong backing).

And that was why Salleh organised a ‘rival’ dinner when Anwar Ibrahim visited Sabah recently. Salleh wanted to divert the crowd from Anwar’s dinner that same night to spare Musa the embarrassment of a crowd at Anwar’s dinner. Musa could not afford for Anwar’s dinner to succeed as this would jeopardise his chances of seeing his tenure as Chief Minister get extended this March. So Salleh stepped in to help Musa sabotage Anwar’s dinner.

It is probably to Salleh’s interest to see his ‘mate’, Musa, continue indefinitely as Chief Minister rather than the post fall into ‘hostile’ hands.