KUALA LUMPUR: For the past week, UDA Holdings Bhd chairman Datuk Nur Jazlan Mohamed has came under fire from the Malay rights group Perkasa and his own Umno party members over the sale of a piece of prime land along Kuala Lumpur’s Jalan Sultan Ismail and for not appointing a bumiputera developer for the Pudu Jail redevelopment project called Bukit Bintang City Centre.

Accusations of betraying the bumiputera agenda were hurled at him. He has defended the company’s decision as an act to shore up its depleting cash coffers which now stand at RM90 million.

UDA is selling the 1.4ha plot of land for RM215.5 million, or RM1,414 psf.  

Burdened with low cash flows and a debt of RM900 million, Nur Jazlan said the sale of the land was also to enable the Finance Ministry-owned company to finance development projects in the Klang Valley.

Nur Jazlan, the Pulai member of Parliament, said his priority is to ensure UDA survives.

“I have to make sure UDA survives first. UDA’s bumiputera agenda’s first priority will be profit. Then only we think about what we can afford,” the outspoken MP told The Edge Financial Daily in an exclusive interview last Friday.

He said the cost of the bumiputera agenda is not sustainable in the long run and the government must realise this, adding that the government must find a new formula to define the agenda in the current situation.

“If the government does not manage the cost of the bumiputera agenda well and explain the reality of the situation well to the public, it will come back to haunt us one day.

Nur Jazlan: UDA is set to lose RM1 million a year from the newly refurbished Puduraya terminal.

“We have to tell the truth. If you look at the bumiputera agenda and its cost, UDA is the clear example. From 1971 to 1996,  [UDA was] 25 years of a hunky dory, fantastic big company. In 1996, it was listed and went downhill from there,” he said.

He added that in its golden years, UDA was given an annual grant running into multi millions of ringgit and its main purpose was to develop and build. It was not profit-driven. The completed projects were then given to bumiputeras. However, those assets soon became rundown as there was no maintenance.

“This is the problem with the bumiputera policy. What is the cost? Who is paying for it? If it is the government, fine. It is hunky dory, it’s perfect. In UDA’s case, once we were taken out from the authority structure and running on the assets we had, [it was] lucky we lasted 10 years.

“We have to have a format or formula on how to define this cost of the bumiputera agenda. If it is going to be the government giving money all the time, think again. If the government stops giving money, this is what happens to UDA,” said Nur Jazlan, adding that the government has to be truthful if it can no longer dole out funds as it used to.

He said the people should just stop making demands and provide solutions instead.

“This problem needs to be solved now because we don’t want to leave the next generation with debts,” he added.

Asked what he meant by modifying the bumiputera agenda, Nur Jazlan said: “Today, you will find that Petronas’ contribution will soon decline and tax collection has plateaued already. So where are the other sources of government revenue? The government has got to rely on FDI (foreign direct investments).
Even for that, you have to fight like mad because there is a lot of competition [from all over the world].”

“Then you have these ‘pejuang Melayu’ [Malay rights crusaders] threatening the top leadership, shouting where is the bumiputera agenda. You think this is going to endear Malaysia to foreign investors?” he asked.

He said the current bumiputera agenda of UDA is difficult to sustain as UDA makes only RM30 million to RM40 million profit annually, which leaves it very little to save to buy land to develop projects for bumiputeras.

UDA also faces resistance from tenants to its attempts to increase the rental revenue of its retail space.

BB Plaza in Jalan Bukit Bintang has not been refurbished or renovated since 1992, while its neighbours along the prime shopping strip have been transformed many times over.

“The vicious cycle is when the shopping centre is not attractive, then nobody wants to move in and we have to actually rent out at a lower rate. So it is like something that feeds on itself.

“Everybody [in Jalan Bukit Bintang] has renovated. Farenheit has renovated twice. Pavillion is up. Competition is very tough.

“The cost of the bumiputera agenda today is no longer viable because of the competition. Why haven’t we renovated [BB Plaza]? Because we don’t have any fresh capital.

“This is the perfect example of the bumiputera agenda. The cost. The long-term future of UDA is under threat,” said Nur Jazlan, adding that fear has dissuaded people from tackling the issue.

“If you cannot afford to own [rent] a shop, admit it-lah. Then what do you do? You change the way of doing business. How? You rent the walkway. Put your products there. Locate your back end somewhere else that is cheaper. Let someone else take the shop lot.

“Of course, later on, someone else will say ‘Nah, ini dia agenda bumiputera. Suruh orang Melayu berniaga ditepi jalan.’ Tapi Melayu memang suka berniaga tepi jalan. [So, this is your bumiputera agenda. Make the Malays trade on the roadside. But surely the Malays like to do business on the roadside.] It is true what. They love the gerai concept, and the returns are higher. Be truthful about it,” he said.

He said UDA is set to lose RM1 million a year from the newly refurbished Puduraya Terminal.

“UDA spent RM63 million [to renovate and refurbish] but will never recover [the cost]. We want to raise the rents or service charge just to cover the cost, but even then the tenants are shouting because they want to continue paying the old price. Without the rise in service charge, we are expected to lose RM1 million a year,” said Nur Jazlan.

“If the cost is going to be detrimental to the company, then you better think again about the bumiputera policy in its current state. Nobody wants to tell the truth, but the truth must be told now because the reckoning is near.

“I have to make sure UDA survives first. The first priority of UDA’s bumiputera agenda will be profit, then only can we think about what we can afford,” said the feisty politician.

This article appeared in The Edge Financial Daily, June 6, 2011.