Mindef land swaps: A ticking time bomb



THE architects of the Defence (Mindef) Ministry “land swap” probably did not foresee that their clever scheme would one day be exposed and blow up in their faces.

I came up “close and personal” to one of these land swap schemes when my colleagues and relatives in Johor Baru told me years ago that an old landmark in that southern city had ceased to exist.

They told me that Camp Majidee had “closed down” and all its assets and personnel were transferred to Batu Pahat, just an hour’s drive from my family home in Muar.

The Majidee military camp, one of the oldest in the country, occupied a 132-hectare site located between Jalan Bakar Batu and Tebrau Highway.

Established in 1940, it was home to an elite special force army regiment (the pride of the army and nearby residents) through the years.

It was officially closed down on June 22, 2014 and a valuable piece of real estate, the South Key development project, is taking shape.

On May 14, Mindef stated that it would release on its website the full reports on the land swaps “in stages”.

Meanwhile, it had lodged complaints with the Malaysian Anti-Corruption Commission (MACC) so that investigations can begin.

On May 16, Mindef special officer Mohd Nasaie Ismail lodged a report with the MACC on 14 projects linked to the land swaps. He said they were part of 16 projects being investigated by a committee led by former auditor general Tan Sri Ambrin Buang.

The 16 land swaps involved 2,923 acres belonging to the government valued at RM4.7 billion and up to December 2018, only five projects had been completed.

Over the weekend I took time off to visit Mindef’s official portal and saw several documents uploaded there. A 59-page document reported that the private sector would build a certain government facility (eg a military camp), and in exchange, it would be given a piece of government land and not payment in terms of money.

All land swap projects were managed by the Economic Planning Unit before 2009 and by UKAS (Unit Kerjasama Awam Swasta) after 2009, and must be approved by the cabinet. The document further stated that all land swap projects must involve three parties — the government (represented by the relevant ministry), Syarikat Tanah dan Harta Sdn Bhd (STDH, a company under the Finance Ministry) and the company (developer/contractor).

Under the mechanics of the land swap, a piece of land (an army camp site) is transferred by the government to STDH at nominal cost and the company will then build the facility and the land is transferred by STDH to the developer upon completion of the facility and issuance of the certificate of practical completion.

A special note specifies that “no physical cash transaction is involved and any surplus cash return is paid directly into the National Consolidated Fund”.

The document then states that the land transferred to the company under this land swap must be for a period of not more than 99 years (leasehold) and not in perpetuity (freehold).

The investigation by the committee reveals the following facts:

WEAKNESS in project planning;

POLITICAL considerations outweigh government interest. It also stated that several land swaps were meant to ensure Barisan Nasional’s victory in the 14th General Election rather than for “military strategies”.

It states that for Kem Paloh, a memo from the then defence minister’s political secretary instructed that priority must be given to building the camp “for the political interests of Semberong Parliament”. A directive letter had been issued to the company “to purchase the land and commence construction even before a contract had been signed;

LACK of due diligence in choosing the company/contractor;

THE project does not fulfil the needs of the Defence Ministry;

THE contract terms and conditions do not safeguard the interests of the government. In the case of Land Swap Mukim Plentong, the land was transferred to the developer upon receipt of a“land deed bond” (which has now lapsed) even though the project has not been completed; and

ALTHOUGH the cabinet had insisted that all federal land shall be transferred only as leasehold, the land swaps for Jalan Ampang, Batu Uban, Mukim Bukit Raja and Kapar, Mukim Plentong and Kinrara were all as freehold. As a result of all these weaknesses, the government suffered losses of at least RM500 million. The investigating committee recommended that a report be lodged with the police and MACC and that Mindef should prepare and maintain a full inventory of all its lands and assets.

As the matter is now under MACC’s microscope, we wait for the law to take its course.

If there are criminal elements in the entire affair, we will soon know. The bomb is ticking. Interestingly, Datuk Seri Hishammuddin Hussein was the former defence minister when many of these land swaps took place. Recently, he had “challenged” the current defence minister and his deputy to prove that he had “personally benefited financially and politically” from the land swaps.

The writer formerly served the Attorney-General’s Chambers before he left for private practice, the corporate sector and academia.




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