Excuse me, I have $$$ vertigo!

Posted by M ws On Sunday, October 17, 2010 11 comments
Are you reeling in shock from the disclosure that Permodalan Nasional Berhad (PNB) will build Malaysia’s tallest building near the historic Merdeka Stadium at a cost of about RM5 billion with completion expected in 2015?



At this early stage, there has been no information as to the height for the 100-storey 'supertall' building but clearly, it can never surpass the current world’s tallest building — the 160-storey Burj Khalifa, which stands at a towering 828m.

When the PM announced this news on Friday, he said HERE that “We take pride in our national icon, the Petronas Twin Towers. It signifies the spirit of ‘Malaysia Boleh’. Another landmark to be developed by PNB is Warisan Merdeka,” said Prime Minister Datuk Seri Najib Razak during the tabling of the 2011 Budget in Parliament today.

Many of us must be plagued with many questions including:

1) Where is the source of $$$ for this colossal project?

2) Why is there no mention in the budget as to how our country is going to settle our National Debt which has ballooned from 40 per cent of the GDP to 52 per cent today at RM363 billion (according to MP Tony Pua HERE)?

3. Did you know that this 100-storey building was not birthed overnight? On Dec. 7th 2009, The New Straits Times was quoted HERE that 100-storey skyscrapers (were) planned for Kuala Lumpur? I cannot locate the original report in NST as I do not have access to the archives.

As far back then, the three sites in the city had been identified for the development of iconic structures to spur growth in the economy supposedly Dataran Perdana in Jalan Davis, the area surrounding Stadium Merdeka and the vicinity of the Matrade Centre in Jalan Duta.

That report sated that all the plots of land are privately owned. Two belong to government-linked companies - Pelaburan Hartanah Bumiputera Bhd and Permodalan Nasional Bhd (PNB) - while the Naza group owns 25ha in the vicinity of the Matrade Centre. The report also cited that "While it is understood that the design for such a skyscraper is included in the original development master plan for the 25ha site around the Matrade centre, another source claimed that a 100-storey building is to be built near Stadium Merdeka, owned by PNB."

Even at that time, Bank Islam Malaysia chief economist Azrul Azwa had said that "The key thing is the huge cost of the development and what the government's role will be in this. The report also said that according to RSP Architect's Hud Bakar, a 100-storey building, on average, would cost 50 per cent more per square foot than a normal high-rise building, depending on the actual design.

So why is there a necessity to build a 100-storey building knowing full well that the rental would be 50% more than that of other buildings? There is simply no logic at all!!!

4. Does the 100-storey building promote sustainable development? Anyone who has been to KL would be well aware of the congestion that the rakyat face. Were town planners consulted at all?

Do the authorities know that some buildings already have the sick building syndrome? Read the full report HERE.

5. Was a feasibility study carried out to see if this project will cause a glut in the commercial property market? They have to explain and justify the move. If not, this project should be scrapped immediately!

6. We don't need ministers like Ng Yen Yen to come up with immature and shallow statements such as reported HERE where she said:

Its minister Datuk Seri Dr Ng Yen Yen said the tourism sector would flourish with the tower as it would attract tourists to Malaysia.

"It will not only be beneficial to the tourism industry, but also for the domestic trade sector.

"Malaysians should take this suggestion positively because this 100-storey tower is for the good of the country," she told reporters at the MCA elections operation room here today.

"We can build it as we have the capacity for such structures. Look at Shanghai (China), they start with a tower and keep adding more, the same goes for Taipei," she said.

She added that Malaysia has taken a brave step towards being competitive and the tower will open more windows for domestic trade, as well as attract more foreign investors to occupy the building.

It is ridiculous that the country spends RM5billion for the absurd rationale that she gave! Besides, she did not justify what she meant by "for the good of the country" because it is obvious that the benefits are limited!!! So Ng Yen Yen is suggesting that we spend billions to keep up with the Joneses??

Brave step? Ya right! How many investors will occupy their building with full knowledge that the rental will be 50% higher??? It just does not make sense. Obviously, an empty vessel that has not done its homework will make a lot of positive noise!

7. More importantly, do the rakyat need such a project? We need LOTS and none include a 100 storey building that panders to a jaguh kampung mentality and causing more hardship in other areas to many such as highlighted earlier.

RM5 billion is A LOT OF $$ that can be put to GOOD and BETTER use for the country in such a way that it DIRECTLY benefits the rakyat.

In the mean time, please excuse me. I have $$ vertigo !!!

11 comments to Excuse me, I have $$$ vertigo!

  1. says:

    Captain Obvious Dear masterwordsmith,

    Alain Robert @ Spiderman will be a happy man ;)

    Cheers!

  1. says:

    Mavericko 1Menara EPF.

    The score... Najib 1 : EPF members 0

  1. says:

    Anonymous No super project no magic money ! More super projects more magic monies !!! Interestingly, a govt owned land can be turn over to a private owned company just like that. And how was that transaction carried out ?

    We need to remind the evil and corrupt regime of the many "white elephants" around. Even the Rakyat bus terminal was abadoned long long ago by the socalled timber king and needs govt to rehab the project. Bakun itself cost the rakyat lots of taxpayers money.

    They have had mastered the art of corruption so much so that any thinkable mammoth project has the minister singing praise so as to cover up her own shortfall. Note that many reports were lodged against her for projects under her ministry that had elements of corruption BUT but the authority had closed one eye for now.

    People out there. Know that we cannot allow such a blantant govt to continue taking us for a ride without clear accountability. Very soon our EPF money will be needed to rescue many of those projects and we will be paid in monthly method instead after retirement and no more lump sum as now and that's my fear.

    ~ahoo~

  1. says:

    Anonymous I predict the $5 billion will escalate to at least $8 billion by 2015 and the building will not have been completed.

    And any investigations into the cost overruns will be stamped NFA by the MACC and AG.

  1. says:

    Anonymous if fail in the next GE all bn minister can jump down from the 100th floor

  1. says:

    Anonymous PNB to build 100-stories Warisan Merdeka building at a cost of MYR5.0 billion. That’s about USD1.6 billion at today’s exchange rate. Wow!

    Now let’s see…
    Let’s say we start with their ROI. MYR5 billion, if parked in a time deposit account, would turn in, say, 10% annual interest. (10% is a reasonable estimate because I can easily get them 12%). That’s MYR500 million annually. Wow! That’s a lot of money! This is just based on a simple, do-nothing-at-all, returns on the MYR1.5 billion.

    Now, investing in the iconic “mother of all buildings in Malaysia” would involve ROI risks. Surely the owners are not thinking of occupying the whole building are they?! No, of course not. At the cost of MYR50 million per floor, they must be morons to even think about it. Nope. They’ll probably rent it out; a major portion of it. So, renting it out involves risks. What if there are not enough tenants? What if several floors are vacant for a long time? What about maintenance costs? So many what if’s. So, having to bite their finger nails every month, surely the returns should be much more than leaving it safely in a time deposit wouldn’t it? Let’s say that for taking the risk, they expect at least twice the returns (which is already really stupid), on the MYR5 billion. Good. That makes it MYR1.0 billion returns per annum. Wow! I just love this.

    Let’s just say, the owners are “careful” enough to only take 10 floors for their own use. That leaves 90 floors of rental space. Of course we’re only assuming there are 90 floors of rental space, but it could be less if basement car parks are excluded. So that would be MYR1 billion divided by 90 floors. That averages out to roughly MYR11 million per floor. Divide that by 12 months and we have roughly MYR1 million per month per floor. That is, if there are takers. Of course they could break up the floors into smaller units. OK, count me in as a tenant IF you allow a 10 x 10 office space. But seriously, filling up 90 floors is one hellava job.

    Did I say time deposit? Hmmm…sounds like a better option to me. Call me stupid or fuck me dead, but I’ll rather take the MYR500 million every year and sip free champagne at Paris “The Twat”Hilton’s parties paid for by her stupid boyfriends. And Aunty Paula and her fans won’t have to afraid losing their EPF money and won’t curse me for causing traffic jams and contributing to the office space glut. :-)

    StraightTalking

    BTW, the Petronas Twin Towers only cost USD1.2 billion (that’s USD600 million each)

  1. says:

    fargowin The truth hurts.

    The Chinese or the yellow race is what brings progress. Just look at Asia……….is enough.

    Whether they do it internationally or locally they will survive.

    We can distinctly see the lowering of Malaysia standards of living as the percentage of Chinese in this country goes down.

    In the 70s we were tops with 40 over percent of Chinese and today with only 25 percent we are far behind Singapore, Hong Kong and Korea.

    Main reason is the number of such Chinese migrating to these countries – the best ones and rich ones.

    Next ten years as the percentage goes even lower, we would be nearing Indonesia or Philippines.

    Meanwhile enjoy your stay and the good time.

    On the whole as the Chinese spreads out throughout the world, the average standards of these will have much higher standards of living over others.

  1. says:

    Anonymous Now that you mentioned it, I can’t help but rub in the salt.

    You see, while most, if not all, of the advanced (or developed or whatever you call it) countries are rushing to China to tap on that country’s impressive economic growth (both Bill Gates AND Warren Buffet were there just recently to look into investing there); trying to learn about China’s “economic miracle” and how to take advantage of it; pouring in multiple billions of USD into the cities; struggling to learn Mandarin (Putunghua) including yours truly; buying their shares and properties; marrying their women folks; admiring their culture and history; here in Malaysia, millions of Malaysian Chinese are born and literally living right in our backyard. And what does our government do?

    Instead of loving these folks and tapping on their insatiable thirst for economic advancement, learn from their 1,000 years history of commercial shrewdness and moderate political desires to help improve the Malaysian economy, the government chooses to call them “pendatang” and tell them to “balik Tongsan”, frequently running them down like the Chinese Malaysians are their worst enemy that they must eliminate at all costs. I mean, if this government is not stupid, then I really don’t know what stupid is. Governments and private companies (huge MNCs) all over the world are eagerly queuing up at China’s door to share a portion of their wealth.

    What the hell is wrong with our government?

    Just look at China’s GDP for 2008. It was USD4,327 billion! And what’s Malaysia’s in 2008? A poultry USD221 billion. That’s all we can shout about. That’s only 5% of what China made in 2008! Some of their cities, with populations smaller than Malaysia are doing extremely well. Take a look:

    2008 Shanghai (population 19 million) GDP was USD198 billion
    2008 Beijing (population 17 million) GDP was USD174 billion
    2008 Guangzhou (population 10 million) GDP was USD123 billion

    Without sounding like a racist, Malaysia is lucky to have such a huge Chinese population without which, our ringgit’s value would be not be what it is today. It will be 25 sen to a Sing dollar.

    StraightTalking

  1. says:

    Anonymous Correction. I said 25 sen to a Sing dollar.

    It should be SGD0.25 to MYR1.00
    (25 cent Sing Dollar to one Ringgit Malaysia)

    StraightTalking

  1. says:

    katdog I keep wondering, how people can rationalize a valid reason for Governments to invest in mega office building structures.

    Even if profits can be made etc, the primary purpose of governments is NOT to make profits using tax payers money but to use it to provide essential public services such as roads and transport, police, courts etc.

    Similarly, i can't fathom how people can rationalize the use of EPF for 'national/social' purposes. Even though EPF may be government run, the money there is not for the express purposes of 'developing' the nation or to be used 'for the good of the nation' (such as bailing out ailing companies). We already pay the money for 'national purposes' via income taxes. The EPF is meant to be our retirement savings, not for providing development/services for our country.

    The EPF is a fund whose primary purpose is to seek profits to provide good returns/dividends for its members. Its shocking in Malaysia that so many people are so apathetic that they don't care if the EPF fund (their money) is being used to invest in dubious national projects and initiatives that makes very little economic sense.

  1. says:

    masterwordsmith Dear commenters

    Many thanks to every single one of you for your fantastic comments which are far better than my post. Thank you for broadening the scope and breadth of this topic with your lucid ideas, comments and input.

    I am greatly encouraged by your wisdom, concerns, knowledge and love for our country - that you care enough to take the time to share your thoughts.

    I did a follow-up post on the EPF and hope that you can read it at your leisure.

    Take care and thank you for gracing my blog with your elegant presence.

    Do keep in touch.

    God bless you!

    Warmest wishes

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