FREE MALAYSIA TODAY. 16TH FEBRUARY: The government will issue support letters to help buyers of “sick” projects in applications to restructure loans taken for the purchase of affected properties, says local government and development minister Nga Kor Ming.
In a written reply to Parliament, Nga said as of Jan 31, there are 429 projects, comprising 70,727 homes, categorised as sick projects.
Sick projects refer to developments which have fallen behind schedule by 30% or where the time promised for delivery of vacant possession has lapsed.
Nga said the government would freeze the development accounts of developers involved in sick projects to curb irresponsible withdrawals of funds.
He did not elaborate what constituted “irresponsible withdrawals”.
Developers have to place a 3% deposit with the government as part of the licensing requirements for their projects.
The 3% is based on the gross development cost of the entire project and would be refunded on completion of the project.
Nga said the government would also blacklist developers of sick projects and their board of directors, and ban them from applying for licences for future projects.
The ban will only be lifted once they have completed their sick projects.
Nga said his ministry will also declare development sites “abandoned” under the housing law if work has not progressed for a long period of time.
He said the government will engage stakeholders on sick projects.
“We will also hold a talk for all developers in the peninsula to remind them of their responsibilities as licensed housing developers and encourage the use of industrial building systems to hasten project completion at a lower cost without affecting the quality of construction,” he said in a reply to Kota Melaka MP Khoo Poay Tiong on the state of sick projects.