Melaka Chief Minister Mohd Ali Rustam must explain the exorbitant cost behind the construction of a nine-storey building in the state, said a DAP state assembly representative today.

In a press statement, During Tunggal representative Betty Chew said the Menara Perbadanan Tanah Adat Melaka in Melaka Baru has a RM25 million price tag.

"RM25.2 million for constructing a nine-storey building or almost RM3 million per storey is considered high," she added.

No open tender

According to the DAP leader, the chief minister must also explain why the project was two years behind schedule and whether any fine or penalties were imposed o­n the contractor for the delay.

Another question which must be answered, she said, was why there was no open tender for the contract.

In a written reply to her question at the recently concluded state assembly meeting, Mohd Ali said Menara Pertam was built at a cost of RM25.2 million with a built-up area of 13,423 square feet over two acres of land.

He added that since Pertam owned the land there was no land cost. The project commenced o­n Nov15, 1999 and was scheduled for completion o­n Nov 15, 2001.

However, the Certificate of Fitness (CF) was o­nly issued o­n April 23 this year.

The chief minister also told the state assembly that no open tender was made and the construction contract given to Gapadu Development Bhd.

Land premium

Meanwhile, Chew also called o­n Mohd Ali to explain the low land premium of o­nly RM1.33 per square feet imposed o­n a 13-acre piece of prime land next to the Pasar Borong Batu Berendam.

The chief minister claimed the 13 acres - sold to Capital Farmosa Sdn Bhd at a land premium of RM760,704 or RM1.33 per quare feet - was valued at a such a low rate below market price to enable shophouses built there to be sold cheaply to the public.

He said the land was approved in Feb 28, 1996 at a time when the market value was RM2.50 per square feet.

The land value now could be as high as RM5.90 per square feet.

"This sale of land gives rise to many questions. If the government is sincere about enabling the public to buy houses at low rates, why does the government not develop and build houses and shophouses themselves to ensure that they can be sold at a low rate?

"What guarantees are there that the private company will sell the houses and shophouses cheaply to the public? " asked Chew.

She said there is no need to sell the land at such low rates to a private company which will o­nly deprive the public of larger funds it could collect if sold at market rates.

"We are talking of 573,300 square feet and the loss of funds by charging a land premium of o­nly RM1.33 per square feet as compared to the market rate is not small," she said.

She added there has been no development of the land since it was sold to the private company in 1996.

"The government therefore has a responsibility to explain whether it is in the public interest or how the public interest from selling state land at below market rates," said the DAP leader.