Focus View
Flexibility needed to boost tourism
FocusM team | 08 Sep 2017 00:30
Five years is a long time for a listed company to obtain approval from a state government for a land swap deal. 

But that’s what happened to DRB-Hicom Bhd when it failed to get the go-ahead from the Kedah government to change the status of a 134.53ha (333-acre) piece of land owned by Rebak Island Marina Bhd from Malay reserve to non-Malay reserve. 

The land status swap agreement involves Rebak swapping 141.4ha (350 acres) of Malay reserve land with non-Malay reserve land owned by Northern Gate Free Zone Sdn Bhd. The state’s laws allow for the Malay reserve land in Langkawi to be swapped with that of non-Malay reserve status based on certain conditions.    
 
The deal was first mooted in 2011 and DRB had said the swap deal was expected to completed in mid-2012. However, there have since been many extensions.  

On Aug 23, DRB finally announced Rebak was terminating the agreement as approval from the Kedah government for the land swap was not obtained. No reason was offered on why the approval was not given. 

It’s perplexing that the state government can sit on the proposal for more than five years. If the rationale was that the status of the land could not be changed, would it not have been better to have just communicated this to DRB within a year? 

It’s back to the drawing board for DRB. It says Rebak would explore any other possible land status swap with other parties to develop the land.

The Kedah government might have valid reasons not to approve DRB’s application for the swap. But in the interest of transparency, it should reveal why it sat on the proposal for so long. Was it a question of valuation or location?
 
In this instance, the Rebak land was to be developed into a “boutique” luxury concept project with villas and waterfront bungalows and retail outlets. 

Currently, Malaysia has no such “boutique” luxury concept projects to attract high net worth tourists such as is being done in Phuket, Koh Samui and Bali. The Rebak project was aimed at attracting both foreigners and Malaysians to invest.   

State governments must realise it’s their job to promote business and tourism activities that will create employment and benefit their economies. It would be prudent to exercise some flexibility in accommodating investors as long as it benefits the people and does not compromise state policies.