By Yow Hong Chieh | June 01, 2011
The Malaysian Insider

KUALA LUMPUR, June 1 — Putrajaya cannot keep throwing money at agencies tasked with furthering the Bumiputera economic agenda without consideration for profit unlike in the past, says Umno leader Datuk Nur Jazlan Mohamed.

The UDA Holdings Bhd chairman warned there will come a day when the government, whose finances were “being stretched over time”, would no longer be able to dole out grants to statutory bodies like Majlis Amanah Rakyat (Mara) as it does currently.

He said this was particularly true now as the Najib administration grapples with ballooning subsidy costs and a widening budget deficit following a sharp rise in global crude oil prices.

“The money is to be used in a more efficient manner because the government cannot afford to give funds like it did before,” the accountant by training told The Malaysian Insider last night.

“It has to have a return as well because you need to reinvest whatever that was set aside for the Bumiputera so that the Bumiputera can have future sources of income… instead of being spent 100 per cent.”

The Pulai MP said the expectation that everything must be given on demand to further the Bumiputera cause must give way to a more nuanced allocation of funds.

UDA has come under attack from Umno and Utusan Malaysia for allegedly abandoning the Bumiputera agenda after it chose not to appoint Bumiputera joint-venture turnkey investors for the proposed Bukit Bintang City Centre, located on prime land in the heart of Kuala Lumpur’s Golden Triangle.

Nur Jazlan (left) denied the accusations yesterday, pointing out that the corporatised government agency had no choice but be competitive to survive as it no longer received any direct assistance from the government.

“Most people don’t know that UDA Holdings no longer receives any form of special treatment from the government, whether in the form of grants or cash injections or sale of land at nominal prices,” he said.

The wholly-owned unit of the Finance Ministry, whose assets are estimated to be worth RM2 billion, is over RM900 million in debt and free cash flow of RM90 million now.
Nur Jazlan said UDA also “owes” the government RM104 million, paid market prices for the Pudu Jail land and still has to pay RM134 million in land premiums for the property by September.

He added that the company needed to be prudent and work with strategic partners instead of contractors as the cost of developing Bukit Bintang City Centre could reach as high as RM4 billion.

The UDA board has selected a partner to develop the prime piece of land but several disgruntled Malay businessmen fear it could go to a foreign developer instead of them, as part of the Bumiputera economic policy.