Friday, March 31, 2006

KOMTAR to Become Swiftlet Housing Instead of Low-Income Housing

April 1, 2006

Komplex Tun Abdul Razak will be turned into a 65-storey swiftlet housing to produce RM18 million worth of bird nests a year, the Penang Legislative Council and City Council voted unanimously behind closed door in a joint session to approve the project. Fewer than a handful of legislators walked out in protest.

Meanwhile, the state government admin offices, currently occupying KOMTAR, will be moved to new buildings in the reclaimed Bayan Mutiara area, south of Penang Bridge. The move will boost property demand at Bayan Mutiara to prevent the bankruptcy of well-connected developers.

As usual, city officials were under gag order not to discuss any matters that might be relevant to the welfare of Penang residents. But the swiftlet proposal is understood to have defeated another plan to turn KOMTAR into low cost housing for about 5,000 low-income residents.

Revenue shortage

The main reason for the swiftlet win, according to an insider who declined to be identified, is that "it is all economics."

It has now become clear that Penang state finance is in a shamble because of wasteful projects and dwindling grants from the Federal government, due to the central government's prolonged structural budget deficits. In addition, state bodies, such as the Penang Development Corporation, have suffered perennial losses.

While the 9th Malaysian Plan will ostensibly give Penang the “gifts” of a second bridge and mono rail, history is clear that only contractors favored by the federal government will secure these projects that will charge tolls on the Penangites, indirectly worsening the state government revenue sources. Logically, they are only "gifts" if the federal government pay for them, without charging tolls.

After weighing the low-cost housing for swiftlets against that for their human counterparts, the MPPP has decided the swiftlets will bring more benefits.

The problems

First, some background. The offices at KOMTAR are still mostly unoccupied since its completion. It lost its position as the tallest building in Asia to Korea even before it was completed in early 1980s. Now KOMTAR is to meet its demise as an office tower as the state government evacuates even before all the phases have been completed. Additional phases are still to be built over the old wholesale market.

On gray days against a background of low clouds, urban legend has it that drivers on the higher sections of the Penang Bridge can see through some of the empty floors. This phenomenon has gone a long way to counter criticism that the Penang government lacks transparency. In recent years, however, smog, window blinds, or dirty windows appear to have made it more difficult to see through KOMTAR.

KOMTAR has never been fully utilized because it faces problems of maintenance, hygiene, traffic, and bad planning. The problems are so overwhelming, that the MPPP (city council) finds it cheaper to abandon the KOMTAR for another project, especially now that different political personalities are in charge and cannot be held accountable for previous errors. While any mistakes made today by moving to Bayan Mutiara will not become apparent until a couple of generations and a new batch of political personalities later.

Potential tenants have typically complained about traffic congestion, a lack of parking spaces, exorbitant parking fees for employees, smelly garbage, chaotic buses, the dirty glass windows, and a generally dilapidated image unsuitable for self-respecting office workers.

Ingenious solutions

Therefore, the city council was left with two options for tenants: Turn KOMAR into a low-cost housing for 1,200 low income families (5,000 individuals), or into housing for swiftlets which would repay with bird nests.

The avian tenants were especially attractive because they provide their own transport, will not demand any surface access or parking, and will not add to the current traffic confusion. They also prefer dirty windows which reduce indoor lighting.

The MPPP has been reliably reassured by state-appointed veterinarians that the swiftlets will not carry the deadly avian flu strain H5N1, as they do not fraternize with ducks, geese, and chickens.

What really swung the votes were the contrasting revenue potentials. While partitioning each of the 60 upper floors of KOMTAR into 20 units of low cost housing per floor could generate income of about RM150 each unit per month, or RM216,000 for the full year (RM150x20 unitsx60 storeys x12 months), the swiftlets offered a much more competitive return.

Each storey of avian abode is estimated to be equivalent to six units of double-storey shop houses at Parit Buntar or Jawi on the mainland. In these swiftlet towns, now overrun by shophouses and supermarket-sized warehouses converted to attract swiftlets, each successful two-storey shophouse could generate as much as RM50,000 of revenues from the sale of bird nest per year. In other words, KOMTAR's 60-storey space could generate RM18 million a year (RM50,000x6 units per storey x60 storeys).

While there had been some debates initially within the Council in favour of the bipedal tenants on grounds of humanitarian needs, social conscience, and government responsibilities, matters were swiftly settled and the debate brought to a sudden halt when this revenue difference was breached and made clear to the councillors.

Investment costs

Security cost per square meter for housing swiftlets at Komtar would be especially cheap compared to ground-level shophouses, or compared with low-cost housing for mere human beings. This is because Komtar's monolithic structure means only the first few floors need to be heavily fortified, guarded, and equipped with close-circuit cameras and alarm system.

As can be expected, the complete security system contract has been awarded without any open tender to an unknown company, Mewah Lintah Sdn Bhd, with a registered capital of RM2. Each camera will cost RM300,000 while two toilets for visiting security personnel will cost RM150,000 each, which have given rise to the untrue rumour that they are gold-plated to promote the Fengshui potential of swiftlets.

Leaky roofs are especially welcomed in swiftlet housing, but Mewah Lintah has proposed to fix the roof anyway for RM2.5 million every two years when they are expected to become leaky again. A city councilor who refused to be identified insisted that Mewah Lintah is an experienced contractor, being owned by contractor Linta Bocor Sdn Bhd who had built the state legislative hall and Federal parliamentary buildings, all exemplary works of leaky and creaky buildings.

To create a comfortable living environment for the swiftlets, there is a contract to supply fresh cut flowers at RM50,000 per unit. Also unlike other contracts and the Penang Outer Ring Road, this time the contract has gone to an experienced contractor that used to supply scandolously expensive flowers to the Seberang Jaya municipal governments.

Apart from the initial development contract, no contractor has bid for the long-term maintenance of the KOMTAR Swiftlet Project. This is expected because most government-favored contractors find maintenance contracts to be too much hassle and unprofitable given their own inexperience and lack of tight management control. “The maintenance can come later, if any, as an after-thought,” according to a councilor, who also refused to be identified.

After the vote, one councilor wondered aloud whether the Penang government should appoint additional councilors to represent the welfare of the one to two million swiftlet tenants expected. He noted such appointments would help quell discontent within his party. There were also voicing of conspiracy theories whether the old Georgetown was intentionally made to decline in order to turn it into a ghost town, and then a swiftlet town.

When asked how the upfront capital expenditure will be financed, another inside source who also refused to be identified explained that the government can always rope in the lembaga-lembaga, yayasan-yayasan, tabung-tabung, possibly EPF, and various cooperatives with unsuspecting pensioners as shareholders, “as long as we can provide their directors lucrative contracts upfront,” since the decisions to finance the project ultimately falls into the hands of these powerful directors. He further asserted that “this has been done regularly with many major projects from land reclamation to large buildings, in Penang and all around Malaysia. There is no reason this should be a problem.”

And in a candid moment, he volunteered, “what you should worry about is whether there will be any profit left over from the RM18 million revenues estimated from the bird nests.”

We hope this article does not imitate life so well that you thought it is a real story. Before you SMS your unelected MPPP councillors for confirmation, please take note that this report is filed on April 1, 2006.

For references, see: for “The Rot of the Pearl” video
Google satellite map of Penang
WikiTravel on Penang

... Read more! Click here!

Help us choose a motto

We have a hard time deciding on these possible mottos for "Satire in Malaysia." What do you think?

1. Where there is no shortage of materials
2. Only the satires that matter
3. News and Views That Ridicule
4. All Malaysians are equal, but some are more equal than others
5. Why Read This? The Truth Is Funnier
6. Carpe Dime! Seize every dime!
7. The Malaisie Malaise
8. The Bolehwood Tribune [inspired by]

Pardon our French, "Malaisie" is supposedly "Malaysia" in French. No. 4 is inspired by good old Animal Farm.

... Read more! Click here!