KUALA LUMPUR – The Langkawi Development Authority’s (Lada) failure to collect land lease revenue for two projects, namely the development of the St Regis Hotel amounting to RM3.19 million since 2018 and the land lease for the Tok Senik village resort project amounting to RM8.3 million since 2003, were among its highlights for poor management, according to the Auditor General’s (A-G) Report 2022 (Volume 1).
According to the report, the failure to collect the revenue from the St Regis Hotel project up to December 31, 2022, could see Lada risk the loss of revenue estimated at RM11.49 million as well as the loss of the land lease.
The report also highlighted that there were no returns on investment for Lada, either in terms of shareholding or land lease revenue amounting to RM8.3 million from the Tok Senik project as well.
“The (Lada’s) management of the land lease agreement should be reviewed again and implemented regularly to guarantee the government’s interest and avoid further risk of losing earnings and property.”
Among other weaknesses highlighted by the A-G’s report is Lada’s poor record in relation to development projects, with only 11 (55%) out of 20 projects having been completed and only three (20%) of 15 projects involving private investment having been completed.
Overall, the report stated that Lada has yet to achieve satisfactory performance due to a number of its private investment and development projects being unable to be completed according to the set period, failure to reach its targeted revenue and weakness in the management of land leases, which exposes the risk of property loss.
According to the report, Lada’s response, which was received on July 17, stated that four of the six projects identified as being behind schedule were due to the implementation of the movement control order, contractor issues at the project site and a delay in receiving the supply of construction materials.
“As of June 30, three of these development projects have been completed, while two of the said projects are on schedule, while the project to dismantle and rebuild the tourist landing jetty at Gua Cherita, Langkawi, which was supposed to be completed, suffered a 6% delay from its schedule.
“The project has been issued with a Notice of Incomplete Work Certificate and subject to liquidated ascertained damages with work progress of 94% as of June 2023.” – November 22, 2023