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KLIFD may fail, warns DAP

 | July 31, 2012

Tony Pua has criticised the government's attempt to cash in on its KL International Financial District.

PETALING JAYA: DAP has attacked the government’s unveiling of the Kuala Lumpur International Financial District (KLIFD), otherwise known as the Tun Razak Exchange (TRX).

Party national publicity secretary Tony Pua feared that the 28.3-hectare development would suffer the same fate as other mega projects, such as the Bio-Valley, E-Village and Multimedia Super Corridor (MSC), many of which have uncertain economic futures.

“The government must learn from its failures of the past,” he said of the KLIFD, which Prime Minister Najib Tun Razak said was going to bring in RM26 billion in gross development revenue.

Pua claimed that the incentives laid out to attract financial companies to KLIFD showed how difficult the project was to get off the ground.

Citing the PM’s Budget 2012 speech last year, he said that Najib had announced the following incentives:

  • a 10-year 100% tax exemption for qualified companies.
  • stamp duty exemption on loan and service agreements.
  • industrial building allowance.
  • accelerated capital allowance for companies.
  • a 70% income tax exemption for 5 years for property developers.

“It appears that such lucrative incentives are insufficient as Najib promised further incentives through ‘a comprehensive review of business regulations in support of TRX’,” he said.

Flawed assumption

The PJ Utara MP also questioned why there was a need to form the KLIFD off Jalan Tun Razak, close to the city centre, when KL housed many of these financial institutions and related companies already.

“The entire KLIFD concept is founded on the assumption that [these companies]… need to be sited a stone’s throw away from one another.

“However, such an assumption is completely flawed as telecommunications technology, video-conferencing facilities… secure and instantaneous electronic transactions obliterate the need for physical proximity,” he said.

He said that there was no need for Maybank (Malayan Banking Berhad) – which he used as an example- to move to the KLIFD, other than for tax benefits.

Pua also asked why the government had given the land to the government-linked 1Malaysia Development Bhd, and put it in charge without any open tender.

“The decision of global financial institutions to site their offices in Malaysia will not be based on short term benefits as a result of the choice of real estate.

“It will instead be based on the demand for its services and funds, the sophistication of the market instruments and the openness of the economy,” he said.

It was reported that more than 100 “top global” companies were expected to come to TRX, which had a potential of creating more than 500,000 jobs.


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