THE sale of a piece of land earmarked for the development of an international airport in Seri Iskandar, Perak, recently made headlines after it was revealed that it had been sold off without the consent of the state government.

Perak Infrastructure, Energy, Water and Public Transport Committee chairman Mohd Zolkafly Harun on March 30, said that the plan to build the airport, which involves seven plots measuring about 478ha, had been approved at a state executive councillor meeting on February 28, 2018.

However, Zolkafly added that 188.13ha from that allocated land, which was owned by Perbadanan Kemajuan Negeri Pahang (PKNP), had been sold to a third party.

On March 30, Perak Menteri Besar Saarani Mohamad confirmed that a plot of land, which was previously identified as the location for a new international airport in Seri Iskandar, had been sold to a private company.

He said the sale was conducted by the previous state government under the Pakatan Harapan (PH) administration.

The Malaysian Insight looks into the details of the issue.

Who bought the land?

According to documents sighted by The Malaysian Insight, around 1,214ha of the 10,117ha land, which was set aside for the development of a township known as Bandar Seri Iskandar in Perak Tengah, was sold to ECK Development in 2018 for RM50,219,629.

The township was a joint venture project between Malaysian Resources Corporation Bhd (MRCB) and the Perak government. MRCB held 70% of shares while the remaining 30% was held by the state.

In February 21, 1997, MRCB and the Perak government entered into a development agreement for 2,023ha of the 10,117ha land. The state government alienated this land to MRCB.

However, in September 28, 2018, the Perak government sold the land to ECK.

ECK is also embroiled in another controversy involving a joint venture agreement it signed last August with the Kedah government to build the Kulim International Airport by 2026.

According to the agreement, ECK would own 80% equity in the Kulim project while the Kedah government would own the rest through KXP AirportCity Holdings Sdn Bhd.

Jerlun MP Mukhriz Mahathir, however, accused ECK of making a windfall by entering into a housing development deal despite not paying a single sen for the project.

The former Kedah menteri besar said that ECK had been expected to spend RM6 billion in the first phase of the development, including RM2 billion for land acquisition.

However, on the same day the joint venture agreement was signed, ECK entered into a deal with a real estate company to develop a housing area on part of the land acquired for the project.

ECK denied the allegations.

Coming back to the Perak deal, according to court filings, the Perak government confirmed with MRCB on January 25, 2019 that it had indeed sold the land to ECK, on which ECK would build 10 industrial lots.

This was also confirmed in a meeting between MRCB vice-executive president Ishak Mohamed and PKNP former chairman Ariff Yeop Ishak along with its director of property and land on January 25, 2019 at PKNP’s office in Ipoh.

A letter from MRCB on January 31, 2019 detailing the meeting that took place on January 25 showed that PKNP was well aware that the land was earmarked for the development of a new airport for Perak, and that it had cancelled the project.

PNKP also said that the development agreement it had signed with Seri Iskandar Development Corporation on February 21, 1997 was also cancelled. 

Calls for investigation

Since the sale of the land was made public by Aulong assemblyman Nga Kor Ming during the Perak assembly sitting, there had been calls for the police, the Malaysian Anti-Corruption Commission (MACC) and the Perak Public Accounts Committee (PAC) to investigate the matter.

“The land was owned by PKNP and in order for it to be sold, the sale must get the approval of PKNP’s board of directors,” a source told The Malaysian Insight.

“We have verified with PNKP’s director and they have found no minutes of meeting (agreeing to the sale).”

The source said two of PKNP’s directors have also lodged a report to MACC over the sale as no meeting or resolution was passed to allow for the sale of the land to ECK.

However, it is suspected that former Perak menteri besar Ahmad Faizal Azumu and PKNP’s former chairman Ariff had a role to play in the sale of the land, the source added.

“The MACC has called 10 witnesses but hasn’t arrested anyone. Anyone with common sense will know how you could sell a land reserve which has been mentioned in the 2018 budget in Parliament. There is definitely hanky-panky.

“Pakatan Harapan has proved that it is not involved and we have lodged police and MACC reports. So, who has the power (to sell the land)? The PKNP chairman Ariff and maybe the former MB Faizal Azumu,” the source alleged.

The source said that there is a likelihood that the subsequent Barisan Nasional (BN) state government was also involved in the sale of the land to ECK.

“If BN is not involved, they should refer to the purchaser of the land, pay back the premium or do a land swap. They should take back the land to build the airport.”

The fact that the state PAC chairman Mohd Tarmizi Idris has been hesitant to call for a meeting is also not a good indication, the source said.

“Why is the PAC so reluctant to call the meeting? PH has two representatives, both of them have called on the PAC to convene the meeting.

“After nearly a month, no date has been fixed. The PAC has the power under the standing order to summon PKNP and have them submit documents.

“Someone needs to be accountable for this. There is no reason for it to be swept under the carpet.

“Perak folk want the state to take back the land. We need an international airport for future development. Without that, Perak has no competitive edge to attract foreign direct investments.”

Why is the new airport so important?

A new international airport was suggested as part of BN’s manifesto in 2013. However, almost a decade later, no airport has materialised.

The suggestion to build a new international airport to replace the Sultan Azlan Shah airport in Ipoh was to enable wide-body aircraft to land.

The runway at the Sultan Azlan Shah airport was not long enough to accommodate aircraft such as the Boeing 747.

“Perak has huge potential, we don’t have world-class infrastructure but Seri Iskandar can serve as a catalyst and gateway,” said the source.

In 2019, PH allocated RM150 million to upgrade the airport, but again, nothing was done.

“Initially, the reason given (to not upgrade) was that there was no money.

“Then PH gave money, so what is the excuse? At the time, PH negotiated with several  airlines to start direct flights from Ipoh to Bangkok, Hong Kong and Taipei.

“They were just waiting for the runway to be completed,” the source said.

As it stands now, the sale of the Seri Iskandar airport land to ECK is being investigated by the MACC. – May 5, 2022.