THE developer of Plaza Rakyat has until the end of September to settle its outstanding payments to City Hall, failing which its contract will be terminated.

Mayor Md Amin Nordin Abdul Aziz said an agreement had been reached to allow the developer to continue work on the abandoned project.

“In principle, it has been agreed upon (the development). But there is a required process before the development order can be issued.

“They will have to pay a certain percentage to City Hall before the project can start,” he told The Malaysian Insight.

The project in Jalan Pudu was abandoned in 1998 following the 1997 Asian financial crisis.

In 2015, a new developer, Profit Consortium Sdn Bhd, signed a sale and purchase agreement with DBKL to take over the 6.2ha site for RM740 million.

Plaza Rakyat is a mixed development comprising a 79-storey office tower, a 46-storey condominium block, a 24-storey hotel, and a seven-storey shopping centre.

Amin said the developer was waiting for approval of the development order to begin work.

The developer has been stuck in a deadlock with several unit holders, who are demanding that they be compensated and paid interest for the 20 years they have had their funds tied up in the abandoned project.

Former deputy federal territories minister Loga Bala Mohan reportedly said the government would only allow the project to restart once the issue of compensation to buyers was resolved.

However, he had said City Hall and the new developer, as the landowner, did not have any legal obligation towards the lot owners.

Amin said that there was a separate arrangement between the developer and lot owners, and that City Hall was not involved in negotiations between the two.

“The lot owners are not under City Hall. When we sold the land to the developer it came with the liability that they would have to compensate the lot owners as part of the deal.

“Whatever responsibility exists is with the developer (to compensate the lot owners).

Amin said that if the developer gets the approval, they can go ahead with the project even if they have not compensated the lot owners.

“It is then up to the lot owners to take whatever actions against the developer.

“These are two different arrangements between the developer, City Hall, and the lot owners.”

Since January, 104 of the 211 original buyers have been issued offer letters by the new developer, and negotiations are ongoing. – August 30, 2018.