SHAH ALAM: Gamuda Bhd is mooting for a levy to be paid by developers to the government in lieu of the Bumiputera quota requirement, which has contributed to an overhang of unsold units and high holding cost.
Group managing director Datuk Lin Yun Ling (pix) told reporters at a press conference after the group’s AGM today that the holding cost of complying with this requirement is getting heavier. He estimates holding cost to be at around 20% of revenue.
He also noted that this is unlikely to reduce house prices.
The policy requires at least 30% (varies according to states) of total units developed to be earmarked for Bumiputera buyers with a holding period of three years or more. The units are to be sold at a discount of 7%.
He said it would be preferable for developers to pay a levy in place of being subjected to the Bumiputera quota requirement to prevent the painful and costly process of the holding cost, which he said is causing house prices to increase.
“As a developer, we would prefer to pay a 2% levy to the government based on sales. The government can then look to build at locations suitable to the B40 (bottom 40%) group,” noted Lin.
“We think the time has come for the government to relook this practice because in the first place, the intended beneficiaries of this policy are actually not benefiting from it,” he said, adding that the number of Bumiputera buyers are few.
He added that apart from holding cost, locations in which affordable housing are being developed by the private sector developers are not conducive for the B40 group, resulting in low uptake.
Lin said its property arm, Gamuda Land, has only been able to recognise a single-digit profit margin for such developments after netting off its cost of capital.
When asked if the proposal has been conveyed to the authorities and other industry bodies, Gamuda said that discussions are currently underway.
