Decades of urbanisation in the Klang Valley (KV) and across Malaysia have depleted the supply of undeveloped land, which is causing issues for government initiatives that rely upon acquiring land.
“There are major public sector projects in the pipeline that will involve significant land acquisitions by the government including the mass rapid transit (MRT), extension of the light-rail transit, East Coast Highway from Kelantan to Terengganu and the railway from Ipoh to Perlis,” Azemi Kasim, the director-general of Federal Land and Mines, told OBG.
For the MRT in particular the challenge of routing an underground/aboveground metro through an already-crowded city has drawn legal challenges and inflamed a debate about the proper relationship between contractors, consumers and the government.
DISPUTES: The legal uncertainty arose after the Department of Land and Mines posted notices in early 2011 about impending land acquisition for the first line of the MRT system. Several landowners in the Chinatown, Bukit Bintang and Imbi areas took exception to being forced out because of MRT construction along Jalan Sultan, noting the metro will be running underground in any case, and should not impact their above-ground houses and businesses. The dispute centres on a provision in the National Land Code – Section 92b – which the property owners contend allows them to give up the underground portion of their properties while retaining control of the above-ground property. They point out that the NLC was amended in 1990 to allow the separate disposal of underground strata.
The government initially countered that the above-ground portions would be endangered by the building, and told the landowners that they could apply for stratum titles to have the above-ground properties “re-alienated” to them, albeit with no guarantee of success.
But the controversy has escalated to the national level, in part because the protesting business owners are largely Chinese who see the acquisition as a land grab intended to defray the cost of the project. This echoes an argument made by state-owned public transport firm Prasarana, which has advanced the “rail plus property” model as a way to offset the investment required to build the rail. Others respond that acquiring land ostensibly for its underground strata and then replacing the aboveground properties with profit-generating development violates the “public good” rationale for eminent domain and is contrary to law.
IN NEED OF REFORM: Prime Minister Najib Razak made a “categorical assurance” in May 2012 that the Jalan Sultan properties would not be acquired. Meanwhile, MRT Corporation has reportedly made a deal with 20 of the 24 protesting landowners, who agree to vacate their buildings for six months during construction in return for getting to keep their land.
MRT chairman Azhar Abdul Hamid promised that it would restore any damage “brick by brick”. But a group of landowners is still pressing the government, and the legal status of the MRT’s actions remains unclear.
The controversy reinforces the idea that the country’s laws regarding land acquisition are inadequate and need to be modernised to avoid such scenarios in the future. “There has been mounting pressure in recent years for significant reform of the National Land Code, as it currently exists in its original form which was passed into law in 1965,” Kasim told OBG. Issues that need to be resolved include whether it is legitimate to develop property on forcibly acquired sites in order to fund the MRT itself. This approach was used by Hong Kong to help finance its transit system, while Singapore, on the other hand, has relied mainly on fares.
Ultimately, a national debate and a new bill may be necessary. “Singapore had MRT legislation passed specifically for the construction of their transit system,” Kasim said to OBG. “Malaysia may need similar legislative assistance to facilitate implementation of the MRT.”
With leaders already warning that further legal snarls could threaten the promised opening of the first MRT line, set for 2017, a comprehensive ruling on the legal subtleties of land acquisition could be very timely.
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