PAC calls for overhaul of KL land development system over unchecked approvals, ignored public objections and cheap land sales

• The Public Accounts Committee found that government land had been undervalued for years due to a 30-year-old formula to calculate land premiums, leading to land being sold below market value and causing potential losses to the government. According to the PAC, the government has said it will review and update the formula.

KUALA LUMPUR (Aug 25): The Public Accounts Committee (PAC) has called for the government to overhaul Kuala Lumpur’s land development system after uncovering serious issues, including unchecked approvals, ignored public objections, and the sale of public land below market value.

The PAC found that government land had been undervalued for years due to a 30-year-old formula to calculate land premiums, leading to land being sold below market value and causing potential losses to the government. According to the PAC, the government has said it will review and update the formula.

In a report on land development under the Federal Territories Department, Federal Department of Director General of Lands and Mines, and Kuala Lumpur City Hall (DBKL) released on Monday, the PAC also raised key issues:

• Lack of oversight in land development decisions: The Federal Territory Advisory Board only gives advice, unlike local councils in other states, while the Kuala Lumpur mayor holds full power over development decisions. Members of Parliaments are not involved in key land decisions.
• Violation of city plans: Cancellation of gazetted public reserves and green spaces for private projects, violating the Kuala Lumpur Local Plan.

The report also highlighted that some government land handed to developers also overlapped with sites containing critical infrastructure owned by the Department of Irrigation and Drainage (JPS), while the department's own applications for land ownership were rejected, it noted.

“This indicates that there are weaknesses in the land development planning system in Kuala Lumpur that require review, especially regarding the appropriateness of projects such as the allocation of land for high-density development in open or green areas,” it said.

The PAC’s 11 recommendations:

• Create a permanent land oversight committee, including Federal Territory MPs.
• Return control of the land working committee to the federal territories minister for better accountability.
• Review and amend laws (the Federal Capital Act 1960 and Planning Act 1982) to allow appointment of city councillors in DBKL, like other states.
• DBKL must ensure that all land transactions and land-use decisions are in line with the gazetted Kuala Lumpur Structure Plan and Local Plan. Any non-compliance must be publicly justified.
• Use open tenders for land sales, not direct deals.
• Update the 30-year old land valuation formula by end-2025 to reflect market prices.
• The government must get Kuala Lumpur ready for climate change by making sure all flood ponds meet the flood protection system standards set by the JPS.
• The government should give the JPS ownership of land with its assets to protect the original design.
• The government must ensure that any development on river reserve land does not affect the river’s function or cause natural disasters such as floods and landslides.
• The government is urged to review the ownership and development concept of the Kampung Bohol Flood Retention Pond land to ensure transparency and protect public interest.
• Make DBKL’s land information system (OSC 3.0 Plus) publicly accessible.

The PAC said these reforms are urgent to improve transparency, accountability, and Kuala Lumpur’s ability to manage development and climate risks.

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