This article first appeared in The Edge Malaysia Weekly on August 12, 2019 - August 18, 2019

YAYASAN Wilayah Persekutuan (YWP), the foundation that has been in the limelight for its involvement in property development projects — a lucrative business venture — has decided to exit from property-related activities once the jobs in hand are completed.

In order to cushion the impact of the loss of income, YWP is looking to expand its billboard and parking management businesses as well as venture into the management of sand-related activities, ranging from excavation to transport.

YWP has five property development projects, which are all on a joint-venture basis — the foundation is the landowner and the partner developer builds and sells the assets.

The five projects — including the controversial Taman Rimba Bukit Kiara project by Memang Perkasa Sdn Bhd — are expected to bring in profits of RM137.88 million over the next five years. (See Table 2.) The five projects sit on a total of 29.65 acres.

The Bukit Kiara development alone, which is awaiting a Cabinet decision on its status, is expected to provide a profit of about RM99.2 million to YWP.

In an interview with The Edge, YWP CEO Zaizalnizam Zainun expressed his concern over how the foundation will run its charitable activities in five year’s time.

“In January, we decided to no longer be involved in property,” Zaizalnizam says when asked about YWP’s plans moving forward.

“The current projects are expected to bring in money for the next four to five years. There will be no more cash flow from property development after that. We are trying to get new businesses. I need to crack my head to look into the possibility of finding [new avenues to make] money for YWP.”

YWP’s property development venture began to grow around 2011 during the time of former Federal Territories and Urban Well-being Minister Datuk Seri Utama Raja Nong Chik Raja Zainal Abidin. “It [property development] grew like other foundations in other states. But maybe during my time I gave some priority to giving land to YWP to avoid many lobbyists with connections who apply for land,” Raja Nong Chik tells The Edge.

On the process of identifying a land parcel and a developer partner, Zaizalnizam says the developer would identify a piece of land for development and would then approach YWP with the intention of jointly developing the site should the land be obtained. YWP would then submit an application to the Department of Lands and Mines Wilayah Persekutuan Kuala Lumpur (Pejabat Tanah & Galian) (PTG) requesting to purchase the land.

“No preference [is given] to YWP,” he points out. “If we get the land, we proceed and sign the joint venture. In all circumstances, YWP is the landowner and the joint-venture partner is the developer,” he explains.

After the JV is formed, YWP receives payment from the developer on a staggered basis. “For example, once we sign the JV, we get a sum. Upon approval of the development order [we get] another amount and upon building plan approval, [we receive] another sum.”

Zaizalnizam adds that YWP started to rake in RM10 million to RM15 million a year from the property division and once the money started to come in, many more people were able to benefit from its charitable programmes. YWP, he says, spends 80% of its earnings on charitable activities. “Prior to 2011, most of YWP’s funds came from small businesses like billboard and parking operations. Our recipients were small in number, about 100 students,” he says. “The biggest jump in contribution from property was in 2017,” he adds.

As YWP expects a big dip in income in five years, it has identified sand-related activities as a potential new business substitute.

“We are interested in the sand-related industry. In Kuala Lumpur, there are some ponds where we can extract sand. This is a source of income to Wilayah Persekutuan. What we want to do is legalise the sand extraction industry in Kuala Lumpur,” Zaizalnizam says, adding that the plan is still at a preliminary stage as YWP has merely submitted its proposal to DBKL and PTG.

On how this system will work, YWP says that it would be managed under a concession. As a concessionaire, he says, the bulk of the earnings will go to PTG and the model will be on a profit-sharing basis. He says it is still too early to say if YWP will be able to secure the job or how it will be modelled. “We hope that value can be transferred to us and we can give back to the rakyat,” he says.

Meanwhile, YWP is looking to grow two of its existing businesses — billboard management and parking management.

Tapping the billboard and parking management businesses

YWP ventured into billboard management in 2016 and manages 216 sites in Kuala Lumpur, which are all located on temporary occupation land (TOL). TOLs are small parcels — often by the roadside or riverside, of reserve land that cannot be developed — where billboards can be erected.

The TOLs are owned by DBKL, while YWP manages the sites. The sites are tendered out by YWP to media operators who are also responsible for erecting the billboards. YWP collects a fee from the media operators and gives DBKL its portion.

Zaizalnizam says the foundation is now able to make a profit of RM2 million annually from the management of these billboards after deducting RM3 million for licences and rental.

“We have a five-year + two years contract that began in 2016. We plan to ask for an extension,” Zaizalnizam says.

YWP hopes to be able to manage more billboards and has submitted an application to do so. “We discussed this during a board meeting in the presence of the Datuk Bandar. Whether Datuk Bandar wants to give it to us or not, it is up to them,” he says.

He estimates that there are about 2,000 billboard sites in Kuala Lumpur.

YWP’s carpark management business is not profitable. It is now managing car parks for City Hall — one in Sri Petaling, one at the Park & Ride Bandar Tasik Selatan and one roadside parking area.

Although it is not profitable for YWP, Zaizalnizam says the foundation cannot stop taking care of one of the sites — which includes a morning market — as it is a charitable foundation and has to adhere to its duties, which include “assist the population of Wilayah Persekutuan in matters relating to education, economy, social, religion and technology.”

“We have asked for other sites to manage so we can help narrow or cushion the losses,” he says, adding that YWP has tendered bids to manage two other car parks, one in the Masjid India area and the other, an open car park in Jalan Imbi.

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