KUALA LUMPUR: Kidex Sdn Bhd, the concessionaire of the controversial Kinrara-Damansara Expressway (Kidex), is pinning its hopes on a last-ditch attempt by Works Minister Datuk Seri Fadillah Yusuf to reverse the Selangor state government’s decision for cancelling the development of the highway project.

Kidex Sdn Bhd chief executive officer Datuk Mohd Nor Idrus said he is leaving the matter in the hands of the federal government and the works minister to find an amicable agreement with the Selangor government. The Kidex is a federal project that needs state consent.

“There is a concession agreement (CA) signed with the federal government that provides for a fair settlement, but we are not looking at that for now,” he told The Edge Financial Daily.

“If there is no resolution, then we will see what can be done,” Mohd Nor said.

However, he declined to disclose the terms and conditions of the CA. 

To date, details of the 48-year concession agreement between the federal government and Kidex Sdn Bhd have not been disclosed to the public. The Selangor government also raised concerns that the company did not disclose various reports for the project such as a traffic impact assessment, a social impact assessment and an environmental impact assessment, besides failing to reveal toll rates and the full CA.

Despite the controversy surrounding the company’s plans, Mohd Nor said he personally felt that the development would in the long run benefit the people and help alleviate traffic woes in the state.

Fadillah was quoted in media reports on March 1 as saying that he would ask for a meeting with Selangor Menteri Besar Mohamed Azmin Ali soon to discuss the state’s public works projects.

“We will talk about the [Kidex] highway and other development projects planned by the federal government for Selangor,” the minister was quoted as saying.

Petaling Jaya residents have highlighted concerns about the proposed highway encroaching on homes and public buildings like schools and hospitals.

Among the areas that could be affected by the Kidex project are Tropicana Mall, SS2 Mall, Rothman’s traffic lights, Section 14, Amcorp Mall, Hilton Petaling Jaya, Tun Hussein Onn Eye Hospital, Jalan Templer roundabout, Taman Datuk Harun, Taman Medan Baru and Bandar Kinrara.

Mohamed Azmin on Feb 16, announced the cancellation of the conditional approval for the RM2.42 billion Kidex project for failing to fulfil three conditions before its Feb 14 deadline. The following week the state put a final nail in the coffin when it announced that the 14.9km highway project was no longer part of Selangor’s 2035 structural plan.

When contacted by The Edge Financial Daily, former Petaling Jaya City Councillor Derek Fernandez, who is an expert in local government and planning law, said the company is only owed reimbursement for expenses, not compensation for the abrupt termination of the CA.

“It is unlikely that the federal government will have to pay any compensation if the concession agreement is drafted with reasonable prudence,” he said. 

“Any expenditure incurred by one party is taken as a business risk. There will be no refund especially if work has not started,” he said.

Fernandez, however, noted that the contents and conditions in the CA signed between Kidex Sdn Bhd and the federal government have not been revealed publicly up to today.

“As land and development control is the prerogative of the state and local governments, they are fully entitled to refuse permission to use their land or amend their local plans to accommodate the Kidex proposal,” he said.

He pointed out that the Kidex highway was never in any gazetted development plans of the Petaling Jaya City Council (MBPJ) or the state government, as such it has not been planned for and no compensation is payable by the state or MBPJ.

This is because neither the state government nor MBPJ is a party to the contract between the concession holder and the federal government and no rights can be accrued from the contract against them, he said.

On a news report that quoted Mohamed Azmin as denying that the Kidex project had been cancelled, Fernandez said: “There is no confusion. It’s just playing with semantics, and it will not alter the fact that Selangor has decided not to approve the Kidex project as it is lawfully entitled to do.

“The removal of Kidex from the preliminary survey report for the Selangor Structural Plan further affirmed this,” he said.

Kidex Sdn Bhd is owned by the wife of former Chief Justice Tun Zaki Azmi and Umno lawyer Datuk Hafarizam Harun.

A search of the Companies Commission of Malaysia showed that Kidex Sdn Bhd reported a net loss of RM15,758 for the financial year ended Dec 31, 2013 (FY13) compared with RM860 in FY12. Its total liabilities stood at RM11.66 million as of Dec 31, 2014. There was no revenue generated.

This article first appeared in The Edge Financial Daily, on March 9, 2015.