KUALA LUMPUR: The Federal government is losing millions of ringgit in rentals as federal land is leased out at nominal rates instead of at market value, the Public Accounts Committee (PAC) said yesterday.

PAC chairman Datuk Nur Jazlan Mohamed said the Department of Director General of Lands and Mines (KPTG) has been leasing out a lot of federal land at nominal rates.

He said, in the case of YTL Corp Bhd, the department only collected rental of RM120 per telecommunication tower a year from the company for the federal land it used to build its towers under the 1BestariNet project in 2,000 schools.

“Many of these sites are in town areas, which have a high value,” Nur Jazlan told reporters after the PAC meeting yesterday.

He said YTL had argued that the rental fee was not included in the agreement with the Ministry of Education, and it was of the view that it does not need to pay rental. After negotiations, Nur Jazlan said, YTL finally agreed to pay RM120 a year for each tower.

“At face value, the government is losing millions of ringgit, especially in the case of YTL. If YTL is using the tower for its own use, it is not sharing with the government, not for the sole purpose of the 1BestariNet, it is generating revenue from the towers,” Nur Jazlan said.

He said this happened because the KPTG was only a custodian of the land, and its role should be upgraded to guardian of federal land, whereby all the land assets would be recorded and returns to be maximised.

Nur Jazlan also pointed out that the department also collected a minimal fee for federal lands leased out to Prasarana Malaysia Bhd for the light rapid transit system for a period of 30 years.

“The federal lands in the urban area were leased to Prasarana at a nominal fee, although Prasarana is a company owned by the government, but this is unfair to KPTG. 

“If it collects a higher fee from Prasarana according to market value, the collection will go into the consolidated account. If it is given to Prasarana for business, if it posted a loss, the government also loses in terms of land returns,” he added. 

Meanwhile, the federal land lease period for the mass rapid transit project has yet to be decided by the Ministry of Transport.   

It is unclear how much land in the country is classified as federal land as the figure was not given to the PAC.

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