In every country in South East Asia and certainly in the West, infrastructure costs are the responsibility of the utility companies. For example, the Electricity Board would lay the wires right up to the project, the Water Board would lay pipes to the project, the telephony companies would provide these facilities as well and so will sewage.
And so all the developer has to do is to come up with a master plan as approved by the Local Council and as soon as the facilities are in, start building them.
And so all the developer has to do is to come up with a master plan as approved by the Local Council and as soon as the facilities are in, start building them.
But what has happened is that due to the sustained demand for property in Malaysia over the last 30 years developers are saying they cannot wait for the utilities to be built by the utility companies and so they have paid for the infrastructure and handed it over to the Local Councils without cost.
This has been an acceptable practice when the companies were all owned by the Government and there were budget constraints. But today all the utility companies are large corporations with billion dollar budgets and it seems unfair the developers still have to pay the total cost of services.
These eventually gets passed over to the consumer. It is a significant percentage of the cost of each house that is purchased.
This has been an acceptable practice when the companies were all owned by the Government and there were budget constraints. But today all the utility companies are large corporations with billion dollar budgets and it seems unfair the developers still have to pay the total cost of services.
These eventually gets passed over to the consumer. It is a significant percentage of the cost of each house that is purchased.
A check on the affordable housing portfolio on a total volume of low cost housing as obtained from NAPIC records gets a picture that while we have a substantial number of low-cost and medium-cost housing, the overhang in some of the projects are such that these have been built in places where the consumer does not wish to stay for logistics reasons, such as lack of transport or lack of services.
Such houses have been a waste of resources both by state governments and by the private sector. Most developers looking at the object of building affordable housing under the new scheme are probably hoping that one of the ingredients would be free.
It could be the land or it could be the infrastructure or even no duties on imported products/material used for construction or a grant. Any of these would help to reduce the cost of construction in such a way that the house prices could become affordable.
Such houses have been a waste of resources both by state governments and by the private sector. Most developers looking at the object of building affordable housing under the new scheme are probably hoping that one of the ingredients would be free.
It could be the land or it could be the infrastructure or even no duties on imported products/material used for construction or a grant. Any of these would help to reduce the cost of construction in such a way that the house prices could become affordable.
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