Tuesday, February 12, 2008


Call for viable alternative to Trust Fund


The State Government has been urged to consider a more viable or acceptable alternative like setting up a dedicated Sabah Development Corridor Task Force to implement infrastructure projects for tourism potential areas, instead of the proposed Tourism Property Development Trust. The call came from tourism player, who is confident the private sector will provide the initiatives and funding once the plan is made public, to develop the hotel industry expeditiously in the context of the Sabah Development Corridor as envisaged by the Prime Minister. “I like to request sincerely to our Chief Minister Datuk Seri Musa Aman and Tourism, Culture and Environment Minister Datuk Masidi Manjun to consider this urgently,” he said in response to a recent news report about the proposed development trust. He said the report raised concerns as his family owns land along the Tuaran beach, which they had hoped to develop for many years but could not do so as there is no infrastructure like water, electricity and road there. “With the greatest respect to those making the proposal, I have grave reservations that the long- term interest of the land owners will be sufficiently protected by the said development trust or that it will enhance the growth of the hotel industry in Sabah,” he said. In the news report it was stated that development will exclude zones which have been alienated for conservation, such as mangrove swamps. The first development will be the 3,000-acre Sepanggar Resort and the beaches along Tuaran to Kota Belud, which will be developed like the Gold Coast in Australia. And that the entire stretch of coastal land for the Sepangar-Tuaran-Kota Belud development will be placed under a Development Trust Fund, with the Trust Fund ensuring that affected rural landowners can enjoy receiving a recurring income from development of their land. “(But) Sabah’s history is littered with failures of similar government trusts or bodies that have been set to look after the people’s interest,” said Lo. To mention a few, he cited the Rural Development Corporation (KPD) and its subsidiaries, Sabah Marketing Authorities (Sama), Permodalan Bumiputera Sabah and Amanah Saham Sabah (SAS). Pointing out that the Gold Coast of Australia has not been developed by a trust set up by the government, he said the Australian government like all sensible and pragmatic governments provided the necessary infrastructures, incentives and encouraged the private sector to drive or develop the industry. Lo claimed the proposers have also incorrectly presumed that the land owners are rural people and, therefore, incapable of looking after their own interest, as well as that the land owners are incapable of developing or if necessary looking for JV (joint venture) partners to develop their properties. “They (proposers) should conduct an in-depth research into the profile of landowners (concerned),” he said, adding the ‘Nusa Dua’ is also no a good example. He said the proposers have used Nusa Dua as an example of a successful tourism development by a trust, but this is an out-of- date and isolated model. “Nusa Dua was set up when private sector in Bali was weak more than 20 years ago. Great majority of the top world tourism destinations have been driven or developed by private sector initiatives, for example, Cancun, Singapore, Acapulco and even our own Malaysia,” he said. Without a doubt, Sabah is not Bali 20 years ago, he said, adding the private sector in Sabah has been the engine of growth for the development of the tourism or hotel industry from the beginning to now. “Why change this successful formula to a trust which is untested?” On land to be parcelled out and leased to private sector investors who own or have partnerships with international hotel brands, Lo said again the pro- posers have presumed the inability of the landowners to initiate or undertake their own investment or to attract international hotel brands. “May Task which trust has been responsible for the big names to come to Malaysia and Sabah? In parcelling out the land, how will the interest of the landowners be looked after? Who is going to be responsible if there are losses, or when the land, due to one reason or another, is to be auctioned?” he asked. On the Trust Fund being a corporative entity with the Sabah State Government as the major shareholder and supported by the Tourism, Culture and Environment Ministry, Lo said: “The Government has no business to be in business when the private sector has been doing so well in the tourism or hotel industry. There is a great danger that the proposed Trust Fund which, in essence, is a ‘Big Brother’ or ‘We Know Better’ approach, will kill off Sabahan private sector initiatives in the tourism or hotel industry,” he said. Under the proposed Trust Fund, he said Sabahans would eventually have little stake in the hotel industry, like the oil palm industry. “At best, Sabahan landowners will become inactive ‘landlords’ waiting for handouts, if any, from the proposed Tourism Property Development Trust,” he said. He said the proposers have not consulted the landowners before drawing up their proposal. “There is no safeguard for abuse. The principle of the proposed Trust Fund is in direct contradiction to Federal and State government policies of encouraging the private sector or how the interest of the landowners will be safeguarded,” he said.