After 15 years, Plaza Rakyat revival plans in final stages

KUALA LUMPUR (June 2): Kuala Lumpur City Hall (DBKL) is in the final stages of discussing plans to revive the Plaza Rakyat project in Jalan Pudu with Profit Consortium Sdn Bhd, the developer appointed to take over the long-abandoned building and give it a new lease of life.

Mayor Datuk Seri Ahmad Phesal Talib said both the Federal Territories and Urban Wellbeing Ministry and DBKL were happy with the appointment of Profit Consortium and all the parties involved were now looking at how to solve the pressing problems first.

Phesal said initially, DBKL was supposed to go into a joint venture with Profit Consortium Sdn Bhd, but it had agreed to have the developer to buy over the project.

"We are looking at all the possibilities to make sure both the developer and City Hall would benefit from the project," he said.

Phesal said both parties were also in the midst of discussing the technical elements of the existing building, including its structural and engineering aspects.

He also assured the buyers that they would be receiving the due compensation once all the details had been ironed out. 

"We are very serious about salvaging Plaza Rakyat. We hope to start the revival project as soon as possible," he said.

The Plaza Rakyat project, a mixed-use skyscraper complex, was stalled about 15 years ago when the then developer, Plaza Rakyat Sdn Bhd (PRSB), ran into financial difficulties during the 1997/1998 Asian financial crisis.

It was originally supposed to comprise a 79-storey office tower, a 46-storey condominium, a 24-storey hotel and a 7-storey shopping centre. The original Puduraya bus depot was also intended to be replaced under the project.

After 12 years, the government decided to terminate PRSB's contract and subsequently, the developer went into receivership and came under the administration of a consortium of lender banks.

Last year, the arbitrators who were involved in negotiations with PRSB and City Hall agreed that the local authority was lawfully entitled to terminate the agreement because of PRSB's non-performance and breach.

However, City Hall had to settle the RM200 million outstanding loans taken by PRSB and reimburse the company and the banks. There were several negotiations to reduce the amount, and in November, City Hall took over the vacant site.

Three companies had shown interest in developing Plaza Rakyat but the government had decided to go with Profit Consortium.

The revived development will include a mall, service apartments and offices, and will integrate the Plaza Rakyat LRT station.