Felda chairman Tan Sri Shahrir Samad speaks about the equal opportunities they deserve

At the beginning of 2017, Tan Sri Shahrir Samad, the member of parliament for Johor Baru, was named the new Federal Land Development Authority (Felda) chairman, replacing Tan Sri Mohd Isa Abdul Samad, whose term had ended.

Shahrir, aged 68, who has vast experience in government administration, had led three ministries, and is also a veteran Umno politician. 

As Shahrir had helmed Felda for 100 days, he told the New Sunday Times and Berita Harian his main responsibility was to take care of and deliver on promises made to settlers. 

He is getting to know the Felda management better and has reminded them to focus on land schemes because these are the settlers’ main source of income. And, if Felda’s role is to help uplift the rural economy, this is it. 

Felda’s land schemes come under the jurisdiction of the Land (Group Settlement Areas) Act 1960 (GSA). Under the act, such land cannot be leased, mortgaged or sold to others, except with the written approval of the state authorities. The act also prohibits the subdivision of settlers’ land.

Like all Malaysians, children of Felda settlers deserve equal opportunities to buy their own houses and the Felda chairman noted it was only fair for them to be given the same attention regarding affordable homes.

Question: Can you update us on the progress of housing projects for the children of Felda settlers?

Answer: When I came into Felda, I noticed the agency was not really doing what it was supposed to be doing. This was why I reminded the management that we had to go back to how Felda took care of the settlers. Felda needs to address the welfare and social well-being of the settlers, their land schemes and the subsequent generations.

I also realised, with the current policy, there would be problems in delivering 20,000 housing units by the end of 2018. There is an issue pertaining to land approvals from the state governments and local authority approvals.

The Felda New Generation Housing Projects are made up of three phases; Phase 1 is made up of 8,454 units, Phase 2 amounting to 10,746 units and Phase 3, 800 units.  

Q: How much are the affordable houses priced at?

A: Under Phase 1, the settlers’ children pay RM90,000 per terrace house with a floor area of 1,000 sq ft. The houses are of high quality. Felda is incurring RM690 million in subsidy for Phase 1.

Despite the high subsidy, the RM90,000 terrace house is relatively high-cost because it is situated in the settlement area. 

Nevertheless, Felda will follow through by delivering all 8,454 terrace houses under Phase 1 because the contracts have already been signed. Some may say RM90,000 for a house is affordable to own. But is it affordable to repay? 

Felda’s board of directors has recently decided on another option of collaborating with Syarikat Perumahan Negara Bhd (SPNB).

Felda can tap into SPNB’s expertise in delivering affordable homes. You can see the track record of SPNB’s Rumah Contoh Rumah Mesra Rakyat 1Malaysia (RMR1M) programme at Felda Air Tawar 3, Kota Tinggi. There’s no need to reinvent the wheel. Felda doesn’t need to go it alone.

So, for Phase 2 and 3, SPNB can come up with a 700 sq ft basic house priced at RM45,000. SPNB builds a start-up house on a 3,000 sq ft plot of land provided by Felda. The total subsidy for these 20,000 start-up houses is estimated at RM600 million. 

When you compare this with the RM690 million subsidy provided for 8,454 terrace houses under Phase 1, the subsidies for the start-up houses are halved. The savings in subsidies are passed on to settlers’ children, since the start-up house is priced at RM45,000 while those under Phase 1 are priced at RM90,000.

Although the start-up house of 700 sq ft is smaller than the 1,000 sq ft terrace ones under Phase 1, these houses can be expanded and upgraded according to the settler’s income and family size. 

The overall subsidy can be optimised when Felda provides for the land and infrastructural cost while SPNB focuses on building the start-up houses. I think this is a practical option to deliver 20,000 start-up houses by the end of 2018.  

“The Felda New Generation Housing Projects are made up of three phases; Phase 1 id made up of 8,454 units, Phase 2 amounting to 10, 746 units and Phase 3. 800 units.” Pix by Yazit Razali

Q: Can you elaborate on land approvals to facilitate Felda New Generation Housing Projects?

A: Land is a state matter. I had meetings with the menteris besar of various states where potential Felda New Generation Housing Projects are located. So far, the Pahang, Johor, Negri Sembilan and Kedah governments have agreed to help speed up the first phase of the programme.

I have also been meeting with assemblymen whose constituencies have Felda settlements. The priority is to get the process going and solve these land approval problems.

In the months ahead, my team and I will consult Sabah chief minister and menteri besar of Perak, Terengganu and Perlis to have fast- track committees within state governments to iron out these land issues. 

Q: When Felda Global Ventures (FGV) was listed on the stock market in 2012, Felda reaped RM5.9 billion from the initial public offering (IPO). How has Felda used that money?

A: We spent RM1.7 billion on Felda settlers, paying each family RM15,000. The balance of RM4.3 billion was used for various reasons. Felda made one-off payments to the governments of Sabah (RM300 million) and Pahang (RM250 million), apart from spending on housing loans for Felda settlers (RM400 million), management expenses (RM883 million), plus investments in property, both here and overseas.

Prior to FGV’s listing on the stock exchange, we had estates which generated revenue. Now, we are left with Felda Investment Corp Sdn Bhd (FIC), which was incorporated in 2013 to generate additional revenue for Felda, settlers and their land schemes.

We have to look at how we can get higher returns from the RM2 billion investments via FIC. Out of the RM2 billion, RM1.4 billion is invested in hotels and hostels in Malaysia and in London. FIC’s investment in property developer Encorp Bhd amounted to RM330 million, RM144 million in Iris Corp Bhd and RM100 million in Barakah Offshore Petroleum Bhd.

Q: Who are the new directors at FIC?

A: Two months ago, the FIC board of directors had resigned to make it easier for reforms. We will soon announce the names. There will be nine members, most of them are professionals. In the interest of good governance, the FIC chairman will be someone else, not me. In maintaining streamlined policymaking, two Felda board members would be represented in the FIC board.

Q: In December 2016, Felda announced its unit, FIC Properties Sdn Bhd, was buying a 37 per cent stake in PT Eagle High Plantations Tbk from Rajawali Group for US$505.4 million (RM2,242 million). Has the deal been concluded? 

A: To date, Felda has yet to conclude this deal with Rajawali Group. We hope to do so by the end of this month. This 37 per cent stake purchase in Eagle High is the government’s initiative to strengthen Malaysia’s palm oil industry and Felda is the appropriate platform, considering its established experience in plantations.

Both Indonesian President Joko Widodo and Prime Minister Datuk Seri Najib Razak have lent their support towards this deal, which forges closer economic ties between two nations.

Once this deal is completed, Felda, via FIC Properties, will have two board representation in Eagle High and one at the operational level. I would also like to highlight there is a call option. Let’s say, three years from now, we’re not satisfied with Eagle High’s performance, we can exit at the same price plus six per cent interest.

Q: Can you elaborate on how the government loan payback structure would impact Felda’s balance sheet?

A: In facilitating this Eagle High deal, the government has channelled loans of up to RM2.5 billion to FIC Properties. This deal does not incur any funding from Felda. It will not negatively impact Felda’s financial state.  

Q: What are the measures you have taken to make Felda more visible and effective in the eyes of the settlers?

A: Felda and its board members must become accustomed to today’s world.

We have to continue adjusting ourselves to the new realities of communications. Settlers children are very familiar with online news, Facebook, Instagram and blogs. Instead of waiting to receive complaints via official channels, we’ve strengthened Felda’s Inspectorate Unit. Now, they will need to respond and verify complaints by going down to the ground within 48 hours. 

The communications team is also tasked to inform current Felda operations via official accounts of Facebook, Instagram and blogs.

My team and I are accessible via WhatsApp. Since the start of the year, I was added into three WhatsApp group chats titled ‘Pahang MPs’, ‘Felda Generation Voice’ to ‘Settlers Welfare’. 

Q: As an Umno veteran, how do you describe the relations between the ruling political party and Felda settlers?

A: Felda was mooted and established by Umno leaders Tun Abdul Razak Hussein and Tun Dr Ismail Abdul Rahman. It was later led by Tun Musa Hitam, Tan Sri Yusof Noor, Tan Sri Isa and now myself. There are Umno branches in all Felda settlements.

If you look at the political landscape, settlers’ smallholdings are spread across 54 parliamentary and 92 assembly seats.

The opposition politicians such as those from Pakatan Harapan are carrying out campaigns and you can see it is their habit to find fault.

The opposition likes to instigate and rile up dissatisfaction among planters, but have they ever solved any problems faced by Felda settlers?

It is the Felda management and myself who are solving problems. The crux of the problems faced by settlers are low palm oil and rubber prices. We understand what needs to be done for trade facilitation to drive global demand. 

That’s why it is important Felda facilitates FGV to engage with big consumers in China, India and the Middle East. Felda management understands Felda settlers’ socio-economic welfare can be affected by hate campaigns towards palm oil on the Internet by activists.

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Like all Malaysians, children of Felda settlers deserve equal opportunities to buy their own houses and the Felda chairman, Tan Sri Shahrir Samad noted it was only fair for them to be given the same attention regarding affordable homes. Pix by Yazit Razali

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