Lease Delays Affect Revenue From Highway Concessionaire Office Rentals

KUALA LUMPUR, Oct 6 (Bernama) -- A total of 96 administrative offices of highway concessionaire companies in Peninsular Malaysia have yet to sign land lease agreements with the government, even though the offices have been occupied for between one and 26 years, according to the Auditor-General’s Report (LKAN) 3/2025.  

The report said that the delay in signing the land lease agreements has resulted in lease rental revenue amounting to RM96,000 not being collected by the government.  

The report, related to the 2024 Federal Government Financial Statements tabled in the Dewan Rakyat today, noted that the leasing process involved 27 concessionaire companies managing 33 highways, with the land lease process under the responsibility of the Ministry of Works (KKR) and the Department of the Director General of Lands and Mines (JKPTG).  

As of Dec 31, 2024, a total of 136 administrative offices were built by the concessionaire companies, but 96 offices belonging to 23 companies have yet to finalise lease agreements with the government, while six offices did not have any lease clause in their respective concession agreements.  

The report also explained that a nominal lease rental rate of RM1,000 for the concession period was set through the Minister of Land and Cooperative Development’s Memorandum and Cabinet approval in 1997.

“Checks on records of the Malaysian Highway Authority (LLM) found that lease agreements for the 96 administrative offices have yet to be executed, resulting in estimated government revenue losses of RM96,000 based on the nominal lease rate,” the report stated.  

The report added that among the causes of delay were land ownership processes involving 25 applications to LLM and KKR, eight still being processed at the KKR and JKPTG level, 33 offices yet to receive a Form 5A Notice from the District and Land Office, while 17 offices had made the Form 5A payment but the lease agreements had not been finalised since 2004.  

The audit report also revealed that six administrative offices under the Shah Alam Expressway (KESAS) did not contain a lease clause in their concession agreements, resulting in no lease rental being charged to the company.  

For the period between 2005 and 2024, the audit also found that LLM had collected lease payments amounting to RM3.27 million for 27 administrative offices across 10 highways before the lease agreements were signed, even though the agency had no legal authority to do so.  

“In this regard, the audit recommended that concessionaire companies submit applications and expedite the land ownership process at the KKR/LLM and JKPTG levels, and hasten the preparation of a supplementary concession agreement for KESAS Highway to ensure lease rentals can be imposed,” the report said. 

-- BERNAMA