Published June 29, 2010

MDIS to set up campus in Iskandar

RM300m, 30-acre education facility could be the largest campus in EduCity

By PAULINE NG
IN KUALA LUMPUR

THE Management Development Institute of Singapore (MDIS) yesterday signed a deal to establish a 30-acre campus in Iskandar Malaysia. Its RM300 million (S$128 million) investment is the first major one by a Singaporean group in the special economic zone.

Landmark deal: Ms Arlida and Dr Theyvendran exchanging documents at the signing ceremony in Kuala Lumpur yesterday. Others, from left, are Singapore's High Commissioner to Malaysia TJasudasen, Mr Mohamed Khaled and MDIS president Eric Kuan

The decision to set up a private university college in the area called EduCity@Iskandar is also significant in that it comes on the heels of closer bilateral relations between the two countries.

MDIS's commitment took 18 months of 'rigorous efforts', its secretary-general R Theyvendran said, with the final impetus provided by last month's momentous agreement between the leaders of both countries to resolve a number of long-standing issues, including the land in Singapore that is held by Malaysia's KTM.

Even so, the not-for-profit professional institute sees the 'great potential' which the market for education in Malaysia represents, given the estimated 800,000 students enrolled in higher education across the country. Moreover, Malaysia is host to some 50,000 international students.

MDIS signed an agreement yesterday with Education@Iskandar Sdn Bhd in Kuala Lumpur which was witnessed by Malaysia's Higher Education Minister Mohamed Khaled Nordin.

Its campus could well be the largest in EduCity, and MDIS's commitment will provide a timely boost to Iskandar Malaysia as well as aid its aspirations to become a regional education hub.

It is the third institute to commit to EduCity after Newcastle University Medicine Malaysia and the Netherlands' Maritime Institute of Technology, which are scheduled to open in 2011 and 2012 respectively. Marlborough College Malaysia will open its doors near EduCity in 2012. Another Singapore group, Raffles Education Corporation, is currently conducting a feasibility study before it makes a decision.

Education@Iskandar chairman Arlida Ariff described the MDIS deal as a 'landmark agreement which reflects the immense potential for synergy between Singapore and Malaysia'.

Although Singapore investors are among the southern state's biggest, their investments are mainly in small and medium-sized industries, mostly manufacturing.

Ms Arlida, who is also the chief executive of Iskandar Investment, the master planner for the economic zone, said eight campuses were planned for EduCity and that negotiations are currently underway with an engineering institute. Dedicated campuses for dental, infocomm technology and multimedia institutes are also in the works.

As with its Singapore campus, MDIS - which currently has 13,000 students from 70 countries at its six-acre site - expects locals to comprise 70-75 per cent of the student population.

Dr Theyvendran said the RM300 million investment includes the land and building costs. Construction is to commence next year and the first phase of the 'eco and disabled-friendly' campus is expected to be completed by 2013. Initially, it would have the capacity to accommodate 2,000 students, rising to 5,000 in the second phase in 2018 and to 10,000 after the completion of the third and final phase in 2023.

Students from its three campuses - MDIS has another 10-acre campus in Tashkent, Uzbekistan - would be allowed twinning options to enable them to obtain 'a transnational education'.

The Malaysian campus would be funded by MDIS's cash reserves and operated under a Malaysia-incorporated private limited company to be wholly owned by MDIS International Pte Ltd. But a local partner could be invited to value add, Dr Theyvendran said.

Initial courses to be offered are business management, mass communication, information technology and digital media, and travel & tourism.

Articles of Law by BHAG SINGH | June 29, 2010

Landlords and bills

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Should the landlord be held responsible if his tenant defaults in the payment of utility bills?

A landlord may be envied for being a property owner who generates income for himself by letting out his premises. Apart from the fact that to be a landlord, one needs to have financial resources or at least access to them, the role is not without its problems.

Tenants who are in breach of their obligations are sometimes threatened with having their supply of water and electricity disconnected. In the absence of express and specific provisions, this approach is not advisable.

Whilst the landlord may be perceived to be in a better position because he can choose his tenants, he is more exposed to risks. The landlord’s obligation is only in the form of handing over possession of premises when the tenancy commences.

But it is the tenant’s obligations to the landlord to pay the rental and upkeep the property which is more difficult to enforce. If the tenant runs into arrears of rental, causes damage to the premises or leaves without paying for the utilities, there is nothing to hold him on except to sue him.

Non-payment of electricity bills is one area where tenants have left landlords in the lurch. When this happens, landlords are held responsible by the supplier and cannot reconnect supply for new tenants or sell their property without paying up their bills.

Supply disruption
If it is the tenant who has not paid the electricity bill, is it right for the landlord to be held responsible? A landlord will feel aggrieved at having to settle the unpaid electricity bill. Whilst the supplier concerned may expect payment from the landlord before resuming supply, such decisions are dependent on whom the electricity was supplied to. Was it supplied to the tenant who was the occupant or the landlord who is the owner?

The Electricity Act 1990 states in its preamble that it is “an Act to provide for the appointment and functions of a Director-General of Electricity Supply, the supply of electricity at reasonable prices, the licensing of electrical installations and the control of electrical installations ... and for purposes connected therewith.”

Following this, it is provided by Section 24(1) that a licensee, meaning the supplier, shall upon being required to do so by the owner or occupier of any premises, provide supply of electricity to the premises. As such the supplier knows whom it is supplying electricity to.

Upon receipt of a request seeking supply of electricity, the supplier is duty-bound to supply electricity but the supplier can specify the payment required and any security that must be given. In view of this, if the person who seeks the supply is the tenant and not the landlord, the supply contract would in such circumstances be with the tenant as would be the rights and obligations.

In addition to the security required and given, Section 28(2) of the Act empowers the supplier, where the security is insufficient, to increase the security. Failing to comply with this is a ground for disconnecting the supply. Therefore, adequate provisions exist to safeguard the supplier.

As the supplier has an opportunity to protect itself against unpaid bills by taking an adequate deposit, it would not be fair to hold the landlord responsible and withhold supply because of the tenant’s default. This is especially so where the supplier has through its own negligence, allowed the debt to pile up.

Owner’s request
However, the contract is usually in the name of the property owner, who is the landlord. A clause in the tenancy agreement makes it obligatory for the tenant to pay the electricity charges and other utility bills. This, for all it is worth, is merely an internal arrangement between the landlord and the tenant.

As far as the supplier is concerned, the arrangement is with the landlord. If electricity bills are not paid, the supplier is entitled to recover them from the landlord. If payment is not made, it is not wrong for the supplier to discontinue supply or refuse to resume supply.

Unpaid bills is a matter between the landlord and the tenant; it does not concern the supply authority. It is for the landlord to pay up and then seek recovery from the previous tenant. Whether he wishes to rent out the premises again is of no consequence.

Hence, the landlord must be aware that electricity bills are paid promptly. Monitoring can be done by including an appropriate clause in the tenancy agreement.

The tenant can be required to provide the landlord with evidence of payment of the electricity bills of the preceding month together with the rental for the current month. Failure to do so could be made a ground for terminating the tenancy.

The electricity deposit should not be a nominal sum. It should reflect an amount that is a reasonable estimate based on the expected usage so as to provide adequate security.

There should also be a clause to vary the electricity deposit. Thus if it appears that the electricity consumption per month is more than what was earlier anticipated, it could be increased in the light of higher usage so as to be meaningful.

Conclusion
To the supplier, the landlord is a sure source of payment. If the landlord is not made to pay, the supplier may not be able to recover the arrears as the previous tenants may no longer be around and the same may happen with future tenants.

But one must not forget the provisions empowering the supplier to obtain security. If it can have an adequate sum as deposit to cover defaults, and exercise its power to discontinue supply, it can minimise problems with unpaid bills.

If the supplier wishes to make the landlord responsible in any event, then at the time of supply the landlord should be made a party to the supply agreement.

However, in the absence of a contractual relationship with the landlord, it appears to be neither fair nor equitable to compel him to pay when the supply contract is with the tenant.

For those who feel aggrieved, Section 30(4) of the Act provides an option in that the matter could be referred to the Director-General of Electricity Supply for determination of such disputes. Pending the determination, the supplier is required to continue providing supply.

http://www.starproperty.my/PropertyGuide/Legal/5513/0/0