KLANG: Almost 2,900 illegal factories in Selangor are at risk of being shut down by authorities if their owners fail to legalise them within a year.
The state government has decided that a final chance be given to these factories which must legalise their operations between Oct 1 this year and Sept 30 next year.
State Local Government, Public Transportation and New Village Development executive councillor Ng Sze Han said after the dateline, the owners would be issued a show cause letter on why their land should not be seized and also be fined a minimum of RM500, added with a daily fine of RM100 until the matter is resolved.
Speaking during a briefing on regulations compliance and enforcement on illegal factories here today, he said the steps by the government were in line with the National Land Code 1965.
He said the state had started programmes to legalise the illegal factories since 2005 with six extensions.
“However, of the almost 2,900 factories, only 630 have been legalised as of last November.”
He said many of the owners had a poor attitude of waiting till the last minute before they applied for legalisation.
“No matter how much time we give, they will always wait till the last minute. That’s why we decided there will be no more extensions after this.”
In its latest and final step, the state hopes more will legalise their businesses and is offering incentives in the form of discounts in land premiums for land status conversions.
Those who pay up within six months will get a 10 per cent discount while those who pay up in four or two months will get 20 or 30 per cent discounts respectively.
Acknowledging that land status conversion premiums may be too high for some, the state is offering a nominal payment of only 10 per cent. However, a caveat will be placed on the land.
Ng said this was a ‘carrot and stick’ approach and hoped the illegal factories could be legalised as the benefits of the exercise was tremendous for all parties.
“For the owners, they could operate peacefully and move ahead with modern technology. They can also easily expand their businesses with more exports as getting the necessary approvals will be easier then.
“As for the government, there will be more revenue in the form of taxes and licenses. There will also be more jobs and ultimately the economy will improve. We will also have better control of their development and avoid pollution of waterways, school and residential areas.”
He also advised the owners to appoint consultants to handle the legalising process as it was a long and complicated process.
It could take as little as three months to legalise and up to a year if located on non-industrial land.
The cost is estimated to range between several hundred thousand ringgit and up to several million ringgit, depending on the size and land location.
The state had also identified three “hotspots” for illegal factories in Selangor – Sungai Buloh, Telok Gong in Klang and Hulu Langat.
Ng said the highest concentration of illegal factories was in the Klang district as it was near the port and that made it easier for these companies to move raw materials and finished products.
On claims that the state was trying to legalise illegal plastic recycling factories through this exercise, Ng said it was not true and that it slandered the state government.
He said these factories needed to get the necessary approvals from the Department of Environment first.
“Only after getting the DoE approval, can the factories apply to the local councils for a business license. We have just started the legalisation exercise, yet we have been accused of this,” he added.