Tuesday, June 21, 2011

CCC: Calvary Convention Catastrophe?

(EGM Update Part II)

We have tabulated the figures presented to the members at the EGM into the tables below  for easy understanding:-

CCC PROJECT COST  as reported             

RM’ Millions

Prior to Phase 1A

Foundation, sub-structure, Nam Fatt’s claims
Phase 1A

- incurred and paid

- committed and contracted

Total Phase 1A

After anticipated savings of 1.8m

Consultants Fees


Phase 1B





-Other Ancillaries    

Total for Phase 1B


Total for Phase 1A & 1B


Our Estimated Eventual CCC Project Cost

Land Cost (plus incidentals):


Phase 1A & 1B


Phase 2 (estimate)


Capitalized Interest during construction (estimate)


Total Estimated CCC Cost

excluding loan interest during the 10-year repayment period

If and when the CCC is fully completed, it would be at a whooping cost of RM301 million.

RM301 million for a 5,000-seating church works out to RM60,200 per seat. All the big churches in the Klang Valley incurred between RM8,000 to RM12,000 per seat. A reasonable cost per seat is RM10,000. 

A good example is The Blessed Church in Kuching which is building a 5,000-seating church with a 1,000-seating chapel at a total cost of RM50 million only.  Although the land cost is cheaper in Kuching, the construction cost is higher there.

On average, one can easily build a church that sits 200 to 400 persons for RM2 million. Based on this amount, with RM301 million, we can build 150 churches, which would translate to having a total of 58,000 seats!

Spending RM200-300 million for a church of 5,000-seating capacity is a sheer waste of the Lord’s money. This is a classic example of very bad stewardship and the egoistic ambition of a man.

FORECAST FUNDING POSITION  as reported                            

RM’ Millions

Total Building Cost

Partially completed building only
Less: paid up to end 2010


Balance Funding required


Funds Available:

At end 2010 Fixed Deposits

Projected surpluses 2011/12

Prior to completion of CCC
Secured Bank Loans

Alliance 35m and Public 8m


Balance to be raised

Additional bank loan being sought

Although the Deacon expressed confidence in securing an additional bank loan of RM75 million, it is easier said than done. Assuming the bank grants the loan at a margin of finance of 70%, the Church will have to provide collateral of about RM107 million to the Bank.

Since the CCC land and the Damansara Perdana (DP) Church building have already been charged to the Banks for the RM43 million loans, the remaining properties are insufficient to obtain an additional RM75 million loan.

REPAYMENT OF LOANS  as reported                    

RM’ Million

Existing Bank Loans

Additional Bank Loan

Total bank Loans


Share of Condo Project Profit (JV)

Disposal of 5 bungalows in DH

Balance of Loan not repaid

Members Advances outstanding

Estimated Loan interest for 10 years

Balance to be repaid over 10 years

The Loan repayment of RM69m over 10 years works out to RM6.9m per year or RM575,000 per month. The church claims that the amount is within their ability to repay as this is the average monthly income surplus in the first quarter of 2011.

The assumptions made by the Church leadership are:-

1)   There will be a projected income surplus of RM12.2 million over 2011-2012.

2)  The additional bank loan of RM75 million can be secured

3)   The Condo project JV will generate a net profit of RM50 million

4)   The 5 DH bungalows can be sold for RM35 million

5)   The church will continue to generate an income surplus of RM575,000 per  month for the next 10 years to repay the loans.

Here are some reasons why we have doubts about the Church leaderships’ assumptions and why the assumptions are misleading and not achievable.

1)    The Church’s Income Surplus has been dropping over the last 2-3 years and with TOTT (turn off the tap) stance taken by many members, the surplus can be expected to drop further. Therefore, the projected income surplus of RM12.2 million over 2011-2012 may not be realized.  With even more members leaving after the recent conclusion of the court proceedings, we can expect the offering and tithes to dip even further this year and going forward. The continued lack of transparency and accountability will put off some of the remaining congregation from giving.

2)  As stated earlier, it will not be easy to secure the additional loan of RM75 million. If they cannot get the additional RM 75million loan, they will not be able to even start Phase 1B.  What would have been accomplished then would just be a shell and core of the main building. It may be protected from the elements and deterioration but it will be an unusable building.

3)  It was not explained whether the projected RM50 million profit from the JV is an ‘after tax” or “before tax’ profit. Obviously, any income from non-church activities is taxable. If the projected profit is “before tax”, then the net profit will be less than RM50 million.

However, the more pertinent question is how is the RM50 million profit from the JV achievable?

If Calvary Church is entitled to RM50 million profit, then obviously, the JV partner will also get at least RM50 million profit from the development. To achieve a RM100 million profit from a residential development, the gross development value must be at least RM300 million to be viable.

The small land size of 1.75 acres at a road corner, with its triangular shape, does not provide much flexibility in layout planning. At most, it can accommodate a single tower block of serviced apartments. The configuration could range from a high density 400-unit condo tower to a low density 150-unit tower with prices ranging from RM750,000 to RM2 million each.

The question is would anyone buy such expensive apartments in a middle-class neighbourhood and which fronts onto a congested, busy and noisy highway with poor road access.

4) Targeting to sell the 5 DH bungalows for RM35 million or RM7 million per lot is certainly a tall order. All the 5 bungalows have been converted for church use and are no longer suitable for residential dwelling. Therefore, the buyers will only be paying for the land.

At an average of 6,000 sq ft per lot and at say, a discounted price of RM300 per sq ft (assuming buyers are willing to fork out such a price to live next door to a church), the 5 lots will only generate a total proceeds of RM9 million, which is way below the projected amount of RM35 million.

5)  Based on the current scenario and the dwindling membership, it does not appear that the monthly Income surplus of RM575,000 as anticipated by the church is maintainable. Therefore, the church’s ability to repay the loan is in question.

6) The church has also not factored in the maintenance cost of the CCC. Time and again, the leaders have skirted this major issue. A simple arithmetic will reveal the scary figures. If the CCC costs RM300 million and using basic accounting principles of depreciation of say, over 50 years, it would require RM6 million a year just to maintain the building in its fair condition.

7)  Coupled with the running costs of the massive facility like electricity for the lighting and air-conditioning, this will wipe out all the income surplus, the church is expecting. That means the church will never be able to pay off the bank loans which in turn, means that it is a matter of time, the banks will foreclose and auction off the CCC and possibly whatever properties that are also charged to the banks. CCC can destroy Calvary Church.

The possibility of a financial catastrophe for Calvary Church is real. Borrowing such large amounts to build the CCC monument is akin to subjecting the church to the bondage of financial slavery.  Borrowing and pledging all the assets built up by the members over the last 50 years makes the church a slave to the banks.    

Rev. Susan Tang in her latest book “Prayers in the End Times” wrote:
Israel was not related to God, they were related only to their religious system and this provoked God to anger.  God felt anger each time they mentioned, not His name, but their temple – that beautiful, gold –laden, majestic and spectacular building.  What is this grand artifact without the presence of God?  Did you know that God allowed this beautiful building to be crushed, defiled and destroyed?
‘Do not trust in these lying words; saying, the temple of the Lord, the temple of the Lord, the temple of the Lord are these.’ (Jeremiah 7:4)”

This is the attitude of the pastors of Calvary Church.  PG’s wife actually told the leaders that after CCC is completed, all those who left will come back because it would be such a beautiful building. PG is also known to have such unscriptural thinking.  He once told a young pastor, “Get the people in, the money will follow.”  He has turned the house of God into a den of thieves.

If CCC is completed with bank borrowings, Calvary Church will continue to neglect the poor for another ten years. Rev. Susan Tang wrote, “God had no intention of taking the poor out of the land.  He purposely left them for us to take care of them because He wanted to deal with our character of selfishness and greed….Modern-day Christianity today hardly does prayers nor remembers the poor on a consistent basis.  We do concerts and rallies and conserve money to build monumental buildings.  The concentration is on the rich, not the poor because the poor have no money to contribute to our church building and when they come, they give our beautiful multi-storey buildings a poor image.  In order to relieve our conscience, we do remember to give them a little hamper, a ‘shoebox’ of goodies, some shoes and clothes at Christmas and then we forget about them until the next Christmas.”

Rev. Susan Tang continues,
God’s word is clear on this:
  • wealth acquired with a ‘closed heart’ towards the poor will bring an active curse (Amos 5:11).
  • that if we neglect our duty towards them His love cannot dwell in us for neglect of the poor is sin against God (1 John 3:17, James 2:5-9, 5:1-4).
  • where we will be in eternity depends on our attitudes towards them (Matthew 25:31-46)
  • taking care of them will secure for us blessings from above!  We need not pray for blessings, they will come as we bless the poor.  So much of our ‘bless me’ prayers is useless if we neglect the poor (Psalm 41)”