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Saturday, June 9, 2012

Apartment built like a hotel

Hospitality suite: Low with a model of the Tribeca tower project.

If a serviced apartment is like a marriage between a hotel and an apartment, Low Yat Group's latest luxury project may elevate the romance between the two to another level.

Named after a neighbourhood in Lower Manhattan of New York City, Tribeca is designed with elements of a neighbourhood within a building that is also equipped for hotel-style living.

Executive director Low Su-Ming says Tribeca will target mainly investors as well as those seeking the true essence of city-living.

“We find property investors these days seek a lot more added value for their investments,” she tells StarBizWeek.

Among the key features of the hospitality suites are the two rooftop infinity swimming pools and five distinctively different Sky Pods which work as common areas scatter throughout the building.

This is a concept first in Malaysian residential developments and will be visible from the exterior of the building.

The pods, or breakout spaces, will each occupy three storeys along the corridor with internal staircases for easy accessibility. Among the pods would be a jungle-themed children play pod, a three-storey exclusive club lounge, business function rooms and more.

“Each pod acts as extended features to the units where residents or business travellers staying temporarily can entertain friends in one of the lounges or host a 20-pax dinner function in the club,” she says, adding that while residents are free to utilise the common facilities, “some are only accessible with a small fee”.

Tribeca is also designed to light up with colours all around its tower.

“We say for this project, we say we have to do a bit different to define urban. It does not have to be the gray, CBD, Class-A steely look,” Low says.

The group wanted to bring a bit more fun and life into the cityscape by featuring different coloured windows at each unit, making the whole tower rather colourful from the outside.

“As a private developer, we are doing our fair share in contributing in terms of not just adding another building to the city skyline but also thinking of ways to activate the city,” she says.

Being sited on a very strategic location, Low says the group wants to complement the activities already there while further adding vibrancy to the city centre by designing and operating a building that meant for urban lifestyle.

The development will have 297 units built on a 0.756-acre freehold land.

It is a 15-minute walk to Kuala Lumpur City Centre through the covered walkways and a five-minute walk away from Pavilion shopping mall.

Situated in on Jalan Imbi, it is close to the Bukit Bintang and Imbi monorail stations. It will also be accessible via the proposed My Rapid Transit stations in the Bukit Bintang and Pasar Rakyat.

For the studio and suites in Tribeca ranging from 510 sq ft to 1,020 sq ft build-ups, Low Yat expects to price them between RM950,000 and RM1.5mil.

The development has limited loft units with a build-up of 1,300 sq ft, priced in the range of RM2.4mil to RM3mil.

The 36-storey development is targeted to launch in the last quarter of this year and construction would be completed three years from then.

“Summing it up, it's a solid and sustainable investment project. Small units are selling better than larger units, that is a fact,” Low says, adding that while 10% of the units were lofts, the focus is on small serviced suites.

Although land bank in the bustling city centre may be a challenge, Low continues to see potential in Greater KL.

“The Low Yat Group has been a part of the metamorphosis of Greater KL over the last 60 years beginning with its first development Federal Hotel in Bukit Bintang,” she says.

She reveals that there are expansion plans underway for some of Low Yat's first developments in the Golden Triangle, such as Low Yat Plaza and BB Park.

Under Low Yat's property development division are two distinctive portfolios, namely the premium luxury portfolio and the ongoing affordable and mid-market housing developments.

“Tribeca would be the latest addition to our premium luxury projects that occupy prime city centre sites while we are also undertaking larger land tracks for residential landed development happening in the northern Klang corridor,” she says.

With the rampant developments around the Klang Valley, Low says that there is a whole basket full of options for Malaysians in different parts of Kuala Lumpur.

“Different town centres are sprouting out all over Klang Valley but there is only one city centre and it continues to be appealing to both locals and foreigners,” she says.

For its luxury developments, Low Yat has completed and on-going projects like Bintang Fairlane Residences, MyHabitat serviced apartments and the Shiki ski resort in Niseko, Japan.

Low Yat Group has also expanded to China with a commercial development project in Changsu.

By The Star

Time is of the essence in the property development sector too

Have you been to the Immigration Department recently to renew your passport? I was surprised to hear from a family member that 45 minutes was all that she needed to renew her passport. The process of renewing a passport has indeed positively changed with the time.

I recalled in the past that it took months before one could get a passport renewed. The processing time then reduced to weeks, followed by days and eventually to 45 minutes.

The evolution of improvement in the passport renewal process is beyond doubt, impressive. It is clear proof that things of bigger scale can become more efficient with continuous improvement and commitment to improve.

The improved passport renewal process brings forth many benefits such as less waiting time, and reduction in parking and transportation costs as a second trip to the immigration department to pick up the passport is no longer required. The government, businesses, common people and ultimately, the country are beneficiaries of these successes.

This form of efficiency is greatly required in other industries including the property development industry. Sadly today, the process of getting the necessary approvals for a property development project is extremely lengthy.

In my previous article, I highlighted the negative consequences of introducing “cooling off” measures to curb or control house prices and to stifle temporarily the buying appetite of home buyers.

All these measures not only slow down the rate of production of new houses by developers but create a massive housing backlog in the near future due to the anticipated demand and supply imbalance.

It is therefore essential to increase the supply of new housing units with greater pace to meet the increasing demand and maintain property prices.

Property developers today unfortunately have to wait a year or two to obtain the necessary approvals from several authorities before a project can be launched. Then there is a further two to three years required for the construction and completion of the building. Thus, a condominium project may require a total of at least four to five years before it is ready for occupation.

According to the latest World Bank Doing Business Report, Malaysia was ranked 18th when it comes to the ease of doing business. Last year we were ranked 23rd. However, in terms of Dealing with Construction Permits, our ranking dropped to 113th from 111th last year.

The report also highlighted that Malaysian developers need to go through 22 procedures and spend 260 days in total to obtain the necessary licenses, permits and complete the required notifications and inspections.

Comparatively, Singaporean developers need to undergo 11 procedures and the whole process takes 26 days, imagine if this can be achieved in Malaysia. As for Thailand, developers are required to comply with eight procedures and approximately 157 days to go through the whole process. In the case of Indonesia, the whole process involves 13 procedures and an expected processing time of 158 days.

Our closest neighbours definitely have the edge in terms of speed to start property construction i.e. 6 to 11 months advantage.

For Malaysia to remain competitive against its neighbours and in the same breath, meet the growing demand of its population for new housing units at an affordable price, immediate steps need to be taken to improve the approval process for new housing developments in the same fashion as the immigration department.

It is good to note that the Government is looking into the matter when the Chief Secretary to the Government, Tan Sri Mohd Sidek Hassan recently held a Public Consultation with relevant parties, both public and private, to improve efficiency in the construction industry.

As for Kuala Lumpur, the City Hall is also putting in noteworthy effort to shorten the processing time by taking the lead to allow developers to submit their plans online.

When the approval time is shortened and the speed of construction enhanced, the supply of new housing units will increase in momentum and able to respond to the growing demand.

The fear of continuous inflation will be curtailed and at the same time, there will be room for reasonable price appreciation in the future.

For these aspirations to be realised, time efficiency is the essence. It is vital that the relevant agencies, authorities and the private sector set their sights in the same destination and row in the same direction. After all, if you can get a passport renewed in 45 minutes, what else can you expect to speed up?

FIABCI Asia Pacific Chairman, Datuk Alan Tong, has over 50 years of experience in property development. He was FIABCI World President in 2005/06 and was named Property Man of The Year 2010. He is also the group chairman of Bukit Kiara Properties.

By The Star

Pengerang’s property play

There is strong potential for a property development boom in Pengerang, Johor in two years, if plans to turn the area into a major oil and gas hub progresses well, according to property consultants.

They say rental rates and real estate prices in Pengerang have increased substantially in the past 12 months, following announcements about infrastructure developments by Petroliam Nasional Bhd (Petronas) and oil and gas multi-discipline technical service provider Dialog Group Bhd.

PA International Property Consultants Sdn Bhd executive director V. Sivadas, who is based in Johor Baru, says: “The last year has seen heightened activities in terms of buying interest. There has been a substantial increase in the prices of smallholdings and other properties here.”

In Pengerang, Petronashas plans for a RM60bil integrated refinery and petrochemical complex, known as Rapid, which is expected to be commissioned by the end of 2016 while Dialog, together with Netherlands-based Royal Vopak group are developing a RM5bil independent deepwater petroleum terminal which is to be completed in the next six years.

Dialog executive chairman Ngau Boon Keat tells StarBizWeek that the natural deepwater and strategic location of Pengerang has attracted the attention of potential oil and gas investors from Taiwan and other countries.

“Pengerang has the potential to be bigger than what we anticipated. If done properly, the petrochemical industry in Pengerang and Singapore's Jurong Island (combined) can be bigger than Rotterdam in the Netherlands. In 20 years, Pengerang could surpass Rotterdam,” says Ngau.

CB Richard Ellis (Johor) Sdn Bhd director Wee Soon Chit also says real estate prices have gone up substantially since Petronas and Dialog announced their plans for Pengerang last year.

“There are some activities and speculation. For example, agricultural land in the area used to be priced at RM3 to RM4 per sq ft. The prices have almost doubled now,” he says.

Wee says the increase in prices of agricultural land around Pengerang is partially driven by the speculation of future land acquisition bydevelopers.

“This is compared with prices of agricultural land around Mersing or Johor Baru, which have gone up by 20% to 30% in the last three years, driven by increasing commodity prices.”

Meanwhile, Sivadas points out that there are proposals for Pekan Sungai Rengit, which is near to Pengerang, and its immediate hinterland of detached dwelling plots to be re-zoned for commercial purposes.

“Prices are sky-rocketing in anticipation of spillover from the massive developments in the area.”

However, Sivadas says while buying interest for real estate in Pengerang is substantial, there has not been a deluge in transactions.

“We understand that many owners are holding back. They would rather wait and see,” he says.

Sivadas points out that while Dialog's project has taken off, Petronas' Rapid is still in the pre-acquisition stage.

“Land has not been formally acquired. We understand studies are still being undertaken to determine the extent of the land to be acquired for the Rapid project.” A recent report by OSK Research notes that Dialog is making good work progress at the Pengerang terminal project, with more than 150 acres of land reclaimed to date.

“This is sufficient to build its Phase 1 centralised tankage facility, which would have a storage capacity of 1.3 million cu m,” said the research unit.

KGV International Property Consultants executive director Samuel Tan points out that in the next few years, accommodation will be needed for thousands of workers in Pengerang during the construction phase of the projects.

“The demand for accommodation is reflected in the increasing rental rates in the area, which is known as a sleepy fishing village,” he says.

Tan points out that in addition to construction workers who will stay in kongsi or long wooden houses near the construction site, there are engineers and construction professionals who will require more comfortable housing.

Sivadas says the sub-district of Pengerang which includes Pantai Timur and Tanjung Surat has a population of 48,603in 2010.

“There is expected to be much migration from other parts of Malaysia, as well as foreign workers coming into the region in view of the size of the proposed developments here. This will also fuel the property boom.”

Meanwhile, Sivadas notes that the scenario in Pengerang is different compared with the one faced by Gelang Patah and its hinterland in the early 90s when the Johor state government acquired close to 25,000 acres for the development of what is now Bandar Nusajaya, as well as to facilitate the development of the Second Link to Singapore and the Customs, Immigration and Quarantine Complex.

“A substantial amount of land was also acquired for the Port of Tanjung Pelepas. While Nusajaya has the benefit of the link to Singapore as its strongest selling point, the Pengerang region is to be led by the oil and gas industry,” he says.

According to Sivadas, a study of the landbank in Pengerang will show the predominantly smallholding nature of land there, with the exception of a major oil palm plantation (the 4,553-acre Pengerang Estate owned by Multi-Purpose Holdings Bhd to the west of Sungai Rengit, and east of Pularek, the Royal Malaysian Navy's recruit training centre).

“We believe this parcel (Pengerang Estate) will be developed in the near future, dependent on the speed and scale of the oil and gas developments in Pengerang. Further north of Pengerang Estate is Sebana Cove, which is a marina, golf course and residential development with landbank for development too.”

Sivadas says it is possible that the Johor state government may acquire land in the same manner that it did for Bandar Nusajaya and Port of Tanjung Pelepas at Gelang Patah in the 90s.

“Substantial smallholdings could be acquired, for Petronas's Rapid, as well as for re-parcelling of blocks of smallholdings for development,” says Sivadas.

Leisure and tourism

Last July, Johor Mentri Besar Datuk Abdul Ghani Othman said Desaru would focus on the leisure, tourism and hospitality sectors with Khazanah Nasional Bhd being the main driving force behind the development.

StarBiz quoted sources as saying that in the pipeline was the construction of four international-class hotels managed by luxury hotel groups and a new 27-hole world-class golf course with a combined investment of RM1.3bil.

Other components in Desaru's development include the two theme parks incorporating tropical, eco-adventure and water features and a convention centre to cater to the meeting, incentive, convention and exhibition segment.

Sivadas says the developments within Desaru will tie in with the oil and gas developments in Pengerang.

“With an expected huge increase of skilled and expatriates over the next few years, residential and resort developments will enjoy the spill-over effects.”

Sivadas points out that the Desaru development project by Khazanah covers an area of 4,113.29 acres along a 17km coastline fronting the South China Sea.

“Work is underway on the 27-hole golf course designed by Ernie Els, and another 18-hole course designed by Vijay Singh, as well as hotels and infrastructure works. At least three major international chains of hotels and resorts are committed thus far. A themepark is also earmarked,” he says.

Sivadas notes that existing hotels and resorts along the Desaru coast are in high demand especially during festive and school holidays.

“The completion of the Senai - Desaru highway (in mid-2011) and its bridge over Sungai Johor has made the big difference.”

However, Sivadas says there has not been many transactions of land within the Desaru belt.

“Many are either plantations held by government-linked companies or related parties, or alienated smallholdings held by individuals. With the strong prices for palm oil, we don't expect a rush by major land owners to develop their landbank. It may be prudent to submit preliminary applications for development while reaping the benefits of the strong oil palm prices.”

Concerning property developments within the Sungai Rengit and Pengerang area, Sivadas says there are hardly any organised large-scale projects.

“The closest big organised scheme here is Taman Sungai Ringgit which was first launched in the 80s, comprising 264 bungalow plots. Though some land was sold then, the plots remain undeveloped. With all the developments at Pengerang now, the owners here are expecting to finally see good returns on their investments.”

Sivadas says in a smaller scheme called Taman Rengit Jaya, double-storey terrace houses were sold at RM163,000 last year.

“Subsequently, a sub-sale of a unit was done at RM195,000 which translated into a price increase of 20% within a year.”

Tan also says the property market in Pengerang and nearby areas such as Pekan Sungai Rengit, Teluk Ramunia and Desaru is likely to heat up in one or two years.

“Property developers must mitigate their risks. Once the situation is seen to be more concrete in terms of infrastructure being set up, solid progression of projects and subsequently, adequate demand for housing and commercial areas, the property developers will make their moves,” Tan notes.

Tan points out that the travel time to Pengerang has also been shortened with the Senai-Pasir Gudang-Desaru highway.

“The travel time to Pengerang, from Johor Baru, is less than 45 minutes now compared with two hours before.”

However, Wee is cautious regarding the prospects of a property boom in Pengerang and nearby Pekan Sungai Rengit.

“Without a doubt, there will be a rise in property prices and increased property developments in the area once the Petronas and Dialog projects take off. But the question remains about whether the influx of high-income workers or professionals for the oil and gas, or petrochemical industry in the area can achieve the critical mass necessary for a major property boom.”

Wee says a good example is Kertih, Terengganu where Petronas has an integrated petrochemical complex.

“Perhaps Pengerang will become another Kertih in terms of size.”

By The Star

Dijaya buys boutique hotel for RM54m

KUALA LUMPUR: Property developer Dijaya Corp Bhd is buying a boutique hotel on a piece of freehold land in Kuala Lumpur from Multi-Purpose Holdings Bhd for RM54 million cash.

The hotel, built on a 1,106 sq m land, is located just two minutes walk from Tung Shin Hospital and five minutes walk away from China town.

“The proposed acquisition will provide the group with stable, long-term and sustainable income stream. With the prime location of the property, the group believes that the property will be invaluable for the group to improve its profitability and thus shareholders’ value,” said the company in its filing to Bursa Malaysia.

By Business Times

Battersea set to power Sime, SP Setia shares

KUALA LUMPUR: Sime Darby Bhd and SP Setia Bhd’s shares are poised for a significant upside once details of the London’s Battersea Power Station deal are available, analysts said.

The companies yesterday rose as as high as 1.3 per cent after they emerged as the preferred bidders for the site.

Lack of concrete details on the joint-venture bid may have capped the upside, analysts said.

Sime Darby reached a high of RM9.80 before closing marginally lower at RM9.69 than its Thursday’s close of RM9.71, while SP Setia gained 1 sen to end at RM3.76.

There were more than 8.7 million Sime Darby shares traded and less than 50,000 SP Setia shares traded yesterday.

Most analysts viewed the announcement as positive news to the
companies. However, they needed more details before a proper analysis can be made on how the project can benefit the companies’ longterm earnings.

“Generally, we are positive on the property exposure in London given the gradually improving market conditions and resulting economic activities.

“We maintain our ‘outperform’ ratings on both Sime Darby and SP Setia pending further concrete details about the project,” Public Investment Bank said in a report yesterday.

The research house has a target price of RM11.21 and RM4.40 on Sime Darby and SP Setia, respectively.

As at yesterday, there were 20 research houses with a “buy” call and nine research houses with a “hold” tag on Sime Darby.

There were seven analysts recommending “buy”, 14 with “hold” and three “sell” calls on SP Setia.

On Thursday, SP Setia and Sime Darby jointly announced that they had been picked by the joint administrators and receivers of the 15-hectare site in London as the preferred bidder.

They had signed an exclusivity agreement with the joint administrators and receivers to buy the site for STG400 million or about RM2 billion.

Both companies have up to 28 days to do further due diligence as well as negotiate the contract for the acquisition. It means that they will have access to the finer details about the site, including its legal and planning status, upon which they can make a decision as to whether their plans are financially viable.

At the end of the four weeks, they will make a decision as to whether to go ahead.

"At this juncture, the equity share of SP Setia and Sime Darby is still unclear, but with both companies having Pemodalan Nasional Bhd (PNB) as their largest shareholder, we believe it is likely that PNB will take up a direct equity stake in the potential joint-venture.

"However, we do not rule out the possibility of other investors participating in the site's redevelopment," OSK Research said.

Meanwhile, analysts pointed out that the decline in Sime Darby's share price yesterday may be partly due to rising pessimism on crude palm oil prices over the next 12 months.

LMC International Ltd chairman James Fry reportedly said palm oil may extend a decline from its lowest level in seven months as a drop in crude oil prices reduces the appeal of the tropical oil for use in biofuels.

By Business Times

Sales pitch from Canada

An artist impression of Chestermere Manor, a project comprising 96 units of townhouses being marketed by Vision International Properties.

LAST week, a group of fairly young people organised a lunch at a club to promote and market some townhouses in Alberta, Canada. There are a few things about the investment propostion that comes across as rather interesting. Whether it will be profitable or not is another matter. The objective of this article is, therefore, to highlight the different types of property-investment offerings that are entering the market as a result of Asia being rather buoyant, despite the woes in US and Europe.

First, it was the first time that properties as far away as Canada are being promoted this way. Usually, agents will just opt for an advertisement. Vision International Properties did that, besides other things.

One may ask, why Canada? Seems so far away when there are properties in Britain, Australia and Singapore to choose from. Malaysians generally invest in British and Australian property because they have children studying in these countries, or because they themselves studied there. There is, therefore, the emotional and sentimental ties. As for Singapore, it is just an hour away by plane and they frequent the city state and so they decide to buy something in Singapore.

The other thing interesting about this Canadian proposition is that, the director of Vision International is a Malaysian who studied in Canada, worked in an international consultancy firm there for about a year before deciding to go full time into property investment with a partner. Virata Gamany, the Malaysian director has now decided to return to Malaysia to start a branch here, besides other branches in Singapore and China.

Thirdly, Virata, 28, is offering an investment proposition which, thus far, is fairly new to Malaysian residential buyers, to a degree.

Unlike local Malaysian agents representing foreign developers and house builders to promote an overseas property development here, which they sell to Malaysians and other investors in other parts of Asia, Virata and his partners are neither agents nor developers.

They instead bulk purchase into a project in Canada, which they then sell to Malaysians and other investors. It is very much like the Middle-Eastern investors who bought en bloc units in the KLCC area and then sold the units to other buyers at a lower rate than the developer. They are able to do this because they buy multiple units.

In the case of Vision International, it is uncertain whether the properties come at na discounted rate from the developer's price. But they will manage the property on behalf of investors.

In other words, one buy into their project, in this case, Chestermere Manor, which comprises 96 units of townhouses in Calgary, Alberta, not to stay, but to be rented out at a gross yield of between 7% and 8% a year.

He said they will help investors enter into the market easier by assisting with bank loans and legal paperwork and manage the properties and look for tenants. Investors will have to consider the cost of this list of services as it will be factored into the price of the house, or in some other ways.

A two-bedroom unit is priced at C$218,000 with a downpayment of C$76,300. Virata has put the rent at C$1,300 and a string of other fees like property tax, management fee, mortgage expense and condominium fee.

A client can exit anytime because it is a direct ownership, he says.

Virata says Canada is rather low-profiled compared with other destinations but this does not mean a shortage of opportunities. The project he is offering sits on 10 acres, of which about half will be occupied by townhouses. These will be the more affordable alternative to the more pricey three-storey landed units. Vision, he says, is buying nine blocks, of which eight blocks, comprising 96 units, will be sold to investors. They will keep the ninth for investment.

Chestermere Manor is their 19th property investment.

“Our investments are focussed on apartment and condominium units with rentals that are within the range of the average Canadian family. Such properties tend to yield better returns and are less risky,” he says.

There will be regular project updates. Currently, each of the blocks is being built at different stages with the last block expected to be completed in 2014.

Virata says this is investment proposition is neither a Reit (real estate investment trust) nor a land-banking, which had some Malaysian investors losing their life savings earlier this year.

He also suggests investors see the properties for themselves and Vision International will pay for the flight ticket.

“We find it odd that less than 5% of investors ask to see the properties and if not for us providing the return flight tickets, they do not do so.”

While Virata and his team offer a host of conveniences, a property consultant agrees that dealing with one party in this case a property investment company may seem more appealing than buying from an agent who represents a developer, and having to engage letting agents to rent out the unit.

“There is the issue of not knowing who to turn to in the event the desired situation does not materialise for whatever reason, for example, a project not taking off. In the case of having to deal with an agent who represents a developer, and a letting agents, there is a clear separation of duties and responsibilities,” he says.

While Virata's investment proposition may appeal to some, as with other property-related investments abroad, it is worthwhile to note that the low interest rates around the world today has been a major driving force for such investments.

Last week, wire service Bloomberg highlighted the dangers of Canadian housing debt levels.

Canada Mortgage & Housing Corp (CMHC), which called on home buyers to guard against taking on too much debt, cautioned buyers to exercise prudence.

“Interest rates are at historic lows and they are certain to rise in the future. In this context, it is important that they not get overextended,” a CMHC's representative says.

Bank of Canada Governor Mark Carney has said that record consumer debt loads are the biggest domestic economic risk, and housing starts reached the highest since 2007 last month.

Finance Minister Jim Flaherty's March 29 budget put CMHC's securitisation and insurance operations under oversight by the country's banking regulator, with Flaherty citing the economic risks posed by the housing boom.

“Strong labour market conditions will continue to drive the construction of new homes, but some diminution of the current robust pace of housing starts is expected later this year and next year,” CMHC's report says.

Housing is also being supported by a five-year mortgage rate that has been at or close to record lows this year. The Bank of Canada said last month it may need to raise its 1% benchmark overnight rate because of faster-than-expected growth and inflation.

The agency said it had mortgage insurance in force worth C$570bil (US$554bil) at the end of March, up 10% from a year earlier. Canadian law requires borrowers with less than a 20% down payment to have their mortgages insured and CMHC has a C$600bil limit on its insurance portfolio.

CMHC said in January it had begun rationing bulk insurance for lenders to keep from exceeding the limit.

All these represent red flags that potential Malaysian investors need to be aware of. It is difficult to monitor an investment that is so far away, and laws and legal system may be different and the way things are done may vary considerably.

By The Star

Changes in traffic flow

The Jalan Tun Razak/Jalan Pudu/ Jalan Cheras/ Jalan Chan Sow Lin interchange project is progressing well and will ease the bottleneck in the area by Dec 12.

Project contractor System Engineering & Construction Sdn Bhd representative, who refused to be named, said road users would begin experiencing major traffic flow changes temporarily.

“This is a temporary traffic diversion until Sept 14 when the elevated portions are completed and ready for use,” he said.

He added that the traffic diversions (see graphic) was needed to place the cranes at the site.

One of the major changes to take place is the relocation of the Jalan Nicholas/Jalan Cheras traffic lights further down the road near the church.

This traffic light will facilitate U-turns for drivers from Jalan Pudu to Jalan Chan Sow Lin and Jalan Nicholas to Jalan Chan Sow Lin and Jalan Pudu.

Those from Jalan Chan Sow Lin will only be able to make a left turn towards Jalan Pudu where they will have to take the Pudu roundabout to get to Jalan Tun Razak or Jalan Cheras.

Drivers along Jalan Tun Razak will be diverted onto Jalan Nicholas, that will be converted into a one-way road for this period.

Finally, those from Jalan Pudu will be able to go straight towards Jalan Cheras but to get to Jalan Chan Sow Lin, they will have to go along Jalan Tun Razak, Jalan Nicholas and make the U-turn at the relocated traffic lights in Jalan Cheras.

The representative went on to say that they will be working round the clock to meet the deadline.

“Once the elevated portion is completed, we will be concentrating on the Jalan Pudu/Jalan Cheras underpass. Right now, we are preparing a report to Kuala Lumpur City Hall (DBKL) to inform them of a height problem for the underpass,” he said.

He said the underpass they were constructing had a difference height clearance than the one that already exists along Jalan Pudu leading into the city.

“The underpass we are building has a 4.5m height clearance, enough for all vehicles but our contract states we need to increase this to 5.2m. The lower clearance of the existing underpass is 3.7m and there are concerns certain vehicles may not be able to pass through,” he said.

Their suggestion to solve this is to either abandon the need to further increase the new underpass’ height clearance or increase the height clearance of the old underpass.

He also explained the reasons for the project’s three-year completion delay since August 2009.

“We were still going through land acquisition for the project until August last year. So far, we have acquired more than 20 shophouses.

“There was also a number of underground utility pipes we had to deal with,” he said.

He added that they had to get the approval of the Smart management as part of the tunnel ran under their project and this took two years.

“So far, our cost overrun is about RM5mil.” he said, adding that they have already received two contract extensions for the project and are preparing to apply for a third as the current one expires on Sept 14.

Cheras MP Tan Kok Wai said the project costs RM100mil, including land acquisition.

“This project is meant to provide a better traffic dispersal system and ease the bottleneck on this interchange that has caused massive congestion during peak hours.

“I have received many complaints from my constituents on this project so I hope it will be completed soon,” he said.

By The Star