West Coast highway project deferred

PUTRAJAYA: The RM3.12 billion West Coast highway project, first slated to take off 10 years ago, has become a victim of the credit crunch as its concession holder was unable to get financing to implement the project.

This is the second time the highway project has run aground. The first time was in 1998 when the Asian financial crisis struck.

“The project may be shelved... it may also be opened for re-tender,” said Tan Sri Dr Sulaiman Mahbob, director-general of the Economic Planning Unit (EPU), at a briefing and panel discussion held by the department yesterday.

Sulaiman said the West Coast highway project had been deferred because its concessionaire Konsortium LPB Sdn Bhd could not secure financing for the project.

Konsortium LPB is 60% controlled by Kumpulan Europlus Bhd (K-Euro), which in turn is 25% owned by construction giant IJM Corp Bhd. IJM bought the stake in K-Euro in August 2007 for RM33.1 million, three months after Konsortium LPB signed the concession agreement for the highway project with the government.

The West Coast highway is a key project for K-Euro besides the Canal City property development project in Selangor, which has yet to start.

Analysts said the deferment of the West Coast highway project did not augur well for K-Euro’s prospects. Being a shareholder, IJM may not be able to see good returns from its investment in K-Euro following the latest development.

“But one consolation is that IJM’s investment in K-Euro was not a big sum,” an analyst noted.

The proposed highway, which is the second longest in the country, links Banting in Selangor and Taiping in Perak. It has encountered stumbling blocks ever since it was first awarded in 1998.

Since then the prospects of the project had become cloudy as K-Euro itself had financial difficulties. However, the entry of IJM had raised hope the project would secure the necessary financing and commence soon after the concession was signed in May last year.

But luck, it seems, is not on its side as the US credit crunch contagion has resulted in difficulties for project financing.

In addition, some analysts also have doubts on the viability of the West Coast highway project. While the rise in building materials prices has elevated the costs above the original budget of RM3.12 billion, there are concerns over the likelihood of low traffic volume on the proposed highway.

Commenting on other mega public projects, Sulaiman said that Phase I of the inter-state water transfer project between Selangor and Pahang had already opened for tenders.

“Tenders have been called for the project. It will be financed by bank loans from Japan,” he added.

“The double-tracking project is still on although there are some deferments on certain parts of the project,” Sulaiman said. As for the Second Penang Bridge, he noted that the government was in the midst of finalising the terms with UEM Builders Bhd, one of the main contractors.

Going forward, he said the government would focus on promoting projects that had high local content to drive domestic economic growth.

By The EDGE Malaysia (by Kathy Fong)

Europlus plans RM3b bond sale to fund road project

KUMPULAN Europlus Bhd plans to issue bonds worth about RM3 billion early next year to finance the West Coast Expressway (WCE) project.

Its president and chief executive Tan Sri Chan Ah Chye said the company is working with a local rating agency to raise the money quickly.



Ratings for the debt paper are expected to be finalised within a few weeks and the bonds will be put on sale six months thereafter.

The fund-raising exercise has been delayed because of changes made to the alignment of the road and costing, among other factors.

The 216km expressway will cost about RM4.6 billion. It will stretch from Banting in Selangor to Taiping in Perak.

Chan said that construction cost alone is about RM3.6 billion.

Europlus' 64.2 per cent-owned subsidiary, Konsortium LPB Sdn Bhd (KLPB), was awarded the expressway concession on May 25 last year.

Under the concession agreement, KLPB will build the expressway and can collect toll for 33 years before handing the road back to the government.

The consortium's other shareholders are Kumpulan Darul Ehsan Bhd (20 per cent) and Perak Corp Bhd (20 per cent).

Chan expects the expressway project to begin works next year and to take three years to complete.

Currently, Europlus has two major contracts in hand, including the West Coast Expressway and the Canal City, which has been delayed after the Barisan Nasional lost Selangor in the general election.

Chan said the group will soon meet the new state government to finalise new terms and conditions for the project to continue.

Europlus and construction firm IJM Corp Bhd are joint-venture partners in the project.

On its outlook for the year ending January 31 2009, Chan said he expects Europlus to make a profit now that associate company Talam Corp Bhd's proposed regularisation plan has been approved by the authorities.

In the financial year ended Jan-uary 31 2008, Europlus posted net loss of RM4.5 million on turnover of RM41.1 million.

By New Straits Times (by Rupinder Singh)

Dolomite sees gain from highway, housing projects

DOLOMITE Corp Bhd, a construction and property development firm, expects to gain from the execution of projects such as Kemuning-Shah Alam Expressway and Kesas Highway Extension as well as housing projects now under construction.

Its chairman, Tan Sri Mohd Jamil Johari, said the continued uptrend in the construction sector, underpinned by ongoing implementations of the Ninth Malaysia Plan, has provided opportunities for the group’s building materials division in the Klang Valley.

The quarrying and trading division showed a satisfactory improvement during the financial year under review, he said. The group is operating two granite quarries located in Hulu Langat, Selangor, and Bentong, Pahang.

“While competition in local construction industry is intensifying, Dolomite has not relaxed in its effort to improve its order book. The group will leverage on the high volume of construction activities rolled out under the Ninth Malaysia Plan,” he told reporters after the company’s annual general meeting in Kuala Lumpur yesterday.

The group’s construction division will continue to bid for civil engineering and building works called by government agencies and the private sector, Mohd Jamil said.

On the group’s property development, Mohd Jamil said its proposed mixed development project in Kuala Kuantan, Pahang, measuring 3,085,893 sq metres, is due to begin in the third quarter of 2008. Its proposed residential development scheme near Templer’s Park, Selangor, is expected to start next year.

For the financial year ended December 31, 2007, the group posted a revenue of RM160.64 million, up 12.94 per cent from RM142.23 million recorded in the previous year.

It posted a pre-tax profit of RM0.37 million from a loss of RM6.86 million previously.

By Bernama

Gamuda and WCT eye RM1b job

DOHA: Local construction firms Gamuda Bhd and WCT Engineering Bhd, which have a strong partnership in the Middle East, are confident that they will be able to jointly secure a new highway project worth at least RM1bil in Qatar this year.

Company officials based in the Gulf state said the tender for phase two of the Dukhan highway was expected to open as early as next month, as the first phase of the project nears completion.

“We believe we are in a good position to get the contract as this is actually an extension to the current highway project that we are doing, which is almost 90% completed,'' general manager for the Dukhan highway project S.D. Boon told visiting Malaysian reporters in Doha last week.

He said the Gamuda-WCT joint venture (JV) was already pre-qualified for the tender, and was likely to be called in to submit its bid soon.

The JV is the contractor for the 43km four-lane dual carriageway linking the industrial area in Dukhan to Shahaniya. The contract was awarded in July 2005 for 750 million Qatar riyals or RM784mil at the time.

Boon said the second phase of the highway would probably cost more to construct, partly due to higher material cost.

Gamuda has a 51% stake in the JV, while WCT owns 49%.

Shahaniya is located midway between Dukhan on the west coast and the capital city Doha on the east coast of the peninsula.

Qatar's public works authority is planning to upgrade the road link between the country's thriving financial centre in Doha and the fast growing oil and gas industrial area in Dukhan.

Apart from the Dukhan highway, Gamuda and WCT are partners in a consortium led by China’s Sinohydro Corp Ltd for engineering works being done at the New Doha International Airport (NDIA).

The completion date for the NDIA contract has been pushed back to 2010 to make way for additional works that had bumped up the original contract value awarded to the consortium from RM1.8bil to RM2.8bil currently.

Individually, the two companies are also involved in several infrastructure development projects in the region. Both had excellent track records there, analysts said.

A new job secured in the Middle East – where margins are typically higher compared with local projects – would help shore up sentiment on Gamuda and WCT.

Shares in Gamuda fell 6 sen yesterday to RM2.13 – its lowest level since November 2006. Meanwhile, WCT's share price hit a one-year low of RM2.89 last Friday. The stock was down 2 sen at RM2.95 yesterday.

By The Star (by Izwan Idris)

Malaysia likely to give growth projects priority

The government's review of infrastructure and mega-projects under the Ninth Malaysia Plan (9MP) could see several projects put on hold, scaled down, or extended over a longer period, industry sources said.

Projects will likely be prioritised based on necessity, cost, and urgency.

Amid soaring costs and higher fuel prices, projects that would have the most benefits for the people would jump to the front line, they said.

"The government is more concerned with rising food prices. So they will go for top priority projects which can generate growth, instead of mega developments. While this is a concern among industry players, we hope to be given a slice of the smaller cake," said one official of a public listed construction firm.

The government had announced that 880 projects worth about RM15 billion will be implemented under the 9MP.

So far, projects that have been awarded under the 9MP include East Coast Expressway Phase 2 comprising packages 10 and 12 (worth RM1.5 billion), Kota Kinabalu Airport upgrade works (RM750 million), Second Penang Bridge (worth RM3 billion) electrified double-tracking projects from Ipoh-Padang Besar and Seremban-Gemas (RM16 billion collectively), and Langat 2 Water Treatment Plant (RM4 billion).

Projects that have been shortlisted but not yet awarded, meanwhile, include the Penang Outer Ring Road (PORR), Penang Monorail, Johor Baru Monorail, West Coast Expressway, flood mitigation, Pahang-Selangor Raw Water Transfer Project, Klang Valley LRT extension, and Selangor water treatment and distribution, worth RM28 billion collectively.

One industry player said he believes the government may postpone flood mitigation and building of highways in Peninsular Malaysia, while giving the go- ahead for road and bridge construction works in Sabah and Sarawak.

Some research houses, meanwhile, believe that PORR may be shelved indefinitely while the Gemas-Johor Baru double-tracking project could be postponed to 2009.

"Under the Eighth Malaysia Plan (8MP), 30 to 35 per cent of the projects were delayed and carried forward to the 9MP. We are expecting the same for the 9MP, looking at the current political scenario and rising costs.

"We believe the Ipoh-Padang Besar double tracks awarded to Gamuda-MMC could be prolonged from five to 10 years, and there may be some hitches in the Selangor water projects," an analyst said.

The flow of project awards will also likely slow down for the remainder of 2008, which could put downside pressure on the stock market.

"Most people have already factored in the news (project delays). The constraint now is that the government has a budget deficit level to meet and that level is 3.1 per cent of the gross domestic product in 2008. With this constraint in mind, they can't simply go around spending," said one analyst.

The analyst said there is talk that the Penang Monorail project may be re-tendered and the development plan restructured under a build, operate and transfer concept or private finance initiative offering the company the concession.

Another industry player said the government is expected to concentrate on projects which could benefit the public such as building new roads and improving the public transport system.

"We believe the government may go ahead with the Klang Valley LRT extension. They may shorten the plan," he said.

The LRT extension includes an extension of the Kelana Jaya LRT line to Klang, and a new outer-ring line serving the outskirts of the Klang Valley.

By New Straits Times (by Sharen Kaur)

Mudajaya gets RM958m expressway contract

KUALA LUMPUR: Mudajaya Corporation Bhd has secured a RM958 million contract from Bina Puri Holdings Bhd associate KL-Kuala Selangor Expressway Bhd (KLSE) for the construction of the expressway following a competitive tender.

In a statement yesterday, Bina Puri said KLSE had awarded the proposed design-and-build contract for the expressway comprising package 1 (Assam Jawa to Kundang) and package 2 (Kundang to Taman Rimba Templer) to Mudajaya’s subsidiary Mudajaya Corporation Bhd.

Bina Puri, with its partner Arena Irama Sdn Bhd, is targeting to start the construction works by the third quarter of the year. Bina Puri has a 50% stake in the project, which is expected to be completed within 30 months.

The contract was signed here yesterday, with Bina Puri and Arena Irama represented by the group managing director Tan Sri Tee Hock Seng and director Mohamed Raffe Chekku, respectively, and Mudajaya by its managing director Ng Ying Loong and director Anto Joseph.

Bina Puri said the 33km dual carriageway would provide an alternative link road to the present Federal Road 54 from Kuala Lumpur to Kuala Selangor.

It forms part of the government’s planned KL Outer Ring Road (KLORR) which starts from North of Templer Park to Assam Jawa in Kuala Selangor. It will enable the users to shorten travelling time from two hours to 45 minutes from Kuala Lumpur to Kuala Selangor.

Bina Puri said the project was expected to create a stable recurring income for the group. “Bina Puri, being a reputable civil contractor, has its own quarry and ready-mix division and could also participate in the construction of the expressway if its price was competitive and acceptable to Mudajaya,” it said.

The company said that in 2007 it had managed to increase its order book to RM2 billion from RM1.6 billion in 2006.

By The EDGE Malaysia

Mudajaya bags 2 packages of Bina Puri road deal

BINA Puri Holdings Bhd through its associate KL-Kuala Selangor Expressway Bhd (KLSE) has awarded two packages of the expressway project to Mudajaya Group Bhd, valued at RM958 million.

Package 1 of the proposed design-and-build contract is from Assam Jawa to Kundang, while Package 2 is from Kundang to Taman Rimba Templer, Bina Puri said in a statement yesterday.

The company said Mudajaya won the contract based on a competitive tender exercise, and is expected to complete it within 30 months.

Bina Puri, with participating interest of 50 per cent together with its partner Arena Irama Sdn Bhd, is aiming to start the project's physical work by the third quarter of 2008.

KLSE will provide an alternative link road to the present Federal Road 54 from Kuala Lumpur to Kuala Selangor. It forms part of the government plan KL Outer Ring Road (KLORR) which starts from north of Templer Park to Assam Jawa in the Kuala Selangor district.

The expressway is a 33km dual carriageway. When completed, the expressway will enable users to cut travelling time from two hours to 45 minutes from Kuala Lumpur to Kuala Selangor.

"With the award of the contract to Mudajaya, a reliable contractor, we believe that the project will be successfully carried out with quality and timely completion," Bina Puri said.

In 2007, Bina Puri increased its order book to RM2 billion from RM1.6 billion in 2006, and expects the value to increase this year as it looks for opportunities locally and abroad.

By New Straits Times

New highway helps push projects

While township developments have mushroomed in prime locations in the Kuala Lumpur city centre, the northern corridor of the Klang Valley is slowly catching up in development activities.

Steadfast Realty principal Lee Wai Kong said the northern corridor had been quite remote previously but developments have started to pick up since the opening of Guthrie Corridor Expressway (GEC).

The 25km-long GCE connects Bukit Jelutong in Shah Alam to Kuang, near Rawang, and complements the North-South Expressway and New Klang Valley Expressway.

Lee believes that traffic on the highway would eventually pick up although it is quite slow at present.

“There is no doubt that the GCE has brought positive effect around the area but new developments are not as rapid as developments in the Kuala Lumpur city centre,” he noted.

“Although developments along the highway have picked up, we do not expect an immediate intense development in these areas. It will probably take another five to 10 years before we can see a property boom in these areas.”

Lee pointed out that property prices in these areas had also been going up steadily since the opening of GCE.

“Locations closer to Petaling Jaya or Shah Alam can command a better pricing although rental yields are still relatively low.

“Exclusive developments are a different story altogether. They could see better appreciation in value but not in yield. Therefore, locations like Rawang and Selayang might not seem so attractive,” he added.

He said Rawang was just another suburb and the housing demand would be fuelled by locals. He said it would be tougher for Rawang to capture the spillover from Kuala Lumpur.

“I think the development in Selayang will be much faster than in Rawang because of the connectivity. Selayang, which links to north Kuala Lumpur, can command better pricing as well,” he said.

Far no more

Meanwhile, Axis REIT Managers chief operating officer and executive director Stewart LaBrooy said land prices in Jelutong had been rising.

“Jelutong and Shah Alam have become more popular and generated a lot more interest today. A lot of new developments have started since the highway was opened,” he said.

He pointed out that there was a time when people were saying Kota Damansara was far, but people did not mind the distance now as the infrastructure was in place.

“The distances start to appear shorter, thanks to a reduction in travelling time,” he said, adding that Jelutong had good connectivity to the rest of the Klang Valley via major highways.

LaBrooy said more people were moving away from KL.

He said some property owners were “trading up” their current property. Some property owners sell their properties in KL at a high premium and buy a semi-detached or bigger property in the suburb.

He agreed with Lee that Rawang was a “local play”. “Personally, Rawang is just Rawang. The property prices are increasing but at a slower rate,” he said.

LaBrooy said Rawang did offer some good properties but some property buyers were “buying into the address” of the property. Buyers were willing to pay for a prestigious address, he added.

He expected more activities in these areas, going forward, but hoped the new developments would not cause a property overhang.

Developers attracted

Ho Chin Soon Research Sdn Bhd director and master mapmaker Ho Chin Soon opined that the GCE was constructed in such a way that it benefited Sime Darby Property Bhd.

“There is not much increase in property prices in this area but properties here will rise in tandem eventually with the Klang Valley,” he said.

Developments have started to pick up since the opening of the 25km-long Guthrie Corridor Expressway in 2005

The growing attractiveness of the northern corridor of the Klang Valley has not gone unnoticed. More and more developers have bought land in these areas.

Analysts said that the corridor, being strategically located at the confluence of major highways in the Klang Valley, had encouraged homebuyers to move there.

“GCE brings about the development of Bukit Jelutong, Bukit Subang and neighbouring housing areas,” an analyst said, adding that the highway had also helped properties nearby to appreciate in value.

An analyst with a local brokerage said property prices were moving up in the neighbouring areas of Kuala Lumpur and at the Sungai Buloh boundary.

“With soaring property prices in prime areas like Damansara, it makes sense for people to invest in Sungai Buloh, which is bordering Damansara. Therefore, newly developed properties in Sungai Buloh can be an option for investment,” he said.

He added that property prices were expected to pick up eventually.

Rawang, which is further north, was not exactly a development hotbed, said another analyst. He said that although the area had been growing at a steady pace, it was never a first priority for homebuyers. This is despite property prices there being cheaper.

“A homebuyer could probably get a semi-detached house in Rawang at the price of a link house in Mont'Kiara,” he said.

Setia Eco Park in Shah Alam is one of the developments that have benefited from Guthrie Corridor Expressway

“Developments that are doing well due to their locations near a major highway include Setia Alam, Setia Eco-Park and Alam Perdana that are connected by the Setia-Meru Link, as well as Sierramas and Valencia, which are accessible via the Sungai Buloh Interchange,” an analyst said.

He added that it was very important for any development to have a dedicated link to a highway so that residents would not need to travel far by going through another development.

By The Star

Investors sell down toll concessionaire shares

INVESTORS sold down shares of some of Malaysia's biggest highway concessionaires yesterday, on concerns that profits would be hurt if the government lowered toll rates.

Analysts said this was in knee-jerk reaction to Works Minister Datuk Mohd Zin Mohamed's comments on Wednesday that the government would review all highway concessions in a bid to reduce toll charges.

Shares of PLUS Expressways Bhd, which holds the North South Expressway concession among others, fell by 3.7 per cent to close at RM3.10, its biggest single-day drop in seven weeks.

Shares of Lingkaran Trans Kota Holdings Bhd (Litrak), which owns the Lebuhraya Damansara-Puchong (LDP) toll concession for up to 2031, fell by 5.2 per cent to RM3.82 during the day.

It, however, recovered to close at RM3.82, two sen higher than on Wednesday's closing.

"People are worried the government will force the concessionaires to lower the toll rates. But we don't think it's going to be possible to do this as the agreements are all in black and white," said Kamarulzaman Hassan, an analyst at TA Securities.

Lower toll rates are "a far fetched idea" unless the government is willing to compensate the concessionaires, he said.

He is maintaining his "buy" recommendation on both PLUS and Litrak.

Litrak, nevertheless, said it was concerned by the latest development.

"We are concerned, but our negotiations with the government have always been fair in the past and I don't see why it shouldn't continue to be so," a company official told Business Times.

He said the LDP's next scheduled toll hike is not till 2010, when rates are meant to go up to RM2.10 from RM1.60 now.

Litrak was to have raised its rates in January 2007 but the government did not allow this and had to compensate the company, as per the concession agreement.

Litrak was compensated partly in cash and partly through an extension in the concession, the official said.

Other highway concessionaires fared mixed on the stock market yesterday. IJM rose 40 sen to RM5.90, Gamuda rose 2 sen to RM3.16, MRCB fell 2 sen to RM1.63 and MTD Capital closed unchanged at RM3.28.

By New Straits Times (by Adeline Paul Raj and Sharen Kaur)

Developers zoom in on Taman Desa

With better road infrastructure, more projects are coming up

Taman Desa, off Jalan Klang Lama, is experiencing a mini property boom as developers zoom into this much-sought-after neighbourhood in Kuala Lumpur.

The completion of the New Pantai Expressway (NPE) a few years ago has greatly eased the traffic flow at Jalan Klang Lama as motorists can bypass most parts of the widened Jalan Klang Lama.

The NPE links Bangsar and the KL-Seremban Highway to Bandar Sunway, Subang Jaya and beyond.

Taman Desa residents can also access the KLIA-Putrajaya Highway via the Seremban Highway or at Kuchai Lama.

With the new highway linkages, residents of Taman Desa and its adjacent areas, including Seputeh and Taman Abadi, can gain access to any part of the Klang Valley and many amenities are now within their reach.

Over the past few years, several new developments have come up or are being launched in Taman Desa, an established neighbourhood that was developed by Faber Union about 30 years ago.

Faber Union started off with 110 semi-detached houses and 120 bungalow lots in 1976 at Taman Desa. It later built 578 units of two-storey terrace house in 1978.

It then went into building apartments such as the Faber Ria (402 units) in 1985, Faber Heights (370 units) in 1989, Faber Indah (130 units) in 1989, Danau Idaman (659 units) in 1996, Danau Impian (500 units), Danau Permai (512 units), Tiara Faber (320 units) in 2000, and Taratak Muhibbah (1,064 units) in 2000.

It also developed the Casa Desa condominium (410 units) and Danau Villa (64 units of three-storey semi-detached link home) in 2007.

Taman Desa started off as an upmarket housing area with semi-detached houses and bungalow lots many years ago. It has retained its middle-to-upper-class image, thanks to new developments that reflect this upmarket image.

One of the newcomers is the Papillon Desahill condominium by Zeus-TNB Properties Sdn Bhd, an affiliate of Peter's Holdings Sdn Bhd.

The 4.5-acre freehold project comprises 225 units with built-up areas from 1,312 to 2,039 sq ft and duplex units from 2,498 to 3,661 sq ft (from RM365 per sq ft). It is next to the Faber Heights condominium and very near Jalan Klang Lama.

Two other new projects are the Danau Villa three-storey semi-detached link homes, a joint venture between Faber Union and Kuala Lumpur City Hall and the Desa Ria, a 104-unit freehold condo by the UOA Group. It boasts larger units of 2,200 sq ft and was launched in 2006. The units were priced around RM300 per sq ft when it was launched but they are now selling from RM385 to RM445 per sq ft.

Taman Desa's other housing schemes such as Seputeh and Taman Abadi are a mix of landed and high-rise apartments.

There are some 7,000 units of apartment and condominium in Taman Desa alone. These include completed projects like the OBD Garden (260 units), Desa Villa (340 units), Desa Murni (500 units), Bukit Desa (252 units), Desa Ria (104 units), Abadi Villa condo (330 units) and Abadi Indah apartments (754 units).

There are about 5,500 housing units in Taman Desa, Taman Bukit Desa, Taman Danau Desa, Taman Desa Utama, Seputeh and Taman Abadi, with about 30,000 people staying in Taman Desa.

Facilities in Taman Desa include the Desa Water Park, Taman Desa Medical Centre, wet market, office towers at Faber Towers, shops in the Taman desa and Danau Desa commercial centres, two secondary schools and a primary school. A new school is being built near Desa Ria.

Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng said Taman Desa was a generally safe place to live as residents have their own security patrols. He said a number of tycoons also lived there.

Tang Chee Meng >> It is a good place to call home <<

“Taman Desa is one of those under-rated locations in the Klang Valley which is a very convenient place to stay.

“In the past, people were concerned about the notorious traffic congestion along Jalan Klang Lama, but today with the vast improvements in road infrastructure, Taman Desa, with its central and convenient location between KL and PJ, enjoys excellent connectivity and accessibility. It is a good place to call home,” he said.

Tang said Taman Desa had a good record of capital appreciation. He cited the case of a man who bought his first house, a double-storey terrace house, for only RM145,000 in 1989 and sold it in 1991 for RM181,000. Today it is worth RM560,000 toRM630,000. A similar house was priced at only RM70,000 to RM76,000 in 1978.

“The man bought his second house, a double-storey semi-detached house, in 1991 at RM265,000. Today, it is worth more than RM1mil.

“The house was going for only RM98,000 to RM113,000 in 1978 while the bungalows were going for RM140,000 to RM160,000. Today, the bungalows are worth RM1.8mil to RM2.5mil. Prices have never dropped,” he added.

By The Star (by S.C.Cheah)

Making inroads

MTD Capital has received offers to work on other Philippine highways as the company upgrades the South Luzon Expressway in a joint venture project


30-YEAR CONCESSION: Part of the South Luzon Expressway in Manila

CONSTRUCTION-RELATED MTD Capital Bhd, now close to midway into its 11.3 billion peso (RM875 million) upgrading works on the South Luzon Expressway (SLEX) in Manila, has been invited to look at other highway projects in the Philippines.

Group managing director Datuk Azmil Khalili Khalid said MTD prefers to complete the SLEX project first before considering other jobs.

"We will only look at it once we complete this job. But we definitely want to stay in the country for the long term," he said.

Based on the 30-year concession for the SLEX project, MTD should break even within seven years, Azmil told Malaysian journalists during a tour of the project in Manila recently.

"As of today, we have completed some 40 per cent, but we want to complete the project fast. The sooner it is completed, the faster we can collect toll, which means revenue for the company.

"We also want to avoid the risk of higher costs that comes with delays. We don't know where the prices of materials are going to end in the next few years," he added.

MTD Manila Expressway has formed a joint venture with the Philippines National Construction Corp to undertake the upgrading and rehabilitation works on the 30-year-old SLEX, a 29km toll road that will eventually link Manila and Port of Batangas.

The joint-venture company, South Luzon Tollway Corp, was awarded a 30-year concession to upgrade and rehabilitate as well as operate SLEX by the Philippines government on February 3, 2006. It is one of several flagship projects that has received strong support from Philippines President Gloria Macapagal-Arroyo.

The SLEX project consists of three main sections designated as project toll roads (TRs), namely TR1, TR2 and TR3.

Azmil said the project is funded through MTD's equity (3.6 billion pesos or RM279 million), the World Bank through its private sector arm (2.5 billion pesos or RM194 million) and the balance by a consortium of banks led by Philippines' Banco de Oro-EPCI Inc.

He said the company hopes to complete TR1 and TR2 by March next year, and TR3 in the subsequent 12 months.

TR1 requires the retrofitting of viaduct foundations and columns, replacing of all concrete slabs and girders, and widening of the existing bridgedeck from six lanes to eight lanes.

TR2, meanwhile, is from the Filinvest interchange to Calamba, Laguna. Work involves rehabilitation and widening of 15.6km between Filinvest and Sta. Rosa from the current four lanes to eight lanes, and widening of the 11.7km stretch between Sta. Rosa and Calamba from four lanes to six lanes.

TR3 is a new four-lane highway that will extend from Barangay Turbina, Calamba to Sto. Tomas in Batangas where it will link with the Southern Tagalog Arterial Road.

Besides Malaysia, MTD is active overseas in Thailand, The Philippines, Australia, Sri Lanka, Vietnam, Saudi Arabia, United Arab Emirates, China, Indonesia and India.

By New Straits Times (by Kamarul Yunus)

Highway to growth

ZAINUDIN: Firm looking at many countries

HIGHWAY operator Projek Lintasan Kota Holdings Sdn Bhd (Prolintas) will expand its business within Asia, its top chief says.

"We have looked into many countries, including China, Indonesia and the Philippines.

"We are now studying three highways within one country," group chief executive Zainudin A. Kadir said in an interview.

While Zainudin declined to name the country, he said that Prolintas had done its traffic study and would decide by the year-end on the viability of the project.

"Since it is an infrastructure project overseas, we have to be extremely careful because the investment value is hefty. It could be a minimum of RM2 billion," he said.

Considering that the build-operate-transfer project is a long-term investment, Prolintas plans to be the major stakeholder, he added.

Zainudin said the company was also evaluating the business and political risks in that country as it would be bringing in its own contractors and suppliers to work on the project.

"While other Malaysian companies are present in this country, we aim to be the first highway operator there," he said.

On the domestic front, Prolintas will increase the highways under its business from three at present, which are the Ampang-Kuala Lumpur Elevated Highway, Guthrie Corridor Expressway and work-in-progress Lebuhraya Kemuning-Shah Alam.

"By year-end, we plan to own and operate at least four highways," Zainudin said, adding that Prolintas was in talks to buy one highway in Kuala Lumpur.

He emphasised that Prolintas would only buy highways that bring additional value to its shareholders.

The wholly-owned unit under Permodalan Nasional Bhd also submitted a proposal to the government last November to build an urban highway in the Klang Valley.

"We are waiting for the government to call us for further discussions on our proposal," Zainudin said.

On a Business Times story last year about its listing plans, Zainudin said the company aimed for a flotation in three to five years.

"We want to be a listed company one day because we can expand overseas more quickly due to the higher level of confidence placed in listed entities.

"But the final say comes from our shareholders," he said.

By New Straits Times (by Jeeva Arulampalam)

Attractive land price, availability the pulling factors

The cheaper land price and availability of land in the Klang-Shah Alam corridor will continue to attract developers and house buyers to the property market there.

Henry Butcher (M) Sdn Bhd property consultants said transaction prices for residential title land for bungalows in Klang was relatively lower than Shah Alam and other first-tier cities in Malaysia.

Bungalow vacant lands were transacted between RM50 and RM60 per sq ft in Teluk Pulai, Klang, and RM65 to RM80 per sq ft in Bukit Jelutong, Shah Alam.

Newer townships such as Bandar Botanic was transacted from RM70 to RM80 per sq ft and Kota Kemuning had the highest transaction price from RM80 to RM100 per sq ft.

Meanwhile, transaction prices in Setia Alam in Shah Alam was from RM80 to RM90 per sq ft.

The Glenmarie-Saujana-Subang corridor and newer areas in Petaling Jaya such as Mutiara Damansara was transacted from RM220 onwards per sq ft.

Ho Chin Soon Research Sdn Bhd managing director Ho Chin Soon said: “It is a natural progression for people to move away from Kuala Lumpur to Petaling Jaya, Subang Jaya, Shah Alam and finally, to Klang as land become more expensive and scarce.”

With population growth at 4.8% per annum in the Klang Valley, developers are hard-pressed to move to second-tiered cities.

PPC International Sdn Bhd executive director Thiruselvam Arumugam concurred that land price was relatively cheaper and the built up of the properties was bigger in Klang.

“We believe Klang will continue to develop rapidly over the next three to four years, especially in the north,” he said.

Residential projects in Klang due for completion this year include D'Anjung in Teluk Pulai, Bayuemas, Taman Selat Damai in Pandamaran, Bandar Botanic and Glenmarie Cove.

Many new townships in Klang that which were launched in several phases consist of 70% residential units in view of higher demand for houses, he said, adding that property owners in Klang are cash-rich and price cautious.

According to PPC International Sdn Bhd executive director Kamarud-zaman Saad, property owners prefer Klang to Shah Alam, thanks to the freehold status.

He said WCT Land Bhd's Bukit Tinggi township, which is freehold, had led to the opening of Jaya Jusco and hypermarkets like Tesco and Giant. This has transformed Klang into a lively town with better facilities.

The landscape in Klang had gradually changed with the development of Bandar Botanic in the south by Gamuda Bhd that had also led other developers to promote similar lifestyle concept living, he noted.

Kamarudzaman said capital appreciation in Klang averaged from 10% to 15%, with good locations reaching up to 20%.

Meanwhile, Setia Alam township by SP Setia Bhd, which occupied 4,000ha in Shah Alam, is expected to trigger more new developments in north Klang, he said.

“The Setia Alam township will have a positive impact in Klang and Shah Alam,” he said, adding that the mixed development project was expected to complete in 10 to 15 years.

Reapfield Properties Sdn Bhd president David Ong said Setia Alam was the new growth area in Klang-Shah Alam corridor.

The new residential projects in Shah Alam are Kemuning Utama, Bukit Jelutong, Alam Impian, Alam Suria, Setia Eco Park and Subang Permata.

On the property market outlook, Kamarudzaman said the current volatile stock market would lead buyers to become more cautious in buying properties.

“We expect another year of slowdown in local property market in tandem with worldwide property market,” he said.

By The Star (by Shannen Wong)

Major highways help draw buyers to second-tier cities

The well planned community development of Setia Eco Park in Shah Alam

GREATER accessibility through major highways has contributed to the rapid growth of Klang-Shah Alam corridor in the past decade.

Reapfield Properties Sdn Bhd president David Ong said four major highways – North Klang Valley Expressway (NKVE), North-South Expressway Central Link, Shapadu Highway and Federal Highway connects the second-tiered cities to city centre.

With the opening of these highways in Klang-Shah Alam corridor, new townships development was further extended with the infrastructure in the surrounding areas.

Ong said NKVE is a 35km expressway that runs between Jalan Duta in Kuala Lumpur (KL) and Bukit Raja, which is a new industrial and urban area in Klang.

“NKVE is a heavily utilised route for residents in Damasara, KL, Klang Petaling Jaya, Subang and Sungai Buloh,” he said.

Meanwhile, the North-South Expressway Central Link, better known as Expressway Lingkaran Tengah (ELITE), is a critical link that connects the north and south with an uninterrupted journey bypassing the congestion in KL, said Ong.

ELITE starts at a new interchange on the existing NKVE near Shah Alam, transverse towards the south through Batu Tiga on Federal Highway Route 2, towards the KL International Airport (KLIA) in Sepang.

It continued towards the east to connect with the existing North-South Expressway that is about 6km at the north of existing Nilai interchange.

Ong said the 63km expressway, which connects NKVE in Shah Alam to ELITE at the Nilai North interchange, was a popular route for travellers heading to KLIA and the Sepang F1 circuit.

Additionally, Shapadu Highway, or North Klang Straits Bypass Highway, is a new 17.5km dual carriageway that linked North Port to Bukit Raja and connects to NKVE, ELITE and Federal Highways Route 2.

Ong said the accessibility to North Port and West Port in Klang would enhance the growth in the area due to the huge upside potential for the two main ports.

“With the Government encouraging foreign direct investment, these ports are expected to increase activities and stir the economy,” he said.

There is also the Federal Highway Route 2, which is a 16km upgraded expressway that connects Batu Tiga in Shah Alam and Sungai Rasa in Klang, he said, adding that it has two toll plazas and connects to Federal Highway.

PPC International Sdn Bhd executive director Thiruselvam Arumugam said travellers would not mind paying the tolls for these highways along Klang-Shah Alam corridors.

Meanwhile, there are three proposed highways around Klang – the South Klang Valley Expressway, West Coast Expressway and Kemuning-Shah Alam Highway, said Ong.

However, the West Coast Expressway, which stretches from Taiping, Perak, to Banting, Selangor, and runs parallel to ELITE, is believed to have been delayed due to the high price tag of some RM3.1bil for construction, he said.

By The Star (by Shannen Wong)

Penang mulls subway system instead of monorail

PENANG is mulling the idea of building a subway system as a long-term solution for its traffic and flooding problem, instead of the elevated monorail project mooted by the federal government.

"The final say on this matter, however, rests with the federal government, since the monorail is a project which is to be financed by the federal authorities," Penang Chief Minister Lim Guan Eng said.

He was speaking to reporters after chairing his second state executive council meeting in George Town yesterday.

Lim said he realises that an underground transportation system will cost at least three times more than the monorail system.

The chief minister, who received a courtesy call on Tuesday from Malaysian Resources Corp Bhd (MRCB) officials, said he was briefed on the monorail project.

"The parties involved in the monorail project said that they are unable to secure financing for a subway system," Lim said.

MRCB, together with Penang Port Sdn Bhd and Scomi Engineering Bhd's subsidiary, Scomi Rail Bhd, have jointly bid for a monorail project on the island.

In January, Syarikat Prasarana Negara (SPNB) issued a letter of intent to the consortium for the monorail job. The monorail is said to comprise two lines measuring 25km.

The first route proposed is between the Penang International Airport and George Town, while the second line will be from George Town to Tanjung Bungah.

By New Straits Times (by Marina Emmanuel)

IDR highway project to be completed by 2010

JOHOR BARU: The construction of the RM1.1bil Coastal Highway has begun and the 15km six-lane project is expected to be ready by 2010.

The highway's seven interchanges and three bridges would be a lifeline for the Iskandar Development Region (IDR) as it provides a vital road link between the east and west of South Johor, Mentri Besar Datuk Abdul Ghani Othman said.

He said site-clearing works had begun and they would be followed by piling and construction.

“It is one of the biggest infrastructure projects within the IDR,” Ghani said in a statement.

The highway will connect Johor Baru city to the Johor State New Administrative Centre in Nusajaya (JSNAC) and the Second Link crossing.

JSNAC, the nexus of the IDR, is 90% completed and will be ready for occupation by June.

The highway project is spearheaded by the South Johor Investment Corp (SJIC), the master developer and investor in strategic projects.

The highway will be a boon for visitors from Singapore using the new Customs, Immigration and Quarantine Complex here as it will provide direct access to Danga Bay, Nusajaya, JSNAC and a proposed theme park.

“The economic spin-offs from the highway project will be tremendous as it will lead to the creation of new growth centres in Skudai and Gelang Patah,” Ghani said.

He said at least two mega projects worth billions of ringgit would begin this year in the IDR, including the RM4.2bil Node 1 project funded by Arab investors.

By The Star

Highway help

The Kemuning-Shah Alam Expressway, scheduled for completion in 2009, is expected to positively impact property prices in many Klang Valley developments


The new Kemuning-Shah Alam Expressway (LKSA) is expected to open in 2009

THE North Klang Valley Expressway (NKVE), Damansara Puchong Highway (LDP), New Pantai Expressway (NPE), Shah Alam Expressway (Kesas), Sprint Highway and the Federal Highway are among an extensive network of highways creating travelling convenience for those living and working in the Klang Valley.

Besides reducing the daily traffic congestion on the Federal Highway and the Kesas Highway, the new Kemuning-Shah Alam Expressway (LKSA), which acts as a connecting link between the two, is also expected to boost the demand and value of properties located along it.



The 14.7km highway by Project Lintasan Shah Alam Sdn Bhd has a dedicated interchange to Island & Peninsular Bhd’s (I&P) Alam Impian township and passes through developments such as Gamuda Land’s Kota Kemuning and Bukit Rimau by Malton Bhd. It is expected to be fully ready by end-2009 at a development cost of some RM700 million.

I&P managing director Datuk Jamaludin Osman told Propertyplus that the targeted year-end completion of the first phase of LKSA, which links Alam Impian to the Federal Highway, would substantially increase the value of the properties in the township. “Prices of the homes there is expected to appreciate by 15% to 30% when LKSA becomes operational in November,” he said, adding that demand for the properties is also expected to rise in tandem.

About 50% of the 115 units of 2- and 2 ½-storey linked houses and 74 units of 2-storey semidees in the 1,325- acre freehold township have been taken up since its launch in December 2006. Prices range from RM325,000 to RM623,000 for the terraces with built-ups of 2,439 sq ft onwards, while the semidees, with built-ups from 3,113 sq ft, are priced between RM552,000 and RM900,900. The group plans to launch three more phases this year.

Meanwhile, Kota Kemuning is already enjoying good accessibility with a dedicated interchange from the Kesas Highway. Residents living in the 1,820-acre freehold development can head to other parts of the Klang Valley via the Federal Highway, LDP, NKVE and North-South Central Link.

The mature township is 90% developed and just three years from full completion. Its latest 2- storey townhouses with built-ups from 1,700 sq ft are priced at RM280,000 onwards, while 2-storey semidees, priced from RM800,000, have built-ups of 3,200 sq ft and above.

Malton sales and marketing director, Tracey Lai, said the LKSA would bring better appreciation to the properties in Bukit Rimau by providing improved accessibility. “Property values are expected to increase by 15% to 20% and the take-up rate should rise as well,” she said. The average price of 2-storey linked bungalows with built-ups of either 3,125 sq ft or 3,193 sq ft is RM750,000 while a 3,800 sq ft 2- storey bungalow is worth RM1.4 million in the 384-acre freehold Bukit Rimau.

“While most homeowners want greenery, peace and security, they also want facilities and amenities right at their doorsteps. Now, it would appear they have all they need with the new accessibility,” she added.

Beyond Subang
Metro Homes Sdn Bhd director See Kok Loong said developments located along the Kesas Highway, particular those beyond Subang, would benefit most from the completion of LKSA. These include Kota Kemuning, Kemuning Utama, Bukit Rimau, Bandar Puteri Klang, Berjaya Park and Bandar Botanic.

“The LKSA will provide easy access to the Federal Highway, which is a cheaper, more direct route to the city centre compared to the Kesas Highway that links to the Middle Ring Road 2 (MRR2),” he said. He explained that currently, residents from those areas would have to cut through the Elite Highway from the Kesas Highway to get to the Federal Highway.

According to him, the secondary market price for 2- storey terraces in Berjaya Park and Bukit Rimau are RM220,000 and RM280,000 respectively while those Kota Kemuning and Kemuning Utam are going from RM310,000 to RM340,000. Rental rates for the houses range from RM1,000 to RM1,300 per month.

“There will not be significant changes in the [value] of the properties there in the initial stages. Nevertheless, they are expected to gradually increase with the completion of the LKSA as it will create a lot of convenience for the property buyers,” he said.

Rahim & Co (Selangor) Sdn Bhd managing director Choy Yue Kwong estimated a 10% to 20% increase in capital values for properties in the vicinity, with better appreciation in Nilai Impian, when the LKSA is completed or near completion.

“Generally, it makes sense to purchase the properties there before their completion as the values will not change significantly at this stage.

The demand and prices will only increase when the highway is completed and members of the public are able to experience its convenience,” he said, adding that developers would most likely capitalise on this factor to raise the selling price of future launches.

However, he said the ease of accessibility to a major highway alone is not enough to spell success for any housing scheme. “Bukit Beruntung too is easily accessible via the NKVE yet it is far from
being termed as successful,” he said.

He added that properties directly fronting an expressway would suffer from noise pollution, which would depress their value. “In such situations, the mitigating measure will be for the developer or concessionaire to construct a sound barrier to minimise the noise from passing traffic,” he said.

See believes Mutiara Damansara, in Petaling Jaya, is an example of a well planned development as the commercial properties there are fronting the LDP while the residential properties are located at the other end.

“Other developments doing well due to their locations near a major highway include Setia Alam, Setia Eco-Park and Alam Perdana that are connected by the Setia-Meru Link, as well as Sierramas and Valencia, which are accessible via the Sungai Buloh Interchange,” he added.

He said it is very important for any development to have a dedicated link to a highway as residents would not need to go through another development to get home. However, he added that some developers fail to deliver interchanges on time due to high commitment cost.

“If the development is not big enough, the financial burden can be very heavy and would cause problems in getting approvals from the local authority,” he said.

By theSun