Nod for DUKE expressway Phase 3 privatisation

Ekovest managing director Datuk Lim Keng Cheng(inset) had said last month that it was on track to complete the RM1.2bil DUKE Phase-2 extension by the end of 2016.

PETALING JAYA: The proposed privatisation of the Duta-Ulu Klang Expressway (DUKE) Phase-3 has been approved in principle by the Prime Minister’s Department’s Public Private Partnership Unit, said Ekovest Bhd.

The construction and infrastructure group said that its wholly owned subsidiary, Konsortium Lebuhraya Utara-Timur (KL) Sdn Bhd (Kesturi), had received the letter on Wednesday.

“The proposed privatisation of DUKE Phase-3 is subject to further negotiations to finalise its technical and financial terms and conditions,” it told Bursa Malaysia.

Ekovest said that a special-purpose vehicle under Nuzen Corp Sdn Bhd, the immediate holding company of Kesturi and a wholly owned subsidiary of Ekovest, would be incorporated to undertake DUKE Phase-3.

It said the project cost was estimated at RM3.57bil and was expected to be financed via a combination of internally generated funds, borrowings and/or other fund-raising exercises.

“Ekovest will make the appropriate announcement to Bursa Malaysia as and when there is a material development in relation to DUKE Phase-3,” it said.

The proposed alignment of DUKE Phase-3, measuring about 35km, will traverse the north to south of Kuala Lumpur and will serve areas including Universiti Tunku Abdul Rahman, Wangsa Maju, Setiawangsa, Ampang and the Tun Razak Exchange.

It is expected to provide an alternative route for road users with an improved and more efficient traffic dispersal system in and around the Kuala Lumpur city centre.

It also aims to improve connectivity with existing expressways and public rail transportation systems such as the KTM Komuter, LRT and MRT lines, in addition to supporting the development and modernisation of greater Kuala Lumpur.

Ekovest managing director Datuk Lim Keng Cheng had said last month that it was on track to complete the RM1.2bil DUKE Phase-2 extension by the end of 2016.

He said that about a quarter of the construction, which was first proposed to the Government in November 2013, had already been completed.

The company is also expected to recognise a revenue of RM100mil from DUKE in its financial year ending June 30, 2015 (FY15) after having completed the acquisition of the remaining 30% stake in the highway from Malaysian Resources Corp Bhd earlier this year.

Ekovest said it is expecting steady growth in the traffic volume for DUKE, as it is an attractive alternative and in some cases, a primary access for the upcoming developments in the Northern Klang Valley and would be a major east-west link in the northern corridor.

In its recent first-quarter results for FY15, Ekovest saw its revenue rising 48.15% year-on-year to RM88.9mil, while net profit leapt 132.7% to RM1.44mil mainly due to the recognition of property development activities.