KUALA LUMPUR: Ekovest Bhd will receive another 30 acres, making it a total of 60 acres, for work involving the rehabilitation of the Gombak River that snakes through the city.
The project, which is part of the company’s Kuala Lumpur River City development, will see Ekovest rejuvenating and transforming a 2.2-km stretch of the river into a vibrant and liveable riverfront development.
Managing director Datuk Seri Lim Keng Cheng said that as part of a land swap deal with the government, Ekovest will be developing a non-mechanical Gombak River Enhancement And Tunnel (Great) system for the 2.2-km portion of the river.
He said the system would provide flood attenuation by channelling flood water into a flood tunnel below the city, thereby bypassing the river corridor.
“This Great system will also provide an improved flood mitigation system in and around the city centre,” he said at the launch of the KL River City project yesterday.
Lim said the development of the Great system would take 2½ years to complete and cost RM950mil.
“The cost will be funded via a combination of internally generated funds and bank borrowings,” he added.
“With the land swap deal, we can generate over RM9bil in gross development value (GDV) from the 30 acres, which is ten times the cost of the land given to us.”
Lim said the GDV of the existing land the company was developing is RM6.5bil.
“So all in, it would be close to RM16bil,” Lim added.
The projects that Ekovest is presently developing on the 30 acres it already owns are EkoTitiwangsa, EkoRiverCentre, EkoGateway, EkoQuay and EkoAvenue.
Ekovest shares rose 12 sen to close at RM1.17 yesterday.
The KL River City development, which is aimed at rejuvenating and transforming northern KL into a world-class destination, is positioned within Precinct 1 & 2 of the River of Life (ROL) and is a short drive from KL Sentral, KLCC, the Golden Triangle as well as the upcoming Tun Razak Exchange and Bandar Malaysia.
Covering 110km in length, the ROL is a seven-year project under the Economic Transformation Programme for Greater Kuala Lumpur to resuscitate the Klang and Gombak rivers.
Last month, Ekovest announced that its unit, Ekovest KL Bund Sdn Bhd, had received approval-in-principle from the government for the proposed development of KL River City in Gombak.
With the implementation of KL River City, Lim said, the surrounding area covering almost 320 acres has huge potential for future developments that will benefit all developers along the Gombak River.
He was optimistic about the appreciation of developments surrounding the KL River City project.
“We believe that assets surrounding the area can appreciate by as much as 50%.”
Lim cited Heritage condominiums, which is located along Jalan Pahang in Setapak, as an example.
“Before we started KL River City, the condos fetched only RM230,000. But now, people are selling between RM400,000 and RM450,000.”
He acknowledged, however, that there was an oversupply in the condominium market currently, emphasising that any appreciation “would take time”.
“I’m positive about the outlook of the market. It won’t be bad forever. Whatever cooling measures have been introduced worldwide, we will come out of it eventually.”
Ekovest’s net profit for its third quarter ended March 31 was flat at RM11.06mil compared with RM11.08mil in the previous corresponding period, while revenue rose to RM291.75mil from RM184.77mil a year earlier.
The construction firm attributed its earnings to the commencement of preliminary and construction works for the Setiawangsa-Pantai Expressway.
Its net profit was also affected by a one-off expense amounting to RM22.62mil on the recognition of the fair value adjustment pursuant to the granting of the employees share option scheme on March 9, 2017.
For the nine months ended March 31, net profit increased to RM92.19mil from RM20.27mil in the previous corresponding period, while revenue grew to RM770.26mil from RM502.51mil a year earlier.
Lim said Ekovest currently had an order book of RM12.5bil, which could last another four to five years, adding that the bulk of it was from the company’s Duta-Ulu Kelang Expressway Phase 3 project, which is worth RM3.9bil.
“This is excluding the Great system, which will add to our order book,” said Lim.