PUTRAJAYA: Land Public Transport Commission (SPAD) is looking into the possibility of property development adjacent to the country's upcoming mass rapid transit (MRT) lines to partly service the debt for the construction of the MRT.
According to its chief executive officer Nur Ismal Kamal, the value generated from this property play along the rail line could be used to partly pay for the construction of the MRT.
“It is proven in Hong Kong where the already high property prices there escalated even more after the construction of its MRT.
“Syarikat Prasarana Negara Bhd will be in charge of creating this company to manage property and commercial development around our MRT assets.
“We have recently visited Hong Kong specifically to learn from MTR Corp Ltd in relation to the MRT and property play aspects. We have also formed a working relationship with Singapore's MRT operator in the effort to adopt the best practices of the industry,” he told reporters after the Economic Transformation Programme (ETP) update by the Prime Minister Datuk Seri Najib Tun Razak.
The update on ETP saw 19 new developments worth RM167bil with major investments in oil and gas as well as energy, property development, business services and healthcare.
Property development in this update includes investment in the hospitality sector of RM1bil by Teluk Datai Resort Sdn Bhd and RM75mil by YTL Group as well as RM1.9bil in integrated development in Pusat Bandar Damansara by Goucoland Bhd.
SPAD, the supervising and coordinating agency of the country's first MRT project is expected to start the construction of the first MRT line from Sungai Buloh to Kajang in July.
The Sungai Buloh-Kajang line is estimated to be 55km to 60km in length.
It was reported that MTR Corp, that was established in 1975, has developed 27 rail stations, 74,165 residential units and more than 1.7 million sq metres of commercial areas.
Nur Ismal said the call for tender for some of the preliminary and main works of the MRT would start at the end of April and awarding would commence in the middle of May.
“We are still in discussion whether to award all the projects to the contractors before July or progressively as the works start.
In terms of construction cost of the Sungai Buloh-Kajang line, Nur Ismal said, it was hard to estimate at this point of time.
“We will have the final cost of this first line when we completely finalised the alignment after taking into consideration the response from the public, done the value management studies and engineering aspects,” he said.
The total estimated value of the three MRT lines is RM36.6bil.
On the development of the other two MRT lines as initially proposed by MMC-Gamuda JV, Nur Ismal said if any, the second and third lines would be announced in late March or early April after the completion of the Urban Rail Development Plan.
“By then, we can share on how the whole network would look like and where the construction of the next MRT line will be. It would all depend on its priority,” he said.
Asked whether this MRT is a profit-oriented project, Nur Ismal said this MRT project had many facets such as to reduce heavy traffic on the road, to support the development of other entry point projects such as the Warisan Merdeka and the KL International Financial District.
He said usually as in other MRT projects, the Government would bear the construction cost but the project must have the return for the maintenance of its asset and service to the public.