Prasarana's property play

KUALA LUMPUR: Syarikat Prasarana Negara Bhd (Prasarana) is firming up its plans to develop property projects along the mass rail transit (MRT) alignments which would allow the government to directly benefit from the expected surge in property value. Prasarana is a government-owned company which owns assets and provides public transport services in the country.

Group managing director Shahril Mokhtar said on Sunday, Feb 13 Prasarana was in the midst of finalising the prospective land parcels the company would develop. Prasarana will adopt Hong Kong's "rail plus property" approach in its urban public transportation system.

"In Hong Kong, when they want to come out with new lines, they must always look for parcels of land which can be developed to offset the cost of construction.

"In our current rail alignments, we can see iconic areas" where this purpose can be achieved, Shahril told a press conference on Sunday after the launch of the Klang Valley MRT open day and public display at the Mid Valley Convention Centre.

At the same event, Land Public Transport Commission or Suruhanjaya Pengangkutan Awam Darat (SPAD) CEO Mohd Nur Ismal Mohamed Kamal said the government was supportive of Prasarana's plans as they would help pay a portion of the cost incurred in the construction of the MRT system.

"Previously, property plays benefited everybody else but the government. This time around we want to make sure that the upside created by having a fantastic rail network will be used by the government to repay part of the debt incurred in (building) the infrastructure," Nur Ismal said.

Last week The Edge Malaysia highlighted the key beneficiaries of the spillover effect of the expected rise in the value of property along the Sungai Buloh-Kajang MRT line, which would include at least 20 listed property players, five privately-held property developers and three government-linked entities.

The inclusion of Prasarana in the property development scene would certainly add an interesting dimension to the real estate landscape, which has been bubbling with the excitement of the potential upside for being close to the urban public transport infrastructure system.

Nur Ismal stressed that the RM36.6 billion price tag cited for the MRT system was not an official estimate or the final figure as it was only an estimate based on the three-line system originally proposed by the joint-venture between Gamuda Bhd and MMC Corp Bhd, which had recently been appointed the government's project delivery partner.

There have already been concerns that the costs of the MRT system would balloon, with many observers noting that the RM36.6 billion has not included the cost of rolling stock and land acquisition.

Nur Ismal declined to comment on how much the Sungai Buloh-Kajang MRT line and the entire MRT system would cost. However, he said SPAD would ensure that costs be kept in check by engaging value management consultants, independent checking engineers, using the "rail plus property" approach.

Nur Ismal remained tightlipped on the specifics of the funding mechanisms for the MRT system, only reiterating that a special purpose vehicle (SPV) under the purview of the Ministry of Finance will determine how the MRT project will be funded.

"The SPV will have the responsibility to structure the payments to ensure they are suitable for the government's fiscal policy," he said.

When asked, Shahril said the RM2 billion sukuk raised recently by Prasarana was not intended for the MRT system but for carrying out line extensions.

SPAD's three-month open day and public display launched on Sunday drew steady crowds from the early morning, with the key attraction being the 40-feet aerial photograph featuring the planned alignments, with proposed MRT stations superimposed on it.

Nur Ismal said all public feedback would be collated and analysed by May, and the construction of the Sungai Buloh-Kajang MRT line would start on July 16. He added that it was difficult to say what proportion of the proposed rail alignment would be altered following public feedback.

According to SPAD's displays, out of the the 51km of the Sungai Buloh-Kajang MRT line, 9.5km will be underground. SPAD foresees that the MRT line will serve about 400,000 passengers daily.

The proposed line incorporates 35 stations, running through the Rubber Research Institute of Malaysia land, Kota Damansara, Pusat Bandar Damansara, Bukit Bintang, Maluri, Bandar Tun Hussein Onn and Bandar Kajang. SPAD estimates that an end-to-end journey from Sungai Buloh to Kajang would take about 90 minutes while a journey from Kota Damansara to Bukit Bintang would take a maximum of 30 minutes.

The MRT line will be integrated into the existing light rail transit and KTM Komuter lines at four interchanges, with a common ticket to be used for existing and future rail lines.

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