Ekovest ... DUKE3 Realignment Runs Border Of Bdr Malaysia Dev.

It is in talks with 1MDB about the realignment of the DUKE3, which could run along the border of the 495 acre Bandar Malaysia development that 1MDB is undertaking.

The proposed adjustment to DUKE3’s alignment would see a 2km section of the 32km highway hug the border of Bandar Malaysia. DUKE3 will run between Klang Valley’s inner and middle ring roads and will link Setiawangsa to Federal Highway near Mid Valley Megamall.

There is already an MRT station (from MRT Line 2) and the high speed rail station planned for Bandar Malaysia. If 1MDB can bring in a highway to improve connectivity even further, it would be a nice boost for the development’s value.

As for Ekovest, the realignment could help the construction and highway concessionaire reduce the cost and social impact of DUKE3. Not only is the current (Aug 2015) approved alignment longer than the proposed alternative, it would also cut via privately held industrial land.

Such land acquisitions would prove costly since Ekovest cannot require partial lots p the company has to acquire an entire plot, even if the highway only crosses a small part of it.

With 1MDB, Ekovest may not need to acquire the land, since the former is wholly owned by the government. Note that the government assists highway concessionaires in land acquisitions, albeit with a predetermined cap. Hence it is in the government’s interest to ensure that Ekovest’s land acquisition costs are minimized.

In fact it is understood that both parties are leaning towards a model where Ekovest will be allowed to use the land to build the highway in exchange for infra work.

While the savings would be relatively small compared with DUKE3’s estimated cost of rm3.6 billion, for Ekovest, connecting its highway to Bandar Malaysia’s MRT and HSR stations would boost traffic which, in turn, would benefit the company.

Sources say that DUKE3 is already in the final stage of planning and the government is expected to award the concession by end of 2015 if there are no hiccups. Construction would take about 3 ½ years.

If Ekovest moves the alignment to Bandar Malaysia, the group would be counting on 1MDB to relocate the existing airbase in a timely manner.

The move is expected to cost 1MDB about rm2.7 billion. The cost would be defrayed by a rm1.1 billion relocation grant, but 1MDB will still have to fork out the balance – either from borrowings or proceeds of the Bandar Malaysia tender.

The 32km highway will be the largest project Ekovest has undertaken to Aug 2015. The group is presently operating the 18km DUKE and is about halfway via completing DUKE Phase 2.

Ekovest is 32.38% owned by Tan Sri Lim Kang Hoo.