Business

Saturday August 11, 2012

Developing RRI land

A Question of Business
By P. GUNASEGARAM


AS a person who was born and spent his childhood years in the Rubber Research Institute of Malaysia (RRI), Sungei Buloh, it is with some nostalgia that I read about plans to develop the area.

That piece of land now straddling a bustling area near Kota Damansara, Subang Airport and the rapidly developing area of Subang, houses the RRI's research facilities and rubber estates.

For those who lived there a long time ago, it was a tranquil and idyllic area with swimming and paddling in the streams, sports of all sorts in the evenings, hunting, biking and excursions into the jungle nearby. Tigers were said to have been sighted and someone even shot a leopard once.

But the area around it is virtually unrecognisable now and the RRI land stands like an oasis in a desert of poorly planned development. But it will fall to development too as the land has been sold, reported for RM2bil to the Employees Provident Fund (EPF). RRI will get to retain 216ha for its research facilities.

EPF’s wholly-owned unit Kwasa Land now owns the RRI land in Sungei Buloh. EPF’s wholly-owned unit Kwasa Land now owns the RRI land in Sungei Buloh.

EPF's wholly-owned subsidiary Kwasa Land Sdn Bhd will undertake a master plan of the entire area, the area for development will be split up into smaller parcels and the private sector will be invited to tender for their development.

There are plans to have an MRT station too in the area and the whole development is expected to take 10 to 15 years.

No doubt, EPF was chosen by the Government to get the RRI land because it is a provident fund whose members comprise most of the workers in the country and it would therefore be seen as a more neutral and independent party to develop the land.

It is necessary that it gets expertise to both produce the master plan as well as to see how it can maximise the value of the land for itself.

Land scarcity in the Kuala Lumpur/Klang Valley area means the people will be closely watching the former RRI land, possibly among the largest available so close to KL city, to see who gets what.

In fact the jostling seems to have already started. It was reported that listed Dijaya Corp was in talks with top officials of EPF on developing some parcels there. This was promptly denied by Kwasa Land.

Dijaya has declined comment but continued to express its interest in developing some parcels of the land, dangling as a carrot an access road which can be built on its own land that it says will link the RRI land to Petaling Jaya.

In future, more are likely to stake their claims and make their cases for why they should be chosen over others.

EPF and Kwasa should come up with a master plan. This is not something that can be done in a month or two and even if it is finalised there should be provisions to accommodate changes in future demand.

That requires technical expertise. What can be done is to have an international tender process to invite property players to come up with the best master plan and choose one. It will mean input from some of the best brains in the world in the area would have been tapped.

Next would be to get the best local construction companies involved not necessarily developers. They can then build the projects according to the exact specifications set by EPF and EPF will have complete control of the development at all times.

Completion schedules need not be left to the mercy of developers who might finish their projects at different times. Importantly, it also means that EPF would be able to maximise the returns from the development of the land instead of sharing it with other developers.

If whole parcels of land are sold to other developers, then it is highly likely that the entire project will not be properly integrated and there will be a mishmash of different looking structures with no continuity or theme through out the entire development.

On the flip side, that would mean that EPF would have to take on plenty of close management, tough but not impossible with the right staff and the right consultants.

But above all what is needed is honesty, competence, integrity and transparency in all the efforts to do something good with this massive piece of land. That means instituting the right processes from the start open tenders, picking the best to do the job, etc.

EPF through Kwasa must maximise the use of this land it must come up with an overall master plan which combines all elements of a good development, execute well to give a project that satisfies customers while at the same time bringing it good returns.

> P Gunasegaram (t.p.guna@gmail.com) plans to visit the RRI land again before it is forever changed.

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