Forest City gross development value (GDV) has done down a lot! To recap, this is a 66:34 joint venture between China-based developer Country Garden Holdings Ltd and Johor state government’s subsidiary company, Kumpulan Prasarana Rakyat Johor. It’s GDV has since been revised downwards by 25%. Yet, the total GDV is still a staggering RM450 Billion, down from RM600 Billion. In comparison with current Penang, this revised GDV is still more than 100 times bigger than Penang’s yearly total GDV. Of course, it will be spread over a period of 30 years. Thus, if we calculate on simple average, that’s around RM15 billion per year.
In an interview with with The Star, Sultan Ibrahim offered his view of the project. He said that he may be direct and blunt but the truth is, even if Johor does not proceed with the reclamation project, Singapore would still be carrying out its reclamation. After all, Singapore has been doing it since the 1960s. It should thus not only be ‘why is Johor reclaiming’ but everyone should have also asked why when Singapore carried out its reclamation previously. He said this reclamation is “strategically necessary.”
In terms of size, the total development is now smaller. From 1,988ha, it is now only 1,386ha. Major reason for this was to comply with the environmental concerns. Specifically, this ensures a preservation of 48.5ha sea grass area to maintain current ecosystem and more importantly to ensure there’s room for Port Tanjung Pelepas’s expansion in future. This is a controversial project from the beginning. From environmental concerns which was the main reason it was delayed to the uneasiness of our neighbour down south, it was clear that everything was fast-tracked in the beginning.
Of course, when we look at the overall picture, this delay can be said to be a blessing in disguise to the development. Current sentiment remain a little negative for Iskandar and it would cope better if the High Speed Rail (HSR) has more firm announcements. As reported earlier, this High Speed Rail’s existing timeline is also delayed. 2020 will not be the year it is completed anymore. Read here: High Speed Rail? Completion Timeline ‘derailed’. 2020 not possible. The company has also announced that the development will be funded by internal funds. I think this would be the case if China is still facing slowdown in its economy. Once the economy moves and the property market moves again, funds may have to be borrowed domestically.
written on 20 Mar 2015
Next suggested article: 11,900 into Singapore and 50,000 out into Iskandar everyday.