SCORE, Trans Borneo Highway and green certification to beef up the property market.
BY VIKNESH ASHLEY
vikneshashley@thestar.com.my
Kuching city centre.
The Sarawak property market will see an increase in property pricing due to many factors such as progress in the construction industry, Sarawak Corridor for Renewable Energy as well as other projects simultaneously taking place to enhance the land-rich state.
Oxford Business Group in a recent report disclosed that the construction industry has seen a significant increase in activities over a five-year period, between 2009 and 2013 where the yearly value of completed projects had risen from RM4.88bil to RM8.04bil, according to data acquired from the Department of Statistics Malaysia (DOSM).
Construction in Sarawak differs from the national construction trend. Instead of relying on the private sector for funds, funding in this state is split evenly between public and privately funded projects. Of the RM1.9bil of construction carried out in Sarawak, in Q3 2014, some RM929.55bil was spent on public civil engineering projects as compared to RM899.68mil spent on residential as well as non-residential construction, according to DOSM.
This trend looks to continue as 476 new construction developments approved in 2013 resulted in RM15.28bil as well as one project in excess of RM1bil as reported by the Construction Industry Development Board (CIBD). Later in the first half of 2014, an additional of 110 projects of RM2.03bil were approved.
Oxford Business Group also reported that Sarawak’s largest driver of construction at present is the Sarawak Corridor for Renewable Energy (Score). This development is a mammoth project having employed a large army of construction workers to build new townships and manufacturing centres.
Many large projects are on-going, for example environmental-friendly building practices. The creation of new townships virtually overnight has given planners the opportunity to incorporate “green building” components into construction at the earliest stages.
One example is the boom town of Samalaju, built to support the industrial node developing at the site, which is pursuing the well-regarded Leadership in Energy and Environmental Design (LEED) certification devised by the US Green Building Council.
While Sarawak has not traditionally employed environmentally-friendly building practices, if LEED certification is achieved, it would make Samalaju the first “green-certified” township in Malaysia.
As such standards gradually catch on, a new wave of more efficient structures could take their place alongside the state’s first green-certified building: the headquarters of Menara Sarawak Energy in Kuching, which earned a silver rating under the Green Building Index (GBI) in July 2013.
The GBI, a system unique to Malaysia, rates buildings as silver, gold or platinum based on six criteria: energy efficiency, indoor environmental quality, sustainable site planning and management, material and resources, water efficiency, and innovation.
Construction on Sarawak’s second green building, a new branch of the capital’s Kuching North City Hall, was initiated in March 2014. A component of the city's “clean, beautiful, safe” campaign launched in 2013, in which the city incorporates energy-efficient technology into new municipal offices, the building is to be completed by this June.
While the facility is not targeting official GBI certification, it will include a wide array of green features such as LED lighting and use of natural light. As of mid-2014, three of Malaysia’s 29 GBI-certified buildings were in Sarawak.
The Malaysian government has been pouring billions of ringgit into infrastructure projects to provide an extensive and stable utility network, as well as an efficient and modern transport system.
Substantial outlays from both federal and state agencies in recent years to install the infrastructure for the massive Score project have been a boon to the construction industry, and have included several big-ticket contracts for multi-billion-ringgit projects.
As a result, public building projects have been on par with private sector investments. The 167 infrastructure contracts approved in 2013 were worth RM4.22bil, or about 27% of the industry that year, in addition to 67 approved social amenity projects worth RM1.37bil.
These figures were roughly on par with allocations in 2012, when 81 infrastructure and 62 amenity contracts were approved, worth RM3.09bil and RM567.8mil respectively. In the first half of 2014, a total of 37 infrastructure contracts worth RM1.17bil and 13 social amenity builds worth RM132.3mil were approved.
Among the big-ticket contracts currently dominating the sector are upgrades to a large portion of the Trans-Borneo Highway. Work on the state's primary land route has been stepped up in recent years, with RM500mil allocated for improvements in 2014, including additional lanes in some sections.
This figure ballooned in 2015 when the Federal Government announced it was accelerating work on the 1,663 km under its purview (936 km in Sarawak and 727 km in Sabah) at a total cost of RM27bil.
Both local and national construction companies are expected to bid for a slice of the project in 2015, including Hock Seng Lee, IJM Corporation, WCT Holdings, Bina Puri Holdings, TRC Synergy, Naim Holdings and KKB Engineering.
The 2015 budget also allocated RM943mil to build and upgrade 635 km of rural roads in East Malaysia, while dozens of contracts are being tendered for hundreds of kilometers of new and upgraded roads to support Score.
