[sustran] Re: Transportation investments and real estate values

[SUSTRAN Resource Centre]

At 18:25 18/06/99 -0400, Tony Plumbe wrote:
>The Light Rail Transit new lines in Kuala Lumpur are 
>partly financed I understand by allowing the private 
>companies developing the lines also to develop shopping 
>centres at selected stations and recoup their costs 
>through rental of the shops. The same principles are 
>used in many BOT type contracts in Asia.

I don't believe there is any explicit or systematic policy for helping to
fund rail lines with real-estate developments (although such things are
often considered secret here) but there are some specific examples
apparently. 

In the case of the first LRT system, STAR LRT, I was told explicitly by
company officials that there was no such arrangement to allow them to
develop land around or above stations.  This surprised me. I believe them
because I don't see any developments springing up. 

I don't know if the second LRT system, PUTRA LRT, has rights to develop
real-estate around stations. It may be so, at least indirectly, since PUTRA
is owned by a large business conglomerate called Renong. There are at least
two major new developments that have been begun since the line began to be
constructed (at the Taman Jaya station and the huge KL Sentral development)
but I don't know their ownership situation. 

A third system, the PRT monorail, the CBD phase of which is under
construction, was going to be associated with a MAJOR real-estate
development, namely the Linear City development which was to have straddled
the Klang River over several kilometres. Maybe this is the example that you
were referring to? I believe the same corporation was involved in both.
However, I beleive that the Linear City project is either cancelled or
postponed indefinitely. 

The Malaysian Railways (Keratapi Tanah Melayu - KTM) has operated electric
commuter trains (suburban heavy rail) here since 1995 and does have
extensive land holdings apparently. I don't know how many of the land
holdings are at appropriate stations. The KL Sentral development must be
directly helping KTM to some extent, since it is going up where their old
marshalling yards and warehouses used to be. There is at least one other
development taking place along this system (in southern Petaling Jaya) with
a major shopping centre to be built over and around a new station. This one
is certainly an example. 

A rail line to the new airport is under construction (express rail link
ERL). I have not heard of any joint-development arrangements. The city
terminus is at the huge KL Sentral development and one station will be in
central Putrajaya (the new administrative centre for Malaysia) and there
should be enormous development potential there. I have no knowledge if the
company is actually involved in such joint developments however. There have
been no explicit announcements on it as far as I know.

Best wishes,
Paul 
A. Rahman Paul BARTER
SUSTRAN Resource Centre
P.O. Box 11501,  Kuala Lumpur 50748, Malaysia.
Tel/Fax: +60 3 2742590,  E-mail: sustran at po.jaring.my
Web: http://www.geocities.com/RainForest/Canopy/2853/
The SUSTRAN Resource Centre is a not-for-profit organisation 
that promotes and popularises people-centred, equitable and 
sustainable transport with a focus on Asia and the Pacific.