Sunday, November 7, 2010

Controversial skyscraper

The 100-storey Warisan Merdeka building to be constructed in the former Tunku Abdul Rahman Park area near Stadium Negara in Kuala Lumpur has become a most controversial project with hundreds of thousands of Malaysians opposing and ridiculing it in FaceBook, Twitter, blogs and online news portals.

The points raised mostly involved money - "Sheer waste of money", "Money could be better used elsewhere", "Where is the money coming from?", "Can the government afford it?", etc.

Other points involved the location - "It'll create even more traffic jams", "The place is congested enough", etc.

I agree on the point involving the location and that it'll create even more traffic jams, but I shall take a contrarian view on whether it should be built.

The skyscraper will be built by Permodalan Nasional Bhd (PNB) and its president and group chief executive Tan Sri Hamad Kama Piah Che Othman held a press conference to explain that the development costing RM5bil would also have a shopping complex and condominiums.

The 100-storey tower – touted to be the country’s tallest – will cost RM2.5bil to RM3bil and will have gross floor space of 3 million sq ft and 2.2 million sq ft of net floor space .

“PNB’s existing headquarters, Menara PNB will be 30 years old by the time the new tower is completed. We are looking for strategic positioning for the future and will need new office space for the expanding PNB group of companies. The Warisan Merdeka tower will become the new PNB headquarters while Menara PNB will be upgraded and leased out for recurring income,” Hamad told The Star.

He said PNB had the capability to finance the project through internally generated funds but he did not discount resorting to borrowings “if the interest rates are attractive.”

On the rationale for PNB’s decision to undertake the project, Hamad explained: “We have been planning to develop the land since 2004 after acquiring it in 2000. After holding the land for so long, we decided it is now the right time to move ahead with the project. As an investment house, our intention is to optimise returns from the development.”

He said the project was expected to yield reasonable returns of between 8% and 10%.

PNB paid RM310mil or RM220 per sq ft to buy the 36-acre land from Pengurusan Danaharta Nasional Bhd in 2000. Hamad said the market value of the land was estimated at RM800 per sq ft today.

Of the 36 acres, around 17 acres are occupied by Stadium Merdeka and Stadium Negara, which have been identified as a national heritage buildings. Conservation works have been undertaken to restore their heritage characteristics and the two stadiums are now being managed by the National Heritage Trust.

The overall Warisan Merdeka development on 19 acres would have to complement and blend with the heritage theme, and together with the restored stadiums, the site was set to be another major landmark in Kuala Lumpur, The Star reported.

The issue of financing was answered by Tan Sri Hamad - it would be internally financed. So government funds would not be utilised. This is a vital point as many of the detractors seem to be confused over government funds and PNB funds - they are not the same. PNB's funds belong to PNB; if PNB resorts to borrowing money, PNB has to repay the loan, not the government. PNB has to generate revenue through its investments and business activities to get the cash to repay the loan.

Now to discuss the location. Property developers would salivate when told where the land is - hundreds of meters from the Petaling Street Chinatown tourist attraction, a short walk from heritage stadia where events/concerts are still held, two monorail stops from the Imbi/Bukit Bintang shopping district and smack in the middle of Kuala Lumpur.

It seems to be a nice prime location, but - there's always a but - the detractors are right about the area being congested enough.

Recently, I drove in town during the peak hour at 5pm along Jalan Tun Perak and I was stuck in a horrendous traffic jam for around 45 minutes. I was at a traffic-light junction near the Maybank headquarters and the traffic lights changed a few cycles and I did not move even an inch.

The leaders of the nation, City Hall officials and town planners should take a drive in the middle of Kuala Lumpur during peak hours to find out for themselves just how bad the traffic jams can be. The problem is the leaders and VIPs have police escorts who shoo away other motorists with their sirens and flashing lights so that their journeys would be smooth.

I recall a former Transport Minister who had never taken a ride on the LRT before and when he did for his first time, it was a major media event. It was also probably his first and last time on the LRT.

Building a 100-storey skyscraper would mean increasing the daytime population of the area by tens of thousands and also increase the number of cars by the thousands. Building condos in the area would mean increasing the night-time population of the area by the thousands and, yes, there will be hundreds of cars being driven back to the condos when offices close.

The roads in the vicinity of the proposed Warisan Merdeka project such as Jalan Hang Jebat, Jalan Hang Tuah, Jalan Maharajalela and Jalan Sultan are already very busy and congested at any time of the day. You can imagine what the traffic situation would be like when the Warisan Merdeka project is completed.

If PNB decides to go ahead with the project - and chances are it will - there will have to be much planning done to solve the traffic congestion in the area otherwise it would be another of KL's great town-planning disasters.

The project would be rendered worthless if getting in and out of the Warisan Merdeka skyscraper, shopping mall and condos means getting stuck in an hour-long jam.

Perhaps the project can be downsized to reduce the impact.

In that case, the 100-storey skyscraper can be built in a greenfield location where proper town planning can be done, highways built and LRT lines constructed. The skyscraper could then be the central development of a township (like Cyberjaya) and tens of thousands of people (and their cars) can be lured to live and work away from the crowded and congested centre of Kuala Lumpur.

And one final point to consider - why build a 100-storey skyscraper when you can build a taller one? A 100-storey skyscraper is a neither-here-nor-there structure. It will be just another skyscraper, just another building, just another phallic symbol.

My view is this - if you want to be build a 100-storey skyscraper, you might as well just add a few more storeys and make it the world's tallest.

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