The vacant railway land plots have high potential for redevelopment due to their strategic locations, says minister
By LYDIA NATHAN / Pic By MUHD AMIN NAHARUL
The Railway Assets Corp (RAC) should be aggressive to dispose of or jointly develop vacant railway land plots throughout the country, valued at over RM8.4 billion.
Transport Minister Anthony Loke said the railway asset manager should look into ways to sell or jointly develop the parcels, which could amplify returns for the RAC.
Loke noted that the vacant railway land plots have high potential for redevelopment due to their strategic locations, thus can sustain earnings for the RAC — which had stopped receiving government grants since 2015.
“The RAC land (plots) which have high potential and are in strategic locations should be developed and added value to, so that the RAC can enjoy maximum return and allow it to remain stable and competitive with other statutory bodies.
“We will look at how appropriate the land plots are, maybe some could be sold, while the others used for mixed developments which will include housing,” he said at the groundbreaking ceremony for the new RAC Central Tower in Kuala Lumpur (KL) yesterday.
The RAC’s overall assets are worth RM17 billion as at December 2018, including a landbank of 12,446ha, buildings, train stations, depots, rail infrastructures and rolling stock.
Loke said in line with its founding objective as the railway assets’ owner and manager, the RAC cannot remain comfortable with its current business model of leasing or renting railway land.
“Based on the current economic condition and the development of the country’s rail transportation industry, the RAC needs to act as a businessman where it can continue to generate, upgrade and develop what it has,” he said.
According to Loke, all redevelopment involving the RAC’s land plots will be done through open tenders.
The RAC was established in 1992 to develop the railway industry in Malaysia to be on par with developed economies.
Meanwhile, the RM125 million RAC Central Tower will be developed by YTL Corp Bhd’s subsidiary Arah Asas Sdn Bhd on a 0.44 acre (0.18ha) land.
In return, Arah Asas will receive an adjacent plot of land. The value of the land given was undisclosed. YTL is expected to launch a mixed development project on the land simultaneously with the tower’s construction.
Both projects are expected to be completed in the next three years.
RAC GM Azhar Ahmad said the 30-storey RAC Central Tower is expected to be a long-term contributor to the corporation’s earnings via rental from office and commercial spaces, as well as a food gallery.
“The RAC hopes to collect RM12 million a year from the rental of office and commercial spaces,” he said.
Besides the tower, Azhar said the RAC is planning for a few developments in strategic locations namely in KL, Batu Tiga in Selangor and Kempas, Johor.
He said although the RAC remains wary and cautious on the potential oversupply of building spaces around KL, it still sees a potential for the RAC Central Tower.
“As the building will be completed in three years, we are hoping the economy will recover (by then) and people will take up the spaces,” he added.