Sunday, January 25, 2015
Selangor Science Park 2 Moving At Snail’s Pace
DENGKIL: After close to a decade and over a billion ringgit, the Selangor State Development Corporation (PKNS) has little to show for its investment in the Selangor Science Park 2 (SSP2) project in Dengkil.
According to PKNS, only about 10% of the 526.1ha in Bukit Baja, Dengkil it acquired in 2004 for this high-tech park has been developed. Sceptics are concerned that given the lack of progress, this may turn out to be another white-elephant project, considering the total land and development costs thus far amount to RM1.24 bil.
PKNS general manager Azlan Md Alifiah admits the state government agency needs another 10 to 15 years to achieve a total gross development value (GDV) of nearly RM10 bil. However, he is expecting “more development” starting next year.
According to PKNS, the science park has roped in Hanwha Q CELLS Malaysia Sdn Bhd (Qcells), a manufacturer of solar cells, solar panels and solar modules. The company, which is one of Europe’s leading photovoltaic providers, is based in Germany and is part of South Korea’s Hanwha Group.
Another project that has been rolled out in the park is residential development Vega Residensi 1, a serviced apartment project that has been sold out. The solar manufacturing facility is sprawled over 25.9ha, while the latter takes up 4.04ha.
Under the park’s masterplan, 60% of the land is allocated to industrial lots and commercial use, 30% to residential space and the balance of 10% to infrastructure. SSP2 is designed to attract main players in high technology, particularly biotechnology and pharmaceutical industries, yet the only tenant in the project is Qcells.
Asked about other investors planning to set up facilities at SSP2, Azlan says the corporation has yet to secure any.
During a media site visit organised by Selangor State Investment Centre Bhd (SSIC) on Nov 18, Azlan was asked about the reason behind the slow pace of SSP2’s progress. He explained that PKNS’ approval from the local authority to convert the land use to mixed development took the first four years. Subsequently, infrastructure construction work took about two years.
“I do admit it is a slow start and it is quite difficult. But at the end of the day, if there are no takers 10 years from now, we can reconvert the land for other purposes. So we are not worried about the situation. However, we believe we have the catalyst for Korean investors to venture into SSP2, especially with the establishment of a Korean school within the development,” Azlan reveals.
“We want to be a sustainable developer. We do not want to build just for the sake of building, without considering the requirements or market demand. It took us 30 years to develop Shah Alam with land sizes of more than 4,046ha and this shows that we are a long-term player,” he adds.
A market observer is concerned about the project being able to attract local and foreign investors. He also says if things do not go well, the company faces the possibility of higher costs to reconvert the land and this is a risk factor that needs to be taken into consideration. PKNS funded the SSP2 project with its own cash and funds raised from sukuk.
Azlan tells FocusM that PKNS has allocated RM27 mil to demolish and reconstruct a bridge in the area which collapsed last year. Construction is expected to start by March next year and will take about 12 months.
PKNS business development senior manager Norzila Sidek says the allocation of industrial lots is set in a 50:50 ratio for both local and foreign investors.
She adds management has been talking to Japanese, Korean and other investors and hoping that educational facilities there such as colleges, a Korean school and an Islamic international school will be added attractions for potential investors.
Norzila says that Selangor was committed to creating high-tech industrial parks in the state, hence PKNS built Selangor Science Park 1 (SSP1) in Kota Damansara. The park was completed in 1995 with a total land size of 1,174ha, of which 160ha were for industrial lots and the rest for commercial and residential units and amenities, she says.
“To show continuity in this effort, we started SSP2 which is located next to Cyberjaya. In developing it, biotechnology and pharmaceuticals are the main areas we are focusing on, instead of pure manufacturing facilities,” Norzila adds.
Source: FocusMalaysia 5/12/2014