Highway economy: Spurring the Malaysian economy

July 21, 2014
Travel Smarter

More than three decades ago, after the first highway was built in the country, a network of interconnecting highways was developed. These highways have spurred and facilitated economic growth along their respective routes, improving accessibility and accelerating the development of industry, tourism and trade. Highway construction also leads to increased land price, population and employment growth. Improvements in the transportation industry also lead to greater economic efficiency and business opportunities for society.

For example, three main industrial areas in the Klang Valley, namely Sungai Way/Seri Setia, Subang Jaya and Subang Hi-Tech have undergone rapid development because of their close proximity to the New Pantai Expressway (NPE). Sungai Way/Seri Setia recorded an investment of RM6.9 billion by local and foreign investors, which was partly translated to the development of 28 new factories that offered 13,140 job opportunities. Subang Jaya and Subang Hi-Tech meanwhile recorded investments of RM1.4 billion and RM1.6 billion respectively, which created more than eight thousand job opportunities for locals.

The construction of Lebuhraya Pintas Selat Klang Utara Baru (GRAND SEPADU) that took two years from 2010-2012 along the 1.5 – 3 kilometre radius of the highway has encouraged economic growth of its surrounding areas such as Bukit Raja, Kapar, Bandar Sultan Suleiman and Pelabuhan Utara and created more job opportunities for the local people.

Two new townships were developed along the routes of the Eastern Dispersal Link Expressway (EDL), namely Southkey Development and Tebrau Teguh. Property price is expected to double after two and a half years since the expressway opened in 2012.

The North – South Expressway (NSE) has also encouraged growth along Alor Gajah and Ayer Keroh in the south. Between 2001 and 2005, 205 projects involving a capital investment of RM10.32 billion were approved in Melaka, creating about 24,677 jobs. In Johor, 80 per cent of total manufacturing projects approved between 1990 and 2001 were in the four districts that the NSE passes through.

Another highway in Johor, namely the Senai – Desaru Expressway (SDE), brings numerous benefits by cutting travel time from Senai to Pasir Gudang by almost one hour. It also links with the beach resort town of Desaru, thus opening up more opportunities for the tourism sector. Other tourist attractions accessible from the highway include Desaru Beach, the Kota Tinggi waterfalls, Teluk Ramunia, Tanjung Balau, Ostrich Wonderland, the Johor Lama Fort and a crocodile farm.

The Lebuhraya Lingkaran Luar Butterworth (LLB) meanwhile has the only Rest and Service Area (R&R) in the country by the sea with a panoramic day and night view of the Penang Island. It is now a popular place, especially during countdown to Merdeka and New Year celebrations where fireworks display at Penang Island could be comfortably viewed and appreciated at the Rest and Service Area.

With the influx of highways and greater ease of transportation and connectivity, real estate has boomed and property value appreciated, with former plantation lands transformed into amazing mega developments. One example is the area around Lebuhraya Damansara – Puchong (LDP), which has in its vicinity 85,000 new houses and 47 million square feet of commercial space.

Three main suburbs that have benefited from LDP are Petaling Jaya, Bandar Sunway and Puchong. Since the opening of LITRAK, there have been no less than 66 new developments along that highway with 20 located in Puchong alone, which is now a bustling industrial, residential and commercial area. Prior to the development of LDP, Puchong was only accessible via a council road, which is Jalan Klang Lama.

The Kerinchi Link, which is part of Lebuhraya SPRINT (Sistem Penyuraian Trafik KL Barat) and NPE also contributed to the massive development along the route, such as KL Metropolis Development, TNB Bangsar Development, Amona Development, KL Eco City, Pantai Sentral Park, KL Gateway, Gapurna Development, Media City Development and Bangsar South Development.

The same rapid development was also recorded for areas surrounding Ampang – Kuala Lumpur Elevated Highway (AKLEH), when it was opened in 2001. Properties in the nearby areas have enjoyed good capital appreciation. For instance, between 1996 and 2001, a property in AU Industrial Area, Jalan Enggang was sold at RM600, 000 per unit. Between 1996 and 2001, the same property recorded a 67 per cent increase to RM1.8 million in its selling price.

Lebuhraya Kemuning – Shah Alam (LKSA) is another highway concessionaire that saw a rise in property value of the surrounding areas, namely Section 19, 20 and 23 with a hike of almost 70.3 per cent from its original value. House prices in Section 19 and 20, for instance, rose from RM390, 000/unit in 2004 to RM560, 000/unit in 2011.

The same scenario is also happening with the completion of the Duta – Ulu Kelang Expressway (DUKE). Property prices of real estates around its route, namely in Setiawangsa, Wangsa Maju, Ampang, Setapak and Seri Gombak have appreciated. The expressway also provides an easy access to Kuala Lumpur’s Golden Triangle, KLCC, Mont Kiara, Zoo Negara and Genting Highlands.

ANIH Berhad as the concession holder of Lebuhraya KL – Karak (KLK) and Lebuhraya Pantai Timur Fasa 1 (LPT1) plays an important role to boost the economic activities in the east coast region. Through KLK and LPT1, the highways have opened up more job opportunities, reduced vehicle congestion through the cities and facilitated energy savings, cost and shorten the travel time of highway users. The highways have also given a boost to the tourism sector and connect people to the main cities across the region. This is in line with the objective of the East Coast Economic Region’s (ECER) Master Plan initiated by the Government which is to transform the East Coast States into major international and local tourism destinations, exporters of resource based and manufactured products, vibrant trading centres and infrastructure and logistic hubs. ECER covers more than half of Peninsular Malaysia and its population of about 3.9 million represents 14.5 per cent of the total population of Malaysia.

DUKE, KLK and LPT1 connect about nine major tourist attractions and have drawn thousands of visitors to these beautiful and scenic areas. The nine tourist hotspots along the highway – Genting Highlands, Bukit Tinggi, the Kuala Gandah elephant sanctuary, Chamang Waterfall and Lake Chini among others are magnets for potential investment for those looking to capitalise on these tourist attractions.

With the opening of the Seremban – Port Dickson Highway (SPDH) in 1998, thousands are now able to travel easily to the famous beaches of Port Dickson. Both tourists and Malaysians from all walks of life can enjoy the convenience of travelling to Port Dickson and back all year round, making Port Dickson as one of the most popular tourist attractions in Peninsular Malaysia. The number of hotels in Port Dickson has also increased from 3995 in 2008 to 4598 in 2010.

The South Klang Valley Expressway (SKVE) has played a big part in the social and economic integration with its range of highway networks around the Klang Valley. The routes of the SKVE network include many fast expanding business centers such as Putrajaya, Cyberjaya, Teluk Panglima Garang, Pulau Carey and Westport in Klang, which not only enhance travelling convenience, but also spur the economic growth in the surrounding areas.

Lebuhraya Butterworth – Kulim (BKE) provides a direct link from Kulim Hi-tech Park to Butterworth. Besides that, BKE also links the Perai Industrial Zone to the Penang Port, which allows shipping companies a smooth journey to conduct their cargo businesses in an effective manner. The construction of BKE has also successfully relocated 1703 squatters (largest re-settlement of squatters in the country at that time). Their socio-economic status was uplifted when they were offered better living place with three room low cost apartment at 610 sq. ft built-up area at only RM25, 000 per unit. With the opening of this highway that connects two ports of Penang – North Butterworth Container Terminal (NBCT) and Deepwater Wharves, accessibility has greatly improved. Motorists can now bypass the congested local roads and the heavy traffic to and from the ports and Ferry Terminal. BKE has also transformed Butterworth from a sleepy backwater town to a modern progressive town.

Highways have also benefited the locals living near the routes. For instance, the operator of the NSE offers the stalls at the R&R to the local community. In 2010, a nasi lemak seller was reported as saying that she earned RM10, 000 a day during the festive season. The construction of the Lebuhraya Lingkaran Luar Butterworth (LLB) also improved the socio-economic status of locals as they were relocated from 1703 squatter houses to a low-cost apartment at a very affordable price.

Not just within the country but globally too, Malaysian highway concessionaires are making their mark, utilising their expertise to build highways in Asia, South America and the Middle East, generating income on a global scale and in the process contributing to the country’s economy.

IJM Corporation Berhad, the concessionaires of Lebuhraya Kajang – Seremban (LEKAS), Lebuhraya Sungai Besi (BESRAYA) and NPE, operates five highways in India as well as in Argentina, South America.

Providing connectivity with innovative road designs and construction methods are among the renowned hallmarks of Gamuda. Gamuda Berhad also expanded its highway business overseas, successfully completing the construction of the Dukhan Highway in Qatar and West Bengal, India. These highway concessionaires and their impressive global ventures have undoubtedly contributed greatly to the country’s economy.