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Malaysian conglomerate bets big on New Clark City

By: - Reporter / @amyremoINQ
/ 05:22 AM March 24, 2018

Kuala Lumpur/Putrajaya—Infrastructure conglomerate AlloyMtd is set to play a crucial role in spurring development at New Clark City.

That’s because by October next year, the group should have already developed a portion of the 220-ha National Government Administrative Center (NGAC) which include two government buildings; a world class sports complex that will serve as one of the venues for the 30th SEA Games scheduled in the last quarter of 2019; and housing facilities to accommodate athletes and government workers.

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All these will comprise Phase 1A of MTD Philippines Inc.’s commitment under its contract with Philippine state agency, Bases Conversion and Development Authority (BCDA).

MTD Philippines, the local unit of the AlloyMTD Group, is investing some P13 billion for the completion of this 40-ha Phase 1a development alone.

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Ambitious target

And it’s shaping up to be an ambitious target as MTD Philippines will be working on a very tight schedule of about 18 months, having broken ground only in January this year.

Tee Kim Siew, acting chief executive officer of MTD Capital Bhd, is well aware of it. Despite such a constraint, he remains optimistic that MTD Philippines will be able to deliver all of its commitments for the Clark project in time.

“This is why we are very focused on our Clark project… It’s a tight schedule but it’s doable. We are now on the verge of awarding contracts to three or four top tier construction firms. The contracts will all be for Phase 1A,” Tee said in a briefing at Putrajaya in Malaysia.

“Right now, the most important challenge for us is to deliver the sports complex and the rest of the (commitments under Phase 1A). This is our biggest challenge and will be our biggest milestone,” he noted.

This is why, Tee added, they are now focusing much of their efforts on the Clark development, which is currently the group’s second biggest project, next to its 500-million pound project in London.

Financial closure

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For their part, MTD Philippines president Patrick Nicholas P. David said in a separate briefing in Kuala Lumpur, that they are also bracing for the work ahead, knowing all too well the challenge of having to work with a tight schedule.

According to David, they expect to have on board some 5,000 to 7,000 workers on site at the peak of the construction activities, and have equipment that is more than the number of what they usually deploy in their projects in order to meet their October 2019 deadline.

He further disclosed that MTD Philippines is hoping to close financing agreements for the Clark project by next month. Of the more than P13-billion investment, about P9.5 billion will be financed through local borrowings, while the rest will be funded via equity.

“In the next month or so, we expect to seal the financial deals or our loans. We are currently in talks with two banks,” he said.

Once the Phase 1A is completed, MTD will proceed with the 20-ha Phase 1B, which will see the construction of six more government buildings, about 6,000 housing units, and retail and commercial establishments between 2020 and 2022.

New metropolis

To recall, MTD Capital Berhad won the bid to build a government hub within a 220-ha parcel in New Clark City, after it submitted an unsolicited proposal to BCDA.

This project will include the NGAC, which MTD is developing. It involves the development of back-up offices of various government agencies to ensure continuous business operations in case of calamities and disasters.

The inspiration for MTD Capital’s proposal was the Putrajaya, the federal administrative center of Malaysia.

The 9,450-ha New Clark City is poised to be the country’s first smart, disaster-resilient and green metropolis, which, upon completion, is expected to contribute a gross output of approximately P1.57 trillion per year to the national economy. It is also meant to help decongest Metro Manila.

BCDA is positioning the whole of Clark as Asia’s next aerotropolis, and a strategic investment opportunity.

“Clark is on its way to becoming Asia’s next aerotropolis with the development not only of the airport, but the Clark Freeport as well, and the construction of the first smart, green, and resilient New Clark City (NCC),” BCDA VP for business development and operations Joshua Bingcang said.

Aerotropolis is the concept of developing a city with the airport at its center.

Bingcang was among the guest speakers at the 3rd Annual Aetropolis Conference held in Kuala Lumpur. He was joined by airport operators, city planners, social infrastructure developers, and city council representatives from across the globe.

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