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guideline for land reclamation
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MESYUARAT PEMBENTANGAN
KERTAS PENYELIDIKAN JABATAN BIL. 3/2009
21– 23 DISEMBER 2009
DEWAN NUSANTARA, MENARA SRI SAUJANA
INSPEN
KERTAS PENYELIDIKAN
A STUDY ON LAND RECLAMATION COSTS
ZURAIDAR HUSIN
SITI NORAZIAH AHMAD
MOHD IBNI IZZAN ADNAN
2009 --------------------------------------------------------------- Jabatan Penilaian Perkhidmatan Harta (JPPH) Kementerian Kewangan Malaysia
Content Page
1.0 Introduction 1
1.1 Background
1.2 Problem Statement
1.3 Objectives
1.4 Research Questions
1.5 Scope
1.6 Significance of The Study
2.0 Literature 4
2.1 Land Reclamation
2.2 Method of Land Reclamation
2.3 Reclamation Process
3.0 Methodology 8
3.1 Methodology
3.2 Research Approach
4.0 The Projects 10
4.1 Pulau Pinang
4.2 Malacca
4.3 Analysis
5.0 Result and Recommendation 16
Appendix A – Location Plan
Appendix B & B1 – Detail calculation of cost
1
Part 1
INTRODUCTION
1.0 BACKGROUND
The blooming development in recent years in Malaysia has created the
need of more land especially land nears to the developed areas. As
most of the developed areas are located to the coastline, one of the
options is to create more land is to reclaim coastal areas which also
includes land below seawater level.
As we all know, coastal areas are mostly land that belong to the state
government, hence the companies need to make an application to the
state for land alienation. In line of this, JPPH is being requested to
carry out valuation for this purpose.
1.2 PROBLEM STATEMENT
Most of the time, JPPH encounters problem determining the market
value of the coastal land because there is no sales comparables and
thus resort to sales of similar land development located further from
the sea, the costs of land reclamation then is being deducted to arrive
at the market value of such land. The land reclamation costs used for
this purpose were sometimes estimated lower and sometimes higher
because these costs are not documented or tabulated like we did on
building costs for us to refer as a guide. What are the costs of land
reclamations?
2
1.3 OBJECTIVES
The objectives of the study are as follows:
i) To highlight offshore land reclamation methods, and
ii) To show the costs of sea land reclamation in Penang and Malacca
and its ratio to land value.
1.4 RESEARCH QUESTIONS
i) The method of sea land reclamation usually involved in the
development of housing, commercial and industrial and its
process.
ii) What is the material used in reclamation?
iii) What are the costs?
iv) Is there a difference in costs according to location?
v) What are the values of land after reclamation?
1.5 SCOPE
This study is limited to projects located in Pulau Pinang and Melaka
from 2000 – 2008. It will include all types of development on coastal
land, high rise and low rise (residential, commercial and industrial).
The projects under study is those of offshore reclamation. Other types
of land reclamation, eg. for example ex mining is excluded. Studies
3
focus on methods, process, materials and costs of filling the area to
be reclaimed.
1.6 SIGNIFICANCE OF THE STUDY
It will serve as a practical guide for valuers in JPPH to do valuation of
coastal land when the need arises.
1.6 RESEARCH LIMITATIONS
The limitation of this research is solely depending on the availability of
data costs from JPPH George Town case files and the mild respond
from the developers. They were reluctant to impart with the costs due
to their companies’ regulations.
The companies which involve in reclamation project in Melaka also
didn’t give good coorporation to provide the accurate cost of their
projects. Most data provided by UPEN (State Economic Plan Unit) and
consultant companies directly involve with the project.
4
Part 2
LITERATURES
2.1 LAND RECLAMATION
What are land reclamations?
The term “land reclamation” is used to described two different
activities. In the first sense, land reclamation involved modifying wet
land or waterways to convert them to useable land, usually for the
purpose of development. Land reclamation can also be a process n
which damaged land is restored to its natural state. In both cases, the
term is used to refer to some sort of process which is designed to
fundamentally alter the characteristics of a piece of land to achieve a
desired end goal (www.wisegeek.com/what is land reclamation.htm,
accessed 2/6/2009)
Sea land reclamation is creating new land from the sea. It means the
area of new land which reclaimed are land filled by using other
material gain from the sea or mainland.
Land reclamation is either of two distinct practices, one involves
creating new land from sea, riverbeds, wetlands, etc. the other refers
to restoring an area to a more natural state (such as after pollution or
salination have made it unusable). In Malaysia, land reclamation is
widely practiced in the state of Penang, Malacca and Johor.
5
Reclamation activities are carried out in the country for the purposes
of development, i.e industrial, housing, recreational and expansion
area to the wharfs. There are various techniques in sea reclamation
area which has been accepted according to the condition of the area,
size and cots involved (Zaliha Yahya, 1987)
2.2 METHODS OF LAND RECLAMATION
There are two major types of reclamation and each has advantages
and disadvantages (resources.metapress.com, accessed 8/4/2009).
The methods are:-
1. In the “drained” reclamation, fill is placed on the reclamation
site. The advantage is that existing soft marine material can be
left in place, reducing the amount of fill required. The
disadvantages is the longer time require for settlement and a
greater uncertainty in the duration and rate of consolidation.
This could increase the cost in follow up structures to
accommodate a larger settlement. Artificial drainage is required
to reduce drainage paths and accelerate settlement.
2. In the “dredged” reclamation, landfill by is by replacement, in
which soft marine material is removed and replaced by imported
fill. This means a larger volume of fill but the advantage of
faster consolidation. This method are using a combination of
dredging mud from the sea bed, borrowing marine sand,
excavation of islands and construction of seawalls.
6
2.3 RECLAMATION PROCESS
The process of reclamation depends on the method adopted (IJM
Information Booklet 2008). The basic process are:-
Step 1 – temporary bunds were built along the reclamation
boundaries as shore protection structure.
Step 2 – Upon tugging to site, the sand was unloaded by
excavator and transported out by dump trucks via
temporary jetty.
- Bulldozers then spread and compacted the reclaim
land to the desired levels.
Step 3 – A layer of sand of approximately 1.2 meter thick was
laid as drainage path prior to PVD installation and
surcharge on top.
- This sand layer helps to avoid water pollution.
Step 4 – Perforated vertical drains (PVD) were installed at 1.3
meter apart in both direction throughout the whole
reclamation area.
- It act as drainage path to drain out pore water to sand
blanket layer and accelerate the consolidation process.
Step 5 – Surcharge simulates from future loading was applied
on top of sand layer to compress the soft layer below,
resulting effective dissipation of pore water. Keeping
post-construction settlement to minimum.
7
The process mentioned above, is almost the same except for the step
number two, where dredged reclamation method marine sand was
extracted from the sea bed of approved source and loaded onto
barges. Whereas the other method, material used are totally from
mainland e.g river sand, laterite or rock loaded onto reclamation site.
8
Part 3
METHODOLOGY
This chapter will explain the methodology and approach adopted to achieve
the research objectives.
3.1 METHODOLOGY
The methodologies are:-
1. Collection data by interviewing to the related agencies or
companies doing reclamation work.
2. Literatures data will be collect by reading the printed journals,
books, seminar papers, internet access and others.
3. The result will be shown in the form of table and figure.
3.2 RESEARCH APPROACH
The approaches of this study are combination of quantitative and
qualitative approach through content analysis. Content analysis will
analyze the content of the previous literature done by other authors
and the printed report produced by related agencies who are doing the
reclamation work.
Qualitative approach will be done through semi structured interview
with the potential respondent e.g. consultant, developers and related
government department. The questionnaire included the method,
process, materials and cost of the offshore reclamation. To achieve the
research questions, the action taken are:-
9
First Question – what is the method used to reclaim the coastal area
for development purpose?
Interview with the consultant, contractor or developer and doing some
search on past paper regarding the method of offshore reclamation.
Second Question – what is the process in land reclamation work?
Interview with the consultant, contractor or developer and doing some
search on past paper regarding the process of offshore reclamation.
Third Question – what are the material used in reclamation work?
Interview with the consultant, contractor or developer and analyse the
‘built of quantity’ of offshore reclamation works.
Fourth Question – what are the costs of land reclamation?
Interview with the consultant, contractor or developer and analyse the
‘built of quantity’ of offshore reclamation works.
Fifth Question – Is there a difference in costs according to
location?
Comparing the costs incurred by developer in different location.
10
Part 4
THE PROJECTS
This chapter will discuss the selected offshore reclamation project
development to achieve main objective this study. The selected projects
development are in Melaka dan Pulau Pinang.
4.1 Pulau Pinang
The data used are both historical and current data of land reclamation
projects in Penang.
i) Data on project under construction identified for this
study, namely, IJM projects -The Light - will be collected
from the developer. Unstructured interviewed is carried
out to obtain costs and steps in land reclamation.
ii) Historical data will be sourced from case files in JPPH
George Town. Bayan Bay Marina Resort by Bayan Bay
Development Sdn Bhd, Bandar Tanjung Pinang by Eastern
and Oriental (E&O) and Marina Projects by Purerich Realty
Sdn Bhd
11
4.1.1 The Light- developer: IJM.
Located: Jelutung Expressway Area: 32.0 acre Depth: 5 meter
Project started: Jan 2009 Method used: Dredged method
Status: Completed Costs: RM42,276,384.00
Major construction material
No. Material Rate (RM) Volume/Quantity Used
1. Sand 34.00 765,197 m3
2. Earth 18.00 198,316 m3
3. Perforated Vertical Drain
(PVD)
1.60 1,516,000 m3
4. Sand Bag 62.00 106,694 m3
5. 200 mm concrete mattress
175.00 17,883 m2
6. 450mm thick rubble pitching
wall
160.00 2,849 m2
7. Geotextile 8.50 7,530 m2
4.1.2 Project Bayan Bay Marina Resort
Site: Bayan Bay Marina Resort
Area: 15.02 acre (60,783.88 meter persegi) Depth: 3. 66 meter
Project started: 2001 Method used: Dredged Status: Completed
Costs: RM5,664,440.00
No. Material Rate (RM) Volume/Quantity
Used
1. Earth 6.45 129,712.79 m3
2. Rock Revetment 2,000.00 530 m run
12
4.1.3 Projek Bandar Tanjung Pinang, Tanjung Tokong.
Site: Bandar Tanjung Pinang, Tanjung Tokong Area: 240.63 acre (973,796 meter persegi) Depth: 7 meter
Project started: 2003 Method used:
Status: Completed Costs: RM328,000,000.00
Reclamation cost comprising scope of work :
a) Reclamation works b) Temporary rock bunds
c) Coastal protection in the form of rock revetment and 60m set back from waterline d) Soil improvement i.e. surcharge vertical drains
e) Soil investigation f) Independent Consultant’s supervision
g) Infrastructure for fishermen i.e. breakwater
4.1.4 Marina Project, Bandar Tanjung Bungah
Site: Section A Located: Tanjung Bungah Area: 12 acres
Depth: 4 meter Project started: 2007
Status: Completed Costs: RM26,527,742.00
Major construction material
a) Site cleaning below water level b) Stone for filter material
c) Geotextile-Vertical drain d) Red earth
13
4.2 Melaka
In Melaka, extension development area by using reclamation
offshore started in year 1993. The previous reclamation project
done in Melaka are:-
Type Area Location
Commercial 31.9693
hectare
Taman Melaka Raya, now these
scheme offering most valuable
properties in Melaka. Reclamation
started in 1993 and completed in
1997.
Mix
development
21.35
hectare
Taman Kota Laksamana.
Reclamation started in 1993 and
completed in 1997.
Mix
development
9.3185
hectar
Pulau Berkembar Pulau Melaka.
Reclamation started on 1993 and
abandoned. Total proposed to
develop is 50 acre, only 9.3185
hectare reclaimed and developed
The reclaimation to the above project didn’t get the data cost.
In 2004, state government approved another offshore
development project (need to reclaim) area along coastal Jalan
Tengkera to Pekan Tanjung Kling. This project is continuous
development using reclamation method annexe to the Kota
Laksamana until Pekan Tanjung Keling. Total area approved and
reclaimed is 89 acre and another 500 acre are in progress work.
14
That approval include other offshore area to be develop are
along coastal Jalan Ujong Pasir to Pulau Melaka, Town of
Melaka.
After submission before approval from the State Government,
applicant or developer should pay to the State Government. The
cost are:-
a) Earnest money : RM100,000 per application
b) Contribution to the state : RM5,000 per acre
c) Fisherman Fund : RM0.10 per square feet
d) Deposit to MBMB : RM300,000 per application
Please refer to Appendix A: location of land reclamation
projects.
4.3 ANALYSIS
This research is an analysis studies carried out to determine the cost
of sea land reclamation. The volume/area of each construction
material used and market prices of these items are obtained. The
market prices are determined either by per cu meter or per square
meter. The total costs are also derived by multiplying the price per cu
meter/per square meter and the total material consumed. The all total
costs are divided by the volume of land to be reclaimed, hence the
cost of land reclamation per cu meter is derived.
15
Analysis:
Penang:
No. Projects Area (ekar)
Year Reclamation Costs/pm3
1. The Light- IJM 32 2009 RM62.83
2. Marina Project 12 2007 RM120.17
3. Bandar Tanjung Pinang
240.63 2005 RM38.00
4. Bayan Bay Marina
15 2001 RM21.85
Melaka Project
No. Projects Area
(acre) Reclamation Costs/pm3
1 IGN Group Berhad 50 RM92.66 2 ABS Maju 38.6 RM57.62 3 Haruman Utama 180 RM68.64 4 Ultra Green Sdn Bhd (A) 997 RM59.48 5 Strategic Oscar Sdn. Bhd 180 RM71.39 6 Pembinaan Kota Laksamana Sdn. Bhd. 220 RM76.38 7 Ultra Green Sdn Bhd (B) 89 RM66.64 8 Olympia Land 106.855 RM123.33 9 KL Metro 100 RM64.25 10 Ultra Green Sdn Bhd (C) 523.000 RM86.23 11 Mahajaya Sdn Bhd 709 RM64.83
Refer to Appendix B for detailed calculation of costs.
16
Part 5
RESULTS AND RECOMMENDATIONS
We have to distinguish the fact that size of land reclamation under study
is different hence the results corroborate the fact. The costs of land
reclamation in this study are found to be RM35.00 pm3 to RM120.00 pm3
depending on land size. Further research is recommended to be done to
look into the big differences in land reclamation costs.
In the earlier stage of the study, we hope to find and discuss the
relationship of reclamation costs to land value but due to time constraints
and heavy workload at branches offices, we are not able to do it now. This
study will be continued later to include the comparison of land value
between non reclaimed land and reclaimed land.
17
References:
i. Case files in JPPH George Town
ii. (www.wisegeek.com/what is land reclamation.htm, accessed 2/6/2009)
iii. HRC Consultancy Sdn. Bhd., Town Planner consultant of
reclamation project in Melaka.
iv. Juruukur Perunding Sdn. Bhd., Land Surveyor Consultant of
reclamation project in Melaka.
v. UPEN Melaka, State Economic Plan Unit.
vi. Developer of ‘The Light’ – IJM.
Appendix B
1. IJM
Analysis m3: RM42,276,384
Land area x depth
RM42,276,384 647,511 meter3
RM65.30 per meter3
PV utk 0.5 thn @ 8% 0.9623
______________________
RM 62.83 p meter 3
No. Material Current Market Price (RM)
(a)
Volume/Quantity Used
(b)
Total costs (RM)
(c)= (a)x(b)
1. Sand 34.00 765,197 m3 26,016,698
2. Earth 18.00 198,316 m3 3,569,688
3. Perforated Vertical Drain (PVD)
1.60 1,516,000 m3 2,425,600
4. Sand Bag 62.00 106,694 m3 6,615,028
5. 200 mm concrete mattress
175.00 17,883 m2 3,129,525
6. 450mm thick
rubble pitching wall
160.00 2,849 m2 455,840
7. Geotextile 8.50 7,530 m2 64,005
Jumlah 42,276,384
2. Project Bayan Bay Marina Resort
Site: Bayan Bay Marina Resort
Area: 15.02 acre (60,783.88 meter persegi)
Depth: 3. 66 meter
Project started:
Method used:
Status: Completed
Reclamation cost :
a) Reclamation (Earth Filling) RM4,604,440.00
b) Shore Protection (Rock Reventment) RM1,060,000.00 RM5,664,440.00
PV for 2 year @ 8% 0.85734
RM4,856,350.99
Analysis : RM4,856,350.99 Land size x depth
4,856,350.99
60,783.88 m2 x 3.657 meter
RM4,856,350.99 222,286.65 meter cube
RM21.85 per meter3
3. Projek Bandar Tanjung Pinang, Tanjung Tokong.
Site: Bandar Tanjung Pinang, Tanjung Tokong
Area: 240.63 acre (973,796 meter persegi)
Depth: 7 meter
Project started: 2005
Method used:
Status: Completed
Reclamation cost comprising scope of work :
a) Reclamation works b) Temporary rock bunds
c) Coastal protection in the form of rock revetment and 60m set back from waterline
d) Soil improvement i.e. surcharge vertical drains e) Soil investigation f) Independent Consultant’s supervision
g) Infrastructure for fishermen i.e. breakwater RM328,000,000.00
PV for 3 year @ 8% 0.79383 RM260,376,240.00
Analysis : RM260,376,240.00
Land size x depth
RM260,376,240.00 973,796 meter x 7 meter
RM260,376,240.00 6,816,572 meter cube
RM38.20 per cube
4. Marina Project, Bandar Tanjung Bungah
Site: Section A
Located: Tanjung Bungah
Area: 47,314 sq. meter Depth: 4 meter
Project started: 2007
Status: Completed
Costs: RM26,527,742.00
PV utk 2 tahun @ 8% 0.8573
________________ RM22,742,233.00
Analysis : RM22,742,233.00 Land size x depth
RM22,742,233.00 47,314 sq. meter x 4 meter
RM22,742,240.00
189,256 meter 3
RM120.17 per M3
APPENDIX B1
RECLAMATION PROJECT IN MELAKA
Per Acre P.S.F P.S.M P.M3
1 IGN Group Berhad 50.000 202,343.13 4.00 RM75,000,000 RM1,500,000 RM34.44 RM3.20 RM92.66
2 ABS Maju 38.600 156,208.90 5.00 RM45,000,000 RM1,165,803 RM26.76 RM2.49 RM57.62
3 Haruman Utama 180.000 728,435.28 5.00 RM250,000,000 RM1,388,889 RM31.88 RM2.96 RM68.64
4 Ultra Green Sdn Bhd (A) 997.000 4,034,722.08 5.00 RM1,200,000,000 RM1,203,611 RM27.63 RM2.57 RM59.48
5 Strategic Oscar Sdn. Bhd 180.000 728,435.28 5.00 RM260,000,000 RM1,444,444 RM33.16 RM3.08 RM71.39
6 Pembinaan Kota Laksamana Sdn. Bhd. 220.000 890,309.79 5.00 RM340,000,000 RM1,545,455 RM35.48 RM3.30 RM76.38
7 Ultra Green Sdn Bhd (B) 89.000 360,170.78 5.00 RM120,000,000 RM1,348,315 RM30.95 RM2.88 RM66.64
8 Olympia Land 106.855 432,427.51 3.00 RM122,000,000 RM1,141,734 RM26.21 RM2.44 RM94.04
9 KL Metro 100.000 404,686.27 5.00 RM130,000,000 RM1,300,000 RM29.84 RM2.77 RM64.25
10 Ultra Green Sdn Bhd (C) 523.000 2,116,509.18 4.00 RM730,000,000 RM1,395,793 RM32.04 RM2.98 RM86.23
11 Mahajaya Sdn Bhd 709.000 2,869,225.63 5.00 RM930,000,000 RM1,311,707 RM30.11 RM2.80 RM64.83
3,193.455 12,923,473.83 4.64 RM4,202,000,000 RM1,315,816 RM30.21 RM2.81 RM70.13
RECLAMATION PROJECT IN PENANG
1 IJM 32.00 129,499.61 5 RM42,276,384 RM1,321,137 RM30.33 RM2.82 RM65.29
2 Bayan Bay Marina Resort 15.02 60,783.88 3.66 RM5,664,440 RM377,126 RM8.66 RM0.80 RM25.46
3 Bandar Tanjung Pinang 240.63 973,796.56 7 RM328,000,000 RM1,363,089 RM31.29 RM2.91 RM48.12
4 Marina Project, Tanjong Bungah 12.00 48,562.35 4 RM26,527,742 RM2,210,645 RM50.75 RM4.71 RM136.57
299.65 1,212,642.40 4.915 RM402,468,566 RM1,343,129 RM30.83 RM2.86 RM67.53
ComponiesNo.
TOTAL
TOTAL
AnalyzeAcerage M.S Depth
Cost Reclaim
(estimation)