Talam to focus on niche projects and JVs

The Sun 24/4/2006

KUALA LUMPUR: Talam Corp Bh, long known as a developer of affordable mass housing, will concentrate on niche projects and enter joint ventures (JV) withm reputable developers. This will take place after a corporate restructuring exercise and completion of its current projects, Talam executive chairman Tan Sri Chan Ah Chye said.

He said the company's main objective is to complete all the projects and to ensure that they are of a certain standard and quality. "Yes, there have been concerns over the years because we used contractors who did not measure up to the mark... but now we're working with IJM [Corp Bhd) as the main contractor, and they'll ensure that quality is maintained," Chan said.

Talam will complete all its projects, albeit with, some delay due to the financial problems, he said, adding that the company is targeting to complete the 12,000 sold but uncompleted units in the Klang Valley by end-2007.

Among the projects that have stalled outside the Klang Valley are the RM5.2 billion freehold Bandar Bukit Beruntung in Selangor and RM1.46 billion Pulau Melaka mixed development.

Chan was speaking at a press conference last Friday to announce a memorandum of understanding (MoU) between Talam and its major financier. He said the MoU) would allow Talam to draw down trom the escrow account to pay for the balance of the operation and construction costs of the current projects, estimated at around RM800 million. The financier has agreed in principle to the deal and Talam is hoping to ink it in a month's time, Chan said.

The units, which Chan said were in various stages of completion, are in 10 projects scattered throughout the Klang Valley and include projects in Ulu Klang, Bukit Jalil and Puchong. Talam still has an undeveloped landbank of between 5,000 and 6,000 acres the troughout the Klang Valley.

Chan said that a number of factors including high gearing due to land costs, red tape and environmental concerns, among others, were partly to blame for the company's troubles.

He added that Talam still has about 1,000 units completed but unsold and the company was unable to get an advertising permit from the Housing and Local Government Ministry because of the status of its current projects.

However, Chan said the JVs with IJM Corp on two other projects, Sierra Ukay and Sierra Selayang, would continue and would be a source of revenue or the company going forward. The JVs are on a 50:50 basis. "For the moment we'll tack on to reputable names in the industry until we clean up our act," he added.