Ekovest Gains Approval for DUKE Phase 2A Links: Laluan Istana Kiara and Kampung Baru Link

Ekovest Secures Greenlight for DUKE Phase 2A Links

Ekovest Bhd (KL:EKOVEST) has announced government approval for the construction of two critical links under Phase 2A of the Duta-Ulu Kelang Expressway (DUKE) project. The approved links are Laluan Istana Kiara and the Kampung Baru Link, forming part of a broader infrastructure plan to enhance connectivity across the Klang Valley.

Project Details: DUKE Phase 2A

1. Laluan Istana Kiara

• Status: Ready for concession agreement signing, pending clearance from the Attorney General’s Chambers.

• Significance: A crucial segment aimed at easing traffic congestion between Duta and Ulu Kelang.

2. Kampung Baru Link

• Status: Concession agreement in finalization, with a deadline set for December 31, 2026.

• Purpose: To improve access to Kampung Baru, a key urban area within Kuala Lumpur.

3. Kapar Link (Pending Update)

• Status: Initially approved in 2017 but no new updates provided in the latest filing.

• Role: Connects the broader DUKE network to western Klang Valley.

Financial and Project Scope

The combined length of the three links (including the Kapar Link) spans approximately 75.2 kilometers. The total estimated project cost for Phase 2A is RM6.32 billion. Funding will be sourced through:

• Internally Generated Cash: Utilising existing revenue streams.

• Borrowings: Potential financing from financial institutions.

• Mixed Funding: Combination of debt and equity.

Why These Links Matter: Strategic Connectivity and Economic Impact

Since its opening in October 2017, DUKE 2 has shown significant growth in traffic, with average annual daily traffic (AADT) reaching 89,103 vehicles in the first half of FY2024 — a 6.2% increase from FY2023 and 47% higher than FY2019.

Key Benefits of Phase 2A:

1. Improved Urban Mobility:

   • Enhanced connectivity between Duta, Ulu Kelang, and Kampung Baru.

   • Reduced travel time and less congestion within Kuala Lumpur.

2. Economic Growth:

   • Supports commercial activity by linking high-traffic zones.

   • Facilitates economic integration across the Klang Valley.

3. Sustainability and Efficiency:

   • Decreased vehicular congestion and carbon emissions.

   • Increased traffic efficiency for daily commuters and logistics operators.

Phase 2A: Strategic Importance to Klang Valley

The DUKE Phase 2A links are pivotal to the Klang Valley’s infrastructure modernization. By adding new arteries to the existing DUKE expressway, Ekovest aims to:

• Strengthen Transport Connectivity: Linking residential, commercial, and industrial areas.

• Boost Traffic Flow Efficiency: Minimizing bottlenecks and easing urban mobility.

• Support Urban Expansion: Enabling smoother transit within the Greater Kuala Lumpur area.

Traffic Growth Insights:

• Significant Increase: Since the opening of DUKE 2, traffic volumes have consistently grown, indicating the expressway’s importance in urban transit.

• Future Projections: The additional links are expected to attract more vehicles, further boosting traffic volume and toll revenue.

Economic Impact and Funding Strategy

Ekovest plans to fund the Phase 2A project using a combination of internally generated funds and external financing. The project’s robust financial framework is designed to:

• Optimize Capital Utilization: Balancing debt and internal funding to reduce financial risk.

• Long-Term Revenue Generation: Increased traffic volume on the new links will contribute to toll revenue growth.

• Job Creation: Infrastructure development will generate employment opportunities during and post-construction.

Revenue Forecast:

The enhanced traffic capacity is likely to boost toll revenue significantly, supporting the financial sustainability of the project.

Challenges and Future Outlook

While the approval is a positive step, there are challenges to address:

• Regulatory Compliance: Finalizing the concession agreements and ensuring legal clearance.

• Funding Structure: Efficiently balancing debt to maintain a healthy financial position.

• Traffic Management: Minimizing disruption during construction and integrating new links with existing roads.

Market Reaction:

Following the announcement, Ekovest’s stock is expected to gain traction, reflecting investor confidence in the company’s ability to execute large-scale infrastructure projects.

Ekovest’s Strategic Vision: Connecting the Klang Valley

Ekovest’s commitment to expanding the DUKE network reflects its strategy of enhancing urban infrastructure and supporting economic development. By increasing road capacity and reducing congestion, these projects are crucial for sustainable urban growth.

Key Takeaways for Investors:

• Growth Potential: Increased traffic and toll collection as the new links are completed.

• Infrastructure Development: Strengthening Ekovest’s portfolio of urban transit projects.

• Strategic Location: Linking key areas in Kuala Lumpur, fostering real estate value growth along the routes.

Conclusion: A Pivotal Move for Urban Mobility

The approval for DUKE Phase 2A links marks a significant milestone in Ekovest’s mission to enhance urban connectivity in the Klang Valley. As construction proceeds, the Laluan Istana Kiara and Kampung Baru Link will be instrumental in reducing congestion and supporting economic activity within Greater Kuala Lumpur.

As a strategic investment, the project aligns with Ekovest’s vision of building integrated, efficient, and sustainable transport networks. With expected growth in traffic volume and revenue, the DUKE Phase 2A expansion is poised to strengthen both urban mobility and Ekovest’s market position.

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