KUALA LUMPUR, Aug 18 — One of the joint-developers of London's iconic Battersea project, SP Setia, said yesterday it expected the cost of the second phase of development to top the initial estimate of £750 million (RM4.1 billion), Nikkei Asian Review reported.
The developer’s deputy president Wong Tuck Wai was quoted saying the higher-than-expected budget was due to changes in design made by developers of the defunct power plant site to accommodate larger built-up area.
The budget also swelled to account for higher inflation and anticipated currency fluctuations, he added.
"The cost will increase due to inflation, design and building envelope," Wong was quoted saying at the company's earning briefing.
"To mitigate some of the increase, we have changed procurement strategy from design-and-build contract to construction-and-management contract for phase two and three."
Wong did not disclose the amount of the new budget.
Sime Darby Bhd and SP Setia each owns 40 per cent stake in the mixed-use project sprawling 17 hectares, while Malaysia's state-run Employees Provident Fund owns the remainder 20 per cent.
Both SP Setia and Sime Darby are owned by the government through Ministry of Finance Incorporated.
When fully developed, the project will house more than 4,000 apartments, technology firm Apple's office campus, and an underground train station.
SP Setia reported a nine per cent increase in net profit in the second quarter from a year earlier, driven mainly by continued progress of its Battersea Power station project, the company said yesterday.
Net profit for the three months ended June 30 totalled RM136.32 million compared with RM125.78 million in the previous year.
But its quarterly revenue plunged 22 per cent year-on-year to RM794.71 million from RM1.01 billion due to completion of several development projects.
