Feasibility Study
Feasibility Study
Feasibility Study
PROGRAMME CODE:
AP224 SEMESTER 05
SESSION : OCTOBER 2022 – MARCH 2023
COURSE / CODE : CONSTRUCTION ECONOMICS III (BQS 606)
LECTURER : SR NOOR AISHAH BINTI MOHAMAD HAMDAN
PREPARED BY:
GROUP : AAP224 5A
Table of Content
1.0 WHAT IS FEASIBILITY REPORT? ..........................................................................................2
1.1 What Is Mixed-Used Development? ......................................................................................3
1.2 Background Of Project ...............................................................................................................5
1.2.1 Building Included In The Project ...........................................................................................6
1.2 Basis Of Estimate Cost ..........................................................................................................7
1.2.1 Cost Included / Excluded...................................................................................................8
2.0 DEVELOPMENT PROCESS ................................................................................................9
2.1 The Local Authority Involved in The Proposed Development Project .......................................9
2.1.1 Local Authority .............................................................................................................9
2.1.2 One Stop Center Unit (OSC)......................................................................................... 11
2.2 Procedures Development Plan ............................................................................................ 13
2.2.1 Collecting Technical Data (Non-Mandatory) ................................................................. 14
2.2.2 The Consideration of The Development Plan ................................................................ 15
2.2.4 Construction Site Monitoring and Interim Inspection Notification.................................. 19
2.2.5 Final Examination Notification Stage I And Stage II........................................................ 20
2.2.6 Deposit of CCC and G Forms ........................................................................................ 22
2.3 Time Frame ....................................................................................................................... 25
3.0 SCHEDULE OF AREA ............................................................................................................ 31
3.1 Building Plan ........................................................................................................................... 33
3.1.1 Single Storey Terrace House (600mm x 2100mm) ............................................................... 33
3.1.2 Double Storey Terrace House (Premier) (7000mm x 2300mm)............................................. 33
3.1.3 Double Storey Terrace House (Deluxe) (7000mm x 2300mm) .............................................. 34
3.1.4 Double Storey Shop Lot (6000mm x 2100mm) .................................................................... 35
4.0 VIABILITY REPORT........................................................................................................... 36
A) Pre-Development Cost .............................................................................................................. 36
B) Construction Cost...................................................................................................................... 37
5.0 CONCLUSION ......................................................................................................................... 39
REFERENCES............................................................................................................................... 40
1.0 WHAT IS FEASIBILITY REPORT?
Feasibility studies are detailed assessments of the viability of a potential project. Besides,
In the Software Development Life Cycle, feasibility studies are the second primary phase. Before
undertaking any design or construction project, a feasibility study is essential. Various variables
are included in the study report to determine a venture's success, such as technical, economic,
legal, operational, and scheduling factors. This study aims to determine whether the information
system can be implemented once a rough specification of the system has been developed.
Moreover, it will determine whether enough revenue will be generated to cover the project's
expenses. The project client or the consultant will work out the project feasibility study traditionally
by considering financial issues, such as the return on investment, demand and supply in the
market, and risk analysis on the market conditions (Shen et al., 2010).
Mixed-use developments are not standardized products. This is because it can be built in an
urban or suburban area, depending on the location. Other than that, mixed-use development can
be formed into 4 groups which are: -
1. First, it can be a single high-rise building on a single site with at least two uses integrated
into it. This type of mixed-use development typically has retail at street level, offices above
the retail, and either hotel rooms or residential units above the offices.
2. Secondly, two or more high-rise buildings may have different uses on one site. An office
building generally combines a residential tower (a condominium building) and a hotel.
Hence, each user can also have retail, but differently.
3. The third type of mixed-use development combines several low-rise structures on one site
with retail on the ground level, residential units above, and office space above.
4. Lastly, it can be a single mid-rise building on a single site with retail on the ground floor
and residential or office above. Depending on the developer's insights and opportunities,
any of the four types of mixed-use developments in the preceding paragraph may be built
in an urban or suburban area or be considered an expansion.
Otherwise, mixed-use development has two differentiating terms, which are “cornerstone
use” and “dominant use”. In any project, the cornerstone uses are the most economically viable
and profitable. Moreover, it guides decisions regarding the suitability and compatibility of other
project uses. Next, the dominant use is the one that occupies the most space in the project. Even
if it is not the cornerstone, the dominant use must have a strong financial foundation.
1.2 Background Of Project
The proposed development site is located at Batu Gajah, Perak. Spanish Anyelir Garden
is a new urban construction planning project built on 9 acres of land located in the Batu Gajah,
Perak. In this project, residential and commercial components are included in the integrated
development plan. Spanish Anyelir Garden designed with the concept of Andalusian Islamic
culture, Spain. Thus, Throughout the environment, residents will be able to enjoy a beautiful and
wide view of the lake. Other than that, there will also be various access and facilities surrounding
this new development project in Batu Gajah. In addition, it will be easier for residents to move
from one place to another in the new urban project area thanks to a wide range of access points
and public transportation facilities. A TOD (Transport Oriented Development) located just
1kilometer from Batu Gajah KTM station and the ETS line, the Spanish Anyelir Garden is just
one-kilometer away from the train station. With the latter, you can travel hassle-free up to
Thailand's border and down to Kuala Lumpur. There are many routes and infrastructures in Batu
Gajah. By highway and by KTM (ETS Line), Ipoh-Lumut is easily accessible. Having good
interstate connectivity means you do not have to drive yourself. Those working in Kuala Lumpur
and Penang can enjoy optimal lifestyle options. Hence, Spanish Anyelir Garden built by a
developer with extensive experience in the field of housing sector construction namely Team Keris
Berhad in collaboration with the Batu Gajah District Council.
For this project, there was a mix used development so there are several types of building included.
As we known that mix use development provides variety function of building in one place and
provides facilities towards the users. Then, Spanish Anyelir Garden give various choices to the
people which are: -
Single-Storey Terrace
Characteristic: -
• Size: 6m x 21m
• 4 Bedrooms
• 2 Toilets
• Open Space Parking
An estimated cost for a project is based on a basis of estimate (BOE), a document that
outlines the assumptions and methodologies used to generate the estimate. Generally, it is used
to explain how an estimate was developed, as well as to ensure transparency and accountability.
Other than that, bidding contractors can use this report to determine the ability of the contractor
to complete the project based on the data and narrative information provided. It is important that
the BOE include a description of the work that is being estimated, as well as the assumptions and
constraints considered while developing it. It may also include supporting documentation, such
as estimates of labor or material costs, or references to industry standards or best practices used
to develop the estimate, as well as a detailed explanation of the estimate.
Due to the feasibility study being prepared at the initial stage of the project, a lot of data
are not known and determined yet. Thus, a lot of assumptions are made for the calculation. The
basis for calculating the gross development cost will be based on the relevant Cost Book released
by BCISM, similar past projects, and a common yardstick used in a viability report. Meanwhile,
the gross development value is based on the current market price for the buildings that are similar
in their built areas and specifications.
The cost listed below will be the main costs that are included in the feasibility study.
Meanwhile, the following are the costs that will be excluded in the preparation of this feasibility
report:
The “Majlis Daerah Kinta Barat” (MDKB) was established on 01 September 1979 under the Local
Government Act 1976 (Act 171). On 26 March 2009, MDKB was renamed to “Majlis Daerah Batu
Gajah” (MDBG). As an organization placed under the jurisdiction of the Ministry of Housing and
Local Government (KPKT), MDBG is also responsible for the Planning and Development of its
administrative area to create and give development to a pattern of prosperous, cultured, and
knowledgeable community life to move towards the next era. MDBG's objectives are:
The location of Majlis Daerah Batu Gajah is Jalan Haji Abdul Wahab, Kampung Bendera, 31000
Batu Gajah, Perak.
Figure 2.2: Location of Majlis Daerah Batu Gajah
2.1.2.1 Introduction
One Stop Center (OSC) is a local centre established to ensure the implementation of improving
the delivery system can be implemented more efficiently and comprehensively to increase the
effectiveness of public services and stimulate economic growth in the nation. OSC will
simultaneously process applications for land development (Section 124A and 204D NLC),
planning permission, and building plans.
The Implementation of the One Stop Center is a novel approach to shortening the period
of time for the approval of land development as an alternative to accelerating the approval
process and directly disclosing land delivery system procedures and processes of land
development proposal to local authorities in order to provide a comprehensive, accurate, and
timely service to the public.
There are three (3) objectives of One Stop Center as shown below:
i. Coordinate and expedite the approval process for land development applications in PTG and
PBT, including applications for planning permission, building plans, and other plans.
ii. Shorten the time norm and facilitate the application process for planning permission, building
plan, and land development application certificate for Build Then Sell (BKJ) concept, High
Impact Projects, Foreign Investment, and Government Projects within four (4) months and
under the Sell Then concept Build (JKB) within six (6) months.
iii. To standardise the procedure and process for applications for planning, building plans, and
land development applications in accordance with the National Land Code 1965 (Act 172)
and the Drainage, Roads, and Buildings Act 1974. (Act 133).
2.1.2.3 The Role and Duties of The One Stop Center (OSC)
For the role and responsibilities of the One Stop Center (OSC), seven (7) roles have been listed:
The Chairman of the OSC Committee is responsible for evaluating and deciding whether to
approve, not approve, or approve with plan amendments planning permission applications,
building plans, engineering plans, and other related plans, as well as certifying land development
applications. If the Chairman is unable to carry out his duties, the Deputy Chairman will assume
those responsibilities. In this instance, the Council Secretary is proposed as the Deputy Chairman,
and the Chairman first appoints the Council Secretary to the OSC Committee.
There are six main processes that are still maintained in the OSC 3.0 Plus Manual, and they
are as follows:
For the purpose of gathering relevant data, applicants are encouraged to conduct technical
information collection sessions. However, helping applicants get accurate information before
designing and creating plans and documents with the intention of submitting a formal application
is a non-mandatory procedural requirement. Subject to adherence to the list of documents
outlined in the OSC 3.0 Plus Manual, applicants who do not carry out the information collection
process will not affect their right to submit a formal application.
In this process, applicants known as PSP/SP apply or visit the relevant agency to gather
information (if required). All agencies/technical departments internal and external will have
records of the date of receipt of the application for information or receipt visit from the applicant/
PSP/ SP. After receiving an application or visit from the applicant, PSP, or SP, they will give
advice, prepare, and supply the information within a reasonable time. PSP or SP will record and
collect information from relevant agencies.
2.2.2 The Consideration of The Development Plan
OSC must receive a copy of the technical review from the Agency/Technical Department
and record the date of receipt. Then, OSC receives and coordinates the “Kertas Perakuan” from
the Approval Department and records the date of receipt. The OSC shall coordinate the
preparation of the “Kertas Perakuan” to be discussed in the OSC Pre-JK meeting. The OSC
then gets ready for the pre-JK OSC meeting. The OSC is required to compile a list of
unsuccessful applications during the maturity period and create a meeting agenda. He must also
send a meeting invitation to:
a. Approval or Note: For consideration of JK OSC for the first time and the second time.
b. Rejection or Note: For consideration of JK OSC for the first time and the second time.
c. Approval With Plan Amendment or Notes: For JK OSC consideration for the first time only.
Finally, the OSC prepares the results of the meeting. Update the meeting result
information in the OSC V3 KPKT portal. OSC also needs to prepare notification letters and cover
letters as follows:
OSC distributes the Letter of Notification of the JK OSC Meeting to the Approval
Department to issue an official approval (final approval) and copy it to the applicant/ PSP/ SP
for document preparation. PSP/SP receives a copy of the meeting decision notification letter for
the preparation of the official approval document (final approval) from the OSC within 5 days
from the date of the JK OSC meeting. PSP/SP provides official approval documents and
payment of charges or any related fees.
2.2.3 Notification of Construction Work Start
The main objective of the notification of the construction work procedure is to give an official
notification to be recorded by the PBT and agency/technical department before the work on the
construction site starts. PSP/SP receives notification and complete form B (Mula kerja tanah
dan kerja bangunan) and submit notification of start of construction work to OSC. OSC receives
and records the notification of the start of construction work along with documents from the
applicant/ PSP/ SP. OSC prepares cover letters, document distribution and records of the date
of distribution of notification of the start of construction work to the agency:
i. External Technical Agencies:
a) Tenaga Nasional Berhad (TNB)
b) Indah Water Konsortium (IWK)
c) Public Works Department (JKR)
d) State Water Authority (PBAN)
e) Occupational Safety and Health Department (JKKP)
f) Malaysian Fire and Rescue Department (JBPM)
g) Solid Waste Management and Cleaning Corporation (SWCorp)
iii. OSC also distributes a copy of the cover letter to the applicant/ PSP/ SP
At this stage, it is appropriate for Local Authorities to visit the site where noncompliance is
frequently ordered to be corrected immediately. Consequently, repeat visits are encouraged. As
a response to the developer's application, Majlis Daerah Batu Gajah conducts this procedure to
inspect the proposed development. The plan for the new development, which has been
approved by Majlis Daerah Batu Gajah, should be brought to the site visit for new development
inspection as a guide for the engineers in charge of the project to inspect each corner of the
building structure.
In addition, local authorities must ensure that the building's condition is safe and in
accordance with the law. The contractor, engineer, and developer are involved in monitoring.
The structure of the building should be compared to the plans, including distance measurements
and the number of rooms depicted. The inspection of the toilet, windows, doors, and walls
reveals that the dimensions of each space in the building should conform to the specifications
outlined on the blueprint. Similarly, utilities such as electricity and water should be functional if
there is damage or a structural violation of the plan, CCC and should not be removed, and the
developer should work with their consultants to address the issue.
Additional inspections are conducted in the building's environment. The local authority
(LA) is responsible for ensuring the safety and comfort of a residence. If there are problems or
defects with the building, the developer must repair or correct them before obtaining approval to
occupy the new housing from the local authority (LA). This inspection revealed no deficiencies,
and all spaces correspond to the approved blueprints.
At this stage, OSC formalises and monitors the final inspections conducted by six different
agencies. The final inspection is conducted when all physical work and final finishing has been
completed for the entirety of the scope of work specified in Form G, particularly the scope of
work for the Agency/Technical Department that will issue clearance/ qualification/ confirmation
as follows:
i. Scope of work of the State Water Authority (PBAN)
iii. The scope of work of the Local Authority Engineering Department (PBT)
iv. The scope of work of the Public Works Department (if involving JKR roads)
v. The scope of work of the Malaysian Fire and Rescue Department (JBPM)
vii. The scope of work of the Department of Occupational Safety and Health (JKKP)
Before submitting the Final Inspection Notification, PSP/SP shall ensure that all corrective actions
directed by the Local Authority and Agency/Technical Department have been implemented. The
PSP/SP is required to submit the Final Inspection Notification directly to the relevant
Agency/Technical Department and a copy to the PBT Building Department and OSC Unit. Thus,
agencies are well-informed about the systems installed prior to inspection, which expedites the
process and enables immediate issuance of clearance letters on inspection dates. PBT and
Agencies/Technical Departments are not permitted to impose any conditions or technical
requirements on PSP, nor are they technically new.
Figure 2.9: Process 5 Final Inspection Notification Workflow Chart
Before issuing a certificate for the issuance of CCC, PSP must ensure that all Forms G1 to G21
have obtained a letter/certificate of release/qualification/confirmation from the relevant
Agency/Technical Department. Prior to submitting a copy of the CCC to the developer/owner, a
PSP who has certified the issuance of the CCC must deposit a copy with the Local Authority
(PBT) and Professional Board, as required by section 25(3) of the Uniform Building Bylaws of
1984. PSP must complete Form G and Form F/ F1 (CCC) and submit them to OSC when
accepting and distributing CCC deposits. Before completing the CCC deposit procedure with
the PBT and Malaysian Architects Board/Malaysian Engineers Board, it is not recommended
that the PSP hand over the CCC to the owner/developer. OSC must record the date of receipt
of the CCC deposit and PSP documents.
Prepare cover letter, circulation and record of CCC deposit circulation date along with
documents and a copy of the cover letter for PSP as follows:
Department Municipality Building is responsible for confirming receipt and recording the date of
receipt of the CCC deposit along with documents from OSC upon receipt and recording of the
CCC deposit.
C. Fees for Applications that have been rejected in the OSC Committee Meeting
i. A new fee must be submitted which is half of the original fee amount.
A Building Schedule of Areas illustrates the sizes of all the spaces described in a Building
Performance Specification. Other than that, the Performance Specification gives an estimation of
the size of all the named spaces in the Building Schedule of Areas. The area needs to be drawn
to scale in a 'box' form with the size noted. It should be drawn to scale as a 'box' with the area
size noted. So, it also helps to identify the specification for every parts included in the project.
Figure 2.14 shown the example schedule of area in a project.
3.6 Ground Floor and First floor for Double Storey Shop Lot
4.0 VIABILITY REPORT
A) Pre-Development Cost
Item Description Unit Qty Rate Amount (RM)
A PRE-DEVELOPMENT COSTS
1 Soil investigation
-4 number/acre no 36 3,500.00 126,000.00
Plan & Submission fees,
2
contributions, etc
-RM 150k/acre acre 9 150,000.00 1,350,000.00
3 Contribution
a. TNB L/S 10,000.00
b. LAP L/S 3,000.00
c. IWK
-1.65% of income L/S 1,871,631.30
d. JPS
-RM 4,000/acre acre 9 36,000.00 324,000.00
e. TM L/S 5,000.00 5,000.00
f. CIDB
-0.125% of Construction cost L/S 88,904.75
4 Survey work
-RM100,000/acre acre 9 100,000.00 900,000.00
5 Professional fees
-Fees 10% L/S 7,112,380.00
-Service Charge 6% L/S 4,267,428.00
Developer's overhead &
6
management cost
-2% construction cost L/S 1,422,476.00
7 Sales & Marketing & Legal fees
-1% income L/S 1,134,322.00
TOTAL PRE-DEVELOPMENT COST 17,480,820.00
Table 1: Pre-development Cost
B) Construction Cost
1. Building Cost
Cost/m
GFA Cost/Unit
Item Description 2 (GFA) Unit Amount (RM)
(m2) (RM)
(RM)
B BUILDING COST
1 1-storey Terrace (20'x70') 93 1,800.00 167,400.00 251 42,017,400.00
2-storey Terrace Deluxe
3 223,600.00 39 8,720,400.00
(22'x75') 172 1,300.00
2-storey Terrace Premier
4 258,000.00 46 11,868,000.00
(22'x75') 172 1,500.00
5 2-Storey Shop-Office (20'x70') 230 1,600.00 368,000.00 8 2,944,000.00
TOTAL BUILDING COST 65,549,800.00
Table 2: Building Cost
2. Infrastructure Cost
Amount
Item GFA (m2) Unit Qty Rate (RM)
(RM)
C INFRASTRUCTURE COST
1 Site Preparation
-RM 500,000/acre acre 9 500,000.00 4,500,000.00
2 Earthwork
-RM 10,000/acre acre 9 10,000.00 90,000.00
3 Roadwork
-RM 20,000/acre acre 9 20,000.00 180,000.00
4 Storm water drainage
-RM 12,000/acre acre 9 12,000.00 108,000.00
5 Sewerage reticulation
-RM 16,000/acre acre 9 16,000.00 144,000.00
6 STP
-RM 10,000/acre acre 9 10,000.00 90,000.00
7 Water reticulation & hydrants
-RM 12,000/acre acre 9 12,000.00 108,000.00
8 TNB substations no 1 120,000.00 120,000.00
9 External M&E services
-RM 20,000/acre acre 9 20,000.00 180,000.00
10 Landscape
-RM 6,000/acre acre 9 6,000.00 54,000.00
TOTAL INFRASTRUTURE COST 5,574,000.00
Table 3: Infrastructure Cost
3) Gross Development Cost
Item Description Cost (RM) Total Cost (RM)
71,123,800.00
C. Preliminaries
= RM39,721,191.00 X 100
RM99,628,809.00
5.0 CONCLUSION
From the viability report above, it can be concluded that the project is viable and recommended
to proceed. The total estimated gross development cost is RM 99,628,809.00 and the total
estimated gross development value is RM 139,350,000.00. Bringing a total of RM 39,721,191.00
estimated gross profit for the proposed medium-sized mixed property development project.
With the project’s return on investment (ROI) above 30 per cent, the project can be considered
viable and it is recommended for the client to proceed with their investment.
REFERENCES
Laman Utama. Portal Rasmi PLANMalaysia@Perak (Perancangan Bandar Dan Desa Perak
Darul Ridzuan). (n.d.). Retrieved January 2, 2023, from
https://planmalaysia.perak.gov.my/index.php/muat-turun-kebenaran-merancang/carta-alir-
proses-km.
Portal rasmi Majlis Bandaraya Ipoh (MBI). (n.d.). Retrieved January 2, 2023, from
https://www.mbi.gov.my/sites/default/files/kpkt_manualosc_3.0.pdf.
Portal Rasmi Majlis Daerah Batu gajah. Laman Web Rasmi Majlis Daerah Batu Gajah - Utama.
(n.d.). Retrieved January 2, 2023, from https://www.mdbg.gov.my/index.php.
Primuscoreadmin. (2022, February 3). One stop center unit (OSC). Official Portal of Kluang
Municipal Council (MPK). Retrieved January 2, 2023, from
https://www.mpkluang.gov.my/en/department/project-management/one-stop-center-unit-
osc.