Malaysian Deputy Prime Minister Ahmad Zahid Hamidi said on Thursday (11 May) that they scrapped the RM7.4 billion Bandar Malaysia deal with IWH CREC due to commercial reasons, reported Bernama.
In December 2015, the Ministry of Finance’s wholly-owned unit TRX City Sdn Bhd sold a 60 percent stake in Bandar Malaysia to IWH CREC, a consortium consisting of Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corporation (CREC) for RM7.4 billion. The buyers also paid a 10 percent down payment or RM741 million upon signing of the deal.
But last week, TRX City’s Board of Directors decided to terminate the share sale agreement (SSA) as the buyers have repeatedly failed to meet payment obligations despite extensions granted.
“The cancellation was 100 percent a commercial decision. It should be seen from the opportunity lost when the delay continued to happen,” said Ahmad Zahid, adding that the government wants Bandar Malaysia to be built within a specified period.
In fact, government officials insist that the deal with IWH CREC lapsed on 30 April after the joint venture failed to show proof that it has at least RM1.93 billion in funding that is required to carry out the relocation of the airbase in the Bandar Malaysia site.
Now the Malaysian government is wooing China’s Dalian Wanda Group to be the master developer of Bandar Malaysia, with The Straits Times reporting that talks have reached an advanced stage. The only thing required for it to proceed is the approval of China’s financial regulators.
According to unnamed financial executives, Dalian Wanda plans to use half of Bandar Malaysia for tourism and entertainment-related developments valued at around US$8 billion (RM34.74 billion).
Located on the former site of the Kuala Lumpur Air Base in Sungai Besi, the 197ha Bandar Malaysia is a massive prime land with a gross development value of about RM150 billion. It will also house the highly-anticipated High Speed Rail (HSR) that will connect Singapore with Kuala Lumpur.
Image sourced from Straits Times
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