After the Ministry of Finance’s (MoF) unit TRX City Sdn Bhd terminated the sale of a 60 percent stake in Bandar Malaysia last month, the Federal Government has formed a new management team to oversee the massive project, reported the Nikkei Asian Review.
On Wednesday (17 May), top MoF official Irwan Serigar Abdullah has been appointed to lead TRX City Sdn Bhd, which owns Bandar Malaysia. He has also been instructed to find a new master developer for the project by 14 July.
The authorities intend to transform the 2 sq km site formerly occupied by the air base in Sungai Besi into a mixed-use development containing a digital trading hub, transport centre and a rail terminus.
Situated 15 minutes from central Kuala Lumpur, Bandar Malaysia has a gross development value of more than RM160 billion and will be developed in over 20 years.
Touted as the biggest property development in the country’s history, the prime site will also feature the Malaysian terminus for the highly-anticipated 350km High Speed Rail (HSR) that will connect Singapore with Kuala Lumpur. In fact, the governments of both nations are set to call international tenders by end-2017 to begin the ambitious 10-year infrastructure project.
However, there are fears that delays in developing Bandar Malaysia might impact the HSR project.
According to Prime Minister Najib Razak, the new master developer of Bandar Malaysia needs to have “a proven track record, speed of delivery, and financial capability.”
When he attended the Belt and Road Forum for International Cooperation held earlier this week in Beijing, he met with China’s richest man Wang Jianlin, who is also the Chairman and Founder of Dalian Wanda Group, a company the Malaysian government is courting to participate in Bandar Malaysia after it scrapped the deal with its former partners.
On December 2015, a consortium consisting of Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC) won the tender to purchase a 60 percent stake in Bandar Malaysia from TRX City Sdn Bhd for RM7.41 billion (US$1.7 billion). They also forked out a 10 percent down payment upon signing of the agreement.
However, the deal was terminated last month due to IWH – CREC’s failure to fulfil its financial obligations despite repeated extensions granted by TRX City Sdn Bhd, which also refunded the down payment.
Notably, TRX City Sdn Bhd was previously owned by the troubled state fund 1Malaysia Development Berhad (1MDB), and the development of Bandar Malaysia, including the sale share, were among the moves undertaken to recover money from the debt-laden state fund.
In April 2017, 1MDB also agreed to pay US$1.21 billion (RM5.24 billion) to International Petroleum Investment Company (IPIC) in two tranches by July and December 2017. This is in a bid to settle a dispute in a 2015 agreement, in which the UAE state-owned fund agreed to lend US$1 billion to 1MDB and assume coupon payments on US$3.5 billion of its bonds in exchange for unidentified assets. However, 1MDB defaulted on the loan, resulting in the settlement.
Image sourced from AP
Radin Ghazali, Content Writer at PropertyGuru, edited this story. To contact her about this or other stories email radin@propertyguru.com.my
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