Analysts believe the requirement for bidders at Bandar Malaysia project’s request for proposal (RFP) to be affiliated to a Fortune 500 company is aimed at rebuilding the credibility and reputation of the RM200 billion project, reported The Sun Daily.
In issuing the RFP for Bandar Malaysia’s master developer, the Finance Ministry unveiled a new standard by requiring an interested firm or consortium to be an affiliate of a Fortune 500 company or an affiliate of a firm that has generated cumulatively in the past three years at least RM50 billion in revenue from the whole value chain of real estate and associated business.
It must also have an experience in international quality real estate development projects.
“It’s very critical to ensure that the project will take off, to avoid being another white elephant project,” said one analysts who refused to be named.
Another analysts sees the requirement as a way of attracting foreign investors.
“The Fortune 500 criterion tells you one thing: you need a foreign party. It hints at the direction for the investor selection. I think Fortune 500 is a branding, but there is not much chance for a local company to be selected on its own.”
He expects the winner to be another Chinese company, if not China Railway Engineering Corp (CREC), which is a Fortune 500 firm.
“Not many Western companies have strong cash flow. Looking at this, it would probably be a Chinese firm.”
Notably, China’s Wanda Group, which was ranked 385th on Forbes 500 List for 2016, has reportedly expressed interest in the Bandar Malaysia project.
This comes after the RM7.41 billion sale of a 60 percent stake in Bandar Malaysia to CREC and Iskandar Waterfront Holdings Bhd (IWH-CREC) as well as its appointment as master developer was scrapped due to the alleged failure of the buyer to meet payment obligations. This was, however, denied by IWH-CREC.
Tan Siang Hing, an analyst at PublicInvest Research, said a big company is needed given the development’s huge size.
“If they can bring in a good partner, it’s not difficult for them to catch up on the progress because the topography of the land is flat and fantastic.”
Image sourced from The Star
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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