The federal government has committed to invest an additional RM2.8 billion to complete the 70-acre Tun Razak Exchange (TRX) project to dispel fears that the authorities might abandon the new financial district, reported Reuters and Channel NewsAsia.
“Injecting RM2.8 billion, in addition to the RM3.7 billion transferred earlier to (developer) TRX City, will bring the total funding by the government to RM6.5 billion,” said Finance Minister Lim Guan Eng on Thursday (21 June).
“The alternative of not coming up with funding of RM2.8 billion and not completing the project is to pay RM3.51 billion in compensation, as well as an eyesore abandoned mega-project in the heart of Kuala Lumpur.”
This is because TRX City did not have enough funds for infrastructure works to complete the project and needed financial help from the federal government.
Notably, the new financial district features Southeast Asia’s tallest tower – the 492m Exchange 106, which is being built by Indonesia’s Mulia Group and is just months from completion. Aside from HSBC and Affin Bank, which purchased land parcels there, Australian developer Lendlease also agreed to build a mall and hotel in TRX.
In addition, Lim alleged that the reason why TRX City was struggling to complete its infrastructure is that out of the RM3.7 billion initial funding given to the developer, RM3.1 billion was misappropriated by its former parent company 1Malaysia Development Bhd (1MDB).
“This project is a classic example of how 1MDB has used its (funds) to pay off debts not related to this project.”
But completing TRX will help realise RM7.6 billion in the project’s value, and this will help recoup all embezzled funds, repay all loans, recover investments and opportunity costs and maybe even achieve a small surplus return, he estimated.
TRX City’s CEO Azmar Talib thanked the new federal government for not abandoning the project. The company, which is now a subsidiary of MoF, also plans to lodge a police report regarding the funds stolen by 1MDB.
Image sourced from World of Buzz
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