Economist: Drop China, appoint Japan to develop Bandar Malaysia

Hoo-Ke-PingPETALING JAYA: Malaysia would benefit more if the Japanese, not the Chinese, were to build Bandar Malaysia, said an economic analyst.

Hoo Ke Ping said this was because the Japanese would provide jobs and help spur Malaysia’s economy.

“They will only bring in their systems, design, blueprint and engineers.

“They will buy steel from us because steel in Japan is expensive. They will not bring in tiles, construction materials or their workers,” he told FMT.

Hoo was responding to the finance ministry’s move on May 3 to terminate a 2015 share sale agreement between TRX City and the consortium comprising Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corporation (CREC).

TRX City said this was due to IWH CREC’s failure to complete the RM7.41 billion purchase of 60% equity, even after 12 extensions.

Speaking to FMT, Hoo said there might be zero growth if China continued investing in Bandar Malaysia.

“This is proven from the second link in Penang. They brought their restaurants, secretaries, workers, steel and bricks.

He said currently, Malaysia’s housing bank loans made up 30% of all financial loans. Some of the loans were for housing projects that were overpriced, especially in 2014 and 2015, and which were now valued at much less, he said.

With TRX City, he added, there would be an excess of office and residential units within the city.

“And due to that, if there are more long-term infra loans, it might lead to a crisis.”

Most of the financial crises in the world were due to property loans, he said.

“Property crisis leads to banking crisis. This leads to a currency crisis.”

Due to that, he said, the Bandar Malaysia project should be done in phases.

“Whoever comes in must be able to hold on to the project and go slowly, so that there will not be too much development or excess in property in the Klang Valley,” he said.

Only the Japanese had the cash to do so, he added.

He said this could be seen in Japanese investments in India and Indonesia. In India, Japan had signed deals amounting to US$20 billion to build a high-speed rail, and more agreements would be signed to further develop the line to connect the entire country, he said.

Japan has also signed deals with Thailand amounting to US$8 billion to build a high-speed rail from Chiang Mai to Bangkok.

Hoo added that the Japanese political situation was strong and positive, and their interest rate was low.

Meanwhile, he said, China was facing financial problems and a shortage of US dollars.

Bandar Malaysia, which will be developed on the former Sungai Besi airbase site, is poised to be a catalyst for economic growth and national development. Among others, it will feature the Kuala Lumpur Internet City, the hub for the new digital free trade zone.

It will also be Malaysia’s transport nucleus, connecting the Kuala Lumpur-Singapore high-speed rail, MRT lines, KTM Komuter, Express Rail Link and 12 highways.