IWH-CREC involvement in Bandar Malaysia back on the cards

iskandar-waterfront-china-railway-bandar-malaysiaPETALING JAYA: Speculation is rife that the joint-venture between Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (CREC) will have its participation in the multi-billion ringgit Bandar Malaysia project reinstated after their initial plans collapsed in May.

The conglomerate stands a good chance to win the bid after Dalian Wanda Group, which was eyed by the Malaysian government for the project, were hit with restrictions resulting from China’s new capital control measures, The Star reported.

The report cited a construction analyst with a local banking group as saying that although a meeting in Beijing between Prime Minister Najib Razak and Chinese President Xi Jinping in May had indicated that China’s interest in the project had waned, its state-owned enterprises (SOEs) can benefit from the turn of events.

“We expect China’s government through its SOEs to be in a strong position to gain from the Wanda fallout,” the analyst, who reportedly declined to be named, was quoted as saying.

CREC is a state-owned holding company, under the Chinese government.

“After all, there are strategic interests in the project for the Chinese government and Malaysia can capitalise on this, while working on further deepening ties between the two countries,” the analyst was quoted as saying.

On May 3, TRX City Sdn Bhd which comes under the finance ministry, announced that the share sale agreement with Beijing’s CREC and IWH regarding the sale of 60% of Bandar Malaysia’s issued and paid-up capital had lapsed and was therefore terminated.

It said this was due to the failure of the purchasing parties to fulfill payment obligations.

Later the same month, Dalian Wanda Group chairman Wang Jianlin – China’s richest man – told the media in Beijing at a joint press conference with Najib that the company’s possible investment in the project would be “really huge”, estimating it at more than US$10 billion (RM44 billion).

“While we have not reached an agreement yet, I am here expressing my stance,” he was reported to have said.

However, the Wall Street Journal (WSJ) later reported that China’s banking regulators told executives of the country’s state-owned lenders that six of Dalian Wanda’s foreign acquisitions were subject to government capital restrictions.

In addition, Beijing was preventing the company from using funds parked on the mainland to further finance any of these deals, according to the report.

The Bandar Malaysia urban development project, with an estimated cumulative gross development value of RM150 billion, is planned on the site of the current site of the former Royal Malaysian Air Force base in Sungai Besi, on the outskirts of Kuala Lumpur.

Developed as a public-private partnership initiative, it is expected to be completed over the next 30 years.

It will also house the main terminal in Kuala Lumpur, for the planned KL-Singapore High Speed Rail (HSR) project which is expected to be ready by 2026.

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