KUALA LUMPUR: Malaysia has received proposals from nine firms to develop the multibillion-dollar Bandar Malaysia project on 197ha of land where an air force base once stood.
Two of the proposals are from Japanese firms while the rest are from China’s state-owned entities.
Missing conspicuously from the list, so far, is the Dalian Wanda Group, whose chairman Wang Jianlin had in May told the media in Beijing at a joint press conference with Prime Minister Najib Razak 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 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 Straits Times reported today that the two Japanese giants which had made a bid to become the master developer of Bandar Malaysia were Daiwa House Industry Group and Mitsui Fudosan.
One of the firms bidding for it is Australia’s John Holland, but this firm is wholly owned by China Communications Construction Company (CCCC).
The report, quoting senior government sources, said the Chinese state-controlled entities that had submitted pitches to become master developer for Bandar Malaysia were CCCC, China State Construction Engineering, China Gezhouba Group, Greentown Overseas, China Resources, China Vanke and CCCC via John Holland.
The bids received feature development plans valued between US$7 billion and US$10.5 billion, according to Malaysian government officials.
The ST reported that several of the Chinese bidders had indicated they would hire renowned Spanish architect Santiago Calatrava to design the integrated township.
The Bandar Malaysia project, owned by 1Malaysia Development Berhad, had originally been awarded to China Railway Engineering Corp (CREC) and its Malaysian partner, Iskandar Waterfront Holdings (IWH), in December 2015 in a RM7.4 billion deal aimed at raising funds to tackle 1MDB’s massive debt burden.
However, 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. But the joint venture had disputed the termination, and called it “unacceptable”.
Bandar Malaysia’s request for proposal exercise was open only to Fortune 500 companies with combined revenue of RM50 billion or more in the past three years, according to the report.
The strong interest in the project is largely because it will house the terminus for the multibillion- dollar high-speed rail (HSR) project that will connect Kuala Lumpur with Singapore, another huge undertaking that could cost more than RM50 billion.
According to the ST report, the Japanese and Chinese are betting that the successful bidder in the real estate project would stand a better chance of securing a major role in the KL-Singapore HSR project
Over the past year, Beijing and Tokyo have actively lobbied government officials in both Malaysia and Singapore to promote the interests of their engineering and construction concerns.
The ST, quoting unnamed Malaysian government officials and financial consultants involved in the township and rail projects, reported that the Chinese government and its companies were the most aggressive in pushing their pitches.
The Chinese have already signed a RM55 billion contract to build the East Coast Rail Line, which is a 620km electrified network that runs all the way from Tumpat, located near the north-eastern border with Thailand, down the coast to Kuantan Port, before cutting through the mountainous central region of Peninsular Malaysia to Port Klang.