PUTRAJAYA: The Bandar Malaysia project, which was previously linked to 1MDB, will take off soon after the government signed a deal with a consortium which includes a major Chinese company today.
In a joint statement, TRX City Sdn Bhd, a wholly owned subsidiary of the finance ministry, said it has entered into a deal with IWH CREC Sdn Bhd, the consortium comprising lskandar Waterfront Holdings (IWH) and China Railway Engineering Corporation (CREC), to develop Bandar Malaysia.
IWH-CREC is acquiring 60% equity stake in Bandar Malaysia Sdn Bhd, the project’s master developer, from its parent company, TRX City.
Putrajaya had approved the reinstatement of the project in April.
The signing ceremony for the revived multi-billion ringgit project was witnessed by Prime Minister Dr Mahathir Mohamad. Also present were Economic Affairs Minister Mohamed Azmin Ali, Finance Minister Lim Guan Eng and Transport Minister Loke Siew Fook.
A condition of the deal is that IWH-CREC, being the master developer, must build 10,000 units of affordable homes in Bandar Malaysia.
Bandar Malaysia will be located on 195.5ha in Sungai Besi in the heart of Kuala Lumpur, and the government is said to have requested for a 28.3ha park that will be the green lung in the centre of the massive development.
The consideration for the stake sale is anchored on Bandar Malaysia’s land valued at RM12.35 billion, the statement said. The project’s expected gross development value is RM140 billion, it said.
In the revived deal, the staggered payment term has been shortened from the original seven years to three years.
The statement also said that in addition to the original deposit sum of RM741 million, IWH-CREC will pay an additional RM500 million as advance payment, bringing the total advance to RM1.24 billion.
The project was cancelled by the then Barisan Nasional government in May 2017, citing that IWH-CREC had failed to meet payment deadlines for the purchase of a 60% stake in the project.
Bandar Malaysia will add value to economy, create jobs, says Mahathir
Mahathir welcomed the revised plan for Bandar Malaysia, saying it will add value to the economy through the creation of jobs and acceleration of retail and institutional demand for commercial and residential space.
He said the project will have a significant impact on the economy as it will serve as a hub to further attract high-impact global multinationals.
“It will allow potential co-action in the fields of finance, technology and entrepreneurship,” he said.
Mahathir said Bandar Malaysia will take into consideration the government’s policy of ensuring that such a massive development project will be people-centric.
This, he said, is in line with the philosophy of the Shared Prosperity Vision 2030 to boost the country’s economic growth.
“With an expected gross development value or GDV of RM140 billion, it will generate
tremendous impact on urban development for Malaysia to further draw foreign direct
investments,” he said.
Along the way, he said, the project will move small and medium enterprises up the value chain and stimulate demand for Malaysian-made construction materials, technology and home-grown talents in advancing sustainable urban growth.
“This is a vision and commitment that we share,” he said.
Mahathir said the Bandar Malaysia project should be viewed as a long-term development of over 20 years, and an opportunity to help shape Kuala Lumpur’s direction in the next few decades, especially as a potential transport hub which will change the way people travel.
He also spoke of the good relations between Malaysia and China where the “special bond goes back a long way”.
“It was cemented in 1974 when our second prime minister visited China which succeeded in opening up doors and paving the way for a relationship that has proven to be mutually beneficial,” he said.
At a press conference later, Mahathir was asked on the commencement date of the project, to which he said: “I told them to start immediately because I want to see it myself.”