1MDB, Malton to redevelop RMAF base

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KUALA LUMPUR: The cabinet has agreed in principle to entrust the task of redeveloping the Sungai Besi Royal Malaysian Air Force (RMAF) base to a consortium of companies that include 1Malaysia Development Bhd (1MDB), sources say.

The other members of the consortium are Lembaga Tabung Angkatan Tentera (LTAT) and Datuk Desmond Lim of Malton Bhd, they say. It cannot be ascertained if Malton or Lim, through his private company, has a stake in the consortium.

It is learnt that the mandate of the consortium is to develop the 162-hectare site into a multi-billion-ringgit Islamic financial centre. This is in line with the government’s plans to enhance Malaysia as a regional Islamic financial centre.

The sources say the government will also ink an agreement with the Qatar government that will commit an undertaking for major investments in Malaysia. The investments will be jointly undertaken with 1MDB and may likely include the redevelopment of the Sungai Besi RMAF base.

It is said that 1MDB would hold 30% interest in the consortium while Lim or Malton would hold 40%. LTAT would hold the remaining 30%.

The Sungai Besi airport, which served as the country’s first international airport from 1952 to 1965, was eyed by many parties as it is probably the last major tract of land that is located close to the city centre and has the potential for a multi-billion-ringgit redevelopment. It borders the Sungai Besi Highway at one end and Taman Seputeh and Istana Negara at the other.

“The decision to develop the base into an Islamic financial centre was made by the cabinet recently. It was with the view of promoting Malaysia as an Islamic finance hub in this region. It will ultimately create a platform for all Islamic finance-related  institutions to set up base,” said a source.

It is learnt that the runway will be maintained so that private jets can fly in corporate big-wigs to do business in the financial district. There will also be a helipad.

“The other areas inside the base such as the nine-hole golf course and existing quarters housing RMAF personnel will be redeveloped,” said a source.

Last month, it was reported that plans to redevelop the Sungai Besi airport had resurfaced but both Defence Minister Datuk Seri Ahmad Zahid Hamidi and Federal Territories and Urban Wellbeing Minister Datuk Raja Nong Chik Raja Zainal claimed they were not aware of any such plans.

However, it is learnt that members of the golf club and the RMAF officials have been told to look for alternative sites. The cost of relocating the base and the golf course will be borne by the consortium undertaking the redevelopment of the base.

It is not clear if the project was tendered out but according to officials in the property development industry, they were not aware of any exercise by the government calling for expression of interest in the redevelopment of the base.

One of Prime Minister Datuk Seri Najib Razak’s plans to increase government revenue is to redevelop land held by government agencies. In this respect, he announced the development of the Rubber Research Institute land in Sungai Buloh by the Employees Provident Fund (EPF) last month.

He had said that this was to pave the way for the EPF to be directly involved in the economic activities of the country.

It has been reported that apart from the RMAF, the Sungai Besi base also houses the police air wing, the air unit of the Fire and Rescue Department (Bomba) and the Royal Selangor Flying Club. The RMAF units housed in the base include the 10th Squadron, which maintains the Nuri and Blackhawk helicopters for utility and other purposes. The other RMAF operations there are the Aerospace Medical Institute as well as the RMAF museum.

This article appeared in The Edge Financial Daily, May 13, 2010.