Govt revives Bandar Malaysia, IWH-CREC ups advance payment to RM1.24b

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KUALA LUMPUR (April 19): Prime Minister Tun Dr Mahathir Mohamad  today announced the revival of the Bandar Malaysia project, which was abruptly terminated in May 2017.   

The decision was made after due deliberation during a Cabinet meeting on Wednesday, Bernama quoted him as saying.

Dr Mahathir said Bandar Malaysia would have a significant impact on Malaysia’s economy and would serve as a global hub to further attract high impact global finance, technology and entrepreneurial firms.

The Prime Minister’s Office (PMO), in a statement, said IWH-CREC Sdn Bhd, the project’s master developer, is  committed to make an additional advance payment of RM500 million.

“The Government welcomes the commitment by IWH-CREC to make an advance payment of RM500 million, in addition to the original deposit sum of RM741 million, to be paid within 60 days from the date that the Government officially reinstated the project (April 17),” it said.

The sum of RM741 million was the deposit to acquire a 60% stake in Bandar Malaysia Sdn Bhd for RM7.41 billion. With this additional advance payment, the new deposit sum payable by IWH-CREC is RM1.24 billion.

The PMO noted that IWH-CREC Sdn Bhd had been chosen to take up the 60% stake in Bandar Malaysia via an open tender exercise that drew participation from over 40 world-renowned companies, including from Japan, Australia and the Middle East.

IWH-CREC is a 60:40 joint venture (JV) between Iskandar Waterfront Holdings Sdn Bhd (IWH) and state-owned China Railway Engineering Corp (M) Sdn Bhd (CREC). Businessman Tan Sri Lim Kang Hoo holds a 63% stake in IWH, while Kumpulan Prasaran Rakyat Johor Sdn Bhd owns the remaining 37%.

IWH’s 37.72%-owned public-listed firm Iskandar Waterfront City Bhd (IWC) saw its share price jump 16 sen or 18.6% to RM1.02 today, giving it a market capitalisation of RM853.12 million.

The counter was the second most actively traded on Bursa Malaysia today, on strong buying interest after speculation in the media that the project would be reinstated.

The PMO said the decision to proceed with the project was made as it met the Government’s requirement that the development will be people-centric and will add substantive value to the economy.

The project will also include the construction of a people’s park and 10,000 units of affordable homes, and there will also be Bumiputera participation at all levels and local content will be used in the construction process.

“Bandar Malaysia will have significant impact on Malaysia’s economy and will serve as a global hub to further attract high impact global finance, technology and entrepreneurial firms.

“The project is expected to generate tremendous impact on urban development for Malaysia drawing foreign direct investments and generating an expected gross development value of RM140 billion,” it said.

The PMO said the 583.37-acre Bandar Malaysia will draw major international financial institutions, multi-national corporations and Fortune 500 companies to locate their regional headquarters there.

“In addition, tech giants such as Alibaba and Huawei have also manifested interest to establish their ICT centres (there),” it said.

Bandar Malaysia will add further value to the economy via substantive job creation, acceleration of retail and institutional demand for commercial and residential space, moving SMEs up the value chain and stimulating demand for Malaysian-produced construction materials, technology and home-grown talent in advancing sustainable urban growth, said the PMO.

“Like the ECRL, the Bandar Malaysia project should be viewed within the larger context of fostering and cementing long-term bilateral relations between Malaysia and China while ensuring that such projects add maximum economic value to the country,” it added.

PMO said these two major projects will also be a significant contribution to the Belt and Road Initiative which Malaysia expects to be able to tap on and exploit its multiplier effects along the value chain.

“Bandar Malaysia will be a trailblazer in urban planning, being a transit-oriented development that will optimise the amount of residential, business and leisure space and contribute towards a greener environment by facilitating and incentivising the use of public transport over private vehicles,” it said.

“It should be stressed that the principle of integrity, accountability and transparency will remain paramount at all times. No corruption or any form of shady deals will be tolerated. This approach will prevent leakages, questionable dealings and abuse of power and will translate into massive savings for the Government,” it added.