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Wednesday May 19, 2010

Sg Besi land transfer to 1MDB

PETALING JAYA: The Government will transfer ownership of the prized land in Sungai Besi, currently the base for the Royal Malaysian Air Force, to 1Malaysia Development Bhd to be developed into a multi-billion ringgit commercial project, akin to an “urban renewal project,” said a source.

“It will basically be a left hand, right hand transfer. The Government has entrusted the land to 1MDB, which is a wholly-owned government agency, which will then be responsible for unlocking the value and maximing returns from the land.

“1MDB will manage the entire process and with the mandate as a land owner, it will woo foreign parties to contribute to foreign direct investments in the country,” said a source close to the plans.

It is believed that the massive project will be developed through a joint-venture with Qatar Investment Authority (QIA), which only recently signed a memorandum of understanding with 1MDB for a strategic real-estate development in the Klang Valley.

It was announced earlier that a joint committee would be set up by 1MDB and QIA to assess the viability of real-estate opportunities along with other investments. QIA has proposed to invest some US$5bil in these projects.

According to sources, 1MDB may also tap the expertise of another of its foreign partners, Abu Dhabi’s Mubadala Development Co, which it had tied up with early this year to explore clean technology projects and investments, including the possibility of building Malaysia’s first carbon-neutral city.

However, at this stage, a source said, no property developer – local or foreign – had been identified to participate in the project.

It is believed that top officials of 1MDB, a strategic development fund, had visited Abu Dhabi recently and were briefed by Mubadala on Plan Abu Dhabi 2030 – a massive and highly ambitious urban structure framework plan to develop the city.

“Mubadala’s track record is impressive and they have a lot of experience, so 1MDB will be working closely with them and leverage on their expertise.

“These are the building blocks. 1MDB does not claim to be an expert but it has good relationships with those who are, so we can leverage on their capabilities,” the source said.

Sources said the final details of the partnership with QIA would be worked out within 30 days.

“The development (on the Sungai Besi land) has to be green (environmentally friendly), very organised, liveable and people centric. It’s timely that KL has urban renewal projects with wide open public spaces, public parks and library, gathering places and so forth. That’s what 1MDB is looking to have currently ,” the source said.

The fund, the source said, was in the process of selecting the master planners or architects for the project. Once the plan was done, sources said, the land would be parcelled out.

“1MDB will remain in total control of the master plan together with its joint partner throughout this project,” he said.

Two days ago, the Royal Malaysian Air Force (RMAF) chief Datuk Seri Rodzali Daud was quoted by Bernama as saying that the Government had not made a request yet but the RMAF was ready to shift its base from Sungai Besi to enable the base to be developed as a commercial hub.

“Shifting the RMAF base from Sungai Besi to Dengkil is still in the planning stages…I do not want to elaborate but the Government has plans. But on our side, we will be ready,” he had said.

It is believed that the Sungai Besi land is also being sought after by other interested parties.

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