Conspiciously missing from the revival of the Bandar Malaysia property development fanfare is the role of the Ministry of Finance.
From the government side, the key persons are Economic Affairs Minister Datuk Seri Azmin Ali and Prime Minister Tun Dr Mahathir Mohamad. Azmin signed the framework agreement for the reinstatement of Bandar Malaysia while Dr Mahathir made the announcement last week.
Neither Finance Minister Lim Guan Eng nor the secretary-general of the ministry Datuk Ahmad Badri Mohd Zahir had said much although Bandar Malaysia Sdn Bhd, which holds the 484 acres, is an entity within the ambit of the ministry.
The chairman of Bandar Malaysia is Datuk Asri Hamidon who is also deputy secretary-general of the Finance Ministry. Asri, who heads all investments of MoF, is the chairman of 1Malaysia Development Bhd and TRX City Sdn Bhd, the company which owns the TRX Exchange development.
Sources say that the matter has not come up to MoF because what has been signed is only a “framework” to reinstate the project.
The details of the framework are being worked out between the government and the joint venture of Iskander Waterfront Holdings- China Railway Engineering Corp (IWH-CREC).“It’s only a framework agreement between the government of Malaysia and IWH-CREC. The developer has conditions to fulfil under the terms to reinstate the project. Notably IWH-CREC has to put down the deposit of RM1.24bil, which is a huge amount.
“As long as Bandar Malaysia is under the MoF, the matter has to come to the ministry eventually for signing. Generally when the government agrees to the framework, the MoF representative would sign off,” says a source.
IWH-CREC joint venture is led by Tan Sri Lim Kang Hoo who is making a second attempt to undertake the development of the single largest piece of property development project in the city.
Based on history, the approval from MoF is crucial if IWH-CREC is to see through its second bid for Bandar Malaysia.
IWH-CREC made its first bid for Bandar Malaysia in 2015 when the land was under 1MDB, which was under the watch of former Prime Minister Datuk Seri Najib Razak and Arul Kanda.
After a tender process, IWH-CREC won the mandate to development Bandar Malaysia. Real estate firm CH Williams Talhar & Wong ran the tender process for 1MDB, where Arul was the president and chief executive.
The outcome was announced before the end of 2015 because the sale of Bandar Malaysia was an integral part of the restructuring of the debts of 1MDB.
In May 2016, the certainty of IWH-CREC completing the deal with the MoF became a subject of speculation as 1MDB’s debt problems were increasingly a thorn in the flesh for Najib. 1MDB wanted to close the deal fast as it needed the money to meet its mounting debt obligations.
Eventually, 1MDB had to seek assistance from the MoF, which resulted in the latter taking control of the beleaguered fund.
On May 31, 2016, former Treasury secretary-general Tan Sri Irwan Siregar helmed the board of 1MDB. A year later, TRX City Sdn Bhd, announced that the agreement with IWH-CREC had lapsed because the latter did not meet the financial obligations.
Bandar Malaysia’s parent company is TRX City which in turn is owned by the MoF.
Irwan had announced that an international tender would be called to seek expressions of interest for Bandar Malaysia. However, it did not materialise.