PUTRAJAYA: The revived Bandar Malaysia project will include the Kuala Lumpur-Singapore High Speed Rail (HSR), although the actual HSR project has yet to be decided, said Prime Minister Tun Dr Mahathir Mohamad.
“We will have a station for the HSR in Bandar Malaysia. We need to decide on a suitable speed. It may not necessarily be 400kmph... that might reach Alor Setar. We would like to spend less, scale it down and perhaps do some adjustments first, ” Dr Mahathir told reporters after a signing ceremony between TRX City Sdn BHD (TRXC) and the IWC-CREC consortium.
There have been uncertainties surrounding the status of the HSR. Prior to this, Malaysia and Singapore have agreed to suspend the construction of the KL-Singapore HSR until May 31,2020, to enable both countries to find the best way forward for the project.
Dr Mahathir added that the Bandar Malaysia project would kick off soon.
“I told them to start immediately, as I want to see it for myself also, ” said Dr Mahathir, 94, drawing laughter from the reporters.
Yesterday, TRXC, a wholly owned subsidiary of the Minister of Finance (Inc) entered into a deal with IWH-CREC Sdn Bhd, the consortium comprising Iskandar Waterfront Holdings Sdn BHD (IWH) and China Railway Engineering Corp (M) Sdn Bhd (CREC), to develop Bandar Malaysia, with an estimated gross development value of RM140bil.
IWH-CREC is acquiring a 60% equity stake in Bandar Malaysia Sdn Bhd (BMSB), the project’s master developer, from its parent company TRXC.
Previously in April 2019, the Malaysian government approved the reinstatement of the project and welcomed IWH-CREC’s commitment into the project via the signing of the reinstatement of Bandar Malaysia Framework Agreement.
The 486 acre Bandar Malaysia is the largest piece of development land in the heart of Kuala Lumpur. It is located at the site of the Royal Malaysian Air Force facility in Sg Besi.
The payment by IWH-CREC for the 60% stake was anchored on Bandar Malaysia land valued at RM12.35bil.
The revived Bandar Malaysia deal will also see greater bumiputra participation throughout the project implementation and give priority for the use of locally-produced construction materials, technology and talent in the project.
“We have not decided on the percentage but it will likely be more than 30%, ” said Dr Mahathir.
In his speech, Finance Minister Lim Guan Eng said that in this revived deal, the staggered payment terms have been shortened and accelerated from the original seven years to three years to the benefit of the Malaysian government.
“The dividends from land sale will also be 50:50 between TRX and IWC-CREC from 40:60 previously, ” said Lim.
In addition to the original deposit sum of RM741mil, IWH-CREC will also pay an additional RM500mil as an advance payment.
The finance minister said Bandar Malaysia would bring substantive economic value to the nation with an expected GDV of RM140bil.
Under the new deal, Bandar Malaysia will be more rakyat centric as opposed to previously under 1MDB where the deal was driven by 1MDB Rationalisation Plan aimed at paying off 1MDB’s debts.
“We managed to double the number of affordable homes to 10,000 units. We will also create the 85-acre People’s Park, which will be a combination of a single contiguous built part and several satellite parts, ” said Lim.
Meanwhile, IWH executive vice-chairman Tan Sri Lim Kang Hoo said: “We are glad for the government’s strong support towards the Bandar Malaysia project and the IWH CREC consortium.
“Please allow me to reiterate IWH’s strong commitment to continually strengthen our collaboration with CREC and MoF Inc as a public-private partnership entity in order to achieve the aspirations of making Bandar Malaysia the game changer for the Malaysian economy.”
Bandar Malaysia aims to attract Fortune 500 global technology and entrepreneurial companies to establish their regional offices in Kuala Lumpur.
China Railway Group Ltd president Chen Yun said CREC is committed to creating a platform for China-Malaysia strategic cooperation and innovation exchange, fostering Malaysia’s digital innovation hub, and creating an image of a world-class city for Kuala Lumpur as a connection for transport, finance, data, cultures, enterprises and industries.
Analysts are positive on the revival of Bandar Malaysia on two fronts. Firstly, the increased participation of bumiputra companies will be the much needed spur for the Malaysian economy, which presently lacks a catalyst of growth.
The ECRL failed to excite the market, as the engineering, procurement, construction, commissioning contractor was China Communications Construction Co Ltd.
“If there are indeed more jobs for bumiputra companies, then this could be the much needed boost and multiplier affect needed for the Malaysian economy, ” said an analyst.
Concurrently, should the KL-Singapore HSR be revived, the analyst said construction counters may start to show some life.