Agree­ment with for­mer de­vel­op­ers has ex­pired, says TRX City Sdn Bhd

New Straits Times - - Front Page - ZARINA ZAKARIAH KUALA LUMPUR zari­naz@me­di­

BAN­DAR Malaysia, a mas­sive un­der­tak­ing here with an es­ti­mated gross de­vel­op­ment value of RM150 bil­lion, will have a new master de­vel­oper.

This fol­lows TRX City Sdn Bhd’s an­nounce­ment that the Ban­dar Malaysia de­vel­op­ment agree­ment with the con­sor­tium of Iskan­dar Wa­ter­front Hold­ings Sdn Bhd (IWH) and China Rail­way En­gi­neer­ing Corp (CREC) had lapsed.

TRX City, which is un­der the Min­istry of Fi­nance (MOF), yes­ter­day said the share sale agree­ment (SSA) signed with IWH and CREC on Dec 31, 2015, for the sale of a 60 per cent stake in Ban­dar Malaysia Sdn Bhd had lapsed. (The IWH-CREC con­sor­tium sub­se­quently on July 21 last year as­signed its ben­e­fits and re­spon­si­bil­i­ties to IWH CREC Sdn Bhd).

“This is be­cause, de­spite re­peated ex­ten­sions be­ing granted, IWH CREC failed to meet the pay­ment obli­ga­tions out­lined in the con­di­tions prece­dent un­der the SSA. As a re­sult, the agree­ment be­tween the par­ties stands null and void with im­me­di­ate ef­fect,” TRX City said.

It added that given a sig­nif­i­cant ap­pre­ci­a­tion in the value of the Ban­dar Malaysia land, TRX City’s sole share­holder, the MOF, would now re­tain 100 per cent own­er­ship of the site to “en­sure that the Malaysian peo­ple ben­e­fit from its de­vel­op­ment in its en­tirety”.

TRX City said it would im­me­di­ately be invit­ing ex­pres­sions of in­ter­est for the role of master de­vel­oper of Ban­dar Malaysia, with full own­er­ship be­ing pre­served by the MOF.

Ban­dar Malaysia, lo­cated on the old air­port site of the Kuala Lumpur Air Base in Sun­gai Besi, is ex­pected to be a cat­a­lyst for eco­nomic growth and na­tional de­vel­op­ment.

Deemed the big­gest de­vel­op­ment site in Malaysia in a key strate­gic po­si­tion, it would of­fer many busi­ness, in­vest­ment and employment op­por­tu­ni­ties, in­clud­ing Kuala Lumpur In­ter­net City, the hub for the new Dig­i­tal Free Trade Zone.

It will also be Malaysia’s trans­port nu­cleus, con­nect­ing the Kuala Lumpur-Sin­ga­pore High­Speed Rail, MRT lines, KTM Ko­muter, Ex­press Rail Link and 12 high­ways.

IWH and CREC won an in­ter­na­tional ten­der to se­cure rights as master de­vel­oper of Ban­dar Malaysia with a RM7.41 bil­lion bid to buy 60 per cent in­ter­est in the project. The gov­ern­ment, through the MOF, owns the re­main­ing 40 per cent.

It was pre­vi­ously re­ported that the Malaysia-Chi­nese joint ven­ture, split 60-40 be­tween the two part­ners re­spec­tively, made a 10 per cent down­pay­ment when it won the ten­der in De­cem­ber 2015.

The bulk of the funding was said to come from a con­sor­tium of banks led by the In­dus­trial and Com­mer­cial Bank of China and a clutch of lo­cal fi­nan­cial in­sti­tu­tions, such as Malayan Bank­ing Bhd, CIMB Group Hold­ings Bhd and RHB Bank Bhd.

Un­der the first phase of de­vel­op­ment, the joint ven­ture would as­sume own­er­ship of one-third of the to­tal Ban­dar Malaysia area, con­sist­ing mainly of the run­way strip at the mil­i­tary air­base.

In a state­ment is­sued late yes­ter­day, IWH CREC con­firmed re­ceiv­ing a no­tice of ter­mi­na­tion is­sued by TRX.

The con­sor­tium said it was con­cerned with the con­tent of the no­tice and sub­se­quent press re­lease is­sued by TRX, which “given the fac­tual ma­trix, does not fully and ac­cu­rately re­flect the cir­cum­stances and con­duct of the par­ties in this mat­ter”.

“We take this mat­ter very se­ri­ously, and we are re­view­ing the con­tent of the no­tice and press re­lease, with ad­vis­ers and le­gal coun­sel.

“A fur­ther an­nounce­ment on this mat­ter will be made in due course,” the state­ment read.


Ban­dar Malaysia is lo­cated at the old Kuala Lumpur Air Base in Sun­gai Besi.

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