BANDAR MALAYSIA TO GET NEW MASTER DEVELOPER
Agreement with former developers has expired, says TRX City Sdn Bhd
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.