‘FIRMS BREACHED CONTRACT’
Cancellation of agreement a commercial decision, says DPM
ABREACH of contract led to the cancellation of the Bandar Malaysia project share sale agreement (SSA), Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said yesterday.
Describing it as a commercial decision, Zahid said the decision to cancel the agreement was made by TRX City Sdn Bhd’s board of directors, as the purchasing companies failed to settle the payments.
“I was informed that the payments had been delayed many times, probably more than 10 times. Hence, the SSA had to be cancelled due to the breach of contract,” he said, adding that Bandar Malaysia needed to be developed within the stipulated period.
“The cancellation was fully based on a commercial decision. When the buyers keep on delaying the payment, we have to see this as opportunity loss,” Zahid said after attending the Home Ministry’s monthly assembly here, yesterday.
Zahid said this when asked about the cancellation of the SSA between TRX City, Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (M) Sdn Bhd (CREC) for the Bandar Malaysia project.
On May 3, TRX City announced that the SSA with IWH and CREC, involving 60 per cent of the issued and paid-up capital of Bandar Malaysia Sdn Bhd, had lapsed due to failure of the purchasing companies to fulfil payment obligations.
It was reported that the consortium, IWH-CREC Sdn Bhd, had failed to pay RM7.42 billion for the 60 per cent stake despite it being granted repeated extensions since December 2015.
The Bandar Malaysia development is under the public-private partnership (PPP) model with an estimated cumulative gross development value of RM150 billion. The long-term project is expected to be completed over the next 30 years.