By REUTERS / Pic By MUHD AMIN NAHARUL

Malaysia said yesterday a committee will review the US$100 billion (RM410 billion) Forest City real estate project, a day after Prime Minister Tun Dr Mahathir Mohamad said foreigners would not be granted visas to live there.

Dr Mahathir’s comments were a setback for Chinese developer Country Garden Holdings Co Ltd as it tries to revive faltering demand in the project on Malaysia’s southern tip.

“We will form a committee to study and review whatever terms that were agreed to previously,” Housing and Local Government Minister Zuraida Kamaruddin (picture) said at a press conference.

“We will engage with all the agencies involved and also the developer. Then, we see what is the best way forward,” the minister said, according to a recording of the press conference.

Shares in Hong Kong-listed Country Garden, China’s largest property developer by sales, fell as much as 3.5% in early trade yesterday following Dr Mahathir’s announcement.

The Forest City project, which is envisaged to eventually house 700,000 people on reclaimed land near Singapore, has faced uncertainty since Dr Mahathir’s coalition won a shock victory at the May general election.

The project, along with several other infrastructure mega projects backed by Chinese money, became fodder for Dr Mahathir’s election campaign when he tapped into public displeasure over a perceived overdependence on Chinese capital.

Country Garden Pacificview Sdn Bhd, a joint venture between Country Garden and the Johor state government to develop Forest City, said in a statement on Monday that Dr Mahathir’s comments “may have been taken out of context”.

The company said Dr Mahathir had responded positively during a meeting two weeks ago with Country Garden chairman Yeung Kwok Keung, and that the company has complied with all necessary regulations in developing the project.