Bandar Malaysia — the waiting game continues

The deal which could have also been a major milestone between the 2 govts, somehow fell apart on May 3, 2017

by FARA AISHAH/ pic by ISMAIL CHE RUS

IN THE beginning, everything looked peachy. The idea was to develop a piece of sophisticated property called Bandar Malaysia that would incorporate
all the modern amenities and facilities money could buy.

With an estimated cumulative gross development value of RM200 billion, it piqued the interests of international developers particularly in China and Japan.

Companies and huge developers queued up to present their proposals that could easily spell massive profit.

In the end, a consortium formed by Tan Sri Lim Kang Hoo’s Iskandar Waterfront Holdings Sdn Bhd and China Railway Engineering Sdn Bhd “won the battle” in December 2015, and managed to wrestle a 60% stake in Bandar Malaysia.

However, the deal which could have also been a major milestone between the two governments, somehow fell apart on May 3, 2017, as the consortium failed to meet payment obligations, as announced by the Finance Ministry (MoF) under the then ruling government.

Following the cancellation of the contract, speculations were rife that the then Barisan Nasional (BN)-led government would strike a new deal with China’s real estate giant Dalian Wanda Group.

The MoF then issued the request for proposal for the appointment of Bandar Malaysia’s master developer.

It was also announced that the master developer would be a Fortune 500 company with cumulative revenue of above RM50 billion.

That was then. No news on potential bidders has been heard ever since.

Post-GE14

The 500-acre (202ha) project — which was supposed to house the terminus of the Kuala Lumpur-Singapore high-speed rail (HSR) line — had been thrown into the wilderness after its initiator, the BN-led government, was ousted after the 14th General Election (GE14) last year.

The Pakatan Harapan decided to go back to the drawing board and reviewed the entire project.

As a result, discussions were held between the authorities of Singapore and Malaysia which resulted in the indefinite postponement of the HSR project that was deemed too expensive.

HSR was reported to cost a total of RM110 billion including financing charges. In July last year, MP Tony Pua (Pakatan Harapan-Damansara), who is also Finance Minister Lim Guan Eng’s special officer, revealed in Parliament that while the previous government claimed the Bandar Malaysia project had attracted a lot of potential investors, records stated the number of developers who came forward was “zero”.

As expected, some property players said the Bandar Malaysia project may have lost its colours without the HSR, despite being located in the most
prime land in the country.

However, some property players said the land may be able to fetch a higher valuation — even without the HSR — as it appreciates over time.

Bandar Malaysia, located on the old Sungai Besi Air Force base, is still viewed as having great potential if it is being developed with careful planning.

The People’s Project

Bandar Malaysia was not only meant for the rich as the former Prime Minister (PM) Datuk Seri Mohd Najib Razak said that 5,000 affordable homes were also planned to be developed there.

It was then lauded as a brilliant proposal by the previous government to provide affordable homes with good infrastructures for the people.

Some property players said it could still be the main theme for the project to move forward.

Knight Frank Malaysia Sdn Bhd MD Sarkunan Subramaniam told The Malaysian Reserve in a recent interview that the government would have to redraft and revise Bandar Malaysia’s master plan and objectives.

It would either be “a concrete commercial jungle or cater to the need of the people”.

Sarkunan said “it was such a waste” if the land — that would be the ideal location for affordable homes — is given to “politically inclined companies”,
similar to the situation with the previous government, to build high end projects.

He added that there is no need to give the tender to international developers as some Malaysian developers are capable of building the central
transportation hub.

The current government may now need a longer time to figure out the next step for the Bandar Malaysia development.

In addition, the government also has many other mega projects to address, including the Tun Razak Exchange which is almost completed.

Once the government is done focusing on the other projects and has regained its financial strength, its focus can finally be directed to Bandar Malaysia.