KUALA LUMPUR - Malaysian Prime Minister Najib Razak announced on Wednesday (May 17) the government is calling for proposals for a master developer to work on the country's largest property project, Bandar Malaysia.
Datuk Seri Najib also clarified that the government's decision to terminate its deal with the consortium of Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corporation (CREC) is final and the deal "will not be reinstated".
"Given the importance of this project, it is critical that Bandar Malaysia has the right leadership, the right partners and the right ownership structure to ensure that its full potential is realised," Mr Najib said in a statement on Wednesday (May 17).
The Ministry of Finance (MOF) will retain full ownership of the project, with the ministry's secretary-general Tan Sri Irwan Serigar Abdullah appointed as the chairman of both TRX City and Bandar Malaysia.
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TRX City is the MOF entity that owns the Bandar Malaysia land. It was a subsidiary of state-owned 1Malaysia Development Berhad (1MDB) before being placed directly under MOF as part of the government's plan to rationalise 1MDB's US$11 billion debt.
Mr Irwan said in a separate statement that TRX City will be conducting a request for proposal process, with submissions due by June 30 and the final decision on the master developer to be made by TRX City in consultation with MOF by July 14.
Earlier this month, TRX City announced the termination of the RM7.41-billion deal to co-own and develop Bandar Malaysia with the IWH-CREC consortium, surprising most observers. The initial plan was for the consortium to take up 60 per cent ownership of the project, with TRX City keeping the remaining 40 per cent.
However, TRX City said the deal was off due to the consortium's failure to meet payment obligations. IWH-CREC had disputed the termination and called it "unacceptable".
Mr Arul Kanda Kandasamy, president of the beleaguered 1MDB, was removed as chairman of Bandar Malaysia. The government has not provided an official explanation for Mr Arul's removal, but Mr Najib said on Monday that Mr Arul would be consulted on the project.
It is unclear how big a role Mr Arul would be playing.
The statement on Wednesday included a brief description of the new chairman Mr Irwan's responsibility, which includes overseeing 1MDB's real estate assets.
"He will head a team with overall responsibility for these projects and the monetisation of 1MDB's remaining real estate assets," Mr Najib said.
Mr Najib added that the work of the Budiman Committee to supervise the 1MDB rationalisation exercise "will come to an end".
Bandar Malaysia, located on the fringe of Kuala Lumpur, is to house the Kuala Lumpur-Singapore high speed railway terminus, with the government planning to turn the area into a transport hub.