Malaysia announced yesterday that it is officially seeking a new master developer for the country's largest property project, Bandar Malaysia, with the government retaining 100 per cent ownership of the development.
Prime Minister Najib Razak, in a statement, also refuted reports that the project's previous agreement involving a Malaysia-China consortium could be revived, saying that termination of the deal was "final" and it "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," he said.
A firm owned by Malaysia's Ministry of Finance (MOF), TRX City, two weeks ago abruptly cancelled a deal with consortium Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC) to co-own and develop Bandar Malaysia, citing failure to meet payment obligations.
The cancellation raised eyebrows as the government had sold a 60 per cent stake to IWH-CREC for RM7.41 billion (S$2.4 billion) at the end of 2015 to sharply reduce the debts of scandal-tainted state fund 1Malaysia Development Bhd (1MDB).
The 197ha Bandar Malaysia land, now used as a military airbase, is located at the southern edge of downtown Kuala Lumpur. It is to be developed into a township and transportation hub, including the terminus station for the high-speed railway from Singapore.
Datuk Seri Najib announced that MOF secretary-general Irwan Serigar Abdullah will be chairman of both TRX City and Bandar Malaysia. Mr Arul Kanda Kandasamy, president of 1MDB, was removed as Bandar Malaysia's chairman.
Size of the stake that the government intends to hold in Bandar Malaysia. Some analysts say the move to retain full ownership might help Mr Najib blunt criticism that he was selling out Malaysian interests.
TRX City today owns the Bandar Malaysia land, an asset formerly housed under 1MDB.
Tan Sri Irwan said in a separate statement that submissions for the request for proposal process has commenced, with submissions due by June 30. The final decision on the new master developer will be made by TRX City and his ministry by July 14.
China's Dalian Wanda, owned by tycoon Wang Jianlin, last week expressed interest in investing some US$10 billion (S$13.9 billion) in Bandar Malaysia after a meeting with Mr Najib.
At a brief press conference in Beijing, Mr Wang said: "Wanda is interested in developing cultural and tourism infrastructure projects. While we are not signing an agreement today, I am here expressing our stand."
Mr Irwan said yesterday that parties interested in becoming the master developer must be able to display speed of delivery and "financial capability to deliver a project of this scale".
Malaysia has returned to IWH-CREC the 10 per cent deposit for the aborted RM7.41 billion deal, but one Malaysian official said the consortium could still have a role in the development.
Minister in Charge of Economic Planning Abdul Rahman Dahlan said on Tuesday: "During his trip to Beijing, the PM has made it clear that the new consortium can include the previous consortium players. They can still participate, as long as the numbers are okay."
Datuk Seri Rahman said a new tender that is beneficial to the country is needed because the value of the land has "appreciated a lot".
Some analysts say the move to retain 100 per cent ownership of Bandar Malaysia might help Mr Najib reduce criticism that he was selling out Malaysian interests by allowing China to hold stakes in big development projects.
"Right now, Najib is sending the signal to Malaysians he is not selling out to China. It is all perception," said Professor James Chin, director of the Asia Institute at University of Tasmania.