Many Forest City contracts given to Malaysian firms, says Chinese developer

The site of the Forest City project in Johor. Its developer Country Garden Holdings said that over 40 per cent of contracts have been awarded to Malaysian companies in the second-stage development of the project for consultancy services and construct
The site of the Forest City project in Johor. Its developer Country Garden Holdings said that over 40 per cent of contracts have been awarded to Malaysian companies in the second-stage development of the project for consultancy services and construction materials.PHOTO: BLOOMBERG

KUALA LUMPUR • Chinese developer Country Garden Holdings said that more than 40 per cent of contracts have been awarded to Malaysian companies in the second-stage development of the Forest City project in Johor, refuting criticism that the project has not helped local companies or the population.

The Chinese developer also dispelled the view that the company is depending mainly on the sale of residential units for revenue.

Country Garden Pacificview president Yu Runze said that of its RM4.7 billion (S$1.5 billion) capital expenditure (capex) spent between early 2015 and last December, about RM2 billion, or 42.55 per cent, was spent on the services provided by local consultancy firms and construction materials.

This year, the property developer will spend a further RM5 billion in capex for facilities such as the Jack Nicklaus-designed golf course, another hotel and new infrastructure, as well as a factory to manufacture ready-to-assemble concrete structures like staircases, beams, columns and walls.

"Cement, sand and other materials were bought locally. We did not import them from China," Dr Yu told The Star daily. He said the Chinese developer also used local consultancies such as law firms, planners and architects.

"So, it is untrue to say that Forest City has not benefited Malaysia or its people," said Dr Yu.

He said Forest City is not just about marketing residential units. It is building whole townships with facilities and amenities to create a new destination.

OPTIMISTIC ABOUT PROJECT

If we are not confident about Forest City, we will not be investing some RM470 million to build a factory to manufacture ready-to-assemble concrete structures like staircases, beams and columns.

COUNTRY GARDEN PACIFICVIEW PRESIDENT YU RUNZE, dismissing talks that the developer is in fire-fighting mode.

Dr Yu also disputed the perception that the Chinese developer was in fire-fighting mode as a result of Beijing's capital controls, which have affected sales.

"The number of withdrawals is about 60, compared with the 15,000-unit sales by the end of 2016, the bulk of which were sold to Chinese buyers," he said.

"If we are not confident about Forest City, we will not be investing some RM470 million to build a factory to manufacture ready-to- assemble concrete structures like staircases, beams and columns."

Newswire agency Bloomberg has reported that the Forest City project - to be built on four artificial islands in the Strait of Johor facing Singapore - will house 700,000 people when ready.

THE STAR/ASIA NEWS NETWORK

A version of this article appeared in the print edition of The Straits Times on August 09, 2017, with the headline 'Many Forest City contracts given to Malaysian firms, says Chinese developer'. Print Edition | Subscribe