Malaysia's Pakatan Harapan government yesterday revived the RM140 billion (S$46 billion) Bandar Malaysia project that was started by former premier Najib Razak, and Prime Minister Mahathir Mohamad said the development will house a high-speed rail (HSR) station, as originally planned.
Tun Dr Mahathir said that although Malaysia and Singapore have yet to decide on the stalled HSR project, Bandar Malaysia, located at the southern edge of Kuala Lumpur, will have a stop for the rail line.
"We have not decided on the HSR project itself, but yes, it (Bandar Malaysia) will have an HSR station," he told a news conference after witnessing the signing of the Bandar Malaysia deal in Putrajaya.
The 350km HSR line was meant to cut down rail travel time between Kuala Lumpur and Singapore to 90 minutes, with stops in southern Malaysian states. The line was slated to have a terminus at Bandar Malaysia and another at Jurong East in Singapore.
The project with Singapore was suspended last September, with the two countries saying the HSR construction would be shelved until the end of May next year. The Malaysian media has estimated its cost at RM110 billion.
"We would like to spend less money, it is very expensive, this high-speed rail. Maybe we can scale down or do some adjustments to reduce the cost, or maybe less speed can contribute to cost reduction," Dr Mahathir said.
"It need not necessarily be as fast as 400kmh. If it travels that fast, it might just speed all the way to Alor Setar. So, we will look into what is a more suitable speed," he added.
Dr Mahathir said talks on the project's revival might include how to scale it down. On the Bandar Malaysia project, the Mahathir administration said it is selling a 60 per cent stake in a Finance Ministry company, the project's master developer, to a Malaysia-China consortium for RM6.45 billion. The government will retain a 40 per cent stake.
With the revised plan, more affordable housing units will be built, along with a larger green space, while the government is set to receive higher dividends from land sales within the 197ha site.
Construction is expected to begin soon, although officials indicate further discussions.
"I think very soon. I told them to start immediately because I want to see (it) myself," quipped the 94-year-old Prime Minister.
Under the new terms, Malaysia's Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC) will pay for the 60 per cent stake based on the project's land, valued at RM12.35 billion. Deducting its Islamic bond debt of RM1.6 billion, the stake is estimated at RM6.45 billion.
Dividends from land sales are divided 50-50 between the government and IWH-CREC, a 10 percentage-point increase for the government from the original deal.
The project was fraught with problems at the start as it was under the oversight of a firm linked to scandal-plagued state fund 1Malaysia Development Berhad.
"The present government revived the deal after the necessary detoxification exercise proved that it can still generate economic benefits on urban development for Malaysia," Finance Minister Lim Guan Eng said yesterday.
