PUTRAJAYA (BERNAMA) - The termination of the share sale agreement (SSA) for the Bandar Malaysia development project was a commercial decision, said Malaysian Deputy Prime Minister Ahmad Zahid Hamidi on Thursday (May 11).
The Board of Directors of TRX City made the decision to cancel the SSA because there was a breach in the terms of the contract when the purchasing parties repeatedly failed to meet payment obligations.
"Bandar Malaysia must be built according to a specified period. We see this from the legal standpoint, effect of the delay, and the decision was made.
"For sure, the cancellation decision was 100 per cent a commercial decision. It should be seen from the opportunity lost when the delay continued to happen," he told reporters after the Ministry of Home Affairs' monthly gathering.
Last week, Prime Minister Najib Razak's administration cancelled its deal with Malaysia's Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corporation (CREC) to buy a 60 per cent stake for RM7.4 billion (S$2.4 billion) in Bandar Malaysia and work as its master developer under an agreement signed in December 2015.
The 197ha township is located on the southern edge of downtown Kuala Lumpur and will house the terminus for the high-speed rail (HSR) line from Singapore.
The Bandar Malaysia project, which is expected to be completed over the next 30 years, is owned by scandal-scarred state investment firm 1Malaysia Development Berhad (1MDB).
The RM7.4 billion stake sale to IWH-CREC was part of a government plan to reduce 1MDB's debts.
Officials involved in 1MDB's debt restructuring had said the government's agreement with IWH-CREC lapsed on April 30 after the two companies failed to come up with proof of funding for RM1.93 billion. The amount was needed to carry out the relocation of the airbase.
According to the officials, CREC also failed to secure the necessary regulatory approvals from China before the deadline late last month.