Gov't to keep Bandar M'sia land after RM7.41b deal collapses

3 May 2017, PM 6:59 (Updated 3 May 2017, PM 7:14)

The RM7.41 billion deal which would have seen a consortium between Johor-based Iskandar Waterfront Holdings (IWH) and China Railway Engineering Cooperation (CREC) acquiring a 60 percent stake in Bandar Malaysia has failed to materialise.

TRX City Sdn Bhd in a statement today said the share sale agreement (SSA) entered into on Dec 31, 2015 with the consortium lapsed.

"This is because, despite repeated extensions being granted, IWH-CREC failed to meet the payment obligations outlined in the conditions precedent under the SSA.

"As a result, the share sale agreement between the parties stands null and void with immediate effect," it said.

Prime Minister Najib Abdul Razak was to visit the Bandar Malaysia site at 5pm today but the event was abruptly cancelled.

Instead, TRX City's statement was issued shortly after.

The Bandar Malaysia deal was previously touted as part of the 1MDB rationalisation plan to pare down its debt.

The 486-acre prime land in Sungai Besi, or Bandar Malaysia, had since been transferred and placed under the Finance Ministry.

TRX City said the government will now shelve its plan to sell the land.

"Looking ahead, given a significant appreciation in the value of the Bandar Malaysia land, TRX City's sole shareholder the Ministry of Finance will now be retaining 100 percent ownership of the site to ensure that the Malaysian people benefit from its development in its entirety.

"TRX City will immediately be inviting expressions of interest for the role of master developer of Bandar Malaysia, with full ownership being preserved by the Ministry of Finance," it said.

TRX City said there will be a stringent selection process for the master developer of Bandar Malaysia.

"The selection process will involve very strict criteria, including track record, speed of delivery and financial capability for such large scale development.

"This is to enhance all aspects of Bandar Malaysia, including its role as a business, transport, residential and tourism hub," it said.