A 296ha urban development near Kuala Lumpur that was to have been carried out by a consortium including the government of Malaysia, a local developer and a Chinese contractor has been called off.
Iskandar Waterfront Holdings (IWH) and China Railway Engineering will not proceed with the Bandar Malaysia scheme by mutual agreement, the parties said in a joint statement, reports Reuters.
The two were to have spent $1.8bn on acquiring a 60% equity stake in the Bandar Malaysia mixed-use project from the 1MDB sovereign wealth fund, however this deal lapsed after a failure to meet conditions, according to the statement issued on Wednesday.
The mixed-used scheme was originally designed for the northern terminus of a high-speed rail line connecting Singapore to Kuala Lumpur, but that project was scrapped in January (see further reading).
The Bandar Malaysia project was originally organised by then-Prime Minister Najib Razak to ease the debt burden left by the notoriously corrupt 1MDB, but this collapsed in May 2017 over payment disputes.
Bandar Malaysia, owned by TRX City, a subsidiary of the Ministry of Finance, was reinstated in April, 2019, but now seems to have been definitively abandoned, at least in this form.
IWH and China Railway Engineering had paid a $300m deposit to the government last year to allow them to start work on Bandar Malaysia, and IWH made plans for a $1.2bn listing in the first half of 2021.
TRX City said it remained committed to the project, and that any future business and commercialisation plans would "take into account market conditions and the national socio-economic agenda".
It added that China Railway Group would continue to work with TRX City in any future plans.
Image: Artist’s rendering of the planned 200ha Bandar Malaysia business district in Kuala Lumpur (TRX City)
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