TRX City: Deal with IWH CREC on Bandar Malaysia lapses

PETALING JAYA: The consortium set up by Iskandar Waterfront Holdings Sdn Bhd and China Railway Engineering Corperation (M) Sdn Bhd (IWH CREC) is no longer the master developer of the RM200 billion Bandar Malaysia project due to its failure to meet payment obligations, according TRX City Sdn Bhd, a unit under the Ministry of Finance (MoF).
“This is because, despite repeated extensions being granted, IWH CREC failed to meet the payment obligations outlined in the conditions precedent under the share sale agreement (SSA). As a result, the SSA between the parties stands null and void with immediate effect,” TRX City said in a statement issued yesterday.
However, IWH CREC was quick to respond to the termination notice and statement by TRX City, saying the “factual matrix does not fully and accurately reflect the circumstances and conduct of the parties in the matter”.
“ICSB (IWH CREC Sdn Bhd) takes this matter very seriously and is at present reviewing the content of the termination notice and press release with its advisors and legal counsel. A further announcement on this matter will be made in due course,” it noted.
The acquisition of a 60% stake in Bandar Malaysia by IWH CREC from 1Malaysia Development Bhd (1MDB) for RM7.41 billion was announced in December 2015. This was part of 1MDB’s efforts to pare down its debts through asset monetisation.
TRX City said with the lapse of the agreement, it will be immediately inviting expressions of interest for the role of master developer of Bandar Malaysia.
TRX City stressed that given a significant appreciation in the value of the Bandar Malaysia land, its sole shareholder MoF will now be retaining 100% ownership of the site to ensure that Malaysians benefit from its development in its entirety.
"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.
TRX City noted that steps taken will ensure that there is no detrimental impact on the long-term development of Bandar Malaysia and that, upon its completion, the site will serve the national interest to an even greater extent than before. It added that Bandar Malaysia will be a catalyst for economic growth and national development.
"The biggest development site in Malaysia in a key strategic position, it will offer many business, investment and employment opportunities, including Kuala Lumpur Internet City, the hub for the new Digital Free Trade Zone. It will also be Malaysia’s transport nucleus, connecting the Kuala Lumpur-Singapore high-speed rail, MRT lines, KTM Komuter, Express Rail Link and 12 highways."