(Bloomberg) -- Malaysia is reviving a property and transport hub worth 140 billion ringgit ($34 billion) started by troubled state fund 1MDB, adding to the list of projects the government is resuming.
The cabinet agreed to reinstate the Bandar Malaysia project in an April 17 meeting, Prime Minister Mahathir Mohamad said. The project will be developed with its original partners, Iskandar Waterfront Holdings Sdn. and China Railway Engineering Corp, which own a 60 percent stake in the joint venture with the rest owned by the government, he said.
The country has brought back large state projects after embarking on budget-reduction measures last year. Earlier this month, Malaysia struck a deal with China to resume the East Coast Rail Link at a lower cost, with the government seeking to further reduce the price tag, Mahathir said.
Bandar Malaysia, conceived under 1MDB, was announced in 2011 by former leader Najib Razak, who now faces multiple charges linked to the scandal-ridden state fund. It was set to become a transport hub for the now-suspended high-speed rail connecting Singapore to Kuala Lumpur, as well as the Malaysian capital’s commuter lines and major highways. As 1MDB’s finances worsened in 2015, the state fund signed a deal to sell 60 percent of the project to China Railway and Iskandar Waterfront.
Bandar Malaysia was canceled by the previous administration in 2017, and not by Mahathir.
The revived project will include 10,000 affordable home units and prioritize local content in the construction process, Mahathir said. China Railway and Iskandar Waterfront must make a 500 million-ringgit payment within 60 days of the project’s reinstatement, he said.
Shares of Iskandar Waterfront City Bhd. surged 19 percent to the highest level since April 2018 as of the close in Kuala Lumpur.
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