THE fight to develop Bandar Malaysia is turning into a battle of heavyweights from China and Japan.

At stake is not only the most expensive piece of real estate in the country but an opportunity to build the terminus for the high-speed rail link to Singapore – a definite advantage in snaring the contract to build the rail link.‎

Government sources told The Malaysian Insight that ‎Mitsui, Daiwa, China State Construction and China Resources are among companies which have submitted bids to become the master developer for Bandar Malaysia in response to a request-for-proposal (RFP) due tomorrow.

Their bids said to exceed US$8 billion (RM34.4 billion) dwarf ‎the previous agreement to develop Bandar Malaysia torn up by the Ministry of Finance (MoF) after certain conditions were not met.

While the project has attracted the interest of Chinese companies, the entry of two Japanese conglomerates is surprising, indicating the thinking in Tokyo that its companies need to be involved in ‎Bandar Malaysia to stand a chance of being in the running for the high-speed rail project. 

Bandar Malaysia will be home to the terminus for the ambitious rail link between the two countries at the tail-end of the Asian continent.

The Malaysian government is expected to award the master ‎developer later this year and all agreements will likely be signed before the general election due by mid-2018. 

The reason for the haste: the billions of ringgit earned from the sale of master development rights will be used to repay debts incurred by state investor 1Malaysia Development Berhad (1MDB).

In May, the MoF cancelled the contract to develop Bandar Malaysia awarded in 2015 to the Sino-Malaysia joint venture, Iskandar Waterfront Holdings and China Railway Engineering Corporation. The ministry said the consortium had failed to meet payment obligations despite repeated extensions. 

In 2015, the IWH-CREC consortium acquired a 60% stake in Bandar Malaysia for RM7.41 billion. 

Following the controversial cancellation of the contract, which was initially contested by IWH-CREC, Putrajaya flirted with the idea of signing a contract with China real estate giant Dalian Wanda. 

The Malaysian Insight understands that despite enthusiasm by Prime Minister Najib Razak ‎for the Dalian Wanda deal, Beijing didn’t encourage it, making it clear that it would prefer the involvement of a state-owned enterprise, given the importance of the project.

A decision was then made by the MoF to issue a RFP and invite companies with Fortune 500 pedigree and with RM50 billion in revenue in the last three years.

Treasury secretary-general Irwan Serigar Abdullah, who is the 1MDB chairman, announced yesterday that the deadline for the RFP was July 20 and that several bids have already been received.

However, no other details have been disclosed. – July 19, 2017.