Decision on $33bn Bandar Malaysia follows deal to restart China backed Rail Line.
The Malaysian Government plans to resurrect a multi-billion dollar property project in Kuala Lumpur involving a Chinese State Company, calling it a contribution to China’s Belt and Road infrastructure Initiative.
Prime Minister Mahathir Mohamad said the cabinet had agreed to reinstate Bandar Malaysia, which is expected to cost 140 billion ringgit (US$33.8 billion).
He said the project, which is 40% owned by the Government, would be developed with the same consortium partners, the Malaysian developer Iskandar Waterfront Holdings and China Railway Engineering Corp.
The 500-acre site will promote innovative urban development and serve as a hub for Global Finance, Technology and Entrepreneurial Firms, he added.
Bandar Malaysia was started by the indebted state fund 1MDB in 2011 but it later sold a 60% stake to the consortium. The Government also took over the 1MDB stake due to its debt problems, but the project was terminated by the previous Government in May 2017 due to a payment dispute with the consortium.
The 1MDB scandal led to the election defeat last May of former Prime Minister Najib Razak, who is currently on trial for alleged corruption.
The move to revive Bandar Malaysia comes a week after the government resumed a China-backed rail link project after the Chinese contractor agreed to cut the construction cost by one-third to 44 billion ringgit ($10.6 billion).
It also comes just days before Mahathir is to travel to China to attend the second Belt and Road forum next week.
Prime Minister Mahathir said Bandar Malaysia, like the Rail Project, would boost ties with China and add economic value.
He said the revived project would include 10,000 affordable homes and a people’s park and would prioritise the use of local construction material.
It was originally designed to house the main hub for a high-speed rail line connecting Singapore to Kuala Lumpur that would cut travel time to 90 minutes but Prime Minister Mahathir’s Government suspended the Rail Project on the grounds that it was too costly.
Prime Minister Mahathir said there would be “sufficient room for the station” if the government later decides to go ahead with the high-speed Rail Line.