KUALA LUMPUR -- Prime Minister Najib Razak announced on Wednesday a new management team to revive the stalled Bandar Malaysia development after a deal with a Chinese-led consortium collapsed.
Irwan Serigar Abdullah, a top finance ministry official, will run TRX City, which owns Bandar Malaysia, and has been told to name a master developer by July 14.
Development of Bandar Malaysia is part of the asset liquidation program for 1Malaysia Development Berhad (1MDB), a debt-laden state fund mired in financial scandal.
1MDB recently settled a dispute with an Abu Dhabi counterpart fund in a dispute regarding interest payments on two bonds worth $3.5 billion. It is due to pay International Petroleum Investment $1.2 billion by year's end, and negotiate further debt obligations.
The government plans to turn a 2-sq.-km area in a former military base into Bandar Malaysia. Situated 15 minutes from central Kuala Lumpur, the iconic development will include a transport center, rail terminal, and digital trading hub.
China Railway Engineering, a unit of China Railway Group, and local partner Iskandar Waterfront Holdings won for 7.41 billion ringgit ($1.7 billion) in late 2015 the bid for 60% of Bandar Malaysia and development rights. The deal was abruptly cancelled by TRX City on May 3 on the grounds of payment defaults.
Valued at over 160 billion ringgit over 20 years, and touted as the largest real estate development in the country's history, Bandar Malaysia will include the terminus for a planned 350km high-speed rail to Singapore. Both countries are due to call international tenders by the end of the year to kick start the ambitious 10-year project.
Any delays developing Bandar Malaysia will further burden 1MDB and threaten the rail project with Singapore.
Najib said the master developer will need "a proven track record, speed of delivery, and financial capability." During a recent trip to China, Najib met Wang Jianlin, founder and chairman of property developer Dalian Wanda Group, the country's largest commercial property developer. They discussed Bandar Malaysia, according to state news agency Bernama.