KUALA LUMPUR (Kyodo) -- Malaysia said Friday it will reinstate a multi-billion dollar property development project that was abruptly cancelled two years ago following a payment dispute.
Prime Minister Mahathir Mohamad said the original joint venture will have another go at developing Bandar Malaysia, a 486-acre commercial and residential development in the center of Kuala Lumpur.
The joint venture, IWH-CREC Sdn. Bhd, involves Malaysian firm Iskandar Waterfront Holdings Sdn. Bhd. and China Railway Engineering Corp.
The project was launched in 2011 by 1Malaysia Development Berhad, a scandal-plagued state fund, and has an estimated gross development value of 140 billion ringgit (about $33.79 billion).
In 2017, then Prime Minister Najib Razak terminated IWH-CREC's master developer contract for failure to meet payment obligations related to its purchase of 1MDB's share.
After Najib was ousted in last year's general election, the project and other big-ticket items he launched sat in limbo while Mahathir sought a review over their high costs and allegations of corruption.
In a statement Friday, Mahathir said the Cabinet had on Wednesday agreed to revive the Bandar Malaysia project and retain the original Malaysia-China partnership.
"The Bandar Malaysia project should be viewed within the larger context of fostering and cementing long-term bilateral relations between Malaysia and China while ensuring that such projects add maximum economic value to the country," he said.
IWH-CREC will make an advance payment of 500 million ringgit in addition to the original deposit sum of 741 million ringgit to be paid within 60 days from the date the government officially reinstates the project.
Mahathir said that under the new plan for Bandar Malaysia, there will be a "People's Park," 10,000 units of affordable homes, priority use of local content in the construction process and the participation of ethnic Malay contractors in the project.