Even sans HSR, Bandar Malaysia retains its allure

PETALING JAYA (June 2): The 486-acre Bandar Malaysia development in Sungai Besi, which was to house the terminus of the recently-stopped Kuala Lumpur-Singapore high-speed rail (HSR) line, is still attractive thanks to its strategic location and two future mass rapid transit (MRT) stations coming up there, reported The Edge weekly.

“If developed properly and professionally, the long-term value of this piece of real estate can be unlocked and realised,” said Bangi MP and Ministry of Finance (MoF) special officer Ong Kian Ming in an e-mail to the paper.

Market observers concur, given the site’s prime location and high connectivity to KL’s city centre and the south – it enjoys access to the heart of the city via the SMART Tunnel and to Putrajaya via the Maju Expressway.

They even suggest that the government could sell the land piecemeal to the highest bidder.

“The land is in a very prime area for future development, and many developers are eyeing it. Even without the HSR, the land will be able to fetch a higher valuation, probably even exceeding the earlier valuation that IWH CREC [Sdn Bhd] was willing to pay,” said an observer.

In 2015, IWH CREC – a 60:40 joint-venture between Tan Sri Lim Kang Hoo’s Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp Sdn Bhd (CREC) – made a winning bid of RM7.41 billion for a 60% stake in Bandar Malaysia via open tender.

However, two years later, the MoF cancelled the deal as it claimed that the consortium had missed the deadline to assemble a bank-backed guarantee for the outstanding deferred payment of RM4.5 billion.

The project was subsequently retendered, but little is known about the latest round of bids as the MoF has kept quiet on the process.

Bandar Malaysia’s upsides are vital if the government is to successfully unlock the value of the land, as it must pay off RM3.69 in liabilities carried by Bandar Malaysia Sdn Bhd, including a RM2.4 billion sukuk murabahah maturing in 2023.

In the absence of the HSR, the land’s economic potential would have changed and thus the government may seek to begin a fresh tender exercise, said The Edge.

The Asian Strategy & Leadership Foundation (ASLI) Centre for Public Policy Studies research and business development director Lau Zheng Zhou said Bandar Malaysia may not be as attractive as before, now that the HSR is out of the picture.

“The project may lose its international appeal or narrative without MyHSR because it is supposed to be the ‘global green gateway’ for tourism, trade, culture and innovation,”’ he told the weekly via email.

“Without MyHSR, the land may lose its appeal, and the corporate buildings and offices may appear to be oversupplied.”

He added that the new valuation – of US$10 billion (RM43.3 billion), up from US$6 billion previously – will make Bandar Malaysia more expensive and require more deep-pocketed investors to support its infrastructure cost.

The 350km-HSR was to have seven stops – starting in Bandar Malaysia and ending in Jurong East, Singapore.

However, Transport Minister Anthony Loke said the project may be revisited when the country is more financially sound.

The rail project, along with the third mass rapid transit (MRT) line, was stopped earlier this week.