I was midway writing a follow-up to my earlier piece ‘Black hole of 1MDB’, when news broke that the Bandar Malaysia deal had fallen through.
In that earlier piece, I had estimated that very conservatively 1MDB stood to gain RM12bn in revaluation surpluses from its two main land banks (RM7.2bn from its 486-acre Bandar Malaysia/Sungai Besi land and RM5.1bn from the 70-acre TRX land) – without doing any work at all! Recall that 1MDB had acquired its two main land banks at dirt cheap prices – RM65psf for the TRX land and RM76psf for the Bandar Malaysia/Sungai Besi land.
That RM12bn in revaluation gain was a conservative figure. Perhaps 1MDB could have gained up to RM15bn, based on prevailing land market value back then. Bandar Malaysia alone accounted for about half this figure or more. As 1MDB had already booked in RM5.0bn into its account, this means it (and indirectly the Malaysian government) still had an additional RM7-10bn to cushion further 1MDB losses.
Indeed, the total of RM12-15bn in revaluation surpluses would have come in handy in papering over the black hole of 1MDB and settling the US$6.5bn Ipic mess. There were at least $4.2bn of questionable transactions by 1MDB, including a $2.1bn payment to a firm with a similar name, Aabar Investments PJS Ltd.
The Malaysian government had been counting on receiving RM7.4bn from the sale of a 60 per cent stake in the firm managing Bandar Malaysia as part of the 1MDB rationalisation plan. The plan was to sell it to a consortium comprising Iskandar Waterfront Holdings (IWH) (60 per cent) and China Railway Engineering Corp (CREC) (40 per cent).
As they say about the best-laid plans…. Even back then, the China-led consortium seemed to be disputing the value of the 60 per cent stake, reportedly claiming it was worth only US$1.2bn (RM5.3bn) instead of RM7.4bn.
Full article on Aliran website.
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‘Bandar Malaysia Fiasco’ on Channel News Asia:
I do not see rakyat can benefit from those mega projects of high rise high density development.
Cannot understand why BN do not use the money to improve the infrastructure of small towns and villages where the people need the most help.
Actually najib was singing how great with Wanda going to make as master builder of Bandar Malaysia until the China authority ordered him not to default on the previous IWH-CREC agreement and maintain it. The fact is Wanda did not sign any MOU on Bandar Malaysia, but the local BN media implied it to fool Malaysians to make najib looks good.
Malaysiakini has estimated that if the government parcels out the Bandar Malaysia land and sells it, the revenue could amount to as much RM105 billion. Deduct the costs as enumerated, and the potential profit of as high as RM96 billion!
Do you think Wanda Group would negotiate for a better package, given BN is desperate for money to cover up the debt of 1MDB with GE14 looming?
Chinese investors be it WANDA or CREC are fully aware of the market conditions in Malaysia – they knew KL high end condominium are on fire sale, as the property market in KL is oversupplied, couple with factors such as flash flood & lime stone site that would cost a bomb in engineering & the fact that KL are not suitable for theme park due to hot weather. China companies are not that naive only Putrajaya are super greedy. China investment are more towards military strategies especially in Straits of Malacca. They badly wanted Labuan for Spratlys Island not watever… Read more »
One advantage of being a Chinese puppet is Malaysia will not have to make difficult policy decisions. China will make these for us, (perhaps allegedly) offering hiding places in China … Great advantages of marrying a despotic dictatorship. They can show Malaysia how to do it!.. Malaysia can be the more compliant and obedient ally China really wants.
Karma Law is working.
Dad’s ill legacies … is now pay-back time footed by Pencuri#1 son.
The more these racists mistreat other races, they more their future generations will have to court them for ‘help’.
Karma is good & just.
Fortunately for MO1 karma is not applicable in his belief?
can cleanse sin with every pilgrimage to the holy land>
Financial Times reports Malaysian partner in JV buying 60% of KL property development project ‘faced difficulty in securing financing’. Prime Minister Najib had personally ordered the termination of the deal in the wake of the Bandar Malaysia development deal collapse. As previously reported, China Railway Engineering Corp (CREC) had apparently failed to get approval from the Chinese government nor the funding for the project. CREC is a unit of state-owned China Railway Group. However, CREC’s Malaysian partner, Iskandar Waterfront Holdings, were also believed to have faced difficulty in securing financing. “A crucial factor was the difficulty Iskandar Waterfront Holdings, the… Read more »
Wanda China may turn Bandar Malaysia vision into entertainment focus like theme parks, also rumour that China Greenland group also put out new bid.
Najib to reveal more when in China, whether Malton the new Berjaya crony of his blueprint blue ocean strategy?
Prime Minister Najib has expressed confidence that China’s Wanda group can do wonders in Bandar Malaysia, although a deal has yet to be made.
“We believe Wanda group is in a position to deliver something extraordinary, something so imaginative, that we can create Bandar Malaysia as something that all Malaysians and the region can be proud of.
Topic: 1MDB Scandal: What’s Next?
Date: 8 May 2017 (Monday)
Venue: Penang Chinese Town Hall
(Jln Masjid Kapitan Keling, George Town)
Speakers: Tony Pua, Lim Guan Eng, Ramkarpal Singh, Chow Kong Yeow
Any video from this forum?
please post it here if you have the link. thanks.
Malton (Malaysia) + Wanda (China) will offer new deal to replace IWH-CREC, – (allegedly) to provide $$$ War Chest for BN in GE14?
KUALA LUMPUR (May 8): Iskandar Waterfront City Bhd (IWCity) shares plunged this morning with no firm signal of a reversal of the Bandar Malaysia sale termination emerging.
At 9.02am, IWCity tumbled 29.87% or 92 sen to RM2.16 with 3.10 million shares traded.
Last week, UOB Kay Hian in a note said it expects IWCity shares to be significantly impacted from the latest development.
Desmond Lim who is associated with the Malton group, is said to be particularly close to the prime minister’s wife.
Interesting to see how the Johor government would react as it has 40% stake in IWH, whose share value has been decimated almost 50% since last week.
Skudai state assemblyperson Dr Boo Cheng Hau has filed an emergency motion to the Johor legislative assembly for a debate on the collapse of the Bandar Malaysia deal.
Boo said that the deal involved KPRJ Sdn Bhd, which is owned by the Johor government, and would have an impact on investors’ confidence in Iskandar Malaysia.
KPRJ has 24 percent equity in the Iskandar Waterfront Holdings and China Real Engineering Corporation (IWH-CREC) consortium.
Rumor has it that there is a last minute back-off by a “secret party” to pay/chip-in the differential amount of RM2 billions. Jho Low ?
Ong Ka Chuan said a ‘better’ deal favourable to 1MDB is ahead. Perhaps Najib is to demonstrate that he is not dependent on China, as he is facing President Xi soon for 1 belt 1 road meeting?
Chinese firms harbour doubts over Malaysian port projects
And I believe there are some add-on very hostile sub-conditions as to the contract that also makes the Chinese in fume ! Malaysia first, Malaysia Boleh !
Najib is using his charm to court China’s richest man, billionaire Wang Jianlin of Dalian Wanda Group, having won over Jack Ma?