Political and economics analyst Professor Hoo Ke Ping opined that the Bandar Malaysia deal which lapsed last week is a defunct project from the beginning.
He said the current excess in numbers of office and residential units within the city and Klang Valley was already a bane to the market, what more if Bandar Malaysia and TRX City was developed.
Hoo said the financial and banking system in Malaysia was a bane on the future development of residential or commercial units as banks are more stringent with issuing property loans.
‘There is a clear mismatch of deposit and lending which means the Bandar Malaysia project will require hefty finances in the future so the question is can the bank sustain when issuing loans?”
He said with the current slow growth, Malaysia was already in the right spot for over exposure and with the Bandar Malaysia project spanning to another 10 years, the nation will go into a liquidity crisis.
Hoo said there was no need to push for the Bandar Malaysia project as there is no implication to the country with the deal falling through.
“Why push for more property development when there is an excess capacity within the city?”
The Bandar Malaysia deal is estimated to be valued at RM7.41 billion was lapsed on May 3 after TRX City Sdn Bhd claimed that the conglomerate between Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (M) Sdn Bhd (CREC) failed to meet payment obligations thus causing the deal to stand null and void with immediate effect.
TRX City retained its 100% ownership of the site while inviting the expression of interest for the role of master developer for the project.
The project is slated to be Malaysia’s key transportation hub — connecting the Kuala Lumpur-Singapore High-Speed Rail (HSR), Mass Rapid Transit lines, the Keretapi Tanah Melayu Komuter alongside the Express Rail Link and 12 major highways.
The land development was initially awarded to the 1Malaysia Development Bhd who selected the conglomerate to undertake the development but following the restructuring of 1MDB’s finances, the land was handed over to the Finance Ministry.