The failure by Prime Minister Najib Abdul Razak to secure even a single form of non-binding commitment from China’s corporation Dalian Wanda to acquire Bandar Malaysia brings the Finance Ministry’s plans for the 495 acres of prime land back to square one.
The prime minister needs perhaps a lesson in sales strategy. An evidently desperate salesman trying to sell his family heirlooms is never going to succeed in closing a deal at inflated prices. While these Chinese developers may be cash-rich, they are not stupid.
They know that the previous buyer – the Iskandar Waterfront Holdings (IWH) Consortium who had put in the purportedly best bid in December 2015 could not pay up the full RM7.41 billion it agreed to pay for a 60 percent stake in Bandar Malaysia.
And if Wanda knew that, why would they be so silly as to offer more than what was previously already the best bid Bandar Malaysia could solicit? What can Bandar Malaysia offer – other than being a sizeable piece of prime land in the middle of Kuala Lumpur, that would make it such an ‘irresistable buy’ for a foreign Chinese developer?
The answer, which isn’t music to Najib’s ears, is really “not much”.
Hence the only reason why these Chinese developers would acquire Bandar Malaysia is if they got a bargain price, or if they are able to extract all sorts of financial incentives and tax exemptions from the Malaysian government to make their venture worth the while.
Our developers world-class but…
This then begs the question – what makes these Chinese developers so special that we should bend over backwards to grant them exclusive financial incentives and generous tax exemptions?
We are not talking about smartphone company Huawei setting up a research and design centre in Malaysia. Or for that matter, setting up a manufacturing plant to produce world-class electronic gadgets. We would bend over backwards for Huawei in this case, because we have no expertise in the sector.
On the other hand, our experience with Chinese developers has left a bad taste in the mouth. They have not only single-handedly placed the Johor property development industry on life-support, but they have brought with them their entire supply chain of contractors and subcontractor from China.
Worse, investigations by Malaysiakini recently have proven the Chinese construction projects to have engaged thousands of illegal workers from China. They have demonstrated utter contempt for our laws.
Therefore, as the Finance Ministry rethinks the entire Bandar Malaysia development, the most important question to ask is, “why can’t Malaysian developers do the job?”
For example, a consortium comprising of SP Setia, Sime Darby and EPF stunned the global property markets with a winning bid for the London icon, Battersea Power Station in 2012. It is now a project with gross development value in excess of GBP8 billion, and have won the prestigious London ‘Developer of the Year Award’ in 2015.
Last year, the development also won the London “Deal of the Year Award” after successfully snagging Apple as the largest office tenant, which will take up 5,000 sq ft of space.
Malaysian developers are also regular winners at the International Real Estate Federation (FIABCI) World Prix D’Excellence Awards. They have included Sunway, IJM, YTL, UEM-Sunrise and many more. These developers are now expanding their portfolios not only in the regional countries such as Vietnam, China and Indonesia, but also to developed cities such London and Melbourne.
Why are our own developers not given a chance?
Why not going local?
Even if in the event that there is no one developer who is able to digest the entire 495 acres of land in Bandar Malaysia, the Finance Ministry could always parcel out the development into multiple parts and phases. This will provide the perfect opportunity for the local players to compete to create the best value and designs for the respective carved segments.
The projects will be a massive boost to our local property development industry, stimulate demand for local construction and related-services and most importantly provide thousands of new job opportunities for ordinary Malaysians.
Sometimes we think too hard, travel far and wide in the pursuit for solutions, when really, the answer is right in front of our very eyes.
TONY PUA is DAP national publicity secretary and Petaling Jaya Utara MP.