Bandar Malaysia: Cancellation of deal will not affect economy, says economist

The cancellation of the share sale agreement between TRX City Sdn Bhd and IWH CREC Sdn Bhd for the Bandar Malaysia project would not make any impact on the Malaysian economy.

IQI Holdings Chief Economist and Investment Strategist, Shan Saeed, said the Malaysian government had made a good decision, able to mitigate the risk and see the opportunities it could gain from the project.

He said it was purely a commercial decision, and was confident the government could get better deals from new investors.

Shan said the economy did not run on micro events but macro events.

"The investors are looking at four factors - government confidence, economic confidence, balance sheet of the government and aggregate demand.

"They are looking at modern infrastructure, so for global investors these things are very important...this deal might be micro event and it doesn''t make any impact on the macro perspective," he said in an exclusive interview with Bernama News Channel here Monday.

IQI Group is a leading property and investment company operating and advising clients in Kuala Lumpur, Singapore, Hong Kong, London, Melbourne and Dubai.

Shan said there could be other deals that the government had planned and come up with for better investment in Bandar Malaysia.

He also brushed off claims that it would affect other investments from China in Malaysia.

"You have to understand and look the economy on macro perspective. Malaysia has strong geographical significance, because of the Straits of Melaka, China will never leave Malaysia for the next 100 years. So some people are saying it''s not government-to-government deal, it''s a commercial deal. It''s common sense...you don''t need to involve the government in the deal as it''s purely a commercial deal," he explained.

TRX City Sdn Bhd, an entity under the Ministry of Fi­­nance Inc (MoF), aborted the sale of a 60 per cent stake in Bandar Malaysia Sdn Bhd for RM7.41 billion to IWH CREC Sdn Bhd (ICSB) on grounds that ICSB had not met its payment obligations despite been given 12 extensions.

ICSB is a consortium comprising Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (M) Sdn Bhd (CREC).

Following the termination of the agreement, MoF, through TRX City, will maintain 100 per cent interest in the land while seeking for investors to play the role as master developer.

Bandar Malaysia is the biggest development site in Malaysia in a key strategic position, and will offer many business, investment and employment opportunities, including Kuala Lumpur Internet City, the hub for the new Digital Free Trade Zone.

It will also be Malaysia''s transport nucleus, connecting the Kuala Lumpur-Singapore high-speed rail, MRT lines, KTM Komuter, Express Rail Link and 12 highways. - BERNAMA