PUTRAJAYA (Dec 19): Malaysia’s coffers swelled by more than RM4 billion following renegotiations between the Ministry of Finance (MoF) and private developers over the terms of contract involving the Bandar Malaysia project.

Finance Minister Lim Guan Eng said the government decided to proceed with the RM140 billion project after renegotiating for “the best terms for the people and country” and cleansing it of elements of the 1Malaysia Development Bhd (1MDB) scandal.

“The claim by irresponsible quarters that the project was merely revived from where it was before, is not only erroneous but intended to mislead the people and divert their attention from our success in improving the contract terms and pocketing at least RM4 billion for the country,” he said in a statement today.

Lim said it was public knowledge that Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC), as a consortium, secured the tender to develop Bandar Malaysia in 2015.

“But in May 2017, the agreement was terminated by the previous administration when the 1MDB scandal broke.

“After the detoxification process carried out by the new government to rid the project of elements linked to the 1MDB scandal, a decision was made to resume the agreement once it was proven that the project is capable of generating economic benefits for Malaysia’s urban development,” he said.

Following the signing of the Framework Agreement on April 25, 2019, Lim said the Cabinet approved the setting up of the Bandar Malaysia Development Advisory Committee under MoF to re-negotiate new terms for the project.

“In contrast to the original agreement negotiated by the previous government, the new agreement contains terms that have been improved,” he said.

Prime Minister Tun Dr Mahathir, yesterday, witnessed the signing of the new contract between TRX City Sdn Bhd and IWH-CREC Sdn Bhd (ICSB) for the Bandar Malaysia development project.

TRX City is wholly owned by Minister of Finance (Incorporated), while ICSB is a consortium consisting of Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (M) Sdn Bhd.

The revised terms under the new agreement include a shorter repayment term of three years from seven years and widening of the park and recreation area from 19.7 hectares to 34.4 hectares.

Besides the original deposit of RM741 million, ICSB will pay an additional RM500 million upfront, while the number of affordable homes will be increased from 5,000 units to 10,000 units, Lim said.

He said dividend from the sale of land was also raised to 50:50 between ICSB and TRX City.