Second Finance Minister Johari Abdul Ghani told the Malaysian Reserve the ministry wanted to be in control of the project at the former Sungai Besi airbase and surrounding area.
He denied the ministry planned to sell its 40% stake to government-linked builders, such as UEM Sunrise Bhd.
“We have no intention to sell the Ministry of Finance block of 40%. Currently it’s owned by an MoF Inc entity, and it stays there.
“We will jointly develop Bandar Malaysia with IWH and CREC,” he said, referring to the consortium of Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (CREC), which jointly control the remaining 60% in Bandar Malaysia.
The Malaysian Reserve quoted him as saying the ministry held the chairmanship and chief financial officer posts in project developer Bandar Malaysia Sdn Bhd, ensuring the government’s direct supervision of the 200ha development.
Bandar Malaysia was previously undertaken by 1Malaysia Development Bhd, but it sold 60% of the project to IWH-CREC Sdn Bhd for RM7.41 billion to pare its high debts.
The Bandar Malaysia project, located adjacent to another 1MDB project, the Tun Razak Exchange, involves urban redevelopment of the old airport in Sungai Besi.
The project is envisioned to be an inclusive, public transit-oriented city that is designed as a walkable community through a series of safe, secure and pleasant pedestrian and cycling networks, set against a backdrop of open spaces and greenery, said the report.
Work on Bandar Malaysia, to be developed over 20 to 25 years, is slated to begin this year.
Last June, Bandar Malaysia announced it had secured financing with the set up of a dedicated fund backed by local and international banks that have a combined asset base of over RM57.59 trillion.
The Malaysian Reserve report said among financial institutions supporting the Bandar Malaysia Fund were the Bank of China, Industrial and Commercial Bank, China Construction Bank and HSBC. The local banking groups were CIMB Group Holdings Bhd, Malayan Banking Bhd, RHB Banking Group and Affin Bank Bhd.
The government is offering incentives to the master developer of Bandar Malaysia and its subsidiaries. This includes exemptions on income tax for 10 years, stamp duty, real property gains tax and withholding tax for eight years. In addition, there will be an exemption from import duty on selected construction materials which are currently not made in Malaysia.