“This decision will help allay concerns amongst the local and foreign investors, who have put in billions of ringgit, on the fate of TRXC,” said Finance Minister Lim Guan Eng, adding that the decision was reached despite more than RM3 billion of government funds misappropriated from the company by 1MDB.
Lim said TRXC was required to complete infrastructure works in the project, but could not come up with some RM2.8 billion in costs.
“The alternative of not coming up with a funding of RM2.8 billion and not completing the project, is to pay RM3.51 billion of ringgit in compensation claims, as well as an eyesore of an abandoned mega-project in the heart of Kuala Lumpur.
“In that event, apart from having to pay compensation of RM3.51 billion, the government will also
lose the RM3.7 billion transferred earlier to TRXC,” he told a press conference today.
TRX, which sits on a 70-acre plot of land in the heart of Kuala Lumpur, has been touted to become a leading centre for international finance and business.
It is one of two key real estate projects under the 1MDB umbrella owned by TRXC, the other being the 486-acre Bandar Malaysia development project.
Asked how the money was misappropriated, Lim said the company had no money for the development.
When asked who had authorised the project, he said: “It’s very clear who authorised it. We will let the investigative panel handle it because I think it involves individuals.”
He said the RM2.8 billion would be paid in stages by 2024, with the government paying RM344 million for this year.
“While this project is a classic example of how 1MDB used money to pay off its debts not related to this project, at the same time it did not maximise value of prime land in the KL centre.”
On the 106-storey Signature Tower at Tun Razak Exchange, he said it was expected to be completed by the end of this year.
He said it was crucial to complete the TRX project to generate confidence with investors as some foreign investors had already bought land.
He said there were several prominent foreign investors, like HSBC, Prudential and Affin Bank, as well as others like Lembaga Tabung Haji and Mulia Property Development.
He gave assurances to both local and foreign investors that their investments would not be written off.