Najib signing the plaque signifying China Railway Group Limited as the first Fortune Top 500 Company in Bandar Malaysia. (From left) Looking on proudly are Lim Kang Hoo and Zhang ZhongYan

Investing USD$2 billion to build integrated office complex

KUALA LUMPUR: China Railway Group Limited (CREC), one of China’s biggest state-owned companies, will invest USD$2 billion to build its own Regional Center in Bandar Malaysia.
The integrated office complex is set to become the regional hub for MNCs from around the world.

According to the press release, CREC president Zhang Zongyan announced this in the presence of Prime Minister Datuk Seri Najib Tun Razak, Johor Menteri Besar Datuk Seri Mohamed Khaled Nordin and several cabinet ministers at a ceremony on Monday, March 21.

Also present were Chinese Ambassador to Malaysia Huang Huikang and IWH executive vice chairman Tan Sri Lim Kang Hoo.

“CREC will be the first among MNCs to set up regional centres or relocate their HQs in Bandar Malaysia.

We will showcase this through the new integrated office complex we are building,” said Zhang Zongyan.

China Railway Group Limited president Zhang ZhongYan

Najib said CREC’s decision to open its regional centre in Bandar Malaysia would be a major boost to the Malaysia economy.

“This is an open endorsement by global companies of their continued confidence in Malaysia and a testimony of their faith in the Malaysian economy which remains fundamentally strong,” he added.

He said Bandar Malaysia was an integral part of the Government’s plan to accelerate Malaysia towards becoming a truly high-income developed economy by attracting top-notch talent from around the world.

Prime Minister Datuk Seri Najib Tun Razak

He said this strategic move to woo foreign GLCs, MNCs and major private investors to set up or relocate regional offices in Bandar Malaysia would create the demand for high-powered talent and effectively help stem Malaysia’s brain drain to other countries.

“Bandar Malaysia will also serve as Malaysia’s gateway to the world through the High Speed Rail to Singapore with direct links to the KLIA and Changi Airport, and the proposed Pan Asean Rail Transit to Bangkok and beyond,” he stressed.

IWH director Izaddeen bin Daud said that the IWH-CREC consortium with MoF have been actively sourcing for local and international partners to develop the first phase of the Bandar Malaysia project.
Bandar Malaysia is situated at the old airport site in Sungai Besi and a little over a kilometre away from the Kuala Lumpur city centre.

“The development blueprint also includes an integrated underground city modelled after Canada’s Montreal underground city, with dedicated space for financial and commercial centres, tourism and shopping facilities, high-end corporate offices, an indoor theme park and themed theatres,” said Izaddeen.

The integrated city is a transit oriented development that incorporates International Financial Centre (RMB Settlement Centre), MNC regional centre, commodities exchange centre, ASEAN forum centre, health & medical hub, education centre, intelligent IT centre, tourist destination, green and sustainable city, E-commerce and international MICE.

The strategic announcement came three months after its successful bid with its Malaysian joint-venture partner, Iskandar Waterfront Holdings (IWH) late last year to acquire 60% of the equity in the Bandar Malaysia project from 1MDB Real Estate for RM7.41 billion.

The Bandar Malaysia development is now under the Public-Private Partnership (PPP) model with the Ministry of Finance (MoF) holding 40% of the development company and the IWC-CREC consortium holding the remaining 60% equity.

Chinese Ambassador to Malaysia Huang Huikang

IWH is also a PPP company with the Johor State Government, through Kumpulan Prasarana Rakyat Johor (KPRJ) owning 40% of the company, with the balance 60% owned by Credence Resource Sdn Bhd, a company controlled by businessman Tan Sri Lim Kang Hoo.

This shareholding structure effectively means that about 54% of the project is now owned by the Federal and Johor State Governments via 1MDB RE/MoF and KPRJ respectively.

With the involvement of leading Chinese and Malaysian government-linked companies, the Bandar Malaysia development has now naturally also become a Government-to-Government project.
CREC, a Global Fortune 500 Company, will consolidate all its current regional businesses and operations once its new headquarters in Bandar Malaysia is up and running.

CREC is a major player in large-scale integrated infrastructure projects globally and especially in Southeast Asia and Africa. Its current order book of projects in Malaysia total over RM2 billion includes the Gemas-Johor Baru double-tracking rail and Sabah Railway projects.

IWH, a public-private partnership involving the State and Federal governments and local investors, is the master developer of 4,300 acres of waterfront land on the eastern and western sides of the Johor Causeway.

IWH has secured “done deals” with no less than 11 strategic partners who are all ready to roll out high-impact projects along an eight km coastal stretch of Danga Bay in Johor. These projects, which are in various stages of implementation and involving a cumulative gross development value of RM125 billion, will be completed over the next 10 to 15 years.