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Monday, May 15, 2017

Report: China nudges PM on IWH-CREC deal

The Iskandar Waterfront Holdings and China Rail Engineering Corp (IWH-CREC) consortium might be brought back to the Bandar Malaysia project, following Prime Minister Najib Abdul Razak's visit to Beijing.
"Chinese Prime Minister Li Keqiang told Najib that China hopes the deal on Bandar Malaysia stays unchanged. Najib may have to take the Chinese wishes into consideration," said a government source in Beijing, reported Star Online.
Putrajaya had inked a deal with IWH-CREC in late 2015, which would see the latter acquiring a 60 percent stake in Bandar Malaysia for RM7.41 billion.
However, Putrajaya unilaterally announced on May 3 that the deal had been canceled. Almost immediately, Najib began "courting" China's Dalian Wanda group - China's biggest property developer - as a potential suitor for Bandar Malaysia.
Najib has met Dalian Wanda boss Wang Jianlin to pitch Bandar Malaysia. Wang has yet to commit to the project.
Regardless of whether Dalian Wanda was brough on board, it was heavily speculated that Najib would be made to explain why CREC - a Chinese government-owned company - was cut out of the lucrative and strategic Bandar Malaysia deal.
Tightrope act
After his meeting with Li and President Xi Jinping on Saturday evening, Najib said that the equity structure for Bandar Malaysia would be changed and that foreign participants would not be limited to just Wanda Group alone.
"We will take into account the position of CREC and other groups that are interested, including Dalian Wanda," he said.
It was reported that Najib visited Dalian Wanda headquarters earlier on Saturday morning where he praised company during a joint press conference.
Wang reportedly said the investments in Bandar Malaysia would be huge as the deal is now worth US$10 billion (RM43.4 billion).
"While we have not reached an agreement ... Wanda has confidence in Malaysia and its future prospects. We are willing to share our experience with Malaysia to build a one-of-its-kind mega integrated cultural and tourism project," he said.
Najib also seemed confident that Dalian Wanda would take up the Bandar Malaysia offer and that he would announce the details "when the time comes".
"We believe Dalian Wanda Group is in a position to deliver something extraordinary, something so imaginative that we can create Bandar Malaysia as something that all Malaysians and the region can be proud of," Najib said.
Smaller stake for IWH-CREC
A Malaysian official in the Prime Minister's entourage to Beijing told Star Online Najib's stance on changing the equity structure of Bandar Malaysia came after his meeting with Li.
"They met after the Wanda event. In his speech, Li made clear China's wishes on Bandar Malaysia.

"Now the possible scenario is: IWH-CREC, Wanda and the Malaysian Government will jointly develop Bandar Malaysia.
"But the equity stake of IWH-CREC could be smaller," said the official.
Najib is expected to tread carefully on any business deals with China because the latter has many interests in Malaysia through state-owned entities.
This includes the RM55 billion East Coast Rail Link by China Communication Construction Company Ltd, a publicly-listed but majority Chinese government-owned company.- Mkini

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