Now that the new ruling party has gotten their gears into grind, several notable and large-scale development projects have been up for review. As news of the nation’s growing debt (more than RM1 trillion to date) plagues newspapers and social media, the new Minister of Economic Affairs, Datuk Seri Mohamed Azmin Ali, has justified that the projects being reviewed are necessary as the nation’s debt corresponds to these mega projects. “Part of it was because the process was not transparent and open, and most of the major projects was not budgeted in the national budget, it was off-budget," he told reporters.
To sum it all up, to date, here are 8 major developments that are currently being reviewed under extreme scrutiny or will be by our new government.
1. Bandar Malaysia
Owned by 1MDB, Bandar Malaysia is planned to be a 200ha development that functions as a central transport hub under the redevelopment of the Sungai Besi airforce base. The project was developed under the public-private partnership (PPP) and is estimated to be worth RM150 billion, with a city plan that includes diverse city housing, international business hubs, key components for lifestyle and retail, and more.
2. Tun Razak Exchange (TRX)
Also known as KL’s new financial city, the Tun Razak Exchange is developed by TRX City, MRT Corp, and SMART to become the leading centre for international business and finance. Measuring 70ha wide, the development aims to create a positive socio-economic impact for those residing in Kuala Lumpur, Malaysia, and neighbouring countries, whilst increasing productivity and life quality. To know more about TRX’s master plan, find out more here.
3. Pan-Borneo Highway
A toll-free highway that links Sabah and Sarawak over a span of 2000km, the Pan-Borneo Highway includes interchanges, pedestrian bridges, bus shelters, and bridges, some of which will cross Sungai Rajang, the longest river in Malaysia. The development of this highway is expected to improve access between the rural areas of Sarawak and Sabah to main towns.
4. Kuala Lumpur-Singapore High Speed Rail (HSR) - Scrapped
Estimated to cost RM50 billion and above, the Kuala Lumpur-Singapore High Speed Rail (HSR) could lose up to RM209 billion if the project is scrapped, according to chief executive of MyHSR Corporation, Mohd Nur Ismal Mohamed Kamal. Previously, dealings for the HSR were led by SPAD but recent news has announced its abolishment, with the Transport Ministry taking over its tasks. With the HSR, travelling to and fro Singapore/Kuala Lumpur would only take 90 minutes.
Note: As of 29th May 2018, the Government of Malaysia has officially called for the cancellation of the KL Singapore HSR project.
5. East Coast Rail Link (ECRL)
The railway station that will span 3 states (Gombak, Selangor, Kelantan) and pass through 22 stations, the East Coast Rail Link (ECRL) is worth RM144 billion in investments and partnership. Spanning 688km, the development will shorten the commute time from Kelantan to Gombak and vice-versa by at least half, with only four hours on the ECRL.
6. PR1MA
Recent talks have surfaced regarding PR1MA and the idea to restructure it back under the Housing and Local Government Ministry. “Although PR1MA is not under the ministry, however, there is a possibility for us to propose to the Cabinet to synchronise everything together, instead of having two separate programmes which share the same target,” said Housing and Local Government Minister Datuk Zuraida Kamaruddin. It is not exactly known how profitable PR1MA has been since its inception in 2012.
7. Pasir Gudang Hospital
Several developments in Johor will be under review, but most notable would be the Pasir Gudang Hospital in Bandar Seri Alam. The Finance Ministry has personally issued letters to ask for the review of these projects, and in doing so, the review hopes to implement open tenders for contractors. It is expected to save the government up to 10% of the project’s worth, a total of RM500 million.
8. Bagan Datoh Energy Port
Reportedly very likely to be reviewed along with a few other ports’ developments, the Bagan Datoh energy port has an estimated construction cost of RM30 billion that involves partnership with China. The energy port involves an oil pipeline that will cut across Peninsular Malaysia to the coastal town of Bachok, Kelantan. It is planned to be built alongside the West Coast Expressway (WCE) worth RM5 billion, that will then connect all ports around the Straits of Melaka.
As these projects and more come under scrutiny and review, several big developers foresee potential pessimism as they were awarded the High Speed Rail (HSR) project delivery partner (PDP) scope. In the next few months to come, we can expect the mid-term review for Budget 2018 in September, as Budget 2019 will be announced on October 19. Some of the key developments that were previously announced in Budget 2018 include the LRT3, MRT2 & MRT3, allocation of home units under PR1MA, PPA1M, MyBNHomes, and more.
If you missed out on what’s happening to Malaysia’s property market after GE14, check out our previous article here.
(Written by: Ashley Ooi, 28th May 2018)
