THE Malaysian economy, in particular construction in the secondary sector, will gain from the Bandar Malaysia project revival, analysts said.

Socio-Economic Research Centre executive direcor Lee Heng Guie told The Malaysian Insight the resumption of the project will generate economic activity and spur investments over the medium-term.

He said the construction sector, which has “backward and forward linkages” with 140 sectors, is set to see a boost.

“This, coupled with the revival of the East Coast Rail Link (ECRL) project, will cushion the domestic economy from the direct impacts of external economic headwinds amid an unstable global environment,” he said.

Lee added the government could also develop Bandar Malaysia as a regional hub for technology and Fortune 500 companies.

Sunway University Business School economics professor Yeah Kim Leng said the Bandar Malaysia project will boost gross domestic product (GDP) growth if it can attract foreign direct investment.

This will also renew investor confidence in the country’s economic prospects under the Pakatan Harapan government.

To Shankaran Nambiar, senior research fellow at the Malaysian Institue of Economic Research, the project’s revival bear similarities to the review and resurrection of the East Coast Rail Link.

“There is a need for the Malaysian economy to be stimulated, and given the cloudy global environment, it must have been thought worthwhile to revisit (the Bandar Malaysia project),” he said.

“This will be a useful boost to the economy, jobs will be created and growth levels sustained. I’m sure the project will be tweaked to allow more Bumiputera (contractors) participation and to give adequate space for the national agenda, which will include technology transfer and jobs creation for Malaysians.”

Construction industry veteran Matthew Tee said the project’s revival was definitely welcome news for the construction sector which has been on the downslide down since the general election last May.

This was due to the new government’s decision to renegotiate, review and even cancel many infrastructure projects.

Tee hoped Bandar Malaysia’s developers will be conscious of the new government’s wish for more local participation in foreign-funded mega projects, and for these ventures to also benefit ordinary Malaysians.

Tee, who heads the International Federation of Asian and Western Pacific Contractors’ Associations, said more opportunities must be given for local suppliers and contractors to participate.

“The project should also not just contain luxury properties meant for foreigners but housing that is affordable to Malaysians. This announcement will definitely boost the construction sector and the economy,” said Tee who is a former president of Master Builders Malaysia.

Located at the former Sg Besi Airport site, Bandar Malaysia is a transit-oriented, mixed development with a span of 200ha.

Yesterday, Prime Minister Dr Mahathir Mohamad announced that Putrajaya has revived the Bandar Malaysia project with the original contractor.

 The decision to reinstate IWH-CREC Sdn Bhd, said the prime minister, was made after due deliberation by the cabinet on April 17.

IWH-CREC is a 60:40 joint venture between China Railway Engineering Corporation, a Chinese state-owned holding, and Iskandar Waterfront Holdings Sdn Bhd, in which the Johor government has a 40% stake.

The consortium lost the project in May 2017 after Putrajaya said it had failed to meet payment obligations. The consortium has maintained that it had honoured all 12 payment obligations.

The contract for the project was next awarded to Chinese real estate giant Dalian Wanda. However, the project hit a snag when the Chinese government put a curb on the country’s capital outflow.

Plans will also be redrawn for the development on the old Sg Besi airbase, said Dr Mahathir.

Changes include the construction of 10,000 affordable housing units and a park, increased participation of Bumiputera contractors and higher local content requirements. – April 20, 2019.