Malaysia revives 1MDB-linked mega project as it strengthens economic ties with China

The controversial Bandar Malaysia mega-project linked to the 1Malaysia Development Berhad (1MDB) global financial scandal received a new lease on life on Tuesday after the government signed a deal with a China-backed consortium to continue the venture.

Malaysian Finance Ministry subsidiary TRX City said it had entered into a deal with IWH-CREC, a consortium between the Beijing-owned China Railway Engineering Corporation (CREC) and local developer Iskandar Waterfront Holdings to develop the 48-acre plot of land.

Bandar Malaysia was originally envisioned as a central transport hub for a dozen highways and several rail lines including the stalled Singapore-Kuala Lumpur high speed rail link. It was announced in 2011 by the former premier Najib Razak, who is currently on trial for multiple counts of corruption and abuse of power linked to the 1MDB financial scandal that saw billions siphoned out of the state sovereign wealth fund.

Prime Minister Mahathir Mohamad said at the signing ceremony that the revival of the project was “testimony to both Malaysia and China working out a collaboration that will benefit our peoples”.

Unlike ongoing Malaysia-based Belt and Road Initiative projects such as the East Coast Rail Link, Bandar Malaysia was pursued in “a larger context of forging and underlining long-term bilateral and trade relations between Malaysia and China”, he said.