The government of Malaysia has said it plans to resurrect Bandar Malaysia, the country’s biggest ever real estate development, which it terminated in May 2017 after a dispute with a consortium made up of Iskandar Waterfront Holdings (IWH) and China Railway Engineering Corp (CREC).

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Prime Minister Mahathir Mohamad said on Friday that his cabinet had agreed to reinstate the $34bn scheme, which will give Kuala Lumpur 200ha of shopping mall, canals, 10,000 affordable homes, theme parks, cultural villages, a financial centre and CREC’s own $2bn regional headquarters.

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He added that it would be "a significant contribution to the Belt and Road Initiative, which Malaysia expects to be able to tap [into] and exploit its multiplier effects along the value chain".

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It was originally designed to house the northern terminus of the high-speed rail line connecting Singapore to Kuala Lumpur, which would cut travel time between the cities to 90 minutes, but that project remains suspended.

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Mahathir said Bandar Malaysia, which is 40% owned by the government, would be developed with the same consortium partners, and would boost urban development and attract companies working in finance and technology.

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The scheme was started by state investment fund 1MDB in 2011. It later sold a 60% stake to the consortium, after which the Malaysian government took over 1MDB’s stake.

 

It comes a week after Malaysia reinstated the China-backed East Coast Rail Link project after the Chinese contractor agreed to cut the construction cost by one third to $11bn.