Malaysian investment fund 1Malaysia Development (1MDB) has identified a site at the edge of Kuala Lumpur as the terminal station for a planned high-speed rail line from Singapore.
Two upcoming MRT lines will be added to make the location a transport hub for the Malaysian capital, it announced yesterday.
1MDB also said in a statement that it has completed a “strategic review” under new management and will take steps to reduce its massive debts, including selling assets and carrying out joint venture projects.
The fund is owned by the Finance Ministry, with Malaysian Prime Minister Najib Razak as head of its advisory board.
It has been criticised for amassing debts of nearly RM42 billion (S$16 billion) in just six years after buying 15 power plants and other assets to grow quickly.
The statement yesterday said the terminal station for the KL-Singapore high-speed rail will be sited within its Bandar Malaysia project.
Singapore said earlier this month that it will announce the location of its high-speed rail terminal when the heads of both countries meet for an upcoming retreat.
Singapore Prime Minister Lee Hsien Loong had previously said that Jurong East would be a “very attractive” location. Two other sites being considered are Tuas West and the city centre.
The Bandar Malaysia project has not been officially launched. The planned 200ha mixed development will sit on land in an existing military airbase in Sungai Besi, about 5km from the Petronas Twin Towers in downtown KL.
1MDB is also building Malaysia’s first dedicated financial district, called Tun Razak Exchange, on 28ha of land near Bandar Malaysia.
Concerns about 1MDB’s ability to pay its debts had put pressure on the ringgit and Malaysia’s sovereign bonds in recent weeks.
The fund addressed the concerns about its debts, noting that it “will now focus on its core businesses, and no new investments or projects will be undertaken”.
It will borrow money only to refinance existing debt or meet existing liabilities, or when carrying out project financing.
1MDB president and group executive director Arul Kanda Kandasamy gave the assurance that “1MDB will not undertake any new investments or projects, and we have developed a clear strategy for each of our existing businesses moving forward”.
The lawyer-turned-investment banker took up the post last month, becoming the fund’s third chief since it was set up in 2009.
The fund said it may sell some assets and real estate projects to cut debt. It could also offload land development rights and enter into profit-sharing joint ventures.
“Air Itam and Pulau Indah land (are) to be monetised through joint ventures or outright sale,” it said, referring to land in Penang and Selangor states, respectively.
It will park its 15 power plants and a desalination plant under subsidiary Edra Energy. It is planning to list its power plant assets in a US$3 billion (S$4 billion) initial public offering this year.
The fund said the assets have made it the second-largest independent power producer in Malaysia and the largest in Egypt and Bangladesh, with additional operations in Pakistan and the United Arab Emirates.
The plants have total effective power generation of 5,594MW. In comparison, Singapore had a total generation capacity of 12,521MW last year.