COMMENT While much flak and focus have been drawn towards the issues surrounding 1MDB, work is still progressing on the ground at the Tun Razak Exchange (TRX).

And so are the corporate exercises for Edra Global Energy and expressions of interest for Bandar Malaysia.

At the end of the day, the expected end-result is for these three to be stand-alone companies, with full autonomy and accountability for their operational and financial performances.

Of late, much has been said about 1MDB, the investment fund set up to drive sustainable economic development by forging strategic global partnerships.

While we shall leave the investigators to do their part on the allegations thrown at the company, a look at 1MDB revealed that it has its strength in coming out of the current situation, much stronger that what was perceived.

1MDB is taking a number of concrete steps to reduce its debts and ensure that maximum value is generated as part of its rationalisation plan, which has been progressing well.

After the signing of a joint-venture agreement with Lend Lease of Australia to develop 6.87ha out of 28ha in TRX, there has been a lot of physical work on the ground.

Lend Lease is not a new player in the industry. It is a well-established international property group and has worked on notable projects in Malaysia - Petronas Twin Towers, Setia Mall City and the Pinewood Iskandar Malaysia Studios.

Its chief executive officer for Asia, Rod Leaver, had said during the signing ceremony in March, that the firm did its own assessment and due diligence before embarking on a project and was very much committed to TRX.

The firm, too, was keen to expand its footprint here and bring in larger investors, Leaver had said.

TRX, which has a gross development value (GDV) of RM40 billion, will be one of the largest developments in the current portfolio of global projects of Lend Lease, which it has a 60 percent partnership in the lifestyle quarter with TRX’s master developer, 1MDB Real Estate.

The involvement of a property player of such stature speaks volumes about the potential of the said project.

Bandar Malaysia, on the other hand, has a GDV of RM150 billion. Its 200ha mixed-use urban development will become a benchmark for sustainable urban communities in the region.

Set to become central transport hub

The development will serve as Kuala Lumpur’s gateway for the high-speed rail-line to Singapore and, with two mass rapid transit lines on site, will become a central transport hub in the city.

1MDB’s independent real estate consultant, CH Williams Talhar and Wong, has also announced receiving expressions of interest from more than 40 local and international parties to be development partners for the Bandar Malaysia project.

Meanwhile, the monetisation of its energy assets under Edra Global Energy seems to have also picked up momentum, not only attracting domestic but potential foreign investors as well.

Among others, Tenaga Nasional Bhd has recently announced it was interested in acquiring the assets.

A recent news report also suggested that the interested parties included YTL Power, Malakoff, IJM Corp and Singapore’s Sembcorp Industries.

Although there has been much interest, 1MDB has not fixed a timescale as to when the assets will be sold, as the company wants to make sure it obtains maximum value for its 100 percent shareholder, the Finance Ministry.

As for its other assets, on June 30, 2015, 1MDB announced its intention to appoint an independent real estate consultant to help review expressions of interest received for the company’s land parcels in Air Itam in Penang and in Pulau Indah.

With most of its businesses still in active mode, the company, too, is aware of and remains committed to addressing its financial obligations.

Among others, it has completed the repayment of a US$975 million loan (about RM3.6 billion) on June 8, 2015, on the back of a binding term sheet agreement with International Petroleum Oil Co, which will ultimately result in a reduction of approximately RM16 billion of 1MDB’s debt.

There are no major loan repayments due in the immediate future.

However, with much public pressure and perceptions that 1MDB has to deal with, no doubt it will an uphill task in manoeuvring the company.

To be fair, no company or organisation is able to revamp and restructure businesses overnight.

With the progress made so far, 1MDB has expressed confidence of significantly reducing its debt and ensuring the long-term sustainability of its three core assets - TRX, Bandar Malaysia and Edra Global Energy.

- Bernama