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CEO sheds some light on project
1MDB has landed itself with the RM26bil Tun Razak Exchange |
Its task is to ensure this mammoth project takes off and it becomes a major catalyst of growth for the future. StarBizWeek's B.K. Sidhu and Yvonne Tan met up with its CEO, Datuk Shahrol Halmi, who shared some of his thoughts on how TRX can be a reality. Here are excerpts of the interview:
SBW: Why the name TRX from KLIFD?
Over the years, we got feedback that KLIFD is bit of a mouthful to pronounce and hard to remember, so we thought it'll be good to go and find a good memorable name for the district. TRX came about because it's on Jalan Tun Razak and we are just taking the cue from Wall Street, which is named after an actual street.
What's the role of the Government in TRX and why must the Government be driving it?
Because the Government is driving the ETP and who else is better to catalyse this than the Government? The Government is going to start the ball rolling by doing up the master plan and setting standards. The developers will be invited to participate.
What if there are no “A” grade tenants for TRX?
There will be tenants if we assume the economy is going to grow based on the plans in the ETP. It's a risk I admit but the risk is higher if we do nothing as a country. We are part of the Government's machinery in pushing the country to move forward.
Is there money coming from the Government to develop TRX?
The land was sold to us for RM230mil the valuation at that point of time. They didn't write me a cheque for TRX
The rules on incentives often change to attract FDIs, why?
I cannot speak for the Government but I can roughly outline you the process. We, as the land owner and master developer, would want everything but it's not like whatever 1MDB wants, we get for TRX. There is a process to follow. There are a lot of discussions with the Securities Commission, Finance Ministry and Bank Negara, and it is up to the policy-makers to balance it up.
What's in store for investors in TRX?
There are different models we are examining, and the standard model is that I have the land, you have money and expertise, so we do a joint-venture, where you go and build and in return, I get some of what is built or I get money and you keep everything.We are still firming up things. It's not rocket science, just a matter of risk appetite.
What if you partner does not deliver?
That is why the choice of partners is very important. Our partners are people who are suppose to have deep pockets. They also need to have the capability and commitment to the vision and the key point here is that, which ever the party we are working with, needs to be right, and we do not go through intermediaries.
Is businessman Low Taek Jho part of this project? Is he the one that helped get the commitment for the first RM3.5bil?
The role of Jho Low as far as 1MDB is concerned is zero. I 've heard talks that he is advising the Government on Middle Eastern investors but it's not true. What he does is to help promote Malaysia to investors.
Are we paying Jho Low anything?
Nope. His role is zero, if anything he is probably just introducing a few people to the Government there. We are dealing directly with the Government agencies there. There's no intermediary.
Who else has indicated interest beside the strategic investor?
The Japanese are definitely interested. Once the momentum is built, hopefully we can have our pick and be in a position to open up an international tender.
Have you opened up bids for construction players and companies to take part in TRX?
Not yet. We want to lock in the strategic investors first because when you are a strategic investor, you also want to have a say in who will participate in the project. We expect to have a lot of value around the table.The idea is that we are definitely going to be encouraging local investors and developers, but we will balance that with the fact that we need to get FDIs and create something which is globally competitive.We will let the market drive this.
The talk is that a large part of the development will be undertaken by investors from the Middle East.
No, we are looking beyond the Middle East. Enquiries are coming from all over the world from investors, potential tenants, technology and service providers.
THE Tun Razak Exchange (TRX) may see some of the country’s most prominent regulators relocate to the modern financial district.
1Malaysia Development Bhd (1MDB) says efforts are already under way to relocate the Securities Commission (SC) and Bursa Malaysia to TRX.
Chief executive officer Datuk Shahrol Halmi adds that “a lot of discussions has been held with the SC and Bursa, we certainly think it makes sense,” but he declined to elaborate as it was up to the Finance Ministry to look into the matter.
The SC is currently headquartered in Bukit Damansara while Bursa Malaysia is located on Bukit Kewangan. Both are on prime real estate with the SC building located in one of the most prestigious addresses for residential homes in the country. The stock exchange is housed next to Menara Maybank and is a stone’s throw from the Golden Triangle of Kuala Lumpur.
- Reproduced with the permission of The Star, Malaysia (thestar.com.my)