After more than a week of hyped-up brouhaha, Dato’ Seri Najib Razak’s magic Wanda failed to cast its spell

For more than a week after the Ministry of Finance the sale of a 60% Bandar Malaysia interest to a consortium led by Iskandar Waterfront Holdings (IWH) collapsed, the Prime Minister’s Department media strategists worked overtime to limit the damage caused by the negative publicity.

They fed unnamed and uncorroborated stories to key correspondents with news leaks that the real reason why the IWH deal will terminated was because a much bigger deal was to be signed.

It was The Star who first picked up the “rumour” quoting “some sources” saying “that entity could be Dalian Wanda Group Co Ltd, a Chinese multinational conglomerate corporation and the world’s biggest private property developer” on 6 May 2017.

But it was The Singapore Straits Times who was the first to flesh out the story on 9 May 2017 and created an unreal buzz that Dato’ Seri Najib Razak has all but tied up the deal with Dalian Wanda, hence the urgency to dump IWH.

The Singapore Straits Times wrote that “Government officials and financial executives close to the situation told The Straits Times that negotiations with the Dalian Wanda Group to take a central role as master developer have reached an advanced stage…”

“Malaysian government officials noted that the new deal would be substantially higher than the previous RM12.3 billion valuation tag for the entire project.  According to financial executives familiar with ongoing talks, Wanda has proposed to use half of the development for tourism and entertainment-related ventures valued at roughly US$8 billion,” the Singapore paper added.

All media outlets, online and print, including The Star, quoted the Singapore report with expectations of an agreement to be signed with Wanda in Beijing this week hitting a feverish pitch.

However, with expectations set so high, the stage was set for a spectacular flop.  The press conference announcement yesterday afternoon between Dato’ Seri Najib Razak and Wanda’s Chairman Wang Jianlin in Beijing turned up a damp squib.

Despite the Prime Minister’s over-the-top praise for Wanda, Wang’s brief response was measured in pure diplomatic speak.

"Today, I also talked to the Prime Minister about this project. It is a large project worth over US$10 billion and we have not finalised a deal yet.  We are very optimistic about Malaysia's investment and commercial climate.  We are willing and ready to contribute our share to Malaysia's economic development and to create the one and only unique commercial centre in Malaysia," he said.

Not even a face-saving, typically broadly-worded, non-committal Memorandum of Understanding was signed.

The reason is likely quite simple. Dalian Wanda might be one of the richest private companies in China, making them an attractive target to sell perhaps, a grossly overpriced piece of real estate. But in all likelihood, Dalian Wanda became one of the most profitable companies in the world precisely because it doesn’t pay over-the-top prices of real estate – even if it is indeed prime real estate, especially if the seller is way more desperate than Wanda is interested.

With the IWH deal dead and no super-wealthy knight-in-shining-armour in sight, the Ministry of Finance needs to go back to the drawing board on its plans for Bandar Malaysia.  The priority must not be to sell the land at the highest possible price with the intended purpose for the funds to bailout 1MDB.  The priority to the land must be a economically sustainable development which will not only empower the Malaysian business community, but also in turn create meaningful job opportunities for ordinary Malaysians.