KUALA LUMPUR, Dec 31 — The sale of 1Malaysia Development Berhad’s (1MDB) Bandar Malaysia land sale to China Railway Engineering Corporation Sdn Bhd raises concerns that the government is actively selling off strategic assets and projects to foreign companies in a bid to reduce the state investment fund’s debts, PKR’s Rafizi Ramli said today. 

Rafizi claimed the latest deal would “complicate” Malaysia’s interests when dealing with regional issues involving China, as more of their companies were buying over important projects here.

“This deal today only validates my earlier warning that the 1MDB scandal would drag the country down until many of the country’s important assets will be sold to reduce 1MDB’s huge debt pile.

“If this happens, Malaysia will enter a new era whereby national interests concerning ownership by companies from China will of course complicate our country’s stand on regional issues such as overlapping claims on Spratly island,” he said in a statement.

Rafizi pointed out that 1MDB recently sold off Edra Global Energy to a foreign consortium, and that sale went against Putrajaya’s own rules that cap foreign equity of select industries to no more 49 per cent, claiming that this would permit and encourage future exemptions of the limit.

“I dare to make a guess that Datuk Seri Najib Razak’s administration is also thinking about awarding the Kuala Lumpur-Singapore speed railway line worth RM47 billion to companies linked to the Chinese government,” the Pandan MP added.

1MDB will receive RM7.42 billion from its 60 per cent equity sale of its Bandar Malaysia land bank to China Railway Engineering Corporation Sdn Bhd and Johor-based Iskandar Waterfront Holdings, which is part of its third and final rationalisation plan to settle its outstanding debt.

1MDB embarked on three-legged rationalisation plan that began in June this year, beginning with the share swap deal with Abu Dhabi-based International Petroleum Investment Company (IPIC) and the sale of its priced energy assets Edra Global Energy Bhd to a Chinese firm in November.

Both the deals will reduce the firm’s debt by RM24 billion, but critics contend that 1MDB and Putrajaya, which owns 1MDB through the Finance Ministry, are selling key national assets to foreigners.

Bandar Malaysia, located on a land which currently houses the Royal Malaysian Air Force base, will become Malaysia’s first integrated transit-oriented, mixed-use cluster.

In a statement today, Najib said he has met the vow made in June to resolve challenges facing 1MDB by year’s end, noting that recent sales by the state-owned investment firm reduced an “overwhelming majority” of its debts.