Cyberjaya - History

History

The idea of an IT-themed city, Cyberjaya, arose out of a study by management consultancy McKinsey for the Multimedia Super Corridor commissioned by the Federal Government of Malaysia in 1995. The implementation agency was the Town & Country Planning Department of the Ministry of Housing and Local Government. The catalyst is the agreement by NTT in 1996 to site an R&D center at a site to the west of the new Malaysian administration center, Putrajaya.

Multimedia Development Corporation (then known as MDC), the agency overseeing the implementation of the MSC was located in Cyberjaya to oversee the creation. The real estate implementation was privatized to Cyberview Sdn Bhd (Cyberview) in early 1997. At the time, Cyberview was set up a joint-venture comprising entities such as Setia Haruman Sdn Bhd (SHSB), Nippon Telephone and Telegraph (NTT), Golden Hope, MDeC, Permodalan Nasional Berhad (PNB) and Kumpulan Darul Ehsan Berhad (KDEB), representative of the Selangor Government. SHSB, a consortium comprising Renong, Landmarks, MKLand and Country Heights, was asked to take the lead regarding the development. Federal government linked companies Telekom Malaysia and Tenaga Nasional were conscripted to provide the telecommunication and power supply infrastructure. The ambitious plan was to develop the first phase, comprising 1,430 hectares by year 2006, with the remaining 1,460 hectares to be developed after year 2011. The engineering management consultant, Pengurusan Lebuhraya Bhd (now acquired by Opus International Malaysia) was appointed to manage the construction of utilities and infrastructure, overseeing major construction firms of Peremba and United Engineers Malaysia (UEM).

The central theme for the development is providing a quantum jump in standards, summarized as follows:

• a leading edge multimedia center that will attract world-class multimedia/IT companies;
• sophisticated and state-of-the-art integrated infrastructure and IT system; and
• sophisticated and efficient transportation systems with an emphasis on public transport

However, due to the late 1997 Asian Financial Crisis, the undertaking was deemed no longer viable and necessitated the Government taking over of the 55% and 15% stake in Cyberview shares held by SHSB and NTT respectively via the Ministry of Finance Inc (MOF Inc). The transaction gave MOF Inc a 70% stake and Cyberview has remained a government-owned company ever since. Cyberview then entered into an agreement with SHSB with shareholders comprising Country Heights Holdings Berhad (CHHB), Landmarks, Menara Embun (an MKLand Controlled Company) and Renong (now UEM World) with equal shares of 25%; granting SHSB the right to develop Cyberjaya as the master developer, while Cyberview became the landowner. In 2004, CHHB and Landmarks sold their equity interest in SHSB to MKLand-controlled companies, namely Modern Eden (12.5%), Impressive Circuits (12.5%) and Virtual Path (25%), resulting in MKLand-controlled companies becoming the majority shareholder of SHSB. Due to SHSB's shareholders' reluctance to inject their own reserves into SHSB and the company's practice of awarding contracts at high premiums, SHSB had to take up substantial loans. This has led to its gearing ratio ballooning to an unsustainable amount. Cyberview was then asked by the Government to rescue the ailing SHSB that led to Cyberview's expanded role.

Cyberview's role grew to include implementing various development and government initiatives, while SHSB carried on its role as the master developer. In addition to this, Cyberview was also tasked to undertake city-wide maintenance and spearhead investor interface and community-centric programmes in Cyberjaya.