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KUALA LUMPUR – A controversial RM43 billion (S $ 14 billion) port project off the coast of Melaka that was touted as the largest in the region when it was ready, surpassing Singapore, has been scrapped by the state government .
The Melaka government said in a letter dated Monday (November 16) that the developer of the Melaka Gateway project was unable to complete the reclamation works after three years as contracted, but the developer calls the completion “unfair” and is considering taking legal action.
“We want to resolve this amicably. But if not, we are ready” for legal action, Melaka Gateway CEO Michelle Ong told The Straits Times on Saturday (November 21). He said no reason was given for the “sudden termination.”
The project was initially a partnership between the little-known Malaysian company KAJ Development and the Chinese PowerChina International. It involves the recovery of three islands off Melaka, two of which would be artificial.
Since then, the Chinese partner has left the company. Datuk Ong is also the CEO of lead developer KAJ Development.
In addition to the gigantic deepwater port, Melaka Gateway was to include an international cruise terminal, bungalows with a private marina, condominiums, hotels, and theme parks.
The Melaka state government terminated the sea reclamation agreement with KAJ Development, saying it was unable to complete the development of 246ha, about half the size of Sentosa Island, three years after signing an agreement on October 4, 2017. .
The Chief Minister’s Office said in a letter seen by The Straits Times: “The company must also return the project site, as of the notice of termination issued by the Melaka state government.”
“Therefore, all matters arising regarding the Melaka Gateway project site should be communicated directly with the Melaka State Government.”
Melaka Gateway was planned with the ambition to surpass Singapore as the largest port in the region.
The project was first announced by then-Prime Minister Najib Razak in 2014 after a visit to Beijing.
After Najib was ousted in the 2018 general election, the Pakatan Harapan (PH) government abandoned, or renegotiated, several high-priced China-backed infrastructure mega-projects, including the East Coast railway line connecting Port Klang in the Strait of Malacca with Kuantan on the East Coast of Malaysia.
The Melaka Gateway project was one of those that was scrapped, but the PH government allowed it to continue.
Two of Malaysia’s largest ports are located along the Straits of Malacca itself, but Melaka Gateway was seen three years ago as part of a broader port alliance between Kuala Lumpur and Beijing to increase bilateral trade and boost shipping. and logistics along China’s much-acclaimed Maritime Silk Road. .
Port Klang in Selangor, Malaysia’s largest port, is north of Melaka and Tanjung Pelepas port, Malaysia’s second largest, is in Johor.
Ms. Ong said that the company has requested to meet with the Melaka government, but to no avail.
He said that so far 700 million ringgit has been spent on the Melaka Gateway project.
“We have managed to attract tens of billions in FDI,” he said, referring to foreign direct investment.
“We have several investors,” he told a news conference in Kuala Lumpur on Saturday when asked, adding that deals signed for one of the three islands generated $ 3 billion a year.
Investments obtained for the deepwater port amounted to RM3.8 billion, he said, while the cruise pier had generated investments of RM1.4 billion.
Ongoing construction at the project site was halted in March due to the Covid-19 pandemic, but work resumed two weeks ago, Ms Ong told The Straits Times.
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