KUALA LUMPUR (June 29): The Melaka government has not issued a stopwork order to the Melaka Gateway project, which carries an estimated RM30 billion in gross development value (GDV). 

It has also not asked for the privately-held project to be scaled down, according to the state industry, trade and investment committee chairman Mohd Rafiq Naizamohideen.

What it has done instead is start negotiations with the project's master developer KAJ Development Sdn Bhd to change the status of freehold land on a man-made island involved in the project to a 99-year lease instead. The said island is about 200 acres in size.

On Sept 1, 2016, KAJ signed a memorandum of agreement with China's state-owned Powerchina International Group Ltd to develop the Melaka Gateway mixed development on the Straits of Malacca. The project comprises three man-made islands and one natural island.

To be completed in 2025, the development is expected to attract some 2.5 million visitors annually and create 40,000 to 45,000 jobs.

The islands would feature among others, an international cruise passenger terminal, a commercial city, a liquid bulk terminal, and a maritime industrial park.

“It is a big concern that KAJ was offered a freehold land by the previous government for the first [man-made] island, where reclamation works is 50% to 60% complete. The masterplan signed with the government then involves three artificial islands,” Mohd Rafiq told reporters outside Menara Ilham here, after briefing the Council of Eminent Persons regarding the mega project.

“The discussion is still going on with KAJ and is progressing well. We hope to complete it in a month. So far, no decision has been made on reducing the scale or stopping the project. The focus is on the status of the land.

“In the end, any decision made would be based on the state and people’s needs, because the previous agreement by the Barisan Nasional government was problematic to the country's (sovereignty).

“The project is being done with the cooperation from Powerchina, so the issue of freehold is worrying to the people in the state and Malaysia. KAJ has also asked for freehold land status for the second and third islands, but we won’t allow that,” he added.

Mohd Rafiq said the government would reimburse the premium difference from the conversion of the land to leasehold, from freehold, after it has completed the calculation.

In the meantime, the state is looking at ways to participate in the project and be given the priority to decide on investments on the islands.

“Perhaps our state-linked companies or government can be given the priority to look for investors. There should not be large exclusive rights given to KAJ to decide on investments,” he added.