This article first appeared in The Edge Malaysia Weekly on November 23, 2020 - November 29, 2020

Last week, the Melaka state government terminated a land reclamation contract with KAJ Development Sdn Bhd to, among other things, develop three islands, and build an international cruise terminal, a marina for yachts, bungalows with a private marina, high-end condominiums and a deep sea terminal, at a whopping RM43 billion.

The project was to be carried out on a 246ha site.

The Melaka Chief Minister’s Office said the agreement with property developer KAJ Development, signed in October 2017, expired last month, and that “all matters arising regarding the Melaka Gateway project site should be directly communicated with the Melaka state government.”

But problems had surfaced even before this.

In October 2018, KAJ Development’s licence to operate the port and terminal was revoked by the Ministry of Transport (that is, the federal government) and only after a judicial review was filed against Transport Minister Anthony Loke Siew Fook and the Melaka Port Authority for RM139 billion in damages, were the requisite licences reinstated, in May 2019.

The licences for the operation of the terminal were restored despite overcapacity in the three main ports — Port of Tanjung Pelepas in Johor, Port Klang in Selangor and Penang Port up north — and plateauing container traffic in the region.

KAJ Development’s partners were not local entities but China’s state-owned State Power Investment Corp and three provincial governments.

In September last year, KAJ Development’s CEO Datuk Michelle Ong said piling works had commenced in June 2019, and that the RM682 million cruise terminal was set to be completed in September 2020. That was two months ago.

Back then, the delay was attributed to the “new government”.

If piling or any other work has been completed, will KAJ Development be seeking compensation from the Melaka government, and if there is going to be any compensation, who will pay for it?

Was the project even necessary in the first place?

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