MELAKA (Feb 17): The developer of the multi-billion ringgit Melaka Gateway coastal reclamation project had yesterday failed to have the court review the state government's decision to cancel the reclamation project that it had undertaken for three years.
The decision was made by Justice Anselm Charles Fernandis, who denied leave to the developer KAJ Development Sdn Bhd and ruled that there is no public law element involved in the state's decision and dismissed the judicial review application, according to the developer’s counsel and the state’s legal advisor.
Senior lawyer Datuk Loh Siew Cheang for Melaka Gateway’s KAJ Development and Melaka state legal advisor Datuk Mohd Abazafree Mohd Abbas confirmed the decision with theedgemarkets.com when contacted today.
Abazafree did not appear for the Malacca government, its state secretary and the deputy state secretary (development) who were named as respondents in the legal action. The respondents were represented by representatives from the Attorney-General's Chambers.
Loh said while he respects the decision, he questioned how the Melaka government could be deemed to not be involved in the decision when only the state owns land below the sea, and had approved the works, and the cancellation of the project would lead to the loss of a huge investment in the state.
The termination notice was issued to KAJ Development on Nov 16 last year.
A file search on the case revealed that KAJ Development had immediately filed a notice of appeal yesterday against Justice Fernandis’ decision at the Court of Appeal.
It was reported that the Melaka government had late last year terminated its three-year concession for land reclamation of islands that would form the foundation of the multi-billion ringgit Melaka Gateway project, which would involve a mega port and free trade economic zone.
KAJ Development chief executive officer Datuk Michelle Ong had said the Melaka Gateway project is fully funded by the company without any cost to the state government or the federal government. She also noted that there are also no loans or guarantees provided by the government to the company.
Application filed in December
The company filed the judicial review application on Dec 4 last year.
The company had entered into an agreement on Oct 4, 2017, to reclaim coastal land and islands surrounding the state.
It is seeking a certiorari order to quash the state government's order to issue the notice of termination dated Nov 11, 2020. The company also wants a declaration that the termination notice is declared null and void as it is ultra vires of Section 7 and 9(1) of the Temporary Measures to Reduce the Impact of Covid 19 Act, and another declaration that the termination is illegal and an unlawful act that is against the law.
The company is further seeking other relief and costs for the action.
In an affidavit in support to the application by Yu Ying Yang, a director of the company, the Johor-based company said it entered into an agreement with the state to claim 1,359 acres of sea land surrounding four islands to be called the Melaka Gateway project for a period of 10 years.
This is for a mixed commercial development that would comprise an integrated deep sea port, cruise terminal jetty, marina, tourism, entertainment, commercial properties and a free trade zone.
The company claimed that it is at all material times a national interest project and part of the Economic Transformation Programme endorsed by the Malaysian government. As part of the reclamation agreement, the company had already paid RM9.23 million to the state.
KAJ Development further provided letters from the Prime Minister's Office, the Home Ministry, the Chief Minister's Office in support of the project and had paid quit rent and land premium totalling RM8.923 million.
It further claimed that the Covid-19 pandemic had resulted in a delay of the project due to the implementation of the movement control order and conditional movement control order which restricted the entry of foreign consultants.
The company applied for an extension of time for completion and wrote in to the Chief Minister on June 26 last year to seek an additional 36 months to complete the reclamation works but there was no reply.
On July 3, it wrote to the deputy state secretary (development) for an extension of 36 months but on July 16, it received a letter rejecting the application.
On Oct 1, it appealed again to the state government for an extension, and on Oct 12, the state replied with a letter titled “Termination of the Reclamation Agreement” citing grounds of notice of default as a reason. The company responded to the notice of default that the winding-up order had been stayed for 36 months beginning Oct 1, 2020.
Following that, the company wrote in again on Nov 3 applying for an extension but on Nov 16, the state government issued the notice of termination resulting in this judicial review application.
Yu said the termination is unreasonable and disproportionate and resulted in it not being able to complete the project, thus this is sufficient reason for the notice of termination to be quashed.