Brouhaha aside, KAJ Development seeks ‘amicable solution’ over Melaka Gateway project

It was a press conference attended by representatives from some 30-odd media establishments.

All eyes were on KAJ Development chief executive officer Datuk Michelle Ong as she read out her press statement at the upper floor of a Middle Eastern restaurant in Jalan Ampang yesterday.

The press conference was called five days after the Melaka government terminated the developer’s contract over the multi-billion ringgit Melaka Gateway.

Ong highlighted the projected economic benefits included the growth of population from 875,000 to one million, the creation of 40,000 to 45,000 jobs, a GDP of RM125 billion, Gross National Income of RM99 billion, multiplier effect of RM1.188 trillion and a Gross Development Value of RM68 billion.

Work on the billion-ringgit project – which includes the reclamation and development of three islands (PME 1, 2 and 3) spanning over 609 acres that is “fully funded by KAJ Development without any cost to the state or federal governments” – started in 2015.

After providing the background on the project, Ong said: “On Nov 16 at approximately 10.12am a group of officers from the Melaka Economic Planning Unit (UPEN) arrived at KAJ Development’s office in Taman Pulau Melaka and served a letter of Notice of Termination for the Land Reclamation Agreement (LRA) between KAJ Development and the state government which was signed on Oct 4, 2017. The UPEN officers also posted an A3-size enlarged printout letter of the Termination Notice onto the Melaka Gateway project site archway.

“We hereby assert that the action of the Melaka government in terminating the LRA as unlawful, invalid, unfair, unreasonable and unconstitutional,” Ong said.

Despite the strong words in the presence of several men in ties and suits and the brouhaha, the punchline was sorely missing. In short, all KAJ Development is seeking for now is an “amicable solution”.

The Melaka chief minister’s office, in a brief statement on Nov 16, said the agreement between the state government and KAJ Development ended on Oct 3 because “KAJ Development failed to complete” the work.

At the press conference, Ong said no notice was given leading to the termination of the LRA.

However, paragraph two of the UPEN letter dated Oct 12 says the developer had failed to remedy clauses 8.2 and 11.1 of the LRA within 30 days and as such the agreement was terminated.

The press conference, however, failed to address the content of the said letter. Only when asked by Twentytwo13, Ong revealed KAJ Development had replied to the Oct 12 letter four days later. She, however, stopped short of revealing the contents of both letters.

The Oct 16 letter, which was later sighted by Twentytwo13, had KAJ Development explaining that it had written to UPEN thrice (on May 27, 2019, July 3, 2020 and Sept 29, 2020) to apply for an extension prior to the expiry of the completion period as per clause 11.2 of the LRA but was rejected all three times.

Since KAJ Development had responded to the Oct 12 letter, why didn’t the state government explain in detail why the application to extend the project was rejected?

Why didn’t KAJ Development see the need to highlight the fact that it had reached out to UPEN but was shot down repeatedly? The press conference was the perfect venue to set the record straight.

Also, is KAJ Development hoping for the state government to make a U-turn?

Admittedly, the powers-that-be are prone to making U-turns.

In fact, KAJ Development experienced the U-turn drama not too long ago. Tun Dr Mahathir Mohamad had been critical towards the project and when Pakatan Harapan took office in 2018, the project was cancelled. The matter went to the courts and the project was later revived after the Transport Ministry allowed KAJ Development to appeal against the government’s earlier decision to scrap the development.

There was a change in government again earlier this year.

Today, there are whispers that the project will be given to another party. But that remains coffeeshop talk.

Ong also highlighted that the project had secured “billions” in Foreign Direct Investment but failed to give an exact number.

The lack of clarity is evident.

If KAJ Development has spent RM700 million of its own funds on the project which is 40 per cent completed, then why is the state government pulling the plug?

Given the changes in government since the project started five years ago and the Covid-19 pandemic, surely work would have been disrupted. Doesn’t the LRA have a force majeure clause that takes such matter into consideration?

And since “a whole lot of money” is being invested in the country via this project, wouldn’t this be seen as benefiting the economy that will result in more job opportunities?

The termination of the project has caught the attention of many. China companies are backing the project as the republic has not given up hope of extending its tentacles in the region. But that’s for another day.

Institute for Democracy and Economic Affairs (IDEAS) research director Laurence Todd , had in a Nov 18 statement, said: “The Belt and Road initiative has the potential to deliver significant economic benefits to Malaysia and the wider region, through much need infrastructure. However, delivering large scale infrastructure is not straightforward and without proper planning can result in white elephants. This may now be the fate for the Melaka Gateway.”

There are those who continue to oppose the project – including the nearby Portuguese Settlement residents. While some rejoice over the termination of the agreement, Malacca Portuguese-Eurasian Association president Michael Singho cautioned: “Will this cancellation hold?

If Melaka Gateway, described as an “iconic national project”, is being built in the name of national interest, then it is in the interest of the rakyat that all details pertaining to the project leading to KAJ Development’s termination be made public.

If the parties concerned continue to claim that this project is for the people yet keep details secret, then there is no need for the press and the masses to be dragged into this “you say, they say” fiasco and let the courts decide once and for all.