Developer sues over Melaka Gateway termination

Developer sues over Melaka Gateway termination
Developer sues over Melaka Gateway termination

The developer of Melaka Gateway project has filed a judicial review over the Malacca government's decision to terminate the company's land reclamation concession for the project.

The Melaka Gateway is a yet-to-be-completed waterfront megaproject involving three islands located off the old part of Malacca city launched by then prime minister Najib Abdul Razak in 2014.

In a statement, KAJ Development Sdn Bhd (KAJD) said it was seeking justice as the state government had sought the return of one of three islands already reclaimed, despite the company having been issued land titles and made full payment of land premiums and assessment fees.

"Further, the land title for Island 3 has been approved and necessary due payments had been made. Overall, KAJD has paid over RM10 million to the state government for two islands land titles while the necessary application is in progress for the Island 2 land title," said the company.

According to Bernama, the Malacca government had terminated the sea reclamation agreement on Nov 17 because the company had failed to complete it within three years as agreed when the concession was issued on Oct 4, 2017.

The company said it would argue in court when proceedings begin on Dec 22 that this decision was in breach of the Covid-19 (Temporary Measures) Act 2020 (Act 829), which bars construction-related terminations until after Dec 31, 2020.

The company said works had been suspended since March 18.

"We had submitted several written requests to the state government to extend the land reclamation concession but they were either ignored or rejected. Then, the Nov 16 notice of termination stated KAJD didn’t complete the project as scheduled," said company CEO Michelle Ong.

She said the necessary equipment and foreign experts could not return to Malaysia to work on the project, hence the reclamation works can only continue once Covid-19 restrictions are fully lifted.

Ong stressed that the Melaka Gateway project was wholly-owned by KAJD and not the Malacca government. Investors include foreigners and locals amounting to US$5 billion (RM20 billion).

One major investor in KAJD is Power Construction Corporation of China (PowerChina), a company owned by China's state council.

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