KAJ Development, dropped from RM43bil Melaka Gateway project in 2020, back on board

MELAKA: The mega coastal reclamation project worth RM43bil, Melaka Gateway, will be back in the hands of the original developer, KAJ Development Sdn Bhd, whose contract was terminated by the state government in 2020.

Melaka industrial and investment committee chairman Datuk Seri Ab Rauf Yusoh said the state government would allow the company to continue the project as originally planned.

"The project is expected to generate a revenue of RM15bil in the next six years.

"We have no problem with KAJ Development continuing the development," he said after visiting the project site at Pulau Melaka here on Tuesday (March 8).

KAJ Development chief executive officer Datuk Michelle Ong was present during the visit.

Ab Rauf said the developer had also pledged to complete the RM1.5bil Melaka International Cruise Terminal within 15 months.

A RM1.5bil theme park would also be completed by 2026, he added.

"The project is expected to draw a net investment totalling RM46bil, including through foreign direct investments," he said.

In November 2020, KAJ Development’s contract for the project was terminated by the state government after it failed to complete the work by the given date.

In response, the company highlighted how it had spent close to a decade planning and nurturing the project, which entailed the construction of three reclaimed islands, a deep-water port and a cruise terminal as well as commercial and residential properties.

The following month, KAJ Development filed a judicial review to challenge the termination of the land reclamation concession notice issued by the Melaka government.

The company stated in the suit that it had submitted several written requests to the statement to extend the three-year land reclamation concession which began on Oct 4, 2017, but to no avail.

A notice of termination was issued to the company claiming that it had failed to complete the project as scheduled.

On Feb 9, KAJ Development Sdn Bhd wanted to resolve the termination with the state government after the legal action came up before a three-member panel of the Federal Court chaired by Court of Appeal president Tan Sri Rohana Yusuf in Putrajaya.

Launched in 2014, the Melaka Gateway project, covering 552.8ha, was estimated to be worth RM43bil.

However, the project went through much uncertainty following the change of administration in the Melaka government in May 2018 when Pakatan Harapan came into power.

Disputes also emerged over the freehold land status given to the developer and environmental impact issues affecting residents of the historic Portuguese Settlement.