IDEAS: Melaka Gateway needs better infrastructure planning

MELAKA, Nov 18 -- The Melaka Gateway project, in which the Melaka state government has terminated the sea reclamation agreement with its project developer KAJ Development Sdn Bhd recently, needs better infrastructure planning.

IDEAS research director Laurence Todd said the Melaka Gateway is a large mixed development to construct artificial islands serving both commercial and tourist functions in addition to a new deep seaport.

"The development was considered part of the Belt and Road Initiative (BRI), with a consortium of Chinese state-owned enterprises, led by PowerChina International and local company KAJ Development.

"As with many large infrastructure projects, the development has faced a number of challenges. The project has attracted criticisms from the local community who complained about its impact on their way of life," he said in a statement here, today.

He said the economic feasibility of the project had also been questioned, particularly the demand for additional port capacity, when Malaysia’s current ports including nearby Port Klang continued to operate below capacity as the government’s support for the project had also been mixed.

"The development was originally backed by the federal government under Barisan Nasional but negotiations over the port licence became strained with the Pakatan Harapan government, suggesting a policy discontinuity between the two administrations.

"The Melaka state government initially granted the developer freehold land status on the islands but subsequently sought to move to a leasehold arrangement. Now, due to the failure to progress with the project, the Melaka government had terminated the land reclamation agreement," he said.

Todd said these issues partly reflected the inadequate infrastructure project planning as infrastructure of this scale required rigorous planning, specifically on social and environmental impact assessments to secure local buy-in and protect the local ecosystem and economic and financial feasibility assessments to ensure there is an underlying need for the new infrastructure, while the project implementers have the capacity to deliver.

He said the Melaka Gateway was primarily a privately driven initiative but the Malaysian government should take this opportunity to ensure that infrastructure planning is strengthened both for public and private-led projects.

He said without these processes in place, the projects are at significant risk of being left unfinished.

“The BRI has the potential to deliver significant economic benefits to Malaysia and the wider region through much needed 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 project.

"We should learn from this and ensure that all future infrastructure projects are subject to thorough economic and financial feasibility assessments and social impact assessments, made publicly available," he said.

On Monday, the Melaka government said it had terminated the sea reclamation agreement with Melaka Gateway project developer KAJ Development.

The Chief Minister’s Office said the agreement, dated Oct 4, 2017, expired on October 3 and a termination notice was sent to the company today after it failed to complete the 246.45-hectare project.

-- BERNAMA