Melaka Gateway

China’s Minister of Transport called the Melaka Gateway “the forefront flagship in support of the One Belt, One Road Initiative initiated by the People’s Republic of China.” The project supported China’s interest in improving connectivity between continents through what PRC President Xi Jinping calls “the Maritime Silk Road of the 21st century,” and its location in the Straits of Malacca, through which most of China’s exports and imports pass, made it all the more attractive. The Melaka Gateway port facilities would have provided China direct access to one of the most important trade routes in the world—one that has been historically dominated by Singapore, a nation more politically aligned with the United States than with China.

The project design includes the development of four islands, or PMEs (an acronym for Pulau Melaka East): two reclaimed (PMEs-1 and 2), one existing (PME-3), and one an extension from the shore into the sea (PME-4). PME-1 is intended to host a tourism and entertainment hub with a theme park and an esplanade, while PME-2 is planned to serve as a Free Trade Economic Zone with financial institutions. The existing PME-3, Pulau Panjang, is slated for development into a deep seaport for liquid cargo, while PME-4 is intended to be a maritime industrial park.

Insufficient Economic Rationale

The economic feasibility of Melaka Gateway’s ambitious deep seaport development has been repeatedly questioned due to the under-utilization of Malaysia’s existing ports and Melaka’s existing marina. The development of the Melaka Gateway port would only serve to shift the attention away from the dire need to address the problems of existing underutilized structures. The project’s plan to develop luxury residential and commercial areas on one of the four islands was also met with negative responses, with residents citing the oversaturation of development projects in Melaka. There is a high probability that the project would only increase the number of unsold properties in the state.

Environmental Issues with Land Reclamation

Given the size of the Melaka Gateway, a Detailed EIA(DEIA) should have been required and its findings made accessible to the public, giving ample time and opportunity for feedback, discussion, and engagement before any work on the project commenced. However, no EIA studies were conducted to assess the environmental effects of the project. Instead, the developer used a 1997 macro-EIA report as its basis, an outdated document replete with inaccuracies because more than 20 years had passed since its publication. The project also should have had a Social Impact Assessment (SIA) to look into the impacts of the reclamation works on the coastal communities, but no assessments seem to have been conducted.

Transparency Gaps

Two former prime ministers endorsed the Melaka Gateway as a national project, but the details of the concession procurement were not made public. Various transparency issues concerning the structure of concessions between the government and a private company made the detailed terms of this partnership difficult to ascertain. There was no transparency on the financing arrangements, and the owner of the port was unknown. This concern was amplified by KAJD’s track record as a firm, especially since it had no previous experience owning or operating ports.