In an interview with FMT, Hoo Ke Ping said funding issues were in fact threatening all Malaysian projects led by companies based in China.
The RM43 billion Melaka Gateway project, seen as an attempt to compete with Singapore, features a deep-sea port to be built by 2019 on Pulau Melaka off the coast of Melaka. There’ll also be a cruise terminal and a waterfront district with hotels and a giant observation wheel.
“I foresee that many Chinese-led mega projects won’t materialise because Beijing’s capital controls mean that Chinese companies, be they state-owned or private, will face severe restrictions in investing money overseas.
“Recently, Beijing started vetting transfers above US$5 million out of China,” he noted. “Last year, before the vetting, the threshold was US$50 million.”
Even if the Melaka Gateway project materialised, he said, it would be difficult for the project’s deep sea port to be viable.
“Presently, we already have Port Klang, while the Carey Island port project, which is backed by some really big players, is also massive.”
He said these ports were much bigger than Melaka Gateway’s port but even then would be dwarfed by Singapore’s Tuas port.
“The new Tuas port is a mega port which can easily handle four times the capacity of all Malaysian ports combined,” he added. “Moreover, Singapore’s reputation for efficiency is well known.”
Recently, former prime minister Mahathir Mohamad described the Melaka Gateway project as “unnecessary”, saying there were enough ports in the country.