Economist foresees doom for Melaka Gateway – 5 May 2017

  • An economist has voiced concern that the Melaka Gateway project may not materialise due to China’s strict capital controls.
  • Hoo Ke Ping said funding issues were in fact threatening all Malaysian projects led by companies based in China.
  • The MYR43bn 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 USD5mn out of China,” he noted. “In 2016, before the vetting, the threshold was USD50mn.”
  • Even if the Melaka Gateway project materialised, he said, it would be difficult for the project’s deep sea port to be viable.
  • He said these ports were much bigger than Melaka Gateway’s port but even then would be dwarfed by Singapore’s Tuas port.
  • Recently, former prime minister Mahathir Mohamad described the Melaka Gateway project as “unnecessary”, saying there were enough ports in the country.

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