Monday 23 June 2014

Mega reclamation project off Johor raises concerns


* Johor reclamation project gets go-ahead, but size reduced
Forest City will have an area of only 1,386ha instead of 1,600ha
By Shannon Teoh, Malaysia Correspondent, The Straits Times, 15 Jan 2015

MALAYSIAN environmental authorities have approved reclamation works for the Forest City project in Johor, but for a reduced 1,386ha development instead of the initial 1,600ha.

The project had faced resistance from Singapore and Malaysians living near the site, which is close to Tuas, over fears of damage to the ecology of the waterway between the two countries.

Country Garden Pacificview (CGPV), the master developer, said in a statement yesterday that the Department of Environment (DoE) granted approval after accepting proposals in a Detailed Environmental Impact Assessment to "minimise or mitigate environmental impacts through integrated and workable solutions".

"Our next step is to ensure that all compliance monitoring, in terms of air, noise, water quality and sediment, is robustly implemented and carried out," said Datuk Md Othman Yusof, executive director of the joint venture between Johor state and Chinese developer Country Garden Holdings. "This is one of our immediate priorities - minimising the impact on the local communities and ensuring that the surrounding ecology (is) well preserved," he said in the statement.

A source familiar with the development told The Straits Times that the land reclamation was reduced to improve environmental standards, with CGPV given land on the mainland instead.

"The approved size is smaller because some of the land is on solid ground," the source said of the project whose backers include the state's sultan.

According to reports, one-third of the joint venture belongs to Esplanade Danga 88, a company in which the state has a 20 per cent interest, with the rest belonging directly to Sultan Ibrahim Ismail and royal court member Daing A. Malek Daing A. Rahaman.

Country Garden, which is China's seventh-largest property developer, had voluntarily halted land reclamation last June following controversy over the mixed development project that would include luxury homes and a new stadium for the state football team.

Forest City, which has a gross development value of RM600 billion (S$223 billion), was originally conceived as four man-made islands amounting to 1,600ha, over three times the size of Sentosa.

Initial plans had the islands built in the waters in Tanjung Kupang between south-west Johor and the north-west of Singapore.

Singapore conveyed its concerns on a number of occasions to Malaysia, asking for more information on the reclamation and construction works in the Johor Strait and that work be stopped until full studies were done.

Fishermen and fish farm operators have blamed mass fish deaths in the area on the land reclamation works, but the developer has denied this.

Apart from Forest City, the royal family is also involved in a 1,410ha reclamation project for an oil and gas hub farther west, off Tanjung Piai.





KL has reassured Singapore over reclamation concerns: MFA
By Charissa Yong, The Straits Times, 10 Jul 2014

MALAYSIA has assured Singapore that no reclamation is currently taking place for its two controversial projects near the Johor Strait, said Senior Minister of State for Foreign Affairs Masagos Zulkifli yesterday.

It remains committed to fulfilling its obligations under international law and will take all necessary measures to avoid any adverse transboundary impact, he said in Parliament.



"Singapore is very concerned about the potential transboundary impact on Singapore from reclamation projects in Malaysia that are in close proximity to Singapore," he said in response to questions from Dr Lim Wee Kiak (Nee Soon GRC) and Mr Ang Wei Neng (Jurong GRC).

The Republic has conveyed its concern on a number of occasions to Malaysia, asking for more information on these reclamation and construction works, he added.

Prime Minister Lee Hsien Loong spoke and wrote to Malaysian Prime Minister Najib Razak on the matter in May.

National Development Minister Khaw Boon Wan, who co- chairs the Malaysia-Singapore Joint Ministerial Committee for Iskandar Malaysia, also wrote to his Malaysian counterpart the same month.

The issue was also discussed in May at a meeting of the Malaysia-Singapore Joint Committee on the Environment in Malaysia.

Malaysia had responded on June 30 to Singapore's request for the projects to be temporarily suspended until the Republic receives and studies information on them. The Straits Times understands that Malaysia's Department of Environment was responding to a letter sent by the National Environment Agency.

The Malaysian Foreign Ministry then sent a diplomatic note to the Ministry of Foreign Affairs (MFA) on July 1.

Malaysia has also given Singapore preliminary general information on the projects and promised to share all other information once ready, Mr Masagos said.

Singapore is seeking further clarifications on some of the information provided, and will study the projects' impact.

"We have proposed to hold consultations with Malaysia so that both sides can further discuss and exchange information on these projects," he added.

The major reclamation works first attracted controversy last month, with concerns over their possible impact on Singapore and the environment.

The first project, a luxury home complex on a man-made island three times the size of Ang Mo Kio, is located near the Second Link. Dubbed Forest City, it is developed by China's Country Garden Holdings and a Johor state company.

The second is a residential project by China developer Guangzhou R&F Properties named Princess Cove.

Singapore was not given prior information on either project, and it is concerned about the effect on the coastal environment and infrastructure, among other problems, said Mr Masagos.

Under international law, Malaysia is obligated to "not permit reclamation activities of this scale and nature to take place so close to Singapore without first conducting an environmental impact assessment", he said.

If damage to the environment has been caused or is imminent, Malaysia has a duty to immediately notify Singapore, he added.

Under a 2005 settlement agreement following a reclamation case, both countries must monitor their environments in the Johor Strait, share information and address any adverse impacts.

According to a Johor official, Forest City developers had voluntarily stopped work for about a week while awaiting approval from the Department of Environment. But a Straits Times check on June 25 found that work on a sandbank was still ongoing, as the developers had asked for more time to wind down operations.





KL assures S'pore it will observe rule of law
The Straits Times, 26 Jun 2014

PETALING JAYA - Malaysia assured Singapore that it would observe international law, amid concerns over two massive reclamation projects on the Malaysian side of the Johor Strait.

"The Government of Malaysia remains committed to fulfilling its obligations under the general principles of international law and in particular, the 1982 United Nations Convention on the Law of the Sea," Malaysia's Foreign Minister Anifah Aman said in a statement on Tuesday in response to Singapore's concerns.


The minister added that Malaysia has engaged Singapore on the issue through a Joint Committee on the Environment, which was co-chaired by the heads of Malaysia's Department of Environment and Singapore's National Environment Agency.

He also said that Malaysia's federal government has been in close consultation with the Johor state government and the property developers involved, reported the New Straits Times.

One of the two reclamation projects, a 1,410ha man-made island near Jurong Island, is intended to be furnished with oil storage facilities to capture the spillover energy business from Singapore, marine construction firm Benalec told The Straits Times.

The other project, the 2,000ha Forest City near the Second Link, is being developed by China's Country Garden Holdings and a Johor state company, Kumpulan Prasarana Rakyat Johor.

This island is intended to be turned into a tourist hot spot, complete with hotel, luxurious apartments and recreational facilities.

Singapore had last Saturday voiced concern over possible transboundary impact from the massive projects, given its proximity to Johor.

Back in 2002, Malaysia had similarly objected to Singapore's land reclamation works in Tuas and Pulau Tekong, arguing that the projects could potentially impinge on Malaysia's territorial waters, causing pollution and destroying the marine environment in the Strait of Johor.

The dispute was resolved after the two countries appeared before the International Tribunal for the Law of the Sea, and signed an agreement in 2005.





Work still going on at reclamation site in Johor Strait
Sandbank abuzz with activity though work said to have been halted
By Reme Ahmad Assistant Foreign Editor In Johor Baru, The Straits Times, 26 Jun 2014

A STRIP of sandbank stretching from mangrove swamps in south Johor Baru to the middle of the narrow Johor Strait can be seen from the Second Link bridge some 2km away.

The sandbank is part of a controversial reclamation project by a Chinese developer that has led Singapore to ask the Malaysian government for more details so it can study its possible impact on the Republic and the strait.

China's Country Garden Holdings has said it plans to raise a 2,000ha man-made island in the strait to build luxury homes over the next 30 years. Its partner in the project is Johor state company Kumpulan Prasarana Rakyat Johor.

The sandbank, Johor officials have indicated, is the first part of this massive project - called Forest City - and will be expanded into a 49ha island, roughly the size of 70 football fields.

This island is to become a tourism and recreational area which will include a hotel with 80 rooms.

The sandbank can be seen on the left side of the Second Link bridge as one leaves Tuas checkpoint and drives into Gelang Patah in Johor.

Yesterday, a team from The Straits Times visited the site and spotted four lorries and three excavators still working on the sandbank, despite a Johor official saying on Tuesday that the developer had voluntarily stopped work for a week after the project attracted controversy.

The excavators were filling up the big lorries with sand, which was then ferried to a corner of the sandbank. The sand was dumped into waters not far from the mangrove swamps, presumably to join the sandbank to mainland Johor. It was not clear where the white sand used for the reclamation originated from.

Not far from this frenetic building site were regular scenes around the Johor Strait - a fisherman casting his net into the waters and, just beyond the mangroves, villagers tucking into breakfast at a roadside restaurant in Kampung Tanjung Kupang.

A fisherman who wanted to be known only as Ali showed his catch of the day, which included several kilograms of prawn, swordfish and mullet.

"I can sell this for RM500 (S$194), and sometimes a day's catch can be sold for RM1,000," he said. The reclamation project, he added, "will affect us badly".

He said some fishermen in the area have been paid RM5,000 by the developers as compensation for the coastal project, but asked: "How long could that sustain us?"

The project has also courted controversy domestically, with Malaysian media identifying Johor's Sultan Ibrahim Ismail Sultan Iskandar as a backer of the Country Gardens plan. This has alarmed legal experts and politicians, as Malaysian royalty is not supposed to be involved in business dealings.

Adding to this are reports that the project's promoters are not carrying out environmental impact assessment (EIA) studies, as required by Malaysian law. They are said to be exploiting a loophole that exempts projects smaller than 50ha from such studies.

The first phase of Forest City is 49ha.

Environmentalists are worried about the effect on the marine life, mangrove swamps and water flows in the Johor Strait.

Johor's environment chief Ayub Rahmat had told The Straits Times on Tuesday that the Forest City developers had voluntarily stopped work for about a week while awaiting approval from the Department of Environment.

Asked yesterday why excavators and lorries were still working on the sandbank, he said the developers had asked for "a bit more time" to wind down their operations.





China's richest woman controls firm behind Forest City project
By Rachel Chang In Beijing, The Straits Times, 26 Jun 2014

COUNTRY Garden Holdings, the Chinese property giant behind the controversial Forest City development in Johor Baru, is controlled by China's richest woman and one of the world's youngest billionaires.

Ms Yang Huiyan, 33, is the second daughter of Mr Yang Guoqiang, 59, a former bricklayer who founded the firm 20 years ago in southern Guangdong province.

In 2007, she was catapulted to fame when, just before Country Garden's listing on the Hong Kong Stock Exchange, her father transferred all his holdings to her.

This amounted to 70 per cent of the company's stock and gave the Ohio State University graduate an overnight fortune of US$16 billion after the initial public offering.

The 2008 financial crisis has reduced her fortune to US$7.2 billion (S$9 billion) now, which still puts her in seventh place on China's rich list.

Ms Yang was made vice-chairman of Country Garden in 2012. But by all accounts of the media-shy family - Ms Yang has never accepted an interview and makes few public appearances - Mr Yang still largely runs the real estate giant as chairman.

According to local media reports, he has been training his favoured daughter for succession for almost all her life, taking her along to company meetings when she was a teenager.

Company insiders said she would "listen intently but never say a word".

After she graduated from university in 2003, her first job was as her father's personal assistant.

Mr Yang himself has a classic rags-to-riches story common among China's nouveau riche.

A bricklayer and construction worker in his youth, he started his business by buying up vacant land for development in his hometown of Shunde in Foshan city.

His success, like that of other real estate moguls, was facilitated by a good and allegedly reciprocal relationship with local officials.

In 2007, Guangzhou newspaper Southern Weekly published an expose of Country Garden's collusion with officials to buy a land site in Zhangjiajie, in Hunan province, at almost zero cost.

One analyst noted then that while sites in downtown Guangzhou were sold at about 10,000 yuan (S$2,000) per sq m, Country Garden's total average land cost was estimated at 300 yuan per sq m.

The accusations slid like water off a duck's back for the well-connected Mr Yang, who is a member of the Standing Committee of the Chinese People's Political Consultative Conference of Foshan city.

In the past two years, Country Garden has embarked on an ambitious overseas expansion strategy. Forest City was conceived after Country Garden's first Malaysian development, in Danga Bay, debuted successfully last year.

Danga Bay sales were a big factor in pushing the firm's 2013 revenue up by 50 per cent to 62.7 billion yuan, according to its financial statement. Net profit rose by 24.2 per cent to 8.5 billion yuan.

This year, Country Garden is also launching its first Australian project, an 800-unit development near Sydney's Ryde suburb.

In the meantime, Ms Yang - who is married to the son of a high-level provincial official - looks likely to remain a dominant figure in China's real estate scene.

At the time of her public anointment in 2007, Mr Yang told Hong Kong media that "even if I reach the age of 100, I am going to give it to her anyway".

"She's family and I have faith in her."





Controversial reclamation project in Johor Straits halted
TODAY, 25 Jun 2014

Malaysia’s Department of Environment (DOE) has issued a stop-work order on a massive reclamation project to create a housing development in the Straits of Johor near the Second Link, said a Johor state official.

“The order came about a week ago and all land reclamation work in the area has been suspended pending further studies on the environmental effects of the project,” State Health and Environment Committee chairman Ayub Rahmat was quoted as saying by the New Straits Times (NST) yesterday.

Singapore had earlier expressed concern about the possible transboundary impact from the reclamation work in the Straits of Johor and requested more information from the Malaysian government.

“We have asked the Malaysian authorities to provide more information so that we can undertake a study as soon as possible on the impact of this reclamation work on Singapore and the Straits. They have agreed to do so and we hope to receive the information soon,” said a Ministry of Foreign Affairs spokesman on Saturday.

On Monday, the NST reported that the Johor government confirmed it had received a request from Putrajaya to furnish details on land reclamation projects in the state.

Malaysia media reports earlier said that Singapore Prime Minister Lee Hsien Loong also wrote to his Malaysian counterpart Najib Razak about the issue, after two diplomatic notes on the matter were sent to Malaysia’s Foreign Ministry last month.

A third note was handed to the Minister in the Prime Minister’s Department, Mr Wahid Omar, when he visited Singapore recently, the reports said.

Mr Ayub told the NST that any negotiation on lifting the suspension on reclamation work for the development of the massive Forest City off Tanjung Kupang would be between the DOE and the project’s joint developers, China’s Country Garden Holdings and the state-owned Kumpulan Prasarana Rakyat Johor.

“We will wait for the department to complete its studies on the project, after which we will also ensure that all guidelines are met,” he said.

On the concerns raised by the Singapore Government, Mr Ayub said the state government valued the bilateral ties with its neighbour. “We will look into the issue of other transboundary effects because of the land-reclamation work,” the NST quoted him as saying.

The Forest City project involves creating a 1,817ha island almost three times the size of Ang Mo Kio and the construction of luxury homes. The project, which includes a 49ha tourist hub and recreational facilities, is expected to be completed in 30 years’ time.

The NST report said that reclamation work for the tourist hub began in early March and was expected to be completed by the end of the year.

Based on Malaysian regulations, projects that are larger than 50ha in size require an environmental impact assessment (EIA) report before they can be approved.

However, The Malaysian Insider reported that, as of June 15, publicly available information on the DOE’s web portal showed that no EIA report was submitted either for the Forest City project or another 1,410ha reclamation project off Tanjung Piai, undertaken by Benalec Holdings for the purpose of building an industrial oil and gas hub.

AGENCIES





Johor reclamation project 'to create oil storage hub'
New island to capture spillover oil and gas business from S'pore: Firm
By Reme Ahmad, The Straits Times, 25 Jun 2014

ONE of the two massive reclamation projects coming up in the Johor Strait will be turned into an oil storage hub to capture spill-over oil and gas business from Singapore, an official with the company involved in the works said yesterday.

The project involving Benalec Holdings will raise a 1,410ha man-made island near Jurong Island, the firm's chief operating officer Bernard Boey told The Straits Times.

The reclamation is expected to begin before the end of the year.

The project, located off Johor's Tanjung Piai coast, is roughly twice the size of Ang Mo Kio.

The massive size of the other planned reclamation in the Johor Strait near the Second Link bridge has also sparked controversy, given the lack of details from the developer, China's Country Garden Holdings and its partner Kumpulan Prasarana Rakyat Johor.

The Forest City reclamation, as it is called, is reportedly 2,000ha in total area - nearly three times the size of Ang Mo Kio.

The man-made island near Jurong Island that Benalec is involved in is called the Tanjung Piai Maritime Industrial Park, according to the firm's website. Once completed, oil storage facilities would be built, Mr Boey said.

"Our intention is to capture the spillover from Jurong," he said, referring to Jurong Island's position as a global energy and chemicals hub with some $42 billion worth of investments.

The Malaysian government's plan to capture some of the global energy business from Singapore includes backing the construction of a US$16 billion (S$20 billion) project on the other side of Johor, in Pengerang, called the Refinery and Petrochemicals Integrated Development (Rapid) development, media reports say.

Benalec is also involved in the reclamation works to extend the shoreline of the Rapid project in Pengerang, Mr Boey said. "The route of oil from the Middle East that is heading to China, Japan and (South) Korea - if you have these facilities, you can cater to the demand," Mr Boey said.

He said that apart from the plans by Malaysia, there are international companies setting up oil storing hubs in Indonesia's Batam and Karimun islands.

The Benalec and Forest City plans have raised concerns among environmentalists because fishing grounds, water flows and mangrove forests would be affected.

Mr Boey said the reclamation works for the oil storing hub would start only after the authorities are satisfied with the way the project promoters plan to mitigate its impact on the surrounding environment. Benalec is expected to pay compensation to fishermen in nearby villages who would be affected, he said.





Johor reclamation works begin despite concerns
The Straits Times, 24 Jun 2014

KUALA LUMPUR - Two massive reclamation projects are under way in the Johor Strait despite the lack of environmental assessment reports and a move by Singapore asking about the impact of the development.

According to a report by news website The Malaysian Insider yesterday, the reclamation has also raised concerns over how it will affect the livelihoods of fishermen, as well as ships using the nearby Port of Tanjung Pelepas.

One of the projects is a 2,000ha man-made island - nearly three times the size of Ang Mo Kio estate - that will feature luxury homes and will be completed in 30 years' time.

The works are being carried out by China property developer Country Garden Holdings and Johor state company Kumpulan Prasarana Rakyat Johor.

According to previous media reports, the project, called Forest City, is backed by Johor's Sultan Ibrahim Ismail Sultan Iskandar.

Previous maps used by the Malaysian media showed a rectangular piece of reclaimed land, part of it lying under the Second Link, the bridge joining Tuas to Gelang Patah in Johor.

But The Malaysian Insider yesterday published a map that showed a much bigger island on the Malaysian side of the border in the strait.

Another massive reclamation, also reported by the Insider, is a 1,410ha island by Kuala Lumpur-listed company Benalec Holdings.

On its website, the company named the project as the Tanjung Piai Maritime Industrial Park, and said the island would be turned into a petroleum and petrochemical hub.

According to the Insider, this project is backed by Johor's Crown Prince Tunku Ismail Idris Sultan Ibrahim.

All reclamation in Malaysia with land areas of 50 acres (20.2ha) or more need to have environmental impact assessment (EIA) studies submitted. Only when the EIA report has been approved by the government can the project go ahead.

But the promoters of Forest City had proposed breaking up the man-made island into smaller parcels so that environmental assessment studies would not have to be submitted, the Edge Review online magazine reported last month.

Johor's director of the Department of Environment, Mr Mokhtar Abdul Majid, said yesterday that the Forest City project does not need an EIA report as the land area measures 49 acres.

Reclamation work began in early March and is expected to be completed within eight months, Mr Mokhtar was quoted as saying by the Bernama news agency.

Singapore had over the weekend expressed concern to Malaysia over the reclamation works in the Johor Strait.

Its Ministry of Foreign Affairs (MFA) said that Singapore had asked for more information so it could study the possible impact on the Republic and the strait.

"They have agreed to do so and we hope to receive the information soon," a spokesman said.

"Given Johor's close proximity to Singapore, we are naturally concerned about any possible transboundary impact on Singapore from property development projects that involve reclamation works in the Strait of Johor."

The MFA added: "There are also international obligations for both the Malaysian and Singapore authorities to work closely on such matters."





Mega reclamation project off Johor raises concerns
S'pore seeking more information from KL on massive island below Second Link
The Sunday Times, 22 Jun 2014

Singapore has expressed concern to Malaysia over a proposal for a massive reclamation project to create an island in the Strait of Johor below the Second Link.

The Ministry of Foreign Affairs (MFA) confirmed yesterday that Singapore has asked for more information so it can study the possible impact on the Republic and the strait. "They have agreed to do so and we hope to receive the information soon," a spokesman said in response to media queries.

A report in the Malaysian daily The Star yesterday said that Prime Minister Lee Hsien Loong has written to his Malaysian counterpart, Datuk Seri Najib Razak, about the project.

That was a follow-up to two diplomatic notes on the matter sent to Malaysia's Foreign Ministry last month, the paper said. A third note was handed to Minister in the Prime Minister's Department Wahid Omar when he visited Singapore recently, it added.

The Star reported last Monday that China property developer Country Garden Holdings and a Johor government company, Kumpulan Prasarana Rakyat Johor, were planning the reclamation project called Forest City for luxury homes.

The idea to create a 2,000ha island - nearly three times the size of Ang Mo Kio estate - will take 30 years to complete, Mr Kayson Yuen, Country Garden's regional president for the project, told the paper. A project map showed part of the man-made island under the Second Link, which connects Tuas in Singapore to Johor.

The Edge Review online magazine reported last month that Johor's Sultan Ibrahim Ismail Sultan Iskandar was behind the project, which was being promoted actively by powerful Johor politicians.

Mr Yuen told The Star that his Hong Kong-listed company had studied the project for more than a year before deciding to invest in it, and that an Australian consultant and local contractors had been hired for the reclamation works.

Singapore's MFA said yesterday: "Given Johor's close proximity to Singapore, we are naturally concerned about any possible transboundary impact on Singapore from property development projects that involve reclamation works in the Strait of Johor.

"There are also international obligations for both the Malaysian and Singapore authorities to work closely on such matters. We have asked the Malaysian authorities to provide more information, so that we can undertake a study as soon as possible on the impacts of these reclamation works on Singapore and the Strait. They have agreed to do so and we hope to receive the information soon."

The Star said yesterday there has been no indication that the parties behind the reclamation works submitted environment impact assessment reports to the government.

It noted, however, that reclamation works smaller than 50ha in land area need not submit environmental impact studies.

The Edge Review magazine had claimed in its report last month that the man-made island may be dissected by canals into smaller parcels to get around the legal need for environmental impact studies.





Chinese firms plan 39,000 homes in Johor
The Sunday Times, 22 Jun 2014

Johor Baru - China property developer Country Garden Holdings and four other mainland companies have bought land in the southern Malaysian state of Johor with plans to launch more than 39,000 residential units, including on land to be reclaimed off Singapore's Tuas, The Star newspaper reported yesterday.

The biggest project with Chinese involvement is the raising of a 2,000-ha man-made island off Tuas - nearly three times the size of Ang Mo Kio. This area in the Johor Strait below the Second Link is now being reclaimed by Country Garden and a Johor government company, Kumpulan Prasarana Rakyat Johor.

The reclamation project is called Forest City, and The Edge Review online magazine reported last month that Johor's Sultan Ibrahim Ismail Sultan Iskandar is behind it, and that it is being actively promoted by powerful politicians in the state.

A project map published by The Star showed part of the island under the Second Link.

The projects said to be planned by the China players in Johor's development region called Iskandar are huge by local standards.

Hong Kong-listed Country Garden last year raised concern among Johor property players when it launched the sale of 9,000 residential units in Danga Bay, in state capital Johor Baru, worth RM18 billion (S$7 billion).

It said that 6,000 units were to be launched at the same time, the biggest single launch of any project in Malaysia.

Meanwhile, Guangzhou-based R&F Property Co has plans to build 30,000 residential units over several years, The Star said. The location of the project was not identified.

Other players from China which have recently bought land banks in Iskandar are Shanghai-based Greenland Group, Singapore-based Hao Yuan Investment which is controlled by mainland shareholders, and Zhuoda Real Estate Group.

Some of the projects are being targeted at buyers from mainland China itself, the property company officials have said.

They also hope to leverage on Iskandar's proximity to Singapore, as high home prices in the Republic force cash-rich Singapore residents to look at Johor property instead.

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