KL limits Forest City project after concerns over its impact

KUALA LUMPUR — China developer Country Gardens Holdings can develop less than 405ha, or only a quarter, of its controversial 1,600ha Forest City project in the Johor Straits, under new limits set by Malaysia’s Department of Environment (DOE), a report yesterday showed.

The Malaysian Insider has learnt that the DOE has verbally informed Country Garden Pacific View, a joint-venture unit of Country Gardens Holdings, of the new limits after complaints from locals and the Singapore Government over reclamation work in the narrow waterway between Malaysia and the island state.

“The DOE has decided to limit the project to the first phase and wait for a few years to see the impact before looking at future phases,” a source told The Malaysian Insider.

“The DOE is expected to send an official letter about its decision soon to relevant parties,” he added.

The Forest City development in the Strait of Johor, near Singapore’s Second Link, 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 ambitious project involves massive land reclamation work. Singapore had previously expressed concern about the possible transboundary impact of the reclamation work near its sea border.

Another source said Malaysian environmental authorities made their decision after Singapore presented videos and documentary proof of continued reclamation work for the China-Malaysia joint-venture project.

It is understood that the evidence was presented at the last Malaysia-Singapore Joint Commission on Environment, which met last month.

Singapore’s Ministry of Foreign Affairs did not issue a response to TODAY’s request for comment.

Analysts said it was difficult to gauge how much interest the project has generated among Singaporeans, but that it was likely investors would have already been cautious about the mega-project because it was on reclaimed land.

“At this point, I think the news hasn’t reached the majority of their consumers,” said Mr Sean Tan, general manager of iProperty Singapore.

“And as a Singaporean investor, obviously they would have to relook how that would affect their investment overall. I think Singaporeans being Singaporean investors, they will have a wait-and-see attitude until the formal letters and legislation have been put through.”

The reclamation work had also affected Malaysia’s nearby key transshipment hub, the Port of Tanjung Pelepas (PTP).

Last September, the Johor government said it wanted Country Garden Pacificview, the developer of Forest City, to comply with an Environmental Impact Assessment study before developing the project.

Johor Chief Minister Mohamed Khaled Nordin had said it was important to ensure issues such as the environment were given full attention and that regulations were adhered to.

A public dialogue on Forest City’s Detailed Environmental Impact Assessment turned chaotic on Sept 2 when the developer was confronted by locals affected by the project who were unhappy about not being consulted before its implementation, which was seen as polluting the environment and jeopardising the area’s marine ecology.

The developers had reportedly voluntarily stopped sea reclamation to build the island, which was 30 per cent completed, on June 15 last year, although there was no official DOE notice.

The Forest City project, which has gross development value (GDV) estimated at RM600 billion (S$225 billion) on reclaimed land, is a joint venture between KPRJ, a Johor state government owned subsidiary, and Country Garden Holdings.

The China developer ventured into Johor in 2012 when it acquired 22ha of waterfront land in Danga Bay for nearly RM1 billion. It launched Phase One of the Danga Bay project in 2013, when more than 1,500 units were snapped up in three days.

It launched Phase Two of the Danga Bay project last year, selling more than 6,000 units to date. Danga Bay is part of Malaysia’s ambitious Iskandar Region corridor, a project to develop the southern state as a special development and economic zone that would attract foreign investors.

Country Gardens Holdings is China’s seventh-largest property developer with a market capitalisation of HK$63 billion (S$10.8 billion) as of Dec 31 last year. Agencies, with additional reporting by Laura Philomin