SINGAPORE - Construction and reclamation for a luxury housing project to be built on a man-made island in the Johor Strait will continue, with Malaysia's Department of Environment (DoE) giving the developer the go-ahead.

Work on the project off Tuas had been suspended from last June as concerns about its environmental impact were raised on both sides of the border. Since then, all parties have been waiting for a final verdict from the DoE.

Singapore conveyed its concerns about the project on a number of occasions to the Malaysian government, asking for more information on the reclamation and construction works.

Apart from the project which is called Forest City, a group of investors is also planning a 1,410ha reclamation project for an oil and gas hub farther west off Tanjung Piai.

The DoE last Friday announced on its website that the Forest City project had been approved.

On Wednesday, the project's master developer, China-based Country Garden Pacificview (CGPV), said in a statement that reclamation will continue, but with the project's total size slightly reduced.

The project, now divided into four reclaimed islands instead of one huge island nearly three times the size of Ang Mo Kio as originally planned, will have total size of 1,386ha (3,425 acres).

This is smaller than 1,623ha proposed by the company.

The master developer is a joint venture between China's property developer Country Garden and a Johor state agency, with reports saying that the project's backers included Johor's Sultan Ibrahim Ismail.

Country Garden is controlled by China's richest woman and one of the world's youngest billionaires, Ms Yang Huiyan, 33, who is the second daughter of businessman Mr Yang Guoqiang, 59.

Datuk Md Othman, executive director of CGPV, said: "Our next step is to ensure that all compliance monitoring, in terms of air, noise, water quality and sediment, are robustly implemented and carried out."

"Upon completion, it is expected that new job opportunities will be created for vast numbers of citizens."

The development will diversify the income base of the local communities by providing workshops and training schools in different sectors, CGPV said in its release.

It will also rejuvenate the area infrastructure, by building a new access road, constructing power stations and new water reticulation systems, CGPV said.