Saturday, August 29, 2009

Iskandar: S’pore investors tread cautiously

Mr Harun Johari, the Iskandar Regional Development Authority (IRDA) chief executive, was fresh from meeting yet another Singapore delegation when he sat down for an interview.

Scores of Singaporean groups from the business sector or government have visited the special economic zone of Iskandar Malaysia in south Johor since it was launched in November 2006.

But while interest is keen, investment commitments have not poured in. The only significant investments from Singapore, so far, are in manufacturing, he said.

Mr Harun said there has been RM5.93 billion (S$2.43 billion) worth of investments from Singapore in manufacturing in Iskandar from 2000 to May this year.

There had been no major Singapore investments in new growth areas like the services sector, creative industries and tourism.

‘But talks are going on,’ he told The Straits Times. ‘It will have to involve both governments, and what we hear is positive.’

There are hopes that a Singapore education institution will sign on to open a full-fledged establishment in Iskandar.

Madam Arlida Ariff, chief executive of Iskandar Investment Berhad, said the Singapore institution was in talks to buy land in Nusajaya, west of Johor Baru.

‘We hope we can conclude it by the end of the year,’ she said, but declined to name the institution.

Interest from Singapore is important for the success of Iskandar, which hopes to create a new economy by leveraging on proximity to the island.

Malaysia hopes to attract foreign investment that spills over from Singapore by offering lower costs and more space, along with a high standard of living and service.

Iskandar covers 2,217 sq km in southern Johor, about three times the size of Singapore. The economic zone, which offers special incentives, includes established areas like Johor Baru and existing ports, as well as new sites like the Nusajaya township which is a short distance from the Second Link.

‘We have to be seen as working in concert with Singapore, and Singapore can resolve a lot of its issues by working with Johor South,’ Madam Arlida said.

But Singaporeans are treading cautiously.

Madam Arlida, Mr Harun and Mr Zulkifli Tahmali, strategic marketing director of UEM Land which is the master developer of Nusajaya, agree that security is their top concern.

Johor Baru city nearby has one of the highest crime rates in Malaysia, and stories about Singaporeans getting robbed or mugged make officials wince. These incidents do not happen often, but some of the more violent ones have given southern Johor a poor image.

IRDA is not sweeping the crime rate under the carpet. On its website, it has a link that says ‘Crime Statistics for Iskandar Malaysia’, which shows the crime data, including violent and property crimes.

But the wait-and-see approach is also a result of the perception that the project has slowed to a crawl because of the global economic crisis.

‘People do keep asking us, is it really going on? We bring them to the sites to show them,’ said Mr Harun.

Right now, the most impressive zone is the Nusajaya area. Previously plantation land, it is being turned into a modern township designed on a massive scale and with modern architecture.

It is still hot and dusty as the buildings are scattered and surrounded by construction sites. Kota Iskandar, the new Johor state administrative centre, was the first to partly open in April. It was built to awe as the state assembly and offices are on a massive scale surrounding a huge courtyard.

The government has engaged foreign architects to build the Puteri Harbour yacht marina nearby, and the Horizon Hills golf club a short drive away. Both are elegant modern structures.

‘The population of Nusajaya is now 75,000,’ said Mr Zulkifli.

Iskandar’s supporters expect Nusajaya to come alive by 2012 when the first of the major facilities, such as the Legoland theme park, open.

The government hopes that these projects will act as a catalyst that will pay off in the future.

Source: Straits Times, 29 Aug 2009

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