Iskandar Malaysia five years on
The Iskandar Malaysia development zone was launched five years ago, with the aim of boosting Johor's economy by attracting a wide spectrum of investments. As it approaches its fifth anniversary nextmonth, The Straits Times looks at how it's faring.
- Aside from the serious business of education and tourist attractions like Legoland, recreational facilities in Nusajaya include a marina and clubhouse in Puteri Harbour. -- ST PHOTOS: CHEW SENG KIM
- Model builder Lee Khai Yuen, 36, putting together a building made from Lego bricks. The Legoland Malaysia theme park will be completed next year.
NUSAJAYA: Some time next year, frisky American pre-schoolers squealing with delight at the madcap adventures of The Cat In The Hat will join budding doctors and seamen in the education hub that is rapidly taking shape in southern Johor.
EduCity in Nusajaya, a 15-minute drive from the Johor side of the Second Link, has become a popular destination for education providers looking to open new schools and campuses.
Raffles Education Corp, a private Singapore education group, told The Straits Times that when its American school opens next year, it will offer classes starting at kindergarten level all the way up to 12th grade, the equivalent of the GCE A levels.
The big projects
APART from educational facilities, other big projects coming up include Pinewood Studios, Legoland and an indoor theme park featuring Hello Kitty and other cartoon characters. The expected completion dates of the projects are given in brackets.
Pinewood studios (2013), the same group that produced Johnny English, Batman and Lara Croft, among others, will occupy 32ha of land.
- Legoland Malaysia (2012)
- An indoor theme park (2012), with attractions that include Hello Kitty Town, Barney and Bob the Builder, will be located by a retail mall.
- Johor Premium Outlets mall (to open next month) will have 80 shops offering discounted fare from top brands such as Burberry and Armani.
- Traders Hotel, 292 rooms (2012)
- Renaissance Hotel, 300 rooms (2014)
Palazzo Hotel and Serviced Suites, 293 rooms (2014)
- Gleneagles Hospital, 300 beds, 150 suites (2014)
- Columbia Asia Hospital, 82 beds (opened this year)
OFFICES AND COMMERCIAL SPACE
- Medini Square, 1.05 million sq ft of office space and retail shops (2013)
- Many new projects have been launched by landowners. These include waterfront homes in Danga Bay (by a Malaysian group of the same name), and Senibong Cove by Australia's Walker Corporation.
- Temasek Holdings and Malaysian sovereign fund Khazanah Nasional are planning a wellness township.
The flagship zones
MOST reports on Iskandar Malaysia tend to zoom in on Nusajaya - large plots of empty land now being transformed into Legoland, university campuses and residential areas. But Iskandar actually has four other 'flagship zones'.
- Johor Baru City zone: The area located just past the Causeway includes the Johor city centre, with its supermarkets, hotels and malls that many Singaporeans often patronise. There is also the Danga Bay waterfront project facing Singapore.
- Western Gate Development: The Port of Tanjung Pelepas is found here as well as the 2,100-megawatt Tanjung Bin Power Plant. It also includes Heritage Park with its 9,300 hectares of mangrove park suitable for eco-tourism.
- Eastern Gate Development: Site of Johor's key industrial hub that includes Pasir Gudang and Tanjung Langsat industrial parks, the Johor Port and the Tanjung Langsat Port that handles bulk cargo and liquified petroleum gas.
- Senai-Skudai zone: Senai airport along with an air cargo and logistics park are its key features. Universiti Teknologi Malaysia is also located here.
Iskandar Malaysia in total covers 2,217 sq km, about three times the size of Singapore. Launched on Nov 4, 2006, it is part of the federal government's strategy to turn Malaysia into a fully developed nation by 2020 by lifting per capita incomes to US$15,000 (S$19,500) from US$6,900 in 2009. Incentives include tax breaks and exemptions from the so-called 'bumiputera rules', allowing foreign investors to own 100 per cent of their businesses.
Apart from the ample land in Nusajaya, one of its key attractions is its proximity to Singapore, where the large number of expatriate families is seen as a potentially lucrative source of revenue. 'There are a few hundred people in the queue for the American school in Singapore,' said Mr Gan Chin Huat, the group's special project director.
To make it more attractive, the group plans to run a shuttle bus service to and from Singapore, as well as offer hostel facilities for older children.
The Raffles group, which has 38 colleges in 14 countries, is one of several foreign education providers that are making Nusajaya the fastest-growing of the five Iskandar zones.
Other players include Britain's Newcastle University Medicine Malaysia and the Management Development Institute of Singapore (MDIS), with plans for a 12ha campus. Marlborough College, the British public school whose alumni include Prince William's wife Catherine Middleton, will open its campus next year.
The sprouting of the schools is in marked contrast to the initial scepticism towards the Iskandar Malaysia project. It was launched along with four other huge 'economic growth corridors', making some observers wonder if there were sufficient investment dollars to make them viable.
And then there was Malaysia's chequered record with mega-projects. Some, like the Entertainment Village and BioValley ventures in Selangor, were ditched after failing to pull in investors.
So, will Iskandar Malaysia meet the same fate?
Five years on, progress in the sprawling and multifaceted economic region has been uneven. The Iskandar region, which covers most of southern Johor, has an area of some 2,200 sq km. Other than Nusajaya, none of the other four 'flagship zones' appears to have created the same buzz or reeled in big foreign entities. It has yet to get a company that's big in business process outsourcing, or the backroom operations of a foreign bank, to come on board.
It is also too early to say whether the newer services being brought in, such as movie-making by Pinewood Studios, and tourist facilities like Legoland would create big demand for skilled labour, said Mr Francis Hutchinson, a visiting fellow at the Institute of Southeast Asian Studies.
'With regard to competition on service quality, Singapore comes out ahead, and with regard to competition on price (such as for call centres), the Philippines will win,' he said. But he added that Johor has always done well with property and manufacturing, and has shown potential in education, health and logistics.
Certainly, there is interest from small and medium-sized industries from Singapore in ventures involving engineering and manufacturing, said Mr Loh Lian Hiang, president of the Johor Baru Chinese Chamber of Commerce and Industry.
By February, cumulative investments in factories from Singapore companies stood at RM3.49 billion (S$1.4 billion), compared with RM517.9 million when Iskandar was launched in 2006, officials say. In the last five years, Iskandar has attracted cumulative investments of nearly RM76 billion. Of this, the government's share is RM6.28 billion - or just 8.3 per cent of the total, said the Iskandar Regional Development Authority.
And of the total investments pulled in, 40 per cent 'have already been spent on the ground for the various projects', said the government agency's chief executive Ismail Ibrahim.
'The development of Iskandar Malaysia is private sector-driven. As such, the government sees its role as facilitating and encouraging investment, rather than just injecting it in,' he said.
For those coming in, Iskandar offers the convenience of being near Singapore, minus its higher costs. Crossing into Nusajaya from parts of Singapore via the Second Link would take about the same time as 'going to Jurong or Changi', said Dr R. Theyvendran, MDIS' secretary-general.
The entry of UK-based Pinewood Studios has raised hopes of benefits to downstream industries. Global Capital & Development, a firm majority-owned by Abu Dhabi investment fund Mubadala, wants to set up a 'media village' next to it to be used by related media businesses.
To be sure, the studios will not be completed until 2013, and much more remains to be done to rev up investor interest and activity in the other zones.
But Mr Ismail, in an interview earlier this year, believes things will pick up once the first phase of major projects comes onstream. These include the medical university, the Johor Premium Outlets, scheduled to open next month, and the Legoland theme park which will open next year. 'People will really see the buzz in Iskandar Malaysia' then, he said.