Tuesday 29 May 2012

Iskandar Malaysia no longer a pipe dream?

Ambitious growth corridor takes shape but faultlines emerge as well
By Anita Gabriel, The Straits Times, 26 May 2012

ALL roads lead to Iskandar Malaysia, or so it seems, since the RM945 million (S$380 million) six-lane coastal highway opened in Malaysia's southern tip last month.

The spanking new expressway cuts travel time by half - to about 20 minutes - from Singapore.

Toll booths are visibly absent along the wide 14.5km stretch from Danga Bay, Johor Baru's central business district, to Iskandar Malaysia's Nusajaya, further sweetening the proposition for motorists.

'Iskandar Malaysia is no longer a pipe dream,' said an observer.

Iskandar is Malaysia's largest growth corridor, sprawled over 2,217 sq km, three times the size of Singapore. The government has invested RM6.3 billion in the project, which has created 20,000 jobs since its ground-breaking six years ago. Job creation is set to double in three years.

Iskandar's scale and booming economy are bedazzling. Malls, educational institutions, theme parks, business parks promising low land and labour costs, and high-end homes have sprouted from what was once an endless tract of swamp and oil palm trees.

Yet six years after it began, the project is showing the sort of faultlines seen in Malaysia's other lofty projects-turned-white elephants such as the administrative city Putrajaya and multimedia super corridor Cyberjaya.

Social infrastructure is sorely lacking. 'We see buildings go up but you need to see the footfall before someone opens up a cinema, a restaurant and so forth. There's a limited choice now,' says Professor Reg Jordan, chief executive and provost of NUMed Malaysia, the Malaysian arm of Britain's Newcastle University.

An observer added: 'It's a chicken and egg situation. Retail outlets, cafes and the nightlife activities will follow once the population starts building up.'

There is also a skills gap. 'It's the bright life of the city. If you're good enough, you move to KL or across the border to Singapore,' says Prof Jordan. As a result, staff costs are higher than predicted.

Beefing up safety

THERE are other niggling points - the 'bureaucracy of being new' and worries over crime although Iskandar's proponents insist that issue is largely one of perception.

'But it doesn't mean that we can be idle. We're determined to change perceptions,' said Mr Ismail Ibrahim, chief executive of Iskandar Regional Development Authority (IRDA), a statutory body overseeing the project.

Police numbers have been beefed up and there are more patrol cars, mobile stations and closed-circuit television cameras. The result is a 42 per cent decline in street crime last year from a year earlier.

This year is, without a doubt, a tipping point for the grand project, touted as Asia's budding metropolis.

The plan to turn Iskandar into a hinterland for Singapore businesses, particularly smaller enterprises being squeezed out of the city due to spiralling costs, is gaining traction.

'Singapore's response is no longer lukewarm,' says Mr Manu Bhaskaran, chief executive of Centennial Asia Advisors, adding that 'politics is no longer a risk', a reference to the warming bilateral ties between both countries.

Foreign investors represent 39 per cent, or RM34.2 billion, of total committed investments ploughed into the growth corridor between 2006 and last year.

Of that, Singaporeans forked out RM4.52 billion, or 13 per cent, primarily for manufacturing, Mr Ismail told The Straits Times.

It is easy to get enchanted with the sheer size of the land and houses up for sale in Iskandar Malaysia and their relative affordability.

Close to half of the RM2.5 billion of residential sales racked up as at last month by Malaysia's state-owned UEM Land, the master planner of Nusajaya, have been to foreigners.

'Singaporeans make up the majority of our foreign investors. They are very much into higher-end developments with strong security, green environment and lifestyle concept,' said UEM Land managing director and chief executive Wan Abdullah Wan Ibrahim.

East Ledang, a high-end resort-style project, has drawn Singaporeans, Chinese and Koreans in droves, making up half of total buyers. Of these, 36 per cent are Singaporeans.

Over 70 per cent of the buyers at Imperia at Puteri Harbour are foreigners; of these, 34 per cent are Singaporeans. The other big buyers are Japanese and Britons.

The lure is obvious. A bungalow in East Ledang costs about RM590 per sq ft, so a spacious 5,200 sq ft unit will set you back around $1.25 million - tempting for Singaporeans facing rising prices and boxed-in spaces here.

International tie-ups

LIKE its most anticipated project this year, Legoland Malaysia, Iskandar Malaysia is taking shape block by block.

Legoland will be one of the world's largest theme parks and the first of its kind in Asia, boasting interactive rides, shows and other attractions. It opens in September and has sold more than 30,000 annual passes - more than 10,000 to Singaporeans.

One catalytic project led by state-controlled Iskandar Investment is EduCity, a spacious campus housing some leading schools and tertiary institutions, including Newcastle, Reading and Southampton universities.

Singapore's Raffles University Iskandar opens next month while the famous British school, Marlborough College, starts in August, said IRDA's Mr Ismail.

Over half of the student body of Marlborough College, a 'highend' boarding and day school, will be Singapore residents, said headmaster Robert Pick.

'These are different countries but we are encouraged by the reconciliation. The old issues are healing,' says Prof Jordan.

'Each needs the other and the hope is that with the kind of academic activity we are doing, the border will become somewhat porous.'

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