A new metropolis three times the size of Singapore is taking shape in the foothills of southern Malaysia, where officials and investors have equally huge ambitions for the city.
Dust billows across the horizon as sun-scorched construction crews lay roads, drainage canals, street lamps, power stations and other key installations for a development known as Iskandar Malaysia.
Rolling terrain once covered with palm oil plantations and bush has been bulldozed to make way for theme parks, luxury homes, international schools, hotels, hospitals, a movie studio and a business district by 2025.
Photo: AFP
In short, a new Singapore is being built in an area covering 2,217km2 in Johor state.
Iskandar, one of five “economic growth corridors” Malaysia is developing, was launched in 2006 and will integrate existing towns, seaports and an airport with the new projects being built from scratch.
However, instead of pitting it as a rival to the rich city-state, Malaysia is asking Singaporean investors to take part in the project.
“We see ourselves as collaborating because both countries realize that in order to create more wealth and better distribution of the wealth, we need each other,” said Ismail Ibrahim, chief executive of the Iskandar Regional Development Authority (IRDA). “Investors see Iskandar as something that is believable, something that is working.”
From his 33rd-floor office in Singapore’s financial district, Keith Martin exuded the same optimism.
“It’s really positive that the momentum is picking up massively,” said Martin, chief executive of Global Capital and Development, an Abu Dhabi-backed consortium tasked to develop a prime portion of Iskandar called Medini. “Our strategic advantage is to ride the wave of Singapore. Singapore is all grown up and lacking space to build, business costs are escalating.”
Asia’s strong recovery from the 2008-2009 global recession and the improved bilateral ties between Singapore and Malaysia have made the environment more conducive to promote the Iskandar region to investors, analysts said.
Singapore was ejected from the Malaysian federation in 1965 and ties since then were often testy, but new leaders who have emerged over the past decade have made an effort to promote cooperation and resolve irritants.
Because of its size, Iskandar — which covers Johor state’s capital Johor Bahru — will be developed in phases, with plans to improve rail, sea and air connections to Singapore and facilitate easier immigration clearance.
Malaysia is offering generous incentives, including corporate and personal income tax perks, 100 percent foreign ownership of businesses and unrestricted hiring of foreign “knowledge” workers.
Ismail said investor concerns over crime in Malaysia were being addressed by a strong police presence, more guards, surveillance cameras and creative urban planning.
Investor response has been encouraging so far and the first wave of projects aimed at spurring more investment are due for completion in the next 18 months.
“I’ve been there with my muddy boots on and I’ve got my construction knowledge so they can’t fool me on the progress,” Martin, a veteran of Asia’s construction business, said when asked if the development was on track.
By the end of this year, investment commitments in Iskandar totaled 69.5 billion ringgit (US$23 billion), surpassing its target by 48 percent, with more than 40 percent coming from overseas, Ismail said.
The US-based Chelsea Premium Outlets chain — known for no-frills suburban shops selling luxury brands at discounted prices worldwide — will open an outlet in the Iskandar region in November.
Britain’s Newcastle University Medical School — one of six universities in Iskandar’s planned “educity” complex — will admit its first batch of students later this year.
Marlborough College, a leading British independent boarding school established in 1854, will also open its first campus outside England in Iskandar this year for students aged 11 to 18.
Marlborough’s campus will occupy 36 hectares, including soccer, rugby and cricket fields.
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