JOHOR BAHRU: About 30% of the RM42 billion committed to the Iskandar Malaysia project as at end-2008 is already on the ground being spent, recently appointed Iskandar Regional Development Authority (IRDA) chief executive Harun Johari said.

He said he was confident of hitting the RM47 billion committed investment target by 2010, having secured an additional RM1.6 billion so far this year.

“The target for 2009 is to secure RM3 billion in investment on top of the RM42 billion already committed as at the end of last year,” he said.

Harun, speaking to The Edge Financial Daily during the Iskandar Malaysia Open Day last weekend, said it was one of two main priorities he was focusing on this year.

“Ensuring investors put on the ground what they have committed is one of the main challenges that we currently face,” he said.

“The other is making sure that the local community (Johoreans) are aligned with us, and this means changing their mindset.”

Harun said there was a misconception among Johoreans that the Iskandar project was only a property project catering to investors from Kuala Lumpur and Singapore when Iskandar was really about increasing the quality of life and wealth of the locals.

“Iskandar is about nation-building, increasing value and creating a city with international standing.

“Our job here is to transform standards for both Johoreans and Johor businesses.”

Harun said the continuing challenge of Iskandar was to ensure that the various services of the city — education, healthcare and infrastructure — kept pace with the development.

Jobs, he added, were an essential part of this equation. “We are talking about providing jobs — about 600,000 to 800,000  —  in Iskandar’s economic clusters when everything has been constructed.

“We want to raise the per capita GDP of Johoreans from about US$13,000 to US$31,000 (RM45,240 to RM107,880).”

Harun added that the goal of the open day was to educate locals about the project, and to solicit their views on it.

Changing public opinion on the Iskandar project is one of the key decisions that he has made since being appointed CEO in February.

While the more immediate target for Iskandar was to hit the RM47 billion target for committed investments by 2010, he said, there were also other key performance indicators (KPIs) to which the development authority was subject.

As the master development authority, Harun said, IRDA would have to meet other KPIs that included one for social development and another for the branding of Iskandar Malaysia.

Harun acknowledged that some of the continued cynicism and negative press surrounding IRDA would persist until the developing authority showed that it could execute the plan that it had set before itself.

“This is why I want to see progress on the ground-level as soon as possible,” he said, noting that he understood Malaysians’ concerns about mega projects in general.

In this respect, he said the greenfield developments would represent a good showcase of what IRDA was trying to do with the Iskandar development, and he expected to have something on the ground by the end of this year.

Relationship with Singapore
Iskandar’s relationship with Singapore needed to be strengthened because it was one of collaboration, Iskandar’s developers said at the open day.

While Iskandar has always adopted this stance, Prime Minister Datuk Seri Najib Razak last Friday announced the possibility of a third bridge linking Johor with Singapore that would further cement the country’s relationship with Singapore.

Although the bridge idea is still in its preliminary stages, it has been well-received by Iskandar’s developers.

According to Harun, Singaporean small and medium enterprises (SMEs) were the third largest investor in Iskandar.

He said IRDA was working on improving the public transportation system that ferried Johoreans and Singaporeans across the Johor Strait, and the success of such a system would necessitate the construction of a third link.

As for Iskandar’s developers, Singaporeans represent a potential market for their property developments.

While talk about UEM Land Holdings Bhd’s investments in Iskandar is usually focused on its iconic Puteri Harbour project in Nusajaya, it has been quickly developing residential properties elsewhere in its Iskandar landbank.

The company recently started marketing its homes to Singaporeans in light of slowing demand from Johoreans for its medium- to high-end residential properties in Nusajaya, UEM Land general manager of strategic marketing Zamry Ibrahim said.

“We decided to do this given the way the (local) market is,” Zamry said. “We want to focus on the more immediate market and we’ve started to do a lot of roadshows in Singapore and Jakarta.”

Singaporeans found the medium- to high-cost homes in Nusajaya — ranging from RM300,000 to RM700,000 — to be attractive investments.

“For our Super Sunday Programme, we arranged for buses to come from Jurong Point (in Singapore) to show prospective buyers our properties here,” he said.

“We had good results, with five to 10 bookings from each bus trip.”

Singapore is also an important consideration in Nusajaya’s development of its industrial park, particularly with respect to its plan to develop a bio-technology park, Bio-XCell, in Nusajaya.

According to Zamry, UEM Land has already started marketing Bio-XCell in Atlanta in Georgia, US, and is receiving positive response.

The biotech park is expected to be constructed before the end of this year.

On the other side of the Iskandar development region, Malaysian Pacific Corp Bhd (MPC), which is in the midst of developing its Asia Pacific Trade Expo Centre (Aptec) in the Eastgate Development, noted that collaboration with Singapore was a central part of its Iskandar vision.

MPC president and CEO Datuk Bill Ch’ng told The Edge Financial Daily that the role of Aptec was to transform Iskandar into a regional trade integration centre, and needed Singapore’s help to gain access to world markets.

“If we combine with Singapore — given Iskandar’s geographical logistics and Singapore’s connections with the world — it would be a combination of strength,” Ch’ng said.

“No single private company can do Aptec, which would cost between RM3.6 billion and RM3.8 billion, which is why both Malaysia’s and Singapore’s governments have to be involved.”

MPC has set up an Aptec office in Hong Kong to promote the project in Asia’s largest market, China.

Ch’ng said MPC’s Aptec city, unlike other developments in the region, would not be constructed piecemeal, but would be done all at once.

“The one advantage we have in the east is that the infrastructure — rail, road and sea — is already there... the construction of Aptec can be done in three years, and the rest of the city in six to eight,” he said.

This article appeared in The Edge Financial Daily, May 25, 2009.