Iskandar Malaysia

Iskandar Malaysia, formerly known as Iskandar Development Region (IDR) and South Johor Economic Region (SJER) is the new main southern development corridor in Johor, Malaysia. The Iskandar Malaysia was established on 30 July 2006. It is named after Sultan Iskandar of Johor.

It is against this backdrop that in July 2005, the Government of Malaysia had tasked Khazanah Nasional to conduct a feasibility study for the development of a special economic zone in South Johor in what was then referred to as the Southern Belt Economic Zone (SBEZ).

In October 2005, Khazanah presented a Conceptual Outline Plan for the proposed South Johor Economic Region (SJER) to the National SJER Planning Committee (NSPC) that concluded that there was a strong economic, social and developmental rationale for the proposed development of SJER. The NSPC was chaired together by the Prime Minister of Malaysia, Abdullah Ahmad Badawi and Chief Minister of Johor, Abdul Ghani Othman. Khazanah acts as the secretariat for the committee. The NSPC further tasked Khazanah to develop a detailed and comprehensive Master Plan for the development of SJER that aims to address socio-economic development in a holistic and sustainable fashion.

In March 2006, the Ninth Malaysia Plan covering the period 2006 to 2010 was launched by the Prime Minister. It identified newly named Iskandar Malaysiaas one of the catalyst and high-impact developments under the Plan. This was further reinforced when in November 2006, the Prime Minister, Chief Minister of Johor and Khazanah announced further details on Iskandar Malaysia on the following Comprehensive Development Plan (CDP):

The Iskandar Malaysia is administered by Iskandar Regional Development Authority (IRDA).

Physical Development Strategies

Iskandar Malaysia covers 221,634.1 hectares (2,216.3 km²) of land area within the southern most part of Johor. The development region encompasses an area about 3 times the size of Singapore and 48 times the size of Putrajaya. Iskandar Malaysia covers the entire district of Johor Bahru (including the island within the district), Mukim Jeram Batu, Mukim Sungai Karang, Mukim Serkat, and Kukup Island in Mukim Ayer Masin, all within the district of Pontian.

The Planning Area falls under the jurisdiction of five local planning authorities, namely: Majlis Bandaraya Johor Bahru ("Johor Bahru City Council"). Majlis Perbandaran Johor Bahru Tengah ("Johor Bahru Tengah Municipal Council"). Pihak Berkuasa Tempatan Pasir Gudang ("Pasir Gudang Local Authority"). Majlis Perbandaran Kulai ("Kulai Municipal Council"). Majlis Daerah Pontian ("Pontian District Council")

Five Flagship Zones are proposed as key focal points for developments in the Iskandar Malaysia. Four of the focal points will be located in the Nusajaya-Johor Bahru-Pasir Gudang corridor also known as the Special Economic Corridor (SEC)The flagship zones listed below are envisaged to both strengthen further existing economic clusters as well as to diversify and develop targeted growth factors.

Flagship Zone A – Johor Bahru City Centre

* New financial district
* Central business district
* Danga Bay integrated waterfront city
* Tebrau Plentong mixed development
* Causeway (Malaysia/Singapore)

Flagship Zone B - Nusajaya

* Johor state administrative centre
* Medical hub
* Educity
* International destination resort
* Southern Industrial logistic cluster

Flagship Zone C - Western Gate Development

* Port of Tanjung Pelepas (PTP)
* 2nd Link (Malaysia/Singapore)
* Free Trade Zone
* RAMSAR World Heritage Park
* Tanjung Piai

Flagship Zone D - Eastern Gate Development

* Pasir Gudang Port and industrial zone
* Tanjung Langsat Port
* Tanjung Langsat Technology Park
* Kim-Kim regional distribution centre

Flagship Zone E - Senai-Skudai

* Senai International Airport
* Senai cargo hub
* Skudai knowledge hub
* Senai multimodal centre
* MSC Cyberport city

The Special Economic Corridor (SEC)

It is targeted that developments within Iskandar Malaysia will initially focus on the medium term in the Nusajaya-Johor Bahru-Pasir Gudang corridor. The corridor is an established area of development with two major ports, Port of Tanjung Pelepas and Pasir Gudang, and a third oleo-chemical port at Tanjung Langsat. The area also has two major links to Singapore, the Causeway and the Linkedua ("Second Link"). Many of the new catalyst developments are expected to be in the relatively new and greenfield area of Nusajaya. Nusajaya houses the new state administrative centre and has been identified as an area to house several targeted new growth sectors including in education, healthcare and tourism, among others.

The SEC is envisaged to house most of the leading-edge developments in Iskandar Malaysia including proposed Free Access Zones that will have a relatively large international component.

Currently, the Free Access Zone plan has been scrapped from Iskandar Malaysia.

Economic Development Strategies

The two main economic growth sectors in Iskandar Malaysiacurrently are manufacturing and services.

The key sectors in the manufacturing sector that drives the Iskandar Malaysia economy are electrical and electronic (E&E), chemical and chemical products (petrochemical, plastics, oleo chemicals) and food processing sub-sectors. They contribute 60% of the total value-added in manufacturing.

These key sectors lead to the emergence of supporting or induced sectors such as retail, wholesale, hotels, restaurants and finance. In manufacturing, the induced sectors include fabricated metal products, non-metallic products and transportation equipment.

trategic Economic Thrust (SET)

A combination of seven strategic economic development thrusts is needed to accelerate growth of Iskandar Malaysia during the CDP period. The thrusts are as follows :
* strengthen the existing main economic drivers and diversity into new economic growth sectors.
* strengthen supporting industries and the basic foundation.
* strengthen international linkages.
* build on existing strength in respect of resource endowment and lever on Singapore’s strength.
* optimise spatial distribution of economic activities.
* adopt the cluster approach.
* provide the right type of incentives and support.

Future Growth Scenario, 2005-2025

The future scenario for Iskandar Malaysia should include:
* A well developed, internationally and internally integrated, strong and efficient logistic system giving it a high level of national and international accessibility and internal mobility,
* A strong base for vertically and horizontally integrated dynamic manufacturing and service clusters. With well developed external linkages to major regional and global development nodes.
* A sizeable foreign residents (about 12-15%) with high skills and income would render viable the various international class social and educational, health, recreational and other facilities that are necessary for an international class ‘life style’ which is vital to attract and retain the inflow of international investment and highly skilled managerial and professional workforce.

ocial Development Strategies

The following Strategic Social Development Thrusts (SSDT) are proposed;

* SSDT 1: Enhance coordination and cohesion of all government and non-government agencies involved in social development

* SSDT 2: Build social capital as the basis for social cohesion and integration

* SSDT 3: Enhance ability of individual Bumiputra and privately owned Bumiputra companies especially "Small and Medium Enterprises" (SME) to acquire landed properties and enhance their property portfolio by leveraging and participating in the capital gain.

* SSDT 4: Adopt and implement regional and physical development strategies that will result in the increase in the value of Bumiputra land and also bring other benefits.

* SSDT 5: Promote more mutual funds to spread benefit of the increase in property and rental values to Bumiputra and to take out the allocated new property units not taken up by Bumiputeras.

* SSDT 6: Enhance and upgrade education and training programme at all level of skills and with the cluster associations identify critical skill categories for Iskandar Malaysia development.

* SSDT 7: Enhance cluster linkages among major public and private sector corporations and research institutions with Bumiputera companies especially SMEs.

Livable Communities

A key thrust of Iskandar Malaysia is to create livable communities that encompass quality housing, adequate facilities, quality services and a healthy, safe and lively environment.

In line with this objective of enhancing the city-living environment, the city must be functional, liveable and impart a sense of community and belonging. In addition, the city must also provide a clean, healthy, safe and caring environment that caters to the needs of all stakeholders. To this end the CDP plans not only for the current needs of the population but also for the future, ensuring that inter-generational equity is also sensitively addressed.

Livability in South Johor

In creating liveable communities, the following factors are to be taken into consideration:

* Integrate low cost housing developments with other types to give residents common facilities and environment and reducing social marginalization.
* Provide Rental Homes for Transient Population
* A detailed register of data, including income levels, affordability and location preferences of the Special Needs Group must be kept and constantly updated to match up with residential units offered in the market.
* New Housing developments should incorporate the needs of the disabled in the units allocated to them. These include sizes of doors, ramps for external areas, height of light switches, hand rails for bathrooms and toilets.
* Create Neighbourhood Structures that promote a sense of belonging to the local community
* Design of new developments and redevelopment of housing areas shall refer and conform to guidelines of Crime Prevention through Environmental Design (CPTED).
* The Green Building rating shall be used and implemented to encourage builders to build energy efficient buildings, including for residential units, and to introduce energy efficient mechanisms on older or existing buildings in the city.

The Physical Development Plan

The Physical Development Plan (PDP) primarily contained in this chapter of the CDP outlines the management of land use development within the planning area of Iskandar Malaysia. The objectives are to influence, control and regulate urban activities so as to create an organically harmonious city through the control of the quality, quantity, location and timing of development and building construction activities and inducing land use development towards a desired direction.

For the CDP, the land use zoning plan will be zoned into ‘Zoning Districts’ where areas are identified based on the urban character of the area and/or function of the area instead of identifying specific land use attached to a specific lot. The zoning district system is made up of two important layerings:

* Base zoning district; and
* Special overlay zones

Base Zoning Districts

The main base zoning districts identified for Iskandar Malaysia CDP are;

* District Centre Commercial Zone (DCC) - Refers to commercial areas located within the identified boundary of district centres. Certain activities that would normally be permissible within the "Johor Bahru Central Business District" (JB CBD) can be permitted in this zone. Such activities could be entertainment, 24-hour/extended opening hour activities, etc.

* Local Centre Commercial Zone (LCC) - Refers to commercial areas located within residential neighbourhoods and serves the neighbourhood area to provide small-scale retails and services. Intensity of development and type of activities permissible should be consistent with the character of the neighbourhood area in order to limit adverse impacts on nearby residential areas. It can also refer to commercial areas serving large industrial parks as in Tanjung Langsat and Senai.

* Free Access Zone (FAZ) - This idea has been scrapped. [http://thestar.com.my/news/story.asp?file=/2007/4/5/nation/20070405143724&sec=nation] It originally referred to areas that allow seamless work, business, entertainment and living environment between Johor and Singapore.

* Established Housing (EH) - Refers to existing residential areas in planned neighbourhood units.

* Residential 1 – Low Density (R1) - Low density residential refers to a gross density of nine units/acre and comprises detached and semi-detached unit homes. Village homes within urban areas that are of good quality and have proper services can also be considered as low density residential.

* Residential 2 – Medium Density (R2) - Medium density residential refers to a gross density of 24 units/acre and comprises link homes, low-rise apartments, exclusive condominiums and town houses.

* Residential 3 – Medium High Density (R3) - Medium high density refers to a gross density of 33 units/acre and comprises apartments, condominiums, and town houses.

* Residential 4 – High Density (R4) - High density residential refers to a gross density of 38 units/acre and comprises apartments or condominiums.

* Residential Villages (RV) - Refers to villages within non-urban areas.

* Mixed-use - Residential, Office, Commercial (MX) - Refers to areas zoned for mixed-use development within city centre areas such as within Johor Bahru City Centre and Nusajaya City Centre and also within Transit Planning Zones. It is intended to promote a combination of commercial and housing on the same site. It allows developments with increased intensity especially the residential component. This aims to support the strategy of encouraging city living and transit oriented development.

* Commercial Zone (CZ) - Refers to areas of commercial use and activity.

* Established Industry (IE) - Refers to existing industrial areas that are well established and still providing employment.

* Industrial Park Zone (IP) - Area zoned for planned industrial uses that are generally compatible with one another and with adjoining residential and commercial districts. Service commercial uses that are compatible with and complimenting light industrial uses should also be permitted. The intention is to promote a cluster strategy in planned industrial areas incorporating manufacturing clusters, support services, trade, storage and other service industries to facilitate towards achieving k-economy.

* Enterprise Zone (EZ) - This zone is intended to concentrate high technology industries and industries with a significant amount of research and development activity in line with a cluster strategy. Professional offices, financial institutions and other similar uses may be included when they provide services to the enterprise zone employees.

* Port Zone (PZ) - Refers to all seaport development areas i.e. namely Tanjung Langsat, Pasir Gudang and Port of Tanjung Pelepas.

* Institutional and Community Zone (INS) - Major institutional and civic uses such as art galleries, museum, government offices, palace reserve, hospitals, universities and other civic use.

* Special Security (SS) - Military reserve & emergency operations such as police headquarters.

* RAMSAR Zone (RAMZ) - Refers to sites approved by RAMSAR. These are wetlands of international importance which are of rare and unique and for conserving biological diversity. The three RAMSAR sites in Iskandar Malaysia are Pulau Kukup, Sungai Pulai and Tanjung Piai, which are Environmental Sensitive Areas (ESA) Rank 1.

* Free Trade Zone (FTZ) - Free Trade Zone refers to an area where special tariffs, quotas and incentives are given, and where bureaucratic requirements are lowered in order to attract companies to do business or locate its business in the area and in particular in the Port of Tanjung Pelepas area.

* Public Open Space (OS) - Parks and open spaces that are amenities to the general public.

* Private Open Space (POS) - Refers to private green areas particularly golf courses.

* Forest Reserve (FR) - Refers to existing forest reserve in the Iskandar Malaysia area which are ESA Rank 1.

* Agriculture Zone (AZ) - Refers to productive agriculture areas.

* River Reserve (RR) - Rivers and their reserves which are ESA Rank 1.

* Cemetery (C) - Refers to cemetery reserve land.

* Government Reserve (GR) - Refers to Government lands that are used for offices, institutional, etc

pecial Overlay Zones

The above land use zoning districts is further overlaid with a series of overlay zones/boundaries to provide further details for specific areas requiring specific treatment and control. Examples of the special overlay district are as follows;

* Johor Bahru CBD - Refers to core commercial areas located within Johor Bahru City Centre. It provides the broadest range of uses and is most intensified in terms of commercial plot ratio and height to reflect its role as the centre of business, finance, and employment of Iskandar Malaysia and as the capital city of Johor.

* Nusajaya Central Planning Area - Refers to the core commercial and administrative areas located within Nusajaya. It provides a broad range of uses and is intensified in terms of commercial plot ratio and densities to reflect its role as the centre of administration, business, commerce, and employment of Iskandar Malaysia and the new growth centre within the Special Economic Corridor (SEC)

* Environmental Protection Zone - Overlay of areas identified to require further environmental control by virtue of their identification as Environmental Sensitive Areas (ESA)

* Historic Zone - Overlay of historical area boundary over the base zoning district. The intention is to provide specific controls with regards to building and land within the designated boundary.

* Coastal Zone - The coastal zone for Iskandar Malaysia is the water of Johor Straits within the Malaysian boundary and within a 3km inland zone along the coastline of Johor Strait that also lies within the SEC.

* Highway Business District - The Highway Business District is intended to provide development opportunities for commercial uses along the highway requiring or well adapted to location on primary roads and to provide shopping areas for uses that are not generally compatible with residential districts, yet reasonably convenient to the general location of the retail market areas. Uses with the most significant visual, traffic, noise and other impacts are allowed as conditional uses.

* Transit Planning Zone - Areas within the 400m radius of rail stations where transit oriented development can be pursued.

* Water Catchment Zone - The water catchment area refers to the catchment of Sultan Iskandar Dam; that is an ESA Rank 1 and needs to be protected. Thus, all activities within the water catchment zone must be controlled and no industrial activities should be allowed.

Commercial Development Initiatives

The establishment of Iskandar Investment Berhad ("formerly known as South Johor Investment Corporation Berhad") by Federal and State level investment agencies, Khazanah Nasional Berhad (Khazanah), the Employees Provident Fund (EPF) and Kumpulan Prasarana Rakyat Johor (KPRJ) will spearhead catalyst developments in the Iskandar Malaysia . Iskandar Investment is a commercial entity with long term profit objectives, set up for the purpose of overseeing the development of the Iskandar Malaysia.

Iskandar Investment Berhad, a managing entity, would be formed with the mission to create an environment for development in the Iskandar Malaysia by mobilizing the efforts of government, private sector, international organisations and civil society. It will be the umbrella organisation of the Iskandar Malaysia initiative.

It is a profit-motivated company to drive strategic and catalytic projects in Iskandar Malaysia, with a long term view, set up for the purposes of raising funds to kick start and to ensure continued development of Iskandar Malaysia. Iskandar Investment Berhad will invest in selected strategic and catalytic initiatives through shareholding stakes in joint ventures and contribution of land either through sale or lease or granting of a concession or development rights.

Iskandar Investment Berhad is an Investment Holding Company (IHC) whereby it will operate as a discretionary fund i.e. all investment decisions shall be at the sole discretion of its appointed Board of Directors (BOD). Iskandar Investment may provide bridging or mezzanine financing to catalyst projects to assist in any funding gap at the initial stages.

Participation in Iskandar Malaysia is via investing in Project Development Vehicles (PDV). Iskandar Investment may own land banks but will not directly participate in property development or construction. It will promote strict project evaluation and selection process to ensure that the projects in Iskandar Malaysia are successful and sustainable. Iskandar Investment may partner with major foreign players to participate in Iskandar Malaysia via PDVs.

trategic Catalyst Development

The current plans for the Strategic Catalyst Development include but is not limited to the following:

* waterfront development
* international mixed commercial and residential development
* leisure and destination tourism development
* international manufacturing and Logistics development
* education-based development
* healthcare-based development
* iconic buildings and parks

Business Incentives and Support Package (ISP)

This statement is released by IRDA following Malaysia Prime Minister, Abdullah Ahmad Badawi's announcement on the initial incentive and support package for Iskandar Malaysia in his keynote address at Invest Malaysia 2007 on 22 March 2007.

Objective and scope of the ISP

The development of Iskandar Malaysia requires a substantial amount of investment given the bulk of the development is targeted to be undertaken over the next 15 years. Developing a comprehensive ISP to attract private investors to invest these monies over the short-to-medium term is critical to kick start the development of Iskandar Malaysia. The ISP is structured to encourage early investment.To spearhead the development of concentrated hubs within Iskandar Malaysia, certain zones within the flagship zones in Iskandar Malaysia which require investments of several billion ringgit in gross development value will be granted special incentives. The location of these zones and other details was announced by IRDA on October 2007.

Development initiatives targeted in Iskandar Malaysia

Iskandar Malaysia will pay a special focus on the services sector, in line with the Government’s policy to increase focus on value-added and knowledge intensive activities in the country. Commercial development initiatives identified for the development of Iskandar Malaysia would include activities approved by IRDA within six targeted sectors in IRDA-approved zones, referred to as qualifying activities. These six targeted sectors are amongst the six services-based pillars listed in the Comprehensive Development Plan, and are as follows:-

* Creative
* Educational
* Financial advisory and consulting
* Healthcare
* Logistics
* Tourism

Available Fiscal and Non-Fiscal Incentives

Iskandar Malaysia-status companies will enjoy:-

* Exemption from income tax for a period of 10 years from commencement of operations in respect of income from qualifying activities carried out within the approved node for customers located within the approved node and outside Malaysia or wholly outside Malaysia, provided these operations commence before the end of 2015; and
* Exemption from withholding tax on payments for services and royalties to non-residents for a period of 10 years from commencement of operations.

Approved developers will be entitled to:

* Exemption from income tax up to year of assessment 2015 on statutory income from the disposal of any right in or over land within the approved node;
* Exemption from income tax up to year of assessment 2020 on statutory income from the rental or sale of buildings within the approved node; and
* Exemption from withholding tax on payments made to non-residents for services, interest and royalties, up to 31 December 2015.

Approved development managers will be entitled to:

* Exemption from payment of income tax on statutory income from the provision of management, supervisory or marketing services to an approved developer until the year of assessment 2020; and
* Exemption from withholding tax on payments made to non-residents for services up to 31 December 2015.

In addition, approved companies will also enjoy the following non-fiscal incentives:

* Exemption from the Foreign Investment Committee (“FIC”) rules;
* Flexibilities under the foreign exchange administration rules as follows:
* Make and receive payments in foreign currency with residents;
* Borrow any amount of foreign currency from licensed onshore banks and non-residents;
* Invest any amount in foreign currency assets onshore and offshore; and
* Retain export proceeds offshore; and
* Unrestricted employment of foreign knowledge workers.

Foreign knowledge workers in Iskandar will be able to import or purchase a duty free car for their personal use. This incentive is similar to that offered under the Malaysia My Second Home programme.

The above incentives identified are currently limited to Node 1 Integrated City, a comprehensive development comprising of leisure, residential, financial and high-end industrial components.

All incentives will be given subject to the applicant fulfilling certain criteria, which will be determined by IRDA. IRDA will be the authority which assesses the background of the applicant and endorses the application for submission to the relevant authorities. Detailed guidelines will be released by IRDA in due course.

In lieu of exemption from the Foreign Investment Committee rules, Iskandar Malaysia-status companies will be required to make a contribution to the Social Projects Fund. As outlined in the CDP, the fund will be administered by IRDA for social welfare development in Iskandar Malaysia, including Bumiputra development. The nature of this contribution will be assessed and communicated by IRDA at the same time that the ISP entitlement is granted.

Criticism

The project were not without its criticsm. The largest one, put forth by former Prime Minister Mahathir Mohamad, was that Singaporean involvement in the project and it could affect sovereignty of the nation over the state. In a speech, he claimed that “after the land is sold, the Malays will be driven to live at the edge of the forest and even the forest itself." [http://afp.google.com/article/ALeqM5j2BkfeGr40LJrrM8l0kk8ICwgGaw Project could force Malays from key state: Mahathir] , AFP, 17 May 2008] [http://thestar.com.my/news/story.asp?file=/2008/5/18/nation/21291911&sec=nation Iskandar a project for Singapore to grow, says Mahathir] , The Star (Malaysia), 18 May 2008] Earlier on, the project intends to allow Singaporeans to travel into the region without the need of a passport, but the plan has since been scrapped. One of the opposition party, the Pan-Malaysian Islamic Party, has voiced out similar concerns. [http://www.asiaone.com/News/Latest+News/Story/A1Story20071011-29483.html Beware of S'pore takeover: PAS] , The Straits Times, 10 October 2007] In May 2008, when Singapore won sovereignty over the Pedra Branca terrorital dispute over the International Court of Justice, did not help in allaying such fears from some Malaysians. [http://www.littlespeck.com/new/CInformed-080524.htm Pedra Branca - The buzz in Malaysia] , Littlespeck, 24 May 2008] [http://www.nst.com.my/Current_News/NST/Thursday/Columns/2252235/Article/index_html Taking heed of the lesson bitterly learnt] , New Straits Times, 29 May 2008] Others have doubts on how the project would successfully be implemented, particularly with plans consistently being shifted about. [http://www.malaysiakini.com/news/65664 Johor's U-turn on no-passport rule for S'poreans] , Malaysiakini, 7 April 2007]

References

External links

Official Website

* [http://www.idr.com.my Iskandar Malaysia] English

Unofficial Website

* [http://www.iskandar.com.my Iskandar.com.my] English & Bahasa Malaysia
* [http://www.idrjohor.com IDR Johor] English
* [http://www.iskandarproperty.com Properties and Real Estate in Iskandar Malaysia] English

ee also

* Northern Corridor Economic Region
* East Coast Economic Region
* Sabah Development Corridor
* Sarawak Corridor of Renewable Energy
* Johor Bahru
* Ninth Malaysia Plan