Skeptics will say that most investments going into Iskandar are from GLCs forced to invest there
But serious businesses and investors are making some serious commitments down there
I BIT off more than I could chew recently in the BFM radio studio. Having just made my second trip down to Iskandar Malaysia, that most mega of mega projects, I had a map of the entire Iskandar area and wanted to show it to the host of the show during Digital News Asia’s regular Thursday TechTalk segment.
Unfolding the giant map took some doing but I could not get it folded back in time during the one-minute commercial break, leading the host to suggest helpfully that I seek my wife’s help. On “live” radio, it was a tad embarrassing.
But Iskandar Malaysia has nothing to be embarrassed about in terms of its progress in getting investors, both foreign and local, to buy into its growth story. In fact, according to its chief executive officer, Datuk Ismail Ibrahim (pic), it is targeting to hit RM20 billion in investments this year.
By way of comparison it received on average between RM6 billion to RM8 billion a year from 2006 to 2009 and rising to between RM10 billion to RM12 billion a year in 2010 and 2011. Plus, with investments of RM95.45 billion already committed as of June 2012, Ismail, while not saying it, is clearly hoping to cross the RM100 billion investment mark this year.
[RM1 = US$0.32]
Not bad indeed for a project that has seen a few CEOs come and go, with one being investigated over allegations of financial hanky-panky. And with locals still grousing over not enjoying the economic spillover of the projects. Plus some talk that state government officials are offended by the high-handed ways of the folks from KL who are mostly involved in the various agencies like IRDA and Iskandar Investment Bhd (IIB). Yet Iskandar chugs along nicely, thank you.
Hard core skeptics will say that most of the investments are coming from government-linked companies forced to invest there. But I can tell you that, having been there twice recently, both being hazy days at least in Iskandar, you get a real sense that things are happening. And, I am not even talking about the soon to be opened LEGOLAND or even the Outlet Mall that opened late last year.
Serious businesses are making some serious commitments down there. You know what would be fun? For IRDA to organise a contest among readers of The Malaysian Insider to find the 40 most cynical about Iskandar and then drive them down to have a first-hand look at what is going on and to talk to the companies that are already on the ground and running, even though it is still early days in this mega project that is due to run its course by 2025.
I was down recently for two events. At the invite of Bio-XCell CEO Ritazuddin Ramli to hear his sales pitch to potential investors on site and the most recent being last Wednesday to witness the opening of consulting and market research firm, Frost and Sullivan’s Global Innovation Centre.
The Frost executives are especially bullish about Iskandar and talk of it being part of a mega corridor that stretches from KL to Singapore. They want in early to tap the opportunities they see and are glowing in their praise of how the officials of the various agencies involved have helped them get off and running as soon as possible. They are also confident that more Singapore companies from both private and government sectors will get even more involved in the Iskandar story.
I was worried about the environmental impact that the massive development going on there would have on the quality of life of the region but Ismail assures me that Iskandar is going to soon launch a sustainability plan that will guide the overall development of the region.
Already in place is the focus on services in Iskandar, which by its nature are knowledge and process intensive economic activities with no environmental impact other than the buildings needed and the chilly air-cons running to keep them at just below freezing point, it seems.
Of the nine economic clusters at Iskandar, six are services based: financial advisory and consulting, creative industries, logistics, tourism, education, and healthcare.
Manufacturing make up three: electrical and electronics, petrochemical and oleochemical, and food and agro processing.
As someone who covers tech, what I also found interesting was the lessons that Iskandar have drawn from Cyberjaya’s development. They identify four key lessons, these being infrastructure and accessibility, talent development, lifestyle and amenities development and trade and market access.
The plan is in place, the resources and commitments from both government and investors are coming along at a strong clip, despite the slowdown in Europe. It seems to me that Iskandar, which used to be in the periphery of my interest, deserves more attention and I plan to follow closely what goes on there.
This article previously appeared in The Malaysian Insider