Singapore slings hope for Iskandar's future

WITHOUT a doubt, Singapore is among Iskandar Malaysia's biggest cheerleaders; and the success of Malaysia's ambitious project is inextricably linked to its neighbour.

Singapore-based businesses got the nod to plough over US$950 million for 124 manufacturing projects in Iskandar from 2019 to mid-June 2021. Of this, more than half or 72 projects worth nearly US$590 million were approved during pandemic times (2020 and H1 2021) - according to data provided by the Malaysia-Singapore Joint Ministerial Committee for Iskandar Malaysia.

In terms of foreign investors in Malaysia's southern growth corridor, the city state is the second largest (after China) and has invested RM25 billion (S$8 billion) since the project's inception in 2006 to last year.

Strong connectivity is key

"Iskandar depends on how well Singapore does to move forward. Call it near-shoring or what not, but it's closely linked to Singapore," said Frost & Sullivan managing director for Malaysia Hazmi Yusof.

And for that reason, the fate of the on-and-off again Kuala Lumpur-Singapore high-speed rail (HSR) project will be closely watched. Last year, both countries jointly announced the termination of the mammoth project. Since late last year, there have been reports that talks on the project may be revived. If - or when - the project materialises, it will be a game changer for Iskandar.

Meanwhile, other linkages are fuelling hope - and excitement - such as the Rapid Transit System (RTS) Johor-Singapore and Iskandar Malaysia Bus Rapid Transit, now known as the Iskandar Rapid Transit, which is expected to come online in 2026.

These "immediate mega projects" will change the landscape of the relationship between Singapore and Iskandar Malaysia, said Iskandar Regional Development Authority chief executive Badrul Hisham Kassim. He added: "Connectivity between Singapore and Iskandar Malaysia is key to further developing collaboration and attracting more investment into the region."

In fact, according to Previndran Singhe, managing director and CEO of Zerin Properties, the kickstarting of the RTS construction has already boosted investors' confidence and kept asking prices for properties in the vicinity high despite the pandemic's impact on the Iskandar region.

The Iskandar Rapid Transit will be the backbone of public transportation in the region and is expected to benefit the property market immensely once it starts operation in 4 years' time. The bus service will also be linked to the RTS to ease congestion at the Johor Causeway and attract more visitors from Singapore to Johor - spurring the tourism market, said Previndran.

One major project that has created a buzz of sorts is a 2.3 hectare Coronation Square - an integrated development comprising a retail shopping mall and 6 high-rise towers within the Ibrahim International Business District (IIBD). The project, which is 85 per cent completed and earmarked as a catalyst to transform Johor Bahru into an "international city", will be linked to the RTS that will take commuters to Singapore in just 5 minutes.

The one wild card in the relations between both nations is Malaysia's unpredictable politics. The long and much-delayed HSR project is a fine example. First announced in 2013, the 350-km rail project that would have linked Kuala Lumpur to Singapore and estimated to cost some US$17 billion has had a few false starts. The rail line project finally gained some renewed traction in 2016 under Malaysia's then-premier Najib Razak. But 2 years later, after a historic elections outcome that saw Mahathir Mohamad return to power, the project was dropped. Two years ago, both countries jointly terminated the plan.

Indeed, as Sulaiman Saheh, research director of Rahim & Co International, put it, government policies - whether to aid businesses, or to allow foreigners smoother entry - as well as the political situation are crucial to rekindle confidence in the corridor. This is especially important as Malaysia is competing with other countries in the region as a business as well as home destination.

He added, however, that Iskandar Malaysia's growth path should be seen "more as a marathon, rather than a sprint. Though at present the pandemic coupled with the noticeable gap between supply and demand had resulted in a challenging market, the strategic attributes of the area are still there, with the opportunities for economic spillover effect from its immediate neighbour Singapore, and the (lower) relative cost of living and properties among other cities in the region".