S'pore investors shy away from JB
Malaysiakini
Nov  5, 2006
M. Jegathesan

The government has long dreamed of turning sleepy southern Johor into a Hong Kong-style metropolis, but instead abandoned buildings mar the skyline and nervous Singaporean investors shy away.

Prime Minister Abdullah Ahmad Badawi yesterday launched a multi-billion-dollar development project aimed at transforming the region into a thriving business destination to rival Singapore.

But compared to the orderly city-state, from which it is separated only by a narrow waterway, the shabby state capital Johor Bharu has struggled to shrug off a reputation for crime and disorder.

Scores of ugly concrete pillars bristle from the seabed alongside the failed JB Waterfront Lot 1 shopping complex, which was part of a planned mega-development but now lies empty.

The eyesore acts as a warning to investors that despite the big talk, other new projects in the state could suffer a similar fate.

"Of course, the Waterfront City is troubling me," said Johor state parliamentarian Nur Jazlan Mohamed when asked about the commercial wreckage and other abandoned buildings around the city.

The concrete pillars are the vestiges of the RM6.3 billion Waterfront City, which was launched in 1996 on the eve of the Asian financial meltdown.

The crisis felled the ambitious project which was supposed to comprise 41 blocks of commercial, residential and hotel development, sitting on 47.2 hectares of land created by driving concrete supports into the seabed.

Nur Jazlan said that with a population of just 3.17 million people, Johor must win foreign capital if it is to succeed.

"There is no economic power here. We have to build on the investments from Singapore," he said.

Abdullah called the South Johor Economic Zone, which will be 2.5 times the size of Singapore when completed, one of Malaysia's "most important and ambitious initiatives".

The RM18 billion project is to include exclusive residential homes, a logistics hub, a waterfront city, a medical hub, a theme park and an educational city.

Fear of crimes

But Joyce Eng, a property agent at Gold Ridge Properties, said however that Singaporeans are reluctant to buy homes in Malaysia due to security fears and falling returns on investments.

"Singaporeans are not coming. It is worrying. An apartment unit that cost RM400,000 10 years ago is now going for RM300,000 but yet there are no takers," she said.

"Security is one of the major concerns. We need a gated community to attract Singaporeans to invest," she said, adding that she has twice been the victim of "snatch thieves", a crime that is worryingly common in Malaysia.

A lack of clarity and consistency in government policies was another major factor in deterring foreign capital, Eng added.

Wan Abdullah Wan Ibrahim, managing director of UEM Land which is a unit of UEM, the master developers of the mega project, said schemes in the growth corridor are also aimed at investors in the region.

"It is not just for Malaysians... I don't think there is enough (local) market to pick it up," he said.

Suhaimi Saidi, an economist with Kenanga Research, said that while the huge project will boost Johor's economy, the government must improve the quality of service and security, and ensure clean amenities to woo investors.

"It took a lot of effort by Singapore and Hong Kong to be what it is today. For south Johor to reach that level, the private sector has to take the lead," he said.

"Singapore has adopted a liberal environment, allowing a casino. I think for now, Singaporeans will prefer to invest in the republic rather than in Johor."