New Malaysian metropolis taking shape near Singapore

A new metropolis three times the size of neighbouring Singapore is taking shape in the foothills of southern Malaysia, where officials and investors have equally huge ambitions for the city.

Dust billows across the horizon as sun-scorched construction crews lay roads, drainage canals, street lamps, power stations and other key installations for a development known as Iskandar Malaysia.

Rolling terrain once covered with palm oil plantations and bush has been bulldozed to make way for theme parks, luxury homes, international schools, hotels, hospitals, a movie studio and a business district by 2025.

In short, a new Singapore is being built in an area covering 2,217 square kilometres (887 square miles) in Johor state.

Iskandar, one of five "economic growth corridors" Malaysia is developing, was launched in 2006 and will integrate existing towns, seaports and an airport with the new projects being built from scratch.

But instead of pitting it as a rival to the rich city-state, Malaysia is asking Singapore investors to take part in the project.

"We see ourselves as collaborating because both countries realise that in order to create more wealth and better distribution of the wealth, we need each other," said Ismail Ibrahim, chief executive of the Iskandar Regional Development Authority (IRDA).

"Investors see Iskandar as something that is believable, something that is working," he told AFP.

From his 33rd-floor office in Singapore's financial district, Keith Martin exuded the same optimism.

"It's really positive that the momentum is picking up massively," said Martin, chief executive of Global Capital and Development (GCD), an Abu Dhabi-backed consortium tasked to develop a prime portion of Iskandar called Medini.

"Our strategic advantage is to ride the wave of Singapore. Singapore is all grown up and lacking space to build, business costs are escalating," he said.

Asia's strong recovery from the 2008-2009 global recession and the improved bilateral ties between Singapore and Malaysia have made the environment more conducive to promote the Iskandar region to investors, analysts said.

Singapore was ejected from the Malaysian federation in 1965 and ties since then were often testy, but new leaders who have emerged over the past decade have made an effort to promote cooperation and resolve irritants.

Because of its size, Iskandar - which covers Johor state's capital Johor Bahru - will be developed in phases, with plans to improve rail, sea and air connections to Singapore and facilitate easier immigration clearance.

Malaysia is offering generous incentives, including corporate and personal income tax perks, 100 percent foreign ownership of businesses and unrestricted hiring of foreign "knowledge" workers.

IRDA's Ismail said investor concerns over crime in Malaysia were being addressed by a strong police presence, more guards, surveillance cameras and creative urban planning.

Investor response has been encouraging so far, and the first wave of projects aimed at spurring more investment are due for completion in the next 18 months.

"I've been there with my muddy boots on and I've got my construction knowledge so they can't fool me on the progress," Martin, a veteran of Asia's construction business, said when asked if the development was on track.

By the end of 2010, investment commitments in Iskandar totalled 69.5 billion ringgit ($23 billion), surpassing its target by 48 percent, with more than 40 percent coming from overseas, Ismail said.

The US-based Chelsea Premium Outlets chain - known for no-frills suburban shops selling luxury brands at discounted prices worldwide - will open an outlet in the Iskandar region in November.

Britain's Newcastle University Medical School - one of six universities in Iskandar's planned "educity" complex - will admit its first batch of students later this year.

Marlborough College, a leading British independent boarding school established in 1854, will also open its first campus outside England in Iskandar this year for students aged 11-18.

Marlborough's campus will occupy 36 hectares (90 acres), including soccer, rugby and cricket fields.

Other schools in the "educity" complex include the Netherlands' Maritime Institute of Technology, England's University of Southampton and Singapore's Management Development Insitute.

Tuition will be priced in Malaysian ringgit.

Legoland Malaysia - Asia's first Lego theme park - is slated to open in the Medini sector in late 2012, next to a Legoland Hotel and a lifestyle retail mall.

A 300-bed and 150-suite Gleneagles Medini Hospital costing $156 million is also in the works.

Gleneagles is a popular private hospital in Singapore that caters to wealthy locals, expatriates and "medical tourists" who combine treatment with leisure.

Asian movie production will get a boost with a Pinewood International Studio, supported by an attached "media village."

Houses, luxury apartments and waterfront enclaves are being built to meet the needs of those relocating to the area.

An original masterplan to build a New York or Hong Kong-style financial centre with towering skyscrapers in Medini was redrawn after the global recession in 2008/2009, said Martin.

The new plan calls for a low- to medium-rise business district that will serve the requirements of small and medium businesses seeking cheaper locations but enjoying quality living standards.

It also hopes to attract multinational firms seeking to establish support operations.

Singapore's state-linked investment firm Temasek Holdings and its Malaysian counterpart Khazanah Nasional Berhad are planning to build an "iconic project" in Iskandar, according to Ismail.

He revealed that the project is likely to be a township "promoting healthy living" and covering more than 200 hectares (494 acres).

The Singaporean and Malaysian prime ministers will announce details by mid-year, Ismail added.

Martin said such a project will "almost overnight change the landscape" as it will be another strong vote of confidence on Iskandar.

"It will turbo-charge the already positive momentum," said Martin, who is house-hunting in Iskandar before relocating his family from Singapore.

"I've got my four kids already registered for Marlborough College. We're just looking forward to Medini picking up," he said.

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