“Nusajaya complements Singapore”
Nusajaya is a key driver of the Iskandar Malaysia (IM), an emerging economic zone in South Johor, Malaysia. Designed to be Asia’s foremost integrated city, Nusajaya is about the convergence of diverse developments on a scale and diversity that has never before been attempted in Malaysia, and is positioned to be the largest and premier fully-integrated urban development in South East Asia. The city is located at the south-western tip of Peninsular Malaysia and is strategically situated in close proximity to Singapore with Singapore’s Central Business District a mere 24km away.
The principal thrust of Nusajaya’s development strategy is to offer the global business and residential markets a sustainable and well-planned community set against a backdrop of landscaped parks and gardens complete with water features and a backdrop of Malaysia’s natural beauty. This iconic, integrated development is propelled by nation-building aspirations, commercial vigor and commitment to stakeholder value enhancement.
The Iskandar Malaysia was conceived as the centre of the Johor-Singapore-Indonesia Triangle. Two and a half times the size of neighbouring Singapore, Iskandar Malaysia was designed to be a fully integrated region of global standard, where all aspects of living – business, entertainment, accessibility and the environment – are integrated as one to create a world-class metropolis.
Iskandar Malaysia is divided into five economic flagship zones, of which Nusajaya lies in the centre. The five flagship zones are:
||Johor Bahru City Centre, comprising of the New Financial District and an upgraded Central Business district, as well as the Danga Bay waterfront city.
||the Western Gate development containing Port Tanjung Pelepas and the Pelepas Free Trade Zone
||the Eastern Gate development of Port Pasir Gudang and Tanjung Langsat Port
||Senai-Skudai, where the Sultan Ismail International Airport is located, offering easy access to the region.
Nusajaya is poised to be a world-class city that embodies a diversity of seven signature developments – Kota Iskandar (Johor state new administrative center), Southern Industrial and Logistics Clusters (SILC), Afiat Healthpark, EduCity, Puteri Harbour at the Waterfront Precinct, the International Destination Resort and Nusajaya Residences – making it the most desired city in which to live, work and play. Nusajaya’s overall development is planned and designed to be sustainable, environmentally sensitive and conducive for business, living and leisure. A city that enhances and enriches one’s life, it offers significant investment, financial and business opportunities for discerning local, regional and international entrepreneurs and investors. With 24,000 acres of contiguous development-ready land, Nusajaya is poised to complement the development of both Malaysia and Singapore.
With the planned increase in the population of the Island Republic, housing will become an issue that would affect many Singaporeans. Comprising one of Nusajaya’s key developments are the Nusajaya Residences: Horizon Hills, Ledang Heights, and East Ledang. Singaporeans relocating to Nusajaya would enjoy a high standard of living comparable to developed countries but at a much lower cost. Other benefits include easy access to Singapore, the waterfront development of Puteri Harbour that has garnered global interest and participation, the convenience of Nusajaya’s Medical Hub and EduCity, planned regional hubs for healthcare and education, and no restriction on car ownership.
Nusajaya also provides the perfect opportunity for Singaporean companies that require large land tracts for their operations. The Southern Industrial and Logistics Cluster (SILC), located within Nusajaya, provides 1,300 acres of freehold industrial land in an environmentally sustainable setting with easy access to two international airports and five seaports. The SILC will be focused on developing the value chains of integrated ‘clean’ industrial centres in three major areas – Advanced Technologies, Nutrition & Health and Logistics.
Additionally, companies setting up in Nusajaya can benefit from a skilled workforce. Nusajaya itself consists of 24,000 acres of contiguous development-ready land and is developed to be the benchmark against which other new integrated developments are measured.
Nusajaya is ideal as a new economic growth centre due to its strategic location within the resource-rich state of Johor, Malaysia and proximity to Singapore. It has direct access to ready infrastructure and is linked by a comprehensive network of main roads and highways to major international airports and seaports.
Nusajaya is accessible from the North-South Expressway, which links all major cities on the West Coast of Peninsular Malaysia between Thailand and Singapore. The North-South Expressway is also connected to other major expressways including the Malaysia-Singapore Second Crossing, also known as the Second Link. The Second Link, which is deemed to be the alternative to the Causeway, provides much faster and easier access to transport people and goods between Malaysia and Singapore. Nusajaya is also within the Singapore – Johor Bahru ring road, as indicated in the picture.
Nusajaya is land-linked to the greater Asian continent and the world by air and sea. The city is within 30 minutes to two international airports, Singapore Changi International Airport (SCIA) and Senai International Airport ("Senai Intl"). Senai Intl is able to handle up to 4.5 million passengers and 100,000 tonnes of cargo per annum. Investments up to USD 297.6 million will be made in the next few years to upgrade the airport's passenger and cargo facilities. This includes increasing capacity to 10 million passengers per annum, and increasing direct flights to major cities such as Hong Kong, Shanghai and Perth. Senai Intl is within the logistic triangle of IDR, forming an integrated logistic hub for the southern region with linkage to Port of Tanjung Pelepas and Johor Port.
The Singapore Changi International Airport was ranked 25th out of the world’s largest airports by passenger volume, handling 32 million passengers in 2005. Currently its passenger traffic is forecasted to grow at a rate of 7%. The airport is served by 80 airlines that fly to over 180 cities and register over 4,000 scheduled flights weekly.
Additionally, Singapore’s national carrier, Singapore International Airlines (SIA) was the first to receive the delivery of Airbus’ new super-jumbo, the A380, on 15th October 2007. The SCIA’s Terminal 3, scheduled to begin operation in 2008, was built to cater largely to the A380 super-jumbo. With the completion of Terminal 3 and the upgrade works on the existing terminals, the SCIA will be able to handle a total passenger capacity of 66.7 million passengers per annum, including those travelling through the budget terminal. Together with the indirect benefits gained by the SCIA from the open skies agreement signed between the European Union and the United States ,Singapore is predicted to be the 5th busiest airport in the world for large aircraft by the year 2025.
The city also has direct access to five seaports located within Johor and Singapore, namely the Port of Tanjung Pelepas, Johor Port, Tanjung Langsat Port, Jurong Ports and Port of Singapore Authority.
The Port of Tanjung Pelepas (“PTP”) is located on the eastern mouth of the Pulai River in south-western Johor with proximity to Port of Singapore. It set the world record as the fastest growing port, handling 1 million twenty-foot equivalent units (“TEUs”) of containers a mere 571 days after starting operations. PTP’s total capacity is currently over 6 million TEUs per year, and has experienced spectacular growth from 2.05 million TEUs in 2001 to 4.77 million TEUs in 2006, and in 2007, PTP’s throughput grew 21.4% to hit 2.7 million TEUs. The port’s master plan will include over 75 berths, which will make it the only port in South East Asia with long term capability in handling increasingly growing container traffic.
The Johor Port was the first Malaysian port to be located within a free trade zone, and currently has an annual capacity of 1 million TEUs with 5,500 ground slots. It is designed as a multi-purpose port that caters to all types of cargo including liquid bulk, dry bulk and general cargo.
The Tanjung Langsat Port was designed to complement Port of Tanjung Pelepas and Johor Port. Currently, the port is in the midst of implementing its Physical Development Plan. Upon completion in 2012, the port’s facilities will include a marine support base, liquid cargo terminal, multi-purpose wharves and a jetty capable of handling medium-range tankers up to 30,000 deadweight tonnes. The port’s activity will focus on petrochemical industries, which will pose serious competition to Port of Singapore, already on the receiving end of complaints over high costs.
The Jurong Port in Singapore is well equipped with facilities and services that can handle containers and a variety of cargo including different types of bulk cargo. The port, from January to October 2007, has handled 692,000 TEUs thus far. Jurong Port is currently in the midst of developments to increase handling capacity and improve its operational efficiency. The projects are carried out in phases and are expected to be completed from second quarter of 2008 onwards.
Port of Singapore Authority (“PSA”) is the world’s largest container transhipment hub, handling approximately one fifth of the world’s total container transhipment through-put. The port operates 4 container terminals and 2 multi-purpose terminals in Singapore, and it handled 24 million TEUs of containers in 2006. The PSA has linkage to an excellent network of 200 shipping lines connecting to 600 ports in 123 countries.
Iskandar Malaysia Incentive and Support Package
On 22nd March 2007, Dato’ Seri Abdullah Haji Ahmad Badawi, the Prime Minister of Malaysia announced the initial incentive and support package (“ISP”) for the Iskandar Malaysia. The ISP is structured to encourage early investment, attracting private investors to invest over the short-to-medium term To reinforce the Malaysian government’s commitment to the Iskandar Malaysia, Malaysia's Deputy Prime Minister, Dato’ Seri Najib Tun Razak has stated that ‘there will be no flip-flop in the government’s Iskandar Malaysia policies’.
In order to be eligible for the ISP, potential applicant companies must be approved by Iskandar Regional Development Authority (“IRDA”) and must carry out qualifying activities in designated zones for customers within the zone and outside of Malaysia. These qualifying activities or commercial development initiatives include those within six targeted sectors in IRDA-approved zones. These sectors or industries are:
- creative industries
- educational services
- financial advisory and consulting services
- healthcare services
- logistics services, and
tourism related activities.
The incentives available under the ISP are:
- Exemption from Foreign Investment Committee rules
- Freedom to source capital globally
- The ability to employ foreign employees freely within the approved zones, depending on the amount of space occupied in these zones
- Exemption from corporate income tax for a period of 10 years from commencement of operations for activities within the zone and outside Malaysia, provided these operations commence before the end of 2015
- Exemption from withholding tax on royalty and technical fee payments to non-residents for a period of 10 years from commencement of operations
- Foreign knowledge workers in Iskandar Malaysia able to import or purchase a duty free car for their personal use
On 9th October 2007, IRDA announced its latest ISP, currently limited to Node 1 within Nusajaya. The incentives, which are divided into fiscal and non-fiscal, are available for Iskandar Malaysia-status companies, and have been extended to approved developers, approved development managers and foreign knowledge workers. The incentive packages are as per listed below:
|Incentives for Iskandar Malaysia-
- 10-year income tax break from commencement of operations in respect of income from qualifying activities in the approved node for customers located within the approved node and outside Malaysia or wholly outside Malaysia provided these operations start before the end of 2015.
- Exemption from withholding tax on payments for services and royalties to non-residents for a period of 10 years from commencement of operations
|Incentives for approved developers
- Income tax break up to year of assessment 2015 on statutory income from the disposal of any right in or over land within the approved node
- Income tax break up to year of assessment 2020 on statutory income from the rental or sale of buildings within the approved node
- Exemption from withholding tax on payments made to non-residents for services, interest and royalties, up to December 31 2015
|Incentives for approved development managers
- Exemption from payment of income tax on statutory income from the provision of management, supervisory or marketing services to an approved developer until year of assessment 2015
- Exemption from withholding tax on payments made to non-residents for services up to December 31 2015
|Foreign knowledge workers
- Allowed to import or purchase a duty-free car for their personal use
- Exemption from the Foreign Investment Committee rules
- Flexibilities under foreign exchange administration rules
- 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
- Retain export proceeds offshore
- Unrestricted employment of foreign knowledge workers
- Exemption from statutory rules that state companies must have Bumiputra participation of at least 30% of equity
The story of Singapore’s economic boom is one of the success stories of the 20th century. The Republic has handled its limited resources well and created a robust economy that is still posting impressive growth rates. But the reality of the situation is, Singapore is a country constrained by its physical size; this issue will become even more pressing as it engineers its population growth for economic reasons. The Iskandar Malaysia provides the perfect solution to Singapore’s looming issues by providing what it needs most: space, accessibility and a lower cost of living and doing business. Despite concerns that the Iskandar Malaysia would compete with Singapore, it is when the two work together and complement each other that the greatest benefits are to be gained.