Singapore pledges to help M'sia on Johor project

The Straits Times, May 15, 2007


LANGKAWI - SINGAPORE has agreed to work with Malaysia on a US$105 billion (S$160 billion) development of southern Johor, after talks aimed at rekindling warm relations between the two neighbours.

Late last year, Malaysia had unveiled an ambitious two-decade blueprint to harness mostly private capital to turn 2,200 square km of the state into an industrial and tourism zone, and Johor Baru into a new Asian boom town.

'Singapore has made an assessment and decided it is fundamentally good for us if this project takes off,' Prime Minister Lee Hsien Loong said after meeting his Malaysian counterpart on the resort island of Langkawi. 'It will complement Singapore.'

The Johor plan implies heavy investment from Singapore, but Mr Lee said in December there were 'mixed signals' from Malaysia about the extent to which Singapore investors were welcome.

But Mr Lee said after a two-hour breakfast meeting with Malaysian Prime Minister Abdullah Ahmad Badawi on Tuesday that the pair had agreed to form a joint ministerial panel to ensure cooperation in the so-called Iskandar Development Region (IDR).

Mr Lee referred to Mr Abdullah by the latter's affectionate nickname, Pak Lah, at a joint news conference.

'I have suggested to Pak Lah, who agreed, that we should set up a ministerial committee to oversee the joint cooperation in the IDR,' Mr Lee said, adding that the panel could look into issues like joint tourism promotion and access into the zone.

The Iskandar blueprint, unveiled by Mr Abdullah in November, calls for a high-tech park, logistics and industrial precincts, educational park, regional hospitals, marina, waterside villas, theme parks and exclusive, gated residential communities.

It also envisages passport-free access to parts of the zone for Singaporeans.

Mr Lee and Mr Abdullah were holding bilateral talks for the first time in three years. Despite an initial thaw in relations in 2004, when both leaders were new in their jobs, and a surge in cross-border mergers, unresolved issues continue to lag in the background.

These include the price Singapore pays for Malaysian water, railway land, the use of Johor's air space, and Malaysia's desire to replace the Causeway with a bridge.

Tuesday's meetings, which continued in the afternoon on board a cruise ship, aim to recapture some of that initial warmth in relations. -- REUTERS