The prime minister laid out his vision for the project last Friday, saying it is aimed at attracting foreign businessmen, international professionals and industry experts. The announcement came after the first full board meeting of the newly created Iskandar Regional Development Authority (IRDA) co-chaired by the prime minister himself.
A key component of the South Johor Economic Region, Nusajaya will ultimately cover a 2,217 sq km area providing state-of-the-art facilities and services. The aim is to create an integrated development consisting of seven core components; a new state administrative centre, medical and education cities, Puteri harbour waterfront development, an international destination resort, housing developments and an industrial and logistics park are all planned for the new city.
Chairman of the Southern Johor Investment Company, Azman Mokhtar, says $5.7bn has already been allocated for development plans. In addition to this, the government has pledged an extra $1.2bn to fund projects under the Ninth Malaysia Plan, a comprehensive blueprint for the country's economy. This will see the construction of highways, roads and improved security and cleaning schemes.
Iskandar is hoped to rival popular economic zones created in places such as Dubai, Shenzhen and Bangalore. One way of doing this is through special incentive packages that are being offered for the IRDA. Abdullah said it is important to aim for nothing less than world class if Iskandar is to become a global destination. It must represent the best practices the country can offer investors, businessmen and visitors.
These incentives are due to be presented to the cabinet next month. Although the prime minister did not elaborate, he did state they are likely to include additional tax holidays, exclusive land deals and concessions on utility and local authority charges. Another key incentive to boost foreign direct investment could be the free access enjoyed by overseas investors to take up positions in the IRDA.
"We want to attract investments from around the world. But first they must find it worth putting their money here. And it must be able to draw good managers with special skills." Abdullah said at the launch.
Nusajaya's success is hinged on foreign investments. The government expects the development to gain $13.5bn in investments over the next five years. This predicted growth would bring Johor's gross domestic product contribution to 8% per annum until 2010.
The key recommendation made by the members of the advisory council was to facilitate the free movement of professionals into Nusajaya. Abdullah has said he wants a swift and easy process welcoming people from around the world, with minimal red tape.
Iskandar has several things already working in its favour. The location is well connected with highly developed infrastructure, skilled labour is available and the region benefits from political stability. Additionally, the state government recently announced that plans are underway to develop a full, integrated transport system in Iskandar.
The chief minister of Johor, Abdul Ghani Othman, said the plans will be finalized in the next three months and will include central railways, several bus/taxi/monorail terminals and jetties for river taxis. The minister said the whole transport operation should be up and running in two years time.
In terms of housing, UEM land managing director, Wan Abdullah Wan Ibrahim
projected it will cost $17.2bn over the next 20 years to turn Nusajaya into one the biggest real estate hubs in the region.
Without disclosing names, Wan Abdullah recently revealed he is close to signing deals with five Singaporean advanced technology companies, who are keen to expand their operations to Nusajaya. He also said certain companies in France and Germany have expressed interest, not to mention inquiries from Middle Eastern investors.