Government to co-finance Johor-Singapore Special Economic Zone infrastructure with private sector, says Rafizi

KUALA LUMPUR (July 11): The infrastructure development of the Johor-Singapore Special Economic Zone (JS-SEZ) will be co-financed by the government and the private sector, said Economic Affairs Minister Rafizi Ramli.

JS-SEZ was established by the governments of Malaysia and Singapore to strengthen business ties and improve connectivity between the two countries.

Rafizi said the Malaysian government had informed its Singaporean counterpart that it would not “blindly” allocate funds for infrastructure development but would do so in partnership with private sector investors.

“The government will only consider setting up an infrastructure fund if there is private sector investment,” Rafizi told the lower house of parliament on Thursday during a ministerial explanation session.

Rafizi said the approach aims to prevent the government from repeating past mistakes and reduce the risk of wasting taxpayers’ money on infrastructure.

“Before, when there was a new industrial zone, we spent money on infrastructure and then looked for investors. The government could not determine how much money was needed for infrastructure,” Rafizi said.

He, therefore, said it would be best to wait for private sector investors to come forward before the government allocates a special fund for infrastructure development.

Rafizi noted that such a strategy will also ensure that JS-SEZ attracts global investors, enabling Johor to compete with Vietnam, another favoured investment destination in ASEAN.

“The establishment of JS-SEZ aims not only to attract investors from Singapore but also to offer global investors the ‘best of both worlds’, the sophistication of Singapore combined with the resource and cost advantages of Johor,” Rafizi added.

He also emphasised that JS-SEZ will focus on high-value and advanced technology sectors of the economy, in line with the guidelines of the National Energy Transformation Roadmap (METR), New Industrial Master Plan (NIMP) 2030 and the 12th Malaysia Plan.

Meanwhile, Rafizi said the proposed JS-SEZ would cover an area of ​​over 3,505 square kilometres and encompass six local government areas in Johor.

The six local governments included Johor Bahru, Iskandar Puteri, Kulai, Pasir Gudang, Kota Tinggi and parts of Pontian.

Rafizi mentioned that negotiations on JS-SEZ are in the final stages and the signing of a joint agreement is expected in September this year.

“Malaysia has presented our framework and requests to Singapore and is awaiting their response. However, out of respect for the negotiation process, I am not authorised to disclose specific details,” Rafizi added.

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Rafizi: The Johor-Singapore Special Economic Zone Agreement is in the final stages of negotiations and is expected to be signed in September 2024.