Singapore “concerned” about impact of Malaysia's reclamation works

Chitra Kumar Channel NewsAsia 21 Jun 14;

SINGAPORE: The Ministry of Foreign Affairs (MFA) has said that given Singapore’s proximity to Johor, it is "naturally concerned" about any possible transboundary impact on the country from Malaysian property development projects that involve reclamation works in the Straits of Johor.

MFA was responding to queries following reports in the Malaysian media that Prime Minister Lee Hsien Loong had written to his Malaysian counterpart Najib Razak concerning the land reclamation works near the Second Link.

The MFA spokeswoman also said that there are international obligations for both Malaysia and Singapore authorities to work closely on such matters.

Malaysian reports said the project -- called Forest City -- involves several connected islands with a total land size of some 2,000 hectares.

The reports added that Mr Lee had asked Malaysia to provide all relevant information, including an environmental impact assessment report and an estimate of the project's completion date.

It has also been reported that Mr Lee's letter follows earlier diplomatic notes sent by Singapore to Malaysia's Foreign Ministry.

MFA has confirmed that it has asked the Malaysian authorities to provide more information, so that it can undertake a study as soon as possible on the impact of the reclamation works on Singapore and the Straits.

The ministry said Malaysia has agreed to do so and Singapore hopes to receive the information soon.

- CNA/nd

Singapore wants more information on Johor project: MFA
The Star/Asia News Network AsiaOne 22 Jun 14;

In response to media queries on Malaysian property development projects involving reclamation works in the Straits of Johor, the MFA Spokesman said:

"Given Johor's close proximity to Singapore, we are naturally concerned about any possible transboundary impact on Singapore from property development projects that involve reclamation works in the Straits of Johor.

"There are also international obligations for both Malaysia and Singapore authorities to work closely on such matters.

"We have asked the Malaysian authorities to provide more information so that we can undertake a study as soon as possible on the impacts of these reclamation works on Singapore and the Straits. They have agreed to do so and we hope to receive the information soon."

Singapore concerned over Johor project

PETALING JAYA: An ambitious project which will see massive land reclamation work near the Johor Second Link has raised eyebrows across the Causeway.

The project called Forest City, which is said to involve several connected islands with a total land size of about 2,000ha - bigger than Pangkor island - could have potential transboundary effects and Singapore is concerned.

Singapore Prime Minister Lee Hsien Loong has written to his Malaysian counterpart Datuk Seri Najib Tun Razak about the project.

This is a follow-up to two third-person notes from Singapore on the matter that were sent to the Foreign Ministry last month.

Another letter was handed to Minister in the Prime Minister's Department Datuk Seri Wahid Omar when he was in Singapore for a bilateral meeting recently.

Singapore started voicing its concern after a report appeared in The Star in March on the project by China's Country Garden Holdings Co Ltd and Kumpulan Prasarana Rakyat Johor.

The project will involve land reclamation to build luxury homes on man-made islands off Pendas in southern Johor.

So far, there have been no indications of environment impact assessment reports over the projects. However, reclamation of parcels of less than 50ha each do not require EIAs.

Parties close to royalty are believed to be linked to the project, which will be developed over more than 30 years.

In a recent The Star report, Kayson Yuen, Country Garden regional president for Malaysia project, said the company had studied the mega project for more than a year before it decided to invest.

Singapore's first diplomatic note asked Malaysia to provide all relevant information, including an EIA report and an estimate of the project's completion.

Singapore then sought clarification and explanation via the second note following Johor Mentri Besar Datuk Seri Khaled Nordin's assurance in the state assembly recently that the reclamation work would not affect the environment.

The mentri besar was reported to have said that the state government had issued a notice to the developer, Country Garden Pacific View Sdn Bhd, to prepare an action plan to effectively clear any sediment caused by the reclamation work.

Industry sources said the concerns raised by Singapore should be taken seriously.

They said the fact that Singapore chose to raise its concerns at the government-to-government level when land development was a state matter indicated that the island republic was taking the issue very seriously.

"It becomes a federal matter when transboundary and environmental issues are involved," said one source.

"Singapore is using all channels to raise the matter so Malaysia needs to take this seriously."

Malaysian government officials were tight lipped, but assured that there were discussions ongoing with the other side and that relevant agencies in Johor had been asked to provide more details on the project.

There is also a concern that Singapore may lodge a protest with the International Tribunal of the Law of the Sea (ITLOS) in Hamburg over the reclamation project.

Malaysia went to ITLOS in 2003 when Singapore started land reclamation work, totalling 5,214ha at the eastern and western parts of the Straits of Johor.

ITLOS then directed both countries to conduct a joint study and propose mitigating measures in Tuas and Pulau Tekong.

It also directed Singapore not to conduct reclamation that may cause irreparable damage to Malaysia's interests or serious harm to the area's marine environment.

Mega reclamation project off Johor raises concerns
The Straits Times AsiaOne 24 Jun 14;

Singapore has expressed concern to Malaysia over a proposal for a massive reclamation project to create an island in the Strait of Johor below the Second Link.

The Ministry of Foreign Affairs (MFA) confirmed yesterday that Singapore has asked for more information so it can study the possible impact on the Republic and the strait. "They have agreed to do so and we hope to receive the information soon," a spokesman said in response to media queries.

A report in the Malaysian daily The Star yesterday said that Prime Minister Lee Hsien Loong has written to his Malaysian counterpart, Datuk Seri Najib Razak, about the project.

That was a follow-up to two diplomatic notes on the matter sent to Malaysia's Foreign Ministry last month, the paper said. A third note was handed to Minister in the Prime Minister's Department Wahid Omar when he visited Singapore recently, it added.

The Star reported last Monday that China property developer Country Garden Holdings and a Johor government company, Kumpulan Prasarana Rakyat Johor, were planning the reclamation project called Forest City for luxury homes.

The idea to create a 2,000ha island - nearly three times the size of Ang Mo Kio estate - will take 30 years to complete, Mr Kayson Yuen, Country Garden's regional president for the project, told the paper. A project map showed part of the man-made island under the Second Link, which connects Tuas in Singapore to Johor.

The Edge Review online magazine reported last month that Johor's Sultan Ibrahim Ismail Sultan Iskandar was behind the project, which was being promoted actively by powerful Johor politicians.

Mr Yuen told The Star that his Hong Kong-listed company had studied the project for more than a year before deciding to invest in it, and that an Australian consultant and local contractors had been hired for the reclamation works.

Singapore's MFA said yesterday: "Given Johor's close proximity to Singapore, we are naturally concerned about any possible transboundary impact on Singapore from property development projects that involve reclamation works in the Strait of Johor.

"There are also international obligations for both the Malaysian and Singapore authorities to work closely on such matters. We have asked the Malaysian authorities to provide more information, so that we can undertake a study as soon as possible on the impacts of these reclamation works on Singapore and the Strait. They have agreed to do so and we hope to receive the information soon."

The Star said yesterday there has been no indication that the parties behind the reclamation works submitted environment impact assessment reports to the government.

It noted, however, that reclamation works smaller than 50ha in land area need not submit environmental impact studies.

The Edge Review magazine had claimed in its report last month that the man-made island may be dissected by canals into smaller

Singapore concern over Johor project
MERGAWATI ZULFAKAR The Star 21 Jun 14;

PETALING JAYA: An ambitious project which will see massive land reclamation work near the Johor Second Link has raised eyebrows across the Causeway.

The project called Forest City, which is said to involve several connected islands with a total land size of about 2,000ha – bigger than Pangkor island – could have potential transboundary effects and Singapore is concerned.

Singapore Prime Minister Lee Hsien Loong has written to his Malaysian counterpart Datuk Seri Najib Tun Razak about the project.

This is a follow-up to two third-person notes from Singapore on the matter that were sent to the Foreign Ministry last month.

Another letter was handed to Minister in the Prime Minister’s Department Datuk Seri Wahid Omar when he was in Singapore for a bilateral meeting recently.

Singapore started voicing its concern after a report appeared in The Star in March on the project by China’s Country Garden Holdings Co Ltd and Kumpulan Prasarana Rakyat Johor.

The project will involve land reclamation to build luxury homes on man-made islands off Pendas in southern Johor.

So far, there have been no indications of environment impact assessment reports over the projects. However, reclamation of parcels of less than 50ha each do not require EIAs.

Parties close to royalty are believed to be linked to the project, which will be developed over more than 30 years.

In a recent The Star report, Kayson Yuen, Country Garden regional president for Malaysia project, said the company had studied the mega project for more than a year before it decided to invest.

Singapore’s first diplomatic note asked Malaysia to provide all relevant information, including an EIA report and an estimate of the project’s completion.

Singapore then sought clarification and explanation via the second note following Johor Mentri Besar Datuk Seri Khaled Nordin’s assurance in the state assembly recently that the reclamation work would not affect the environment.

The mentri besar was reported to have said that the state government had issued a notice to the developer, Country Garden Pacific View Sdn Bhd, to prepare an action plan to effectively clear any sediment caused by the reclamation work.

Industry sources said the concerns raised by Singapore should be taken seriously.

They said the fact that Singapore chose to raise its concerns at the government-to-government level when land development was a state matter indicated that the island republic was taking the issue very seriously.

“It becomes a federal matter when transboundary and environmental issues are involved,” said one source.

“Singapore is using all channels to raise the matter so Malaysia needs to take this seriously.”

Malaysian government officials were tight lipped, but assured that there were discussions ongoing with the other side and that relevant agencies in Johor had been asked to provide more details on the project.

There is also a concern that Singapore may lodge a protest with the International Tribunal of the Law of the Sea (ITLOS) in Hamburg over the reclamation project.

Malaysia went to ITLOS in 2003 when Singapore started land reclamation work, totalling 5,214ha at the eastern and western parts of the Straits of Johor.

ITLOS then directed both countries to conduct a joint study and propose mitigating measures in Tuas and Pulau Tekong.

It also directed Singapore not to conduct reclamation that may cause irreparable damage to Malaysia’s interests or serious harm to the area’s marine environment.

Stormy property landscape
NG BEI SHAN The Star 21 Jun 14;

THE booming presence of developers from China in Johor has not only ruffled feathers among local developers but also sparked concerns of the Singapore government due to the massive land reclamation works.

Following the high-profile entrance of Guangzhou-based Country Garden Holdings Co Ltd, which launched 9,000 units in Danga Bay at one-go in 2013, all eyes are now on other developers from China who are expected to adopt carpet bombing kind of development.

Country Garden made the first move in Johor Baru. It is followed by Guangzhou’s R&F Properties Co (R&F) that bought 116 acres near the first link in Johor Baru from the Sultan of Johor for RM4.5bil. R&F could be launching as many as 30,000 units over the next few years on land that is to be reclaimed.

Agile Property Holdings Ltd is another China-based developer that is expected to make its presence felt in Johor Baru after it bought 1.3ha from Tropicana Corp Bhd in Bukit Bintang, Kuala Lumpur.

A study by a government investment body, which had undertaken a comprehensive development plan for Johor estimated that the number of new condominiums coming up in Johor Baru is about 30 times over the number of units built in Mont Kiara.

“That is the number of new units coming into the market,” says an official.

But what has caught the attention of the Singapore government is a project near the Second Link involving 5,000 acres (2,023 ha) reclaimed from the sea.

Country Garden, one of the Top 10 developers in China, has teamed up with a subsidiary of Johor’s state-owned investment arm, Kumpulan Prasarana Rakyat Johor (KPRJ), to undertake the job.





Singapore’s concern

The development has caught the attention of Singaporean authorities who felt that it would eventually have an impact on their shore line.

Towards this end, Singapore has sent a note to Wisma Putra expressing concerns over the project.

“It is being dealt with” says a source.

An addition of 5,000 acres also means that there will be much more land in the southern region, possibly impacting the sustainability of the supply-and-demand chain.

In an interview with StarBizWeek, Country Garden regional president for Malaysia project Kayson Yuen says the mega project “Forest City” will span over 30 years and the company had studied it more than a year ago before committing into it.

He said the land was bought at a “reasonable price” but could not furnish with details for Forest City’s land cost.

As for R&F, a very high-density project is in the pipeline, with the company planning to launch 15 blocks in the first phase. The six plots it bought from the Johor Sultan last year came with a high plot ratio of 1:10.

Industry observers say the plot ratio can be further extended to 1:13.

R&F plans to develop high-rise residential units, retail properties, offices, hotel and a shopping mall, all of which will be on a saleable floor area of about 3.5 million sq m, which is close to 10 times the floor space of the Petronas Twin Towers in the capital.

Local developers are starting to feel the pressure following the massive developments by the Chinese developers.

But the developers from China are optimistic that Johor will be akin to Shenzhen and the units being built would eventually be taken up.

Says Yuen: “It takes Shenzhen 20 years to where it is today... so we expect for it to take some time for Johor to develop into the same status.”

But Iskandar Malaysia, which is almost three times the size of Singapore, is already being positioned as the Shenzen of Hong Kong. Shenzhen is about twice the area of Hong Kong.

Iskandar’s sustainability

The Chinese are investing in Malaysia because of political stability, potential from the Singapore spillover effect, low cost of entry, cultural similarities, language and also partly due to the slowdown of the property market in China.

The developers, especially listed companies, come to Malaysia because it is still considered one of the most affordable countries in the region.

“Take Vietnam as an example, the recent (anti-China) riot shows that there is a considerable political risk to invest in the Indo Chinese nation,” one developer explains.

As for the Philippines, the political relationship is not amicable over the years.

Singapore, on the other hand, is expensive.

Betting on Iskandar Malaysia as the next Shenzhen, Johor becomes a natural investment choice for China developers but it is also the very same reason that Malaysia has to strike a balance to maintain a congenial relationship with Singapore.

That said, the sustainability of Iskandar Malaysia is in question due to supply far outstripping demand.

Currently, Iskandar Malaysia has a population of 1.6 million while Singapore has 5.4 million.

Shenzhen’s population is a whopping 11 million while Hong Kong’s has 7.2 million.

That leads to another question: Who will take up the massive supply of houses in Iskandar Malaysia and Johor Baru?

Country Garden’s Yuen says Chinese buyers make up 35%, locals 40% and Singaporeans 20% for its high-rise Danga Bay project.

Who are the buyers?

While there are rumours that Country Garden has employed a “buy-one-free-one” approach to lure Chinese buyers, Yuen outright denied such talks.

One commercial banker tells StarBizWeek that many of the purchasers from China who buys into Malaysian properties fall into the middle-income level.

Their profiles range from small business owners, teachers to executives.

“To them, Malaysian properties are very cheap. Some of them do not even bother to take up loans due to the lengthy process of approval.”

He says such buyers will opt to buy in cash and the property prices here are much cheaper compared with those in their homeland.

Some buy the houses as investment while others buy for their children, so that when they send their children here, there will a place for them to live.

“Other countries like Australia, Singapore and Hong Kong are too expensive for the middle-income Chinese buyers while in Thailand, foreigners cannot own property there,” he explains.

Depending on the bank, the process to approve the loans may vary.

He says normally foreign buyers can get 50% to 60% loan of the total purchase price and banks may request for the foreign buyers to deposit few more months of instalments upfront.

“To prevent the risk of default, banks are usually more cautious with the approval process as the checking of the income statement can be different from the local buyers.

“Some banks may also perform a credit checking on the buyers in their country,” he adds.

It is usually easier for buyers to borrow from the developers’ panel banks, which can also be a local bank.

As for Country Garden, analysts say the company raises bonds in Hong Kong and utilise the funds for its expansion overseas.

While listing can be another way of raising funds, in Country Garden’s case, analysts opine that floatation of its Malaysian unit is unlikely to happen in the near-term.

As for project execution, industry players note that besides developers from China, many contractors from the mainland are also moving into Malaysia.

However, Country Garden’s Yuen says it engages with mostly local contractors for its projects in Johor and hired an Australian consultant for the gargantuan reclamation works.

Chain reaction from China?

So far, Country Garden has the most number of notable projects in Malaysia. R&F is fast gain prominence with its launches in a big way.

Country Garden’s Danga Bay project has a gross development value of RM10bil while its projects in Semenyih and Serendah are estimated at RM3.5bil jointly. It also has the major capital commitment for the land reclamation works for the Forest City off the coast of Pendas, Johor.

Some quarters are concerned that the property growth in China will have an impact on the Chinese developers that have venutred into Malaysia following reports of property bubbles in some of the cities in China.

John So of RHB Research who is based in Hong Kong tells StarBizWeek that the perception that there is a property bubble in the third and fourth-tier cities in China is a “simplistic view”.

“The national home sales (of China) has gone down 10% for the first five months while developers like Country Garden and Evergrande Real Estate Group have experienced robust growth for the same period,” he says.

He notes that sales in certain tier-one and two cities have slowed down by some 20% and it will be impacted by affordability and demand.

The issue of funding
THEAN LEE CHENG The Star 21 Jun 14;

LARGE banners the size of multi-storey buildings and hoardings herald the coming launch of a Chinese mainland developer Guangzhou R&F Properties. Since 2012, it has made its presence felt buying up tracks of land.

Says a 50-something Johorean: “The Chinese developers did things in a big way. They imported grown trees for their projects and spend millions on landscaping. The effect of growns trees on the project was immediate. This impressed many Johoreans.”

The economic spin-offs were massive. But things began to change.

“We have enjoyed the land that fronts the Johor Straits, formerly Lido Beach. That is a public area. Today it is known as Danga Bay and it has become private property.”

The Danga Bay project, a joint venture between Iskandar Waterfront Holdings Sdn Bhd and Country Garden Properties (M) Sdn Bhd, a unit of China-based Country Garden Holdings, is the Chinese developer’s first foray abroad.

The mainland Chinese also irked local developers who quietly voiced their discontent. They pay premium prices for land.

The last two years, Malaysia has become the darling of Chinese developers. According to real estate consultancy Savills, Greenland Group announced in March a US$3.3bil deal in two residential and hotel projects here.

It joins smaller peers Country Garden Holdings Co Ltd, Guangzhou R&F Properties Co Ltd and Agile Property Holdings Ltd, which have invested a combined US$2.7bil in Malaysia.

In 2013, Chinese institutional and retail investors invested a total of US$1.9bil into real estate in Malaysia, exceeding the US$867mil invested in Hong Kong and US$1.8bil invested in Singapore.

“Malaysia is the cheapest in the region in terms of capital city pricing,” says IP Global chief executive of property investment consultant and underwriter Tim Murphy told Reuters in March. He likes Malaysia also because of the “strong foreign ownership level and because you can borrow money. Lenders are friendly.”

Shadow banking is a huge issue currently in China. How Chinese developers fund their projects is haunting the overall Chinese economy because a collapse in the property sector will have far reaching effects on the broader Chinese economy. The contagion effect on Malaysia would be massive.

Shadow banking, the use of funds from non-bank sources, funded most of the development in second and third-tier cities in China. Most of these projects continue to remain empty years after completion. Credit Suisse analyst Victor Wang in a May 9 report says China banks have limited direct loan exposure to the property sector but a total 54% of their loans are collateralised lending. Dropping asset (property) prices and a prolonged weak construction activity would “impact” loan quality.

“Bank of China and Industrial and Commercial Bank of China... are relatively safer banks from this angle as 7.0% and 7.7% of their 2013 loans (respectively) were lent to developers,” says Wang. Exposure of lenders to the sector may be far greater due to off-balance sheet fund raising.

While foreigners are barred from buying homes in China, they are exposed to the sector when they lend to real estate companies via bond investments.

Financial Times had reported that since 2010, foreign investors had lent Chinese real estate companies almost US$50bil and US$6bil in yuan-denominated debt, citing Dealogic. Developers accounted for a fifth or 20% of all non-financial dollar bonds sold by companies across Asia (excluding Japan) in 2013, and more than 40% of new issuance this year.

Developers also use offshore entities to borrow foreign currency using a variety of structures that link onshore and offshore companies to avoid a myriad of restrictions on capital flows. These entities may be based in Cayman Islands or the British Virgin Islands.

Last month, Country Garden postponed the launch of a US dollar bond issue, and this was perceived as yet another sign of growing concern. The Hong Kong-listed company met with investors to gauge appetite for a deal but did not press ahead with it, the Financial Times reported. A number of Chinese developers have suffered in the equity market this year.

Country Garden was planning to use funds from the proposed deal to refinance existing debt. Chinese developers have been active in the bond markets over the past two years, driving issuance in Asia.

On the local home front, Malaysia’s relatively easy laws have also attracted a considerable number of Chinese individual buyers.

The lost of flight MH370, however, has scuttled some of these deals, property consultants said. New investment instruments have resulted in the Chinese going for quick sales if sentiments turn weak or if they see unattractive returns from their property investments.

In Malaysia, Country Garden has come under scrutiny, not over funding, but its plan to reclaim 2,023 ha on the Johor Straits.

According to a source, Country Garden has been called to a meeting with the Department of Environment in the capital last week. Country Garden’s regional president Kayson Yuen said yesterday he has returned to China for a meeting.

A source said detailed studies of the site are on-going. “Country Garden is making efforts in terms of environmental management and in getting the planning right.”

The source said the layout has not been finalised although the land has been reclaimed.

No EIA, but Johor coastal reclamation projects already underway, say sources
The Malaysian Insider MSN News 22 Jun 14;

Despite the absence of an Environmental Impact Assessment (EIA) report and a call for intervention by Singapore, two massive reclamation projects are well underway in the Johor straits that separate Malaysia and the island republic.
The coastal reclamation work has also raised concerns over the effect the project will have on the coastal eco-system and the livelihood of fishermen in the area apart from Malaysia's transhipment hub in the Port of Tanjung Pelepas (PTP).

An environmentalist who declined to be named questioned how work was allowed to proceed despite the projects being "illegal" in the absence of the EIA report.

Several queries by The Malaysian Insider to the Department of Environment (DOE) on the status of the projects, their impact on the environment and the lack of an EIA report have not been answered.

Johor health and environment exco Datuk Ayub Rahmat had told The Malaysian Insider when contacted that it was unlikely that no EIA report was done for the reclamation projects.

Nevertheless, he said that he was waiting for a report by the state's Economic Planning Unit (EPU) on the matter.

"It is improbable that there is no EIA report if it is indeed required. Even for the Tanjung Kupang reclamation project, a preliminary EIA report has been done, so it cannot be that no such report was done for the other reclamation projects.

"Whether it’s a big or small company doing the project, I'm sure they know the law so let's not politicise the issue until we find out the facts and the EPU report is ready, hopefully in a week's time," he had said last week.

The source, however, disagreed with Ayub, saying that as of June 15, 2014, publicly available information on the DOE web portal showed that no EIA report, either preliminary or detailed, was submitted by Country Garden Pacific View Sdn Bhd for the 2,000 ha project, and by Spektrum Kukuh Sdn Bhd for its reclamation off Tanjung Piai.

According to the source, most worrying of all was the coastal reclamation work stretching over 1,817ha by Country Garden Pacific View, dubbed the Forest City.

The plot near the second link crossing to Singapore has also been given a lot number, Lot PTD 4071, Mukim Tanjung Kupang, Daerah Johor Baru.

A company search in February revealed that one of the directors of Country Garden Pacific View is Datuk Daing A. Malek Daing A. Rahaman, who is believed to be a long-time friend of the Sultan of Johor and is a member of the council of the Royal Court of Advisers to the Sultan.

China's Country Garden Holdings Co Ltd had undertaken its first project in Danga Bay, which covers 20ha of land – for which it paid RM900 million several years ago.

It was reported that Country Garden Holdings and Kumpulan Prasarana Rakyat Johor are jointly undertaking the new Forest City project, which is poised to become a tourism hub.

Two weeks ago, Johor Menteri Besar Datuk Seri Mohd Khaled Nordin had assured the state assembly that the land reclamation for the development of the Forest City project in Iskandar Malaysia would not affect the environment.

He had also said that the state government had issued a notice to the developer, Country Garden Pacific View to prepare an action plan to effectively clear any sediment caused by the reclamation work.

He also reportedly said that the DOE would be closely monitoring the activities carried out throughout the duration of the project to ensure that the environment was not compromised.

The other reclamation project covering 1,410ha near Tanjung Piai, which is the southern most tip of continental Asia, is being undertaken by Benalec Holdings for the purpose of an industrial oil and gas hub.

The Johor crown prince Tunku Ismail Idris Sultan Ibrahim and Daing A. Malek are directors of Spektrum Kukuh, which partnered Benalec in the Tanjung Piai reclamation project.

"There are serious environmental concerns here because the area is surrounded by fishing villages, given the rich sea grass and marine diversity,” the source said of the projects.

"Their livelihoods will be affected by the coastal reclamation.”

The source questioned how the land reclamation was allowed to be carried out without detailed EIA reports as required under the law for coastal reclamation projects over 50ha in size.

This requirement is stated under the Environmental Quality (prescribed activities) (Environmental Impact Assessment) Order 1987 to be read together with the Environmental Quality Act 1974.

The Edge Review had reported three weeks ago that Singapore's diplomatic feathers had been ruffled over concerns that the Country Garden project would extend the Johor coast around the Second Link right up to the edge of the boundary separating Malaysia from Singapore.

Media reports said Singapore Prime Minister Lee Hsien Loong had written to Prime Minister Datuk Seri Najib Razak to voice his concerns over the project.

Another letter was handed to Minister in the Prime Minister's Department Datuk Seri Wahid Omar when he was in Singapore recently, according to the report.

The Sultan of Johor, when officiating the opening of the second session of the state assembly last month, had made remarks about the DOE and had said that environment and water issues were state matters.

The sultan had said in his speech that in carrying out development work, environmental issues needed to be given priority and that EIA reports needed to be prepared for development projects.

"However, there are irresponsible quarters who use their powers with the EIA as a weapon to stop a development that does not benefit them.

"For instance, the development project by Benalec, where the MOU was signed three years ago and witnessed by the prime minister himself, has yet to obtain the EIA approval until now," Sultan Ibrahim Sultan Iskandar had said.

The sultan had further questioned why certain quarters were bent on delaying the approval, and said that such actions only hindered the development of the state and drove away investors.

"Johor is for the people of Johor and only the people know the conditions and the needs of the state so why are there outsiders who are trying to interfere or even trying to teach us what we should do in our own state?" the sultan had asked.

The Johor ruler had also suggested that the jurisdiction on environmental issues be handled by the state government because it was related to land and water matters.

"A state environmental body should be set up under the Johor state enactment as what has been done in Malacca, Sabah and Sarawak," the sultan had said. – June 23, 2014.

Is JB the next Shenzen of China?
A JALIL HAMID New Straits Times 22 Jun 14;

MAJOR property developers from China are making a beeline for Johor Baru, cashing in on the foreign-led property boom that analysts say could have some impact on diplomacy, environment and domestic politics.

The Chinese builders are tapping into the new “growth corridor” of Iskandar, its proximity to Singapore and the deep-pocketed buyers from China and Singapore.

Even established local developers were ruffled by the presence of the Chinese companies, which seemed to be unleashing a huge number of units at just one go.

China-based Country Garden Holdings Co Ltd, for example, sold 6,000 condominium units at Danga Bay within a few months, with Singaporean and mainland Chinese snapping up the bulk of the units.

Guangzhou-based R&F Properties Co Ltd, which in December last year bought 116 acres of land near the Causeway from the sultan of Johor for RM4.5 billion, is developing what it called R&F Princess Cove.

News reports said it could be selling up to 30,000 units over the next few years on the land and the adjacent land that is to be reclaimed. Set up in 1994, R&F claimed it is China’s No. 1 “comprehensive property developer”.

Chinese developers are pumping billions of dollars into projects across the globe as regulatory restrictions in China and rising concerns that the property market is overheating have forced many to venture abroad.

“Like other developers, R&F made the move to diversify its investment portfolio outside China as domestic property curbs don’t seem to end soon,” Alan Jin, a Hong Kong-based property analyst at Mizuho Securities Asia Ltd, was quoted as saying.

For various reasons, Johor Baru and the greater Iskandar region seem to be their favourite destination. But the rise of China’s developers in Johor has also led to some side issues.

An ambitious plan by China’s Country Garden and a Johor state agency to reclaim 2,000ha of land and turn it into a man-made island off the Second Link, near Tuas, in Singapore has drawn deep concerns from the Singapore government.

Singapore Prime Minister Lee Hsien Loong wrote to Prime Minister Datuk Seri Najib Razak a few weeks ago, asking for more details on the project, which apparently is located too close to the Singapore border.

“We are asking for more information, especially the shape, the profile and the timeline of the project,” said one Singapore source.

The issue was also raised by Singapore during the recent meeting of the Malaysia-Singapore joint committee on environment.

Country Garden has teamed up with state-owned investment arm Kumpulan Prasarana Rakyat Johor to undertake the project. Singapore is concerned that the project could impact its boundary and marine environment.

A bigger concern for the Johor government is that the property boom in Iskandar could spawn discontent among the local population since the skyrocketing house prices seem to be out of their reach.

Without the corresponding rise in the supply of “affordable” homes, Johoreans might find themselves being priced out of the medium- to high-end property market in JB.

This is not to mention the rise in the cost of living, with businesses and services targeting the more upmarket residents from Singapore and China. Malays will not be able to match the purchasing power of the foreigners.

Already, we have seen the growing number of “homeless” in the city centre. These are Malays who commute to Singapore daily to work but cannot afford to rent a house in the city.

Malay voters in Johor Baru may also find themselves becoming a “minority” if more and more non-Malay voters move into the city centre. In short, there will be a massive shift in the demographics.

We could eventually see more Malays selling off their JB properties and moving elsewhere. Will the much-debated housing board be able to quickly address this demographic deficit? Time will tell.