On the Beat | By Wong Chun Wai

Private sector in the driver’s seat

THE past few months have been hectic for Datuk Seri Effendi Norwawi as the Government pushes the rollout of major Ninth Malaysia Plan (9MP) programmes and high-impact projects, including the Iskandar Development Region and the Northern Corridor Economic Region (NCER), which will be launched at the end of the month. 

Datuk Seri Effendi Norwawi

The expectations are high and as the clock ticks away, the Minister in the Prime Minister’s Department has found himself and his staff racing to meet the deadline.  

It was already 6pm when he walked into his apartment in Kuala Lumpur – two hours late for this interview. “I am sorry as I had to attend a last-minute meeting in Putrajaya on the Northern Corridor,’’ he apologises profusely. 

“We are in the exciting phase of the implementation process. The masterplan for the Northern Corridor will be unveiled soon, followed by that for the Eastern Corridor,” he adds. Sime Darby Bhd, one of Asia’s largest conglomerates, with substantial plantation and property holdings, has been given the job of drawing up the masterplan. 

“In the coming weeks and months, more initiatives will be unveiled, especially in areas that require fresh changes and where there have been dialogues and discussions between the public and private sectors,’’ says the minister. 

However, he is not prepared to disclose more about the NCER, well aware that it should be left to Datuk Seri Abdullah Ahmad Badawi to spell out the details. As part of the launch of the NCER, the Prime Minister is scheduled to visit Kedah and Perlis on July 30, and Penang and northern Perak the following day. 

To be accompanied by other Cabinet members, he is expected to announce a slew of initiatives that are set to transform the four states. The development focus for each state will leverage on the existing economic strengths of the area, such as agriculture, manufacturing, tourism and human capital. 

Big plans up north 

Bits of information on the NCER have already been floating around for some time. For example, one component will be the RM1.1bil Penang Monorail, with two lines of 37km to be built on the island and future extension to the mainland. 

A bus network, along the lines of Rapid KL, with 150 buses will begin operations soon in the state. 

Penang’s much-awaited RM2.7bil second bridge, which will link Batu Maung on the island and Batu Kawan on the mainland, is also set to bring spin-offs for the state, especially in the property sector. The 24km bridge is likely to ease the congestion at the present 13.5km bridge, which is already 21 years old. 

The network of roads through the Penang Outer Ring Road, the second bridge and the public transport upgrade are essential elements that must precede the rollout of other projects in the state. 

Penang will also be made a regional transportation hub. There is talk that Air Asia would fly to major destinations from Penang. One project, also expected to be announced soon, is the setting up of a low-cost carrier centre at the Penang International Airport. 

The container wharves at the Penang Port will be deepened, while on the mainland, food processing centres (including a halal hub) will be set up to handle agricultural products from Kedah, Perlis and northern Perak. 

Kedah and Perlis have been earmarked for an agricultural push, with modern padi farming techniques to be introduced to boost the earnings of the farmers in the country’s Malay heartland. One plan is to increase harvesting to three times a year from the present two. 

The Prime Minister is expected to unveil a special padi grain on July 30. This is meant to improve the padi yield in Kedah and Perlis. Also, Sime Darby is likely to provide details of its seeds research centre, whose key aim is to develop quality rice. 

Potatoes will be cultivated for non-food use, particularly as bio-plastics and composites, as part of the downstream activities to improve the livelihood of farmers. 

Irrigation and flood mitigation projects have been conceived for padi farming areas in Kedah, while an inland container depot will be built. In Langkawi, tourism facilities will come up on the outer islands. 

Corridors of dream 

In northern Perak and Perlis, the thrust will be on human capital development, such as the building of vocational and skills training centres. In Selama, for example, animal husbandry will be the focus. 

Vocational training and an agriculture faculty in a northern state university are being planned to help school-leavers and agriculture graduates to become modern farmers. 

Says Effendi: “There is also the Penang City Park, a mixed development which we are facilitating and assisting. It will be iconic and exciting.” 

The proposed project is a 15-year project covering serviced apartments with healthcare facilities, houses, retail outlets, a hotel, convention centres and office space. The development will boost the state’s economy and create thousands of jobs. 

A metropolitan park that will link the City Park, Youth Park and Botanical Garden is on the cards. This will preserve the state’s 860 acres of green lung, reflecting the authorities' commitment to protect the environment. 

There are other environment-related aspects of the NCER project. In Perak, the Belum Forest has been earmarked for herbal plants research. The northern region has 51.9% of forestland, which the Government is determined to preserve. 

While the finishing touches are being applied to the NCER plan, follow-up actions have been taken on the Iskandar Development Region (IDR) in south Johor, for which over RM4bil has been allocated for infrastructure development. 

“These projects embody the Government’s ambitious goal of making the whole country a hassle-free place for the private sector to flourish,” says Effendi. 

“However, it will take time to cover the entire nation. This corridor development approach, covering the major regions of the country, offers the advantage of speedy implementation, excellent infrastructure and a one-stop agency to deal with.” 

The Second Penand Bridge is an essential part of the state’s development plans


Private sector to the fore 

There is an element that makes the 9MP different from the previous five-year plans. Effendi points out: “In the past, the economy has been predominantly driven by the public sector. But now, since we have a more developed and mature private sector, it’s time to change that. 

“We would like the private sector to be the prime mover of economic growth as is the case with the developed economies. 

He adds, “The 8MP saw the ratio of contribution to the economy as 60:40, the public sector accounting for 60%. The 9MP aims to reverse this so that the public sector’s contribution is reduced to 40% and the private sector goes up to 60%. 

“To sustain the country’s GDP growth at 6% to 7% or higher, the private sector must continue to invest, add production capacity and become the main engine of growth. 

“During the 8MP, the private sector investment growth was – 1%, compared to the 7MP period. Our challenge in 9MP is to achieve 11% growth. In order to accomplish this, the private sector has to invest RM378bil from 2006 to 2010.” 

The IDR, for example, will need plenty of private investors, particularly those from Singapore, to make it a reality. 

The Penang City Park, a unique housing development scheme that cleverly blends in with the environment, including the setting up green lungs, is a private initiative. 

Equine Capital Bhd subsidiary, Abad Naluri Sdn Bhd, which is already developing a township in Batu Kawan, is handling the Penang City Park, which hopes to draw top-notch buyers. Foreign fund managers and investors in Europe have already expressed their interest in the project as Penang is a brand name. 

Describing himself as a “facilitator” for the government and the private sector, Effendi was a banker, civil servant, businessman, Sarawak state assemblyman and Member of Parliament. 

“I have been on both sides. There has to be a mutual trust on both sides. The private sector needs efficiency and prompt decisions, while the public sector has its procedures, rules and circulars to follow,” he says. 

“What we need is a mechanism through which both sides can understand each other, merge and make Malaysia more vibrant.” 

Effendi regards himself as lucky. As an appointed senator, he is free from the punishing constituency work, and is able to devote his time totally to national development. “You can say I am now in the middle ground, and my role is to bring the two sides together.” 

Building trust 

Throughout the interview, Effendi focused his attention on the importance of the private sector, saying “We can only develop a real mature economy if there is a strong and healthy collaboration between the Government and the private sector.” 

How can we build this trust? His reply: “I believe that action speaks louder than words. The Prime Minister himself “walks the talk” in many instances. 

“The National Implementation Task Force (NITF) has set up a Private Sector Investment Advisory Panel to examine various issues affecting the private sector. This panel holds regular dialogue sessions and meetings with the private sector to seek input on how to improve Malaysia’s investment climate. The Government also pro-actively looks into ways to reduce bureaucracy and red tape.” 

Chaired by Abdullah, NITF has established standing and working committees on the education, health, tourism and services sectors, among others. 

Effendi points out that the decision to waive the real property gains tax was made within a month after the Government had engaged the Real Estate and Housing Developers Association in a discussion. 

“We worked with Iskandar Regional Development Authority to come up with incentive package for IDR which was finalised and approved within a month,” he says. Another example, he adds, was the setting up of Pemudah, a high-powered task force that looks into cutting red tape in the public service delivery system. 

“The task force has been given six months to come out with actions. Since it had been set up in February, Pemudah has implemented a series of initiatives to make government processes and procedures more efficient,” he says. 

One of these is the shortening of the time to register new companies from more than a month to only 24 hours. 

“Another example in the property and construction sector, is the setting up of a One-Stop-Centre (OSC) to shorten processing time of development project approvals at the local government level. With this OSC, process time was cut from 3-5 years to a mere 4-6 months,” says Effendi. 

When the interview came to an end, it was nearly 7.30pm. Effendi walked to this writer to the entrance of his condominium. “This is not the end of the day for me. Yes, all of us in Pak Lah’s team have been very busy, but there is more to come. Things are being set in motion for this national mission,” he assures.