REPORT OF THE ITG ON INFRASTRUCTURE DEVELOPMENT AT THE 20TH IMT-GT JBC

27th – 30th July 2006 * AWANA PORTO MALAI * * * KEDAH, MALAYSIA *

INTRODUCTION

The Working Group on Infrastructure Development of the 20th JBC was held at Dayang 1 Room, Awana Porto Malai, Langkawi, Kedah, Malaysia on 29th July 2006. Dato’ Mohd Karim Abdullah Omar headed the Malaysian delegation with 40 participants, Mr. Nasruddin Daud headed the Indonesian delegations with 25 participants and Mr. Mr Viboon Sriprasert headed the Thai delegation with 5 participants.

1. OPENING REMARKS BY CHAIRMAN

Dato’ Mohd Karim Hj. Abdullah Omar as a chairman of the ITG warmly welcomed the participants to Langkawi, Kedah, Malaysia. He noted that it is a great honor and pleasure for him to chair the meeting. There is a lot of development taking part in the region and he believes a lot of opportunities can be identified. This meeting is to look into the progress and updates of the previous projects undertaken and identify the new projects proposals consisting of new initiatives, policy matters, issues and projects.

2. APPOINTMENT OF THE DRAFTING COMMITTEE

The meeting appointed the following persons as members of the Drafting Committee:

Malaysia - Mr. Mizal Saizulikram Bin Ghazali

Indonesia - Ms. Rina Handayani

Thailand - Khun Arunwan Petsang

3. ADOPTION OF THE AGENDA

The meeting agreed to the proposed revised Agenda. The agreed-upon Agenda is presented as Annex I.

4. ADOPTION OF THE REPORT OF THE ITG WORKING GROUP ON INFRASTRUCTURE DEVELOPMENT 18TH JBC, 12TH NOVEMBER 2006, PEKANBARU, INDONESIA

The meeting agreed to adopt the report. The agreed-upon Report is presented as Annex 2.

5. MATTERS ARISING

Matters arising were discussed as below:

[5.1] Progress Reports and Updates

Malaysia

1. Update on establishment of Ro – Ro passenger ferry services by Penang Port Commission

Dato’ Chairman of updated the meeting that currently the vessel is in an annual docking period. He also informed the meeting that there is a plan to change the vessel but has been delayed for few months. Dato’ Chairman gave few opinions for the meeting to consider base on his experience: a. Statistic shows response from public was not so good. This is because there are 2 fast ferry services operating daily between Penang and Belawan, which is cheaper and faster.

b. The vessel is outdated and not in the condition for the Ro-Ro operation.

The meeting agreed to call the operator from Penang and Belawan in solving the matter. The meeting is in view that the operations of the Ro-Ro will bring a lot of opportunities to Indonesia and Malaysia and the ITG will try to help in formulating the operations.

2. Establishment of Ro –Ro Ferry service in Melaka.

Hj. Yusra of DPMM Selangor informed the meeting that the existing jetty in Kuala Linggi was build by Maju Ikan. Maju Ikan has agreed for the jetty to be used for the Ro-Ro and barter trade services. At time being Kuala Linggi Barter Trade Sdn Bhd has been incorporated to operate the Ro-Ro and Barter Trading activities. They have applied licenses from relevant authorities. They also are in the process of identifying a handling agent in Dumai, Indonesia in order to formalize the barter trading activities. The ITG feel that since the physical infrastructure of the jetty is already in existence, so the operations of barter trading and Ro-Ro should come under the ITG on Trade & In-Situ Development.

3. Redevelopment of Sultan Azlan Shah Airport in Ipoh, Perak.

Mr. Hafni Ibrahim informd the ITG that currently Ipoh airport is being use by Air Asia, Jentayu and Kartika Airlines. He also updated the meeting that Perak SEDC is offering 300 acre land for development surrounding the airport area. They are also looking to increase activities at the airport.

4. Update on “Harbour City Development” by ASA Niaga Sdn Bhd

Mr. Azahari Dato’ Shaari of ASA Niaga Sdn Bhd informed the meeting that they have tendered the reclamation work under phase 1 that includes building the main terminal which will consist of Passenger terminal, Ro-Ro Jetty, IMT-GT Plaza and Duty Free Terminal. The project is expected to complete in one year. The ground breaking ceremony will be held during SOM & MM in September. The ITG take notes of the updates.

5. Outcome of “Study to Identify Barter Trade Opportunities in the IMT- GT Region by EPU

The ITG is in the view that Barter Trade issue has been dragged for so long. Many issues were raised up by the players in finding the right solution on this matter. The meeting was informed that the study done by EPU is not yet endorsed by the Cabinet. The ITG is still waiting for the response from EPU on the outcome of the study. Dato’ Chairman will raise this matter up in the Plenary Session meeting to get response from EPU. He also informed the meeting that one seminar on barter trade will be organized by the ITG on Trade & In-Situ Development JBC Malaysia in their effort to get response from various agencies and players related to barter trade. The secretariat will inform the details after everything have been finalized.

6. IMT-GT Airlines

Dato’ Chairman of Air Asia has indicated that Air Asia is interested in the idea to form a consortium to operate IMT-GT Airlines because they have sister company in and Indonesia. However, since they were not in the attendance today, secretariat will follow up on the matters. For Thailand, Thai Airways has expressed the same interest and Riau Airlines of Indonesia will also be part of the consortium. This ITG and ITG on Sectoral Develoment will call for the meeting with all the parties concern to discuss further details about this project.

Indonesia

1. Update on search for partners to operate “Pekanbaru – Kuala Lumpur air route” by Riau Airlines.

Riau Airlines is looking for wider opportunity and partners instead of only Pekanbaru – Kuala Lumpur air route, since Riau Airlines is currently active fly on that route twice a week.

2. Update on Tanjung Buton Development Project

There were no representatives to update the project. Secretariat will follow up and report to the ITG during the next JBC Meeting.

Thailand

1. Update on Pak Bara Deep Sea Port with Land bridge linking with the New Jawa Deep Sea Port.

The Thai Government is looking forward for FDI for Pak Bara Sea Port project in . The People Republic of China is now considering investing with 100 billion baht. Thailand also proposed in this mega project to link the Pak Bara Deep Sea Port with Jawa Deep Sea Port with land bridge.

2. Update on Satun – Wang Prachan / Perlis Highway Project as alternative.

The projects have been approved on Perlis side by the State Government however the development is halfway since the project is yet to be on Ninth Malaysian Plan. On the Thai side, they are prepared to upgrade the road from Satun to Wang Prachan in 2007.

In the same development, Mr. Harjit Singh from Department of Works, Perlis informed the meeting that State Government of Perlis is still asking The Thai Government to reconsider their decision regarding the development of road connecting Bukit Puteh and Tammalang.

The ITG endorsed and will bring it up in Plenary Session for consideration.

[5.2] New Projects / Proposals / Presentations

The following new projects / proposals / presentations were presented:

Malaysia

1. Proposal to develop an international passenger ferry terminal, duty free shopping complex along with an IMT-GT Plaza, Ro- Ro ferry terminal and a budget hotel in the town of Port Dickson, Negeri Sembilan by YBH Property and Management Sdn Bhd.

YBH Property and Management Sdn Bhd is not yet ready to present their paper regarding the projects and will present their paper for ITG endorsement in the next JBC Meeting in Indonesia.

2. Proposal to develop Halal Industrial Park and Common Logistics Centre in by State Economic Development Corporation (SEDC) of Kedah.

SEDC Kedah is not yet ready to present their paper regarding the projects and will present their paper for ITG endorsement in the next JBC Meeting in Indonesia.

3. IMT-GT Chartered Airline by Asmara Air Services Sdn Bhd

The ITG has accepted the presentation and will proposed for the project to be endorsed by Plenary Session.

4. Independent Power Producer (Mini Hydro) in Padang, West Sumatera by Smart Meters Technologies Sdn Bhd.

The ITG has accepted the presentation and will proposed for the project to be endorsed by Plenary Session.

Indonesia

They are 2 proposals from the Indonesian side.

1. Investment opportunities to build Power Plant in many areas in South Sumatera

The ITG takes note of the project. The full presentation will be table during the next JBC Meeting.

2. Investment Opportunities to build Sea Port at Tanjung Api – Api

The ITG takes note of the project. The full presentation will be table during the next JBC Meeting.

Thailand

There were two proposal presented during the ITG.

1. Kantang Port Facilities Development.

The ITG has accepted the presentation and will proposed for the project to be endorsed by Plenary Session.

2. Development of Ban Nakluea Port in Trang Provinces.

The ITG has accepted the presentation and the proposal and has urged any investors to participate in this project.

[5.3] New Initiatives

There were no New Initiatives presented in the workshop.

[5.4] New Policy Matters

There were no New Policy Matters presented in the workshop.

[5.5] New Issue

There were no new issues discussed in the ITG.

6. OTHER MATTERS

• There were no other matters proposed by the delegates in the workshop.

7. BUSINESS NETWORKING / MATCHING

• Dato’ Mohd Karim Hj. Abdullah Omar proposed to make this session after the closing remarks.

All the delegates in the workshop have agreed the proposal.

8. CLOSING REMARKS

The Chairman, Dato’ Mohd Karim Hj. Abdullah Omar, once again thanked the participants for attending the working group. He noted that the working group has been discussing various issues in infrastructure sector and believed that the working group is successful.