15th AIM INTERNATIONAL WORSHOP

Iskandar Development scenario and its policy implications

CS HO, University Technology Malaysia 15th AIM INTERNATIONAL WORSHOP February 20-22, 2010 Ohyama Memorial hall, NIES Tsukuba, Japan

1 1 1 • Degradation of Water quality • Air pollution has also increased • Noise pollution in urban areas • The decline in the quality of life • Supply of housing for the poor • Natural disasters • Global Warming

2 • Review existing documents. • Give priority on prevention of disaster. • Preparation of risk and hazard maps. • Incorporate Hyogo Framework • Review existing legislation • Review existing building codes • Review planning • Enhance the provision for emergency shelters • Improve coordination between agencies • Promote data sharing • Improve public awareness • Propose insurance policy 1

3 Current Policies -CO2 reduction efforts in Malaysia  UN Climate Change Forum at Copenhagen (Dec 2009) – Malaysia target - Reduction of Carbon emission by 40% from 187mil ton in year 2005 to 74.8mil ton in 2020

 In the National Environmental Policy (2002), Green Technology Policy (July 2009), and broad policy in the Ninth Malaysia Plan (2006-2010), outlined strategies towards sustainable development with framework for the development of environmentally friendly and sustainable forms of energy. Emphasis is also given to increase energy efficiency and promotion of the use of renewable energy.

 Promotion of renewable energy and green technology (development of second generation biofuel using biomass as feedstock, installing methane trapping device and steam turbine generators etc ) as a new growth area. INTERNATIONAL POSITIONING OF . At the heart of South East Asia and within minutes from Singapore . Strategically located at the cross roads of East- West trade lanes . Midway between the growing economy of China and India GEOGRAPHICAL COVERAGE

Area Region Population (million) Density (km2)

1.4 Iskandar Malaysia 2,217 631 (Projected 2025: 3.0 million)

Singapore 690 4.1 6,003

Dubai 3,885 1.2 309

Hong Kong 1,095 6.9 6,301 LONG-TERM ASPIRATIONS

2005 Projected (2025) 1.4 million 3.0 million Population Size

20.0 93.3 GDP (PPP) in USD bn

13.5 63.0 GDP (PPP) in EURO bn

14,790 31,100 GDP per capita (PPP) in USD

9,989 21,005 GDP per capital (PPP) in EURO

0.62 million 1.46 million Labour Force

0.61 million 1.43 million Employment

3-4% 1.8% Unemployment PRESENT & FUTURE STRUCTURE OF ECONOMY FOR ISKANDAR MALAYSIA

The Vision IDR Economy “Strong, Diversified, Dynamic and Global” Services Educational Health Services Financial Services Financial Creative

The Main

Pillars Petro Industries (Drivers) Electrical chemical Food and Logistic and and Agro and Tourism Electronics Oleo Processing related chemical Services

( Five Existing “Pillars” shall be reinforced ) ( Four New “Pillars” to be added ) Support Strong Supporting Industries ( Metal Products, Engineering, Non-metallic, Manufacturing Related Services (MRS)) System Strong Supporting Institutions (Education, R&D, Government, Private and social institutions, communication and coordination system)

World-class Professionals and Technical Work Force

Basic Excellent Physical, Infrastructures, including IT Foundation Excellent Working and Living Environment

Stable Political, Social Environment

The well established sectors which are manufacturing based will be reinforced while giving new emphasis on new sectors which are services based FLAGSHIP ZONES

JB CITY CENTRE

NUSAJAYA

WESTERN GATE DEVELOPMENT

EASTERN GATE DEVELOPMENT

SENAI- Catalyst development to complement existing strategic industries in Johor

9 TOTAL COMMITTED INVESTMENT 2008-2009 INVESTMENT BY SECTOR 2006-2009 INVESTMENTS IN FLAGSHIP A

3 Johor Corp – upgrading KOMTAR - RM55mn -1.2 ha open car park -Start nov07, complete 2009

Danga Bay -Tune Hotels 1 Iskandar Investment - Oakwood Service Apartments • GDV: RM200 million Gerbang Perdana/JKR - CIQ To commence in July 08 (light vehicle) A

CMP - Lido Boulevard •GDV: RM2.7bn - Danga Island Danga Bay - Casa Almyra •GDV: RM790 million •Target sales launch April 2008 GDV RM125mn 2 Target for completion 2009

Danga Bay – Promenade

Danga Bay - Grand Siam Hotel Cost: RM120mn Start (April 2008)Target for completion 2010

12 INVESTMENTS IN FLAGSHIP B

UEM Land - Southern Industrial Logistics Clusters Iskandar Investment- MEDINI 5 • Thematic Industrial Park GDV : RM42bn 6 Iskandar Investment – • GDV: RM1.8bn Mixed Urban Development International Destination Resort • Key signings: HG Metal, Jurong Tech GDV: USD1.5-2.0bn 3,321 acres Target to announce by Dec 08 4

1 UEM Land - Johor State New Admin.Centre (JSNAC) • GDV: RM1.5bn B • Won M’sian Institute of Planners • Excellence Iskandar Investment - EduCity 3 Award 2008 • GDV: >RM1 bn over 7 years, area: 305 acres • Newcastle Univ invited to set up medical faculty in educity 2

UEM Land - Afiat Healthpark UEM Land - Puteri Harbour • Signed BLA with Columbia Asia • GDV: RM13bn JV KST (60%): Symphony Int (40%) for 70-bedded hospital. • Key signings: Limitless, Dubai World Aman Resort (46 acres) Cost: RM58mn, 2008-2010 INVESTMENTS IN FLAGSHIP C

1 MMC Corp PTP – expansion (RM1.5bn) •Berth 11, 12, 13 and 14 •Capacity to increase by 3.2mn TEUs to 11.2mn TEUs by 2010 •Expected to attract additional FDI of RM5bn by 2010

2 MMC Corp/Dubai World Maritime Centre at Tg Bin C •Initial investment of RM2.0-2.3bn, • Total expected FDI of RM17-20bn •Total area of 2,255 acres Asia Petroleum Hub – KIC 3 •Key activities: Bunker Terminal in Tanjung Bin •Port-related Industrial & Commercial •GDV: RM1.4 billion activities •Built on manmade island • General Cargo Terminal suitable for non- •located 700m from PTP containerized cargo, heavy cargo & ro-ro • Liquids Terminal with jetties, tank farms and processing plants •Employment of > 3,000

14 INVESTMENTS IN FLAGSHIP D

Johor Corp RM500mil plant to make flexible pipes in Industrial area – Technip Johor Corp Group (France) Acerinox and Nisshin RM5 bil steel plant inTanjung Langsat

D and Industrial Area

Johor Corp Pacific Oleo chemical (subsidiary of Lam Soon) to construct a RM300mil oleo chemical plant in Tanjung Langsat

15 INVESTMENTS IN FLAGSHIP E

1

MMC Corp Bhd •Intergrated Airport City in MMC Corp Bhd 2 Senai Hi-Tech Park 1,000 acres Submission of E masterplan in June

Johor Corp Johor Technology Park & Industrial Park

MSC Cyberport Johor Cybercity in Senai 148 acres Cost : RM400mn (phase 1) Key Design Characteristics

Participating Model: ExSS (Extended Tool Snapshot) Model Type: Energy Integrated Model Participating Modelers: Matsuoka Yuzuru, Gomi Kei, Shimada Koji, Yoshimoto Kohsuke, Janice Simson and Ho Chin Siong Time Step: 1 year Time Frame: 2005 to 2025 Solution Type: Static, Accounting method Equilibrium Type: Market Equilibrium Underlying Computing Framework: General Algebraic Modeling System (GAMs) and Microsoft Excel spreadsheet. Inputs and Outputs

Key inputs Demographics: population by region/ local authority, population composition ratio by sex and age cohort, average household size. Economic: Labor force participation ratio by sex and age cohort, Export value (demand of goods and services from other areas by industrial classification), Import rate (rate supplied from industry outside the area, among the demand of goods and service within the area.), Government expenditure (gov. consumption expenditure, gov. fixed capital formation) Resources: Coal & gas, crude oil, petroleum product, renewable energy, nuclear, hydro power, and electricity. Technology: Technology representations of production, transformation and use technologies. Key outputs Economic: GDP, Gross output by sectors (primary, secondary & tertiary industry), passenger transport & freight transport Energy: Energy balance table, GHG emission inventory.

Emissions: CO2 emissions by sectors (residential, commercial, industrial, passenger transport & freight transport) Climate: GHG reduction by measures . Regional Scope & Other Detail

Regional Profile: Regional Scope: District level Number of Sub-Regions: five Flagship zons: City Center, Nusajaya, Western Gateway Development (Pontian), Eastern Gateway Development (Pasir Gudang), Senai-Skudai.

Other Details: Energy Demand Sectors: Residential, Commercial, Industry, Freight Transportation, Passenger Transportation, Energy Supply Sectors: Coal & gas, crude oil, petroleum product, renewable energy, nuclear, hydro power, and electricity Other Sectors: - Setting of Framework

 Base Year : 2005

 Target Year 2025

 Emission Target

 30% reduction of CO² per capita from 2005 to 2025 with Counter Measures

 50% reduction of CO² emission from 2025BaU to 2025CM

 Scenarios

 2025 BaU (business as usual) without Counter measures

 2025 CM with Counter measures

 Sensitivity analysis Economic activity level Commuting structure 20 Energy Demand By Sector

10,936 12,000 Freight transport Energy demand in IM is Passenger projected to increase from transport 10,000 1,442 3,286 ktoe (toe: tonne oil Industry 232% equivalent) in 2005 to 790 10,936 ktoe in 2025 for the 8,000 5,915 BaU case (BaU: business as usual)

6,000 834 3,286 6,635 253

4,000 Industry is expected to be

Energy Energy demand (ktoe) . 6,635 ktoe and will maintain 572 3,494 the largest share of 61%. 359 2,000 1,733 978 685 382 240 1,091 649 0 2005 2025 BaU 2025 CM 21 Energy Demand by Energy Sources

Coal 12,000 Hydro power

10,000 1,844 Solar & wind Increase in demand power for natural gas (3.2 61 Biomass times) the 8,000 consumption in 2005.

3,854 6,000 964 Energy sources such 33 as biomass, solar 193 and wind power will 4,000 447 be newly introduced Energy Energy demand (ktoe) . 289 for primary energy in 60 3,694 2025 CM case. 1,209 4,978 2,000

1,729 788 0 2005 2025 BaU 2025 CM 22 GHG Emission By Sector GHG Emissions in IM are projected to increase from 12,552 50,000 45,484 Freight transport ktoe CO2 (2005) to 45,484 ktoe CO2 (2025 45,000 Passenger 4,070 transport BaU) 40,000 1,672 Industry Commercial Industry Sector will 35,000 increase 4.1 times in total as compared to 30,000 2004 in GHG emission . 24,832 25,000 (54%of total GHG 19,589 emission in 2025 BaU) 20,000 1,481 12,552 447 15,000 GHG emissions per

GHG emissions (ktCO2) . capital : 9.3 tonnes of 1,615 7,195 10,897 10,000 1,015 CO2 /capita (2005) to 6,035 15.1 tonnes /capita 5,000 3,802 (2025 BaU ), with CM 2,419 7,715 1,468 2,972 will be reduced to 6.5 0 tonnes of CO2/capita. 2005 2025 BaU 2025 CM

23 Potential Mitigation in IM

50,000 623 45,000 Transport demand management 5521 40,000 3510 Fuel shifting 35,000 CO2) 777 -

30,000 262% Efficiency improvement (buildings) 57% 10831 25,000

Emission Reductions Efficiency improvement (transport) 45483 4463 20,000 Efficiency improvement (industry) 52% 15,000 19162 Efficiency improvement (power 10,000 sector) 12552 GHG emissions

GHG emissions/reductions (kt GHG emissions/reductions 5,000

0 2005 2025 BaU 2025 CM

24 Mitigation Measures

25 Low Carbon Region Policy Package Buildings

•Environmental performance standard •Environmental performance standard and evaluation of buildings of equipments •Subsidy to introduce •Adjustment of tax rate of fixed asset •Environmental labeling photovoltaic power tax •Education and information service generation system •Low interest loans to investment to •Green purchasing policy energy efficient buildings

Transport & Land use Industry •Environmental performance •Urban planning standard of vehicles •Subsidy to investment to energy •Transport planning •Tax rate adjustment to efficient equipments •Tax rate adjustment to fixed asset energy efficient vehicles •Promotion of technology transfer •Investment to public transport •Promotion of bio fuel

•Incentive to introduce energy efficient •Controlling urban growth & equipments & buildings choice of transport mode •Incentive to introduce renewable energy

Energy efficiency Lowering CO2 Transport improvement intensity demand control

Mitigation of GHG emissions from Iskandar Malaysia 6. Conclusion • The current annual Greenhouse Gas (GHG) emissions in IM are approximately 12.6 million t-CO2, and in the BaU scenario it will increase to 45.5 million t-CO2 or 3.6 times higher than that of 1 2005.

• However by adopting the mitigation options available, by 2025 the emissions can be decreased approximately 60% and 2 suppressed to a 19.6 million t-CO2.

• The goal of developing Iskandar Malaysia as a Low Carbon Society 3 is possible with the reduction of CO2 emissions per capita.

• To realize a LCS, IM has to have new and bold policies to encourage and promote businesses and citizens have to take 4 countermeasures to lower the emissions levels.

27 15th AIM INTERNATIONAL WORSHOP

THANK YOU FOR YOUR ATTENTION

CS HO , University Technology Malaysia 15th AIM INTERNATIONAL WORSHOP February 20-22, 2010 Ohyama Memorial hall, NIES Tsukuba, Japan

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