ISKANDAR Malaysia has been percolating for seven years.
Until fairly recently, however, many dismissed the idea of the vast project with five "flagship zones" spread across southern Johor state, costing tens of billions of dollars, as just pie in the sky.
The land area of 222,000ha is about three times the size of Singapore, so visualising a project of that scale, which boasts new business hubs, schools, major leisure attractions and thousands of new homes, was always a challenge.
Iskandar is still very much a work in progress and there are plenty of sceptics questioning its long-term prospects.
Its masterplan has set annual targets right up until 2025. But in the past couple of years, building work has escalated, new major investors have committed large sums to Iskandar and plenty of new housing has sprung up.
A vital turning point was the thawing of relations between Singapore and Malaysia in 2010, with the signing of the historic deal over the KTM railway land and related issues. The result of Malaysia's general elections earlier this month eased some of the uncertainty for Iskandar investors.
For now, more ordinary Singaporeans are taking notice of Iskandar, especially after some of the big guns of the local corporate scene committed money to the project.
For instance, in February, Temasek Holdings and CapitaLand unveiled plans to develop a $3.2billion township with Iskandar Waterfront Holdings in Danga Bay - an emerging coastal centre a little west of the Causeway. Danga Bay is part of one of the flagship zones, Johor Baru City.
Temasek has also entered into a joint venture with its Malaysian counterpart Khazanah Nasional to build two wellness projects in Medini - Avira and Afiniti Medini - worth RM3 billion (S$1.2 billion) all told.
Medini is part of a flagship zone called Nusajaya. It is located about halfway between the Causeway and the Second Link at Tuas. It includes Puteri Harbour, where a new customs and immigration centre with links to Singapore, including ferries, is due to open later this year.
Attracting investors
THE total sum committed by investors to Iskandar, as of last December, was RM106.3 billion. Most of it is Malaysian money with 36 per cent from foreigners.
Singapore is the top source of foreign investment, with investors here having committed about RM6.3 billion by December. More deals have been inked since.
One Iskandar early mover is high-profile Singapore billionaire Peter Lim, who is involved in two major projects. The first is the RM3.5 billion Motorsports City, near the Second Link, in which he has a 70 per cent stake, and the second is a medical hub project at Vantage Bay near Danga Bay.
Smaller investors, too, have poured in their faith and dollars. Link THM, a small Singapore-based property developer, is spending $120 million to build Media Village in Nusajaya, a mixed residential and retail project set to be ready by 2018.
Space is one crucial draw for businesses, some of which were invited to Iskandar. Raffles Education, for one, decided to open its first American school in Iskandar's EduCity, as it believed the open spaces it could buy there would allow it to run an all-round education programme.
"By going to Iskandar, we knew we could offer an education programme where a child could learn while being immersed in nature - it's all about the full development of a child," said Raffles American School (RAS) superintendent Rob Mockrish.
The 18.6ha RAS campus is big enough to boast plenty of sports facilities and nature trails.
Singaporeans dominate Iskandar's booming property scene, making up about 80 per cent of all foreigners buying homes there - a third of all buyers, including Malaysians.
Progress breeds confidence
MOST investors and businessmen who spoke to The Straits Times said they have been impressed with the way things are run in Iskandar and at the progress of its development.
The authorities have so far delivered on promises to improve infrastructure and security.
"I've attended meetings where the Iskandar authorities and various stakeholders - developers, telcos, transport operators and such - get together to air their problems. I have seen issues being resolved and real changes being made soon after," said Link chief executive Kenny Tan.
The investors themselves see big gains for the Iskandar economy from their investments.
FASTrack Autosports, the firm developing Mr Lim's motor racing project, aims to create about 5,000 jobs eventually, said its director Barry Kan.
Mr Ho Kiam Kheong, the chief executive of Best Blend, developer of the Vantage Bay medical hub, said Iskandar will narrow the economic gap between Singapore and Johor to the benefit of people on both sides of the Causeway.
"From Singapore's perspective, it's getting expensive and crowded, so it's time for us to see what we can do in Iskandar," he said.
"And on the Johor side, it's about time they tap into this economy and benefit directly."
Lingering doubts
WHILE people in Johor will certainly benefit from the new jobs and leisure options in Iskandar, some sceptics have not been won over. For example, Iskandar's massive size has been touted as one of its attractions, but some wonder about that. "We've brought foreign investors to Iskandar who felt that there's so much land, so why pay a premium?" said Chesterton Suntec research head Colin Tan.
"At that size, land should be cheaper and, while it's still cheaper than in Singapore, prices have shot up a lot because people are buying based on a forward-looking dream."
Industrial land prices in Iskandar have doubled, and, in some cases, tripled over the past two or three years, as have residential property prices.
And while many believe that the Iskandar dream will be realised soon enough, others have yet to be convinced. "Singapore has shown strong political support for Iskandar, but I have yet to see that political support translate into real economic and business results," said International Property Advisor chief executive Ku Swee Yong, who has been involved with various Iskandar projects since 2006.
Neither are all Malaysians enamoured of the project. Dr Oh Ei Sun, a political analyst from the S. Rajaratnam School of International Studies, said: "Traditionally, when we Malaysians hear of something government-driven such as this, we feel that the likelihood of success is not very high.
"My Johor friends are still ambivalent. They want development but, on the other hand, they fear rising prices."
If prices spiral, it will not be surprising to see more push back against Iskandar in the future, DrOh said.
The road ahead
POLITICS remains a dominant factor in Iskandar's growth.
"Malaysia-Singapore political ties will be watched closely by both sides," noted CIMB economist Song Seng Wun.
He added: "We have seen that over the past several years, there have been obstacles and even a restructuring at Iskandar with a new team in charge, but through it all, one consistent feature is that infrastructure upgrading has been proceeding."
