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The Northern Corridor Economic Region (NCER) marginalises Penang as the Federal government has neither stated how much development funds will be spent on Penang nor the target of investment to be attracted to Penang

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Press Conference

by Lim Guan Eng

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(Penang, Wednesday): The NCER is one of the regions identified under the Ninth Malaysia Plan (2006-2010) for the promotion of balanced and equitable national economic development. The NCER claims to revolve around three main thrusts of agriculture, manufacturing and services. However, what we have seen so far is the emphasis of agriculture at the expense of manufacturing and services, which are the mainstays of Penangís economy. 

The NCER marginalizes Penang, as the Federal government has neither stated how much development funds will be spent on Penang nor the target of investment to be attracted to Penang. One fund manager, Aseambankers Equity Research on 5 July 2007, said that the NCER is estimated that at least RM50 billion will be invested in the region over the next 10 to 15 years, with almost half going into infrastructure such as the Second Penang Bridge, Penang Monorail, Ipoh-Padang Besar double-tracking project, highways and inland roads, as well as integrated water management that includes irrigation and flood mitigation.  

Compared with Johorís Iskandar Developlment Region(IDR) which targets RM 50 billion over the first five years and RM 383 billion target over 20 years, the NCER and Penang has clearly lost out in the race for foreign investment. In contrast to Johor alone getting RM 50 billion over 5 years, the RM 50 billion is to be divided over four states of Kedah, Perlis, Perak and Penang and over a period not of 6 years but over 10 to 15 years.  

When the Prime Minister Datuk Seri Abdullah Ahmad Badawi launches the NCER on 30 July, can he reveal how much the government is going to spend in NCER, particularly for Penang? For instance, the RM 2.7 billion 23.5 km second Penang Bridge is fully funded by a RM 2.7 billion loan from China Export and Import Bank. 

Furthermore the NCER is driven by agriculture unlike the IDR which is driven by foreign investment. Whilst the implementation of IDR is under the personal supervision of the Prime Minister, the NCER is handled by a GLC, Sime Darby.  

How much Penang loses out can be seen by the Johor a total of RM 2,489 million comprising domestic investment of RM 879 million and foreign investment of RM 1,610 million in the manufacturing sector for the first three months of 2007. Penang pales in comparison with only RM 178 million comprising RM 81 million in domestic investment and RM 97 million in foreign investment. The difference in investor interest and importance between IDR and NCER or between Johor and Penang can be seen by the difference of investment between RM 2,489 million and RM 178 million! (see table below) 

Sime Darby is too busy involved in creating the largest listed palm oil firm in the world. The RM 30 billion merger between GLCs, Sime Darby, Golden Hope Plantations and Kumpulan Guthrie into Synergy Drive Bhd will see it being listed in November as the second-largest company on Bursa Malaysia with a market capitalisation of about RM48.5 billion. Besides the main three companies, the five other related companies involved in the merger are Guthrie Ropel Bhd, Highlands & Lowlands Bhd, Mentakab Rubber Company (Malaya) Bhd, Sime Engineering Services Bhd and Sime UEP Properties Bhd. 

Upon completion of the merger, Synergy Drive is expected to have a combined workforce of about 107,000 people. Will Sime Darby be focused on the NCER when they are busy combining the three large firms and 5 smaller firms into one productive entity? 

(18/7/2007)


* Lim Guan Eng, Secretary-General of DAP

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