THE warming of relations between Malaysia and Singapore holds much promise for investors looking at Johor.
In the past, billions of ringgit have been pumped into major projects in the state but things turned sour when the 1997 financial crisis struck.
During the height of the crisis, many planned projects were stalled or abandoned and the time seems right now to revitalise them. This could offer tremendous investment opportunities for Singaporean investors .
Before the crisis, Johor – or Johor Baru to be specific – had attracted a considerable amount of foreign direct investment and had, in the process, generated demand for industries such as property and related activities.
At the time, money was almost free flowing, especially from across the causeway, which later found its way to mainly manufacturing and property projects.
The industrial estates of Tebrau and Pasir Gudang and property development in certain areas were sought-after by Singaporeans.
Then came the downturn, and with it, the fall of Johor's most influential corporate agency, Johor Corporation Bhd and Renong Bhd (now known as UEM Land Bhd), the single largest landowner in Johor which has just launched the massive Bandar Nusajaya on 23,000 acres of freehold land southwest of Johor Baru through Prolink Development Sdn Bhd.
Another high-profile project, the Port of Tanjung Pelepas (PTP), owned by Tan Sri Syed Mokthar Al-Bukhary managed to escape the economic turmoil. It had secured financing before the downturn and managed to complete the first phase just about the time the economy began picking up.
The fall of Johor Corp and Renong had a severe impact on Johor's economy, because both were left with huge debts and they had to put on hold many of their grand plans for the state.
Foreign investors, especially Singaporeans, saw their investment gains wiped off by falling property prices and abandoned projects that resulted from the financial crisis.
But the completion of the restructuring of both entities last year seems to be revving up Johor's economic engine and both agencies are reviving their previous plans.
However, taking Johor back into its heyday (the state had intended to achieve developed status in 2005) would need a lot more than just the relaunching of plans.
Some soul searching is in order to determine the viability of their proposed projects.
Both Johor Corp and UEM Land have almost identical business goals for the state – both are committed to large-scale development projects which will require foreign investments.
Johor Corp's land at the Tanjung Langsat Industrial estate, sited southeast of the state, and slightly smaller than Prolink's land, has become the group's growth focus. And Prolink is doing the same with its Nusajaya land.
Johor Corp's forte is investment missions: it has a strong and experienced team that has delivered the success of Pasir Gudang and is likely see a repeat of that in Tanjung Langsat.
It is expected to conclude soon a US$4bil aluminium smelter deal with a Sino-US company, to be located in Tanjung Langsat.
Prolink has the support of both the state and the federal governments to help it kick-start Nusajaya. It has also much expertise in the areas of construction and engineering.
A ground-breaking ceremony has been slated for next month for the launch of the RM350mil Johor Administrative Centre. Plans are also under way to relocate the federal offices in Johor Baru city to Nusajaya.
That will be more than enough to keep the economic activities going. Moreover, Nusajaya already has the infrastructure such as PTP, a rail line and the second link to Singapore, which make it an even more viable investment destination than Tanjung Langsat.
But that is not happening. Prolink is still an amateur as far as investment missions are concerned and has tried in the last seven years, without much success, to sell Nusajaya to foreign investors.
Its most recent effort to get Swiss company Ciba Vision to invest in Nusajaya was, however, scuppered by Singapore halfway through discussions.
It is still trying to get a RM1bil soft-loan to help it push ahead with the Universal Studio plan in that area.
A layman would ask why a state agency like Johor Corp, with its proven record in closing deals, has not extended its help to Prolink. A closer look at the Nusajaya land-bank provides a clue.
The 23,000 acres are owned 64% by Prolink, 20% by the state government through MB Inc, and 16% by private company, Gagasan Kencana Sdn Bhd.
Johor Corp does not have a stake in the development of Nusajaya, or in nearby PTP and the ongoing Tanjung Bin (another Syed Mokhtar project via Malakoff Bhd). It has to concentrate on Tanjung Langsat for its survival.
The only way to get the state's planned projects off the ground and without duplicating resources will be through discussions among all the parties involved: Johor Corp, Prolink and Syed Mokhtar Inc.
It is only fair to get the projects going again to take Johor back to its heyday.