Iskandar: Red Flags on the Horizon

It is telling. All is not well in Iskandar Malaysia, the country's showpiece economic corridor project.

Two chief executive officers of the Iskandar Regional Development Authority (IRDA) have not lasted two years on the job and there are now rumblings over the slow pace of progress from Middle East investors.

Apart from that, the relationship between some of the main players — the Johor Civil Service (JCS), Khazanah Nasional, Iskandar Investment Board (IIB) — leaves much to be desired.

Unwilling for the situation to unravel further, Johor Mentri Besar Datuk Abdul Ghani Othman is signalling his intention to Putrajaya for the state government to take more control of the mammoth project billed as Malaysia's Shenzen to the developed Singapore across the Johor Straits.

He wants IRDA to come directly under the purview of the state government, and rely less on instructions from Khazanah Nasional, the federal sovereign wealth fund tasked with developing the economic zone named after the state Ruler.

The IRDA board is now jointly chaired by the Prime Minister and the MB but The Malaysian Insider understands that the Johor MB could be assigned full chairmanship, giving him control of the regional authority.

Ghani has already started exerting his authority, much to the chagrin of the top brass in Khazanah Nasional. Late last month, he demanded the resignation of the incumbent CEO Harun Johari.

Officials at Khazanah Nasional wanted Harun to be given six more months on the job but last week, the IRDA board quickly accepted Harun's resignation. He will leave in January 2010 for IRDA to have another fresh start.

Harun, an ex-Shell stalwart, was hand-picked by Khazanah Nasional for the top position. He quickly brought in several of his former Shell colleagues to fill senior executive positions, and the organisation ballooned to over 150 staff under his charge.

His critics charged that he lacked charisma but his supporters argued that he is a process-driven individual who was effective behind the scenes. Harun replaced Datuk Ikmal Hijaz, the former Pos Malaysia CEO.

The latter was also hand-picked by Khazanah Nasional to drive IRDA and make it a world-class, one-stop centre for investors.

After being appointed, Ikmal also surrounded himself with several former colleagues from Pos Malaysia or the now defunct Renong Group, in which he oversaw the construction of the Gelang Patah crossing and massive land acquisition in Nusajaya.

The Malaysian Insider has learnt the new CEO of IRDA is Ismail Ibrahim. He is currently director of the National Physical Planning Division under the Urban and Rural Planning Department.

The Muar-born career public servant, who is a British-trained town planner, was among the pioneers assembled by Khazanah Nasional back in 2006 to draw up the Comprehensive Development Plan for the south Johor Economic Region (now known as Iskandar).

He later served as senior vice-president (Planning & Compliance) and became Johor's Federal Commissioner, but quit suddenly to return to the Housing and Local Government Ministry.

Ghani has already told Ismail that he expects an overhaul of the top management of IRDA, wanting him to rid the authority of deadwood.

At least four senior personnel are expected to be removed.

The JCS — a body whose support is necessary if any project is to take off in the southern state — has welcomed the appointment of Ismail.

Relations between the JCS and Khazanah Nasional have been uneasy since the inception of the project in 2006, with Johor civil servants complaining of being sidelined from the decision-making process. They have resented the fact that important decisions regarding Iskandar were being made in Kuala Lumpur.

The shortcomings in IRDA, and to a lesser extend IIB, come at a time when several of the Middle East investors are exhibiting signs of restlessness at the pace of the project.

Government officials told The Malaysian Insider that Khazanah Nasional was forced to buy back some land in Node 1 of Iskandar which it sold to a consortium of Middle East investors. This happened after some disagreement over responsibilities and obligations.

So is Iskandar reeling from unresolved Federal-State relationship issues or more so because of lack of political will? This is a rhetorical question.