4 - Infrastructure Development

Summary

The quality of infrastructure was cited by MNCs as being a big factor in their investment decisions. This includes: utilities and telecommunications; land and industrial estates; seaports and airports; and land transport. This chapter compares the adequacy of infrastructure in the ASEAN-3 and the part this played in the investment decisions of MNCs. The results are based on interviews with the thirty selected MNCs and other independent research. The conclusions are presented at the end of the chapter.

UTILITIES AND TELECOMMUNICATIONS

Utility supply in Singapore was rated as well-developed and reasonably priced. Breakdowns or disruptions in the supply of power and water are infrequent and this has helped to ensure smooth factory operations. Statistics compiled by the Public Utilities Board show that Singapore's electricity rates are comparable to those in Malaysia and cheaper than those in Thailand.

Singapore's water supply situation is, however, an area of concern. A large portion of Singapore's potable water is sourced from Johor. Large industrial consumers of water, such as refineries, and paper and pulp factories, indicated that this might impose constraints on their long-term growth. Companies said that where feasible, they tried to recycle water to optimize its usage.

Singapore's telecommunications facilities were rated as excellent, with international direct dialling (IDD) facilities to almost all countries. The outgoing IDD rates charged by the Telecommunication Authority of Singapore (Telecom) are generally lower than incoming rates. Several MNCs indicated that they were considering setting up regional data and communications centres in Singapore to co-ordinate the electronic transmission of data and information to their various operations in the region.

In the case of Malaysia, its utility supply and telecommunications facilities were considered adequate. The need is for continual upgrading and expansion of these services, especially with the large number of new operations coming on-stream.