Special Economic Zones in the OIC Region:

Learning from Experience

status enabled it to react much more proactively compared to government departments which

faced bureaucratic constraints due to the relationship between the State and Federal

governments

. The PDC took on the role of coordinating the interaction between the municipal

administration and the state government.

The PDC’s primary objectives in terms of FIZ and Industrial Estate development within Penang

is to develop, plan and implement development projects. This includes industrial park

development, township development (residential accommodation) urban redevelopment,

affordable housing and investments. Crucially, the establishment of an autonomous, quasi-

public body enabled the PDC to gain the powers to borrow money from banks. This has allowed

the PDC to increase its land holdings and develop Penang’s industrial areas in line with its

master planning vision.

Box 26 – Penang SEZ Success Factors – Masterplan Approach – PDC Interview

Throughout the development of FIZs and Industrial Estates within Penang, the PDC has retained

the role of ‘master developer’ but in some instances has developed Public Private Partnership

(PPP) arrangements with the private sector to deliver developments.

A recent example of this is the memorandum of understanding (MOU) between the PDC,

Temasek and the Economic Development Innovations Singapore Pte Ltd (EDIS) to establish a

new Business Processing Outsourcing Prime (BPO Prime) and the Penang International

Technology Park (PITP). To facilitate this development a new joint-venture company (JVCo) was

established.

InvestPenang was also established in 2004 to take on the role of industrial promotion from the

PDC. InvestPenang has a remit to explore the key factors which underpin investment within the

State and to strengthen the supply chain and industrial ecosystem which support MNCs within

the FIZs and Industrial Estates.

Interview with Mr Dato Cheri Singh (former chairman of PDC) and BuroHappold 2017.

The PDC identified that Penang’s key value added was the integrated masterplan approach PDC

have deployed in development of the FIZs and Industrial Estates. The provision of land for

industry, high quality infrastructure and supporting amenities and leisure uses to support the

working population are identified as key differentials for investors when choosing to invest

within Penang. For this reason, the PDC also observe that private industrial parks have not been

as popular as the PDC developed zones and estates given the PDCs reputation for masterplan

development and management of FIZs and Industrial Estates.