PM announces incentives for ECER, slams detractors

KUALA TERENGGANU: Announcing incentives to spur development in the east coast,
the prime minister urged the people to stop believing the lies of detractors of the East
Coast Economic Region (ECER).
Datuk Seri Abdullah Ahmad Badawi said: “Nothing (that the government does) is good for
“There are rumours that the government had reduced the fuel subsidy, borrowed billions of
ringgit from the IMF (International Monetary Fund) and the World Bank to support mega
projects in the development corridors.
“These are all lies,” he said at the launch of the ECER Development Council and
announcement of ECER incentives at Universiti Malaysia Terengganu yesterday.
Abdullah said all programmes within the corridor, including education and agriculture, were
“We want to see an equitable distribution of opportunities for the people. This is what we
have been emphasising.”
He added that the establishment of the council would ensure better supervision of
More importantly, he said the council would act as the bridge between the Federal and state
Abdullah said he was satisfied with the progress made since the launch of the ECER last
year, such as the establishment of academic centres of excellence at five universities in this
The universities are Universiti Malaysia Terengganu, Universiti Darul Iman, Universiti
Malaysia Pahang, UiTM and Universiti Malaysia Kelantan.
“This is in line with the ECER goal of stimulating the development of human capital,
encouraging research and development and the expansion of industries in this region.”
Abdullah said RM50 million had been invested in the petrochemical cluster, especially at the
Kertih Plastic Park.
In addition, he said about RM18 billion would be invested in ECER states.
“The projects in ECER will cushion the impact of a recession.”
Abdullah added that ensuring food security and providing a buffer stock for rice were among the initiatives.
ECER will be the first to introduce location-based incentives.
In the tourism sector, for example, companies that commence operations before Dec 31,
2015, are eligible for a 10- year income tax exemption or investment tax allowance
amounting to 100 per cent of capital expenditure for five years.
Among the incentives are:
– In the petrochemical sector, companies that commence operations before Dec 31, 2015,
will be exempted from income tax for 10 years from the year the company derives profit.
These companies will also get double deduction for expenses incurred for promotion of the
ECER Industrial Park overseas as well as derive qualifying capital expenditure allowance for
five years for investments in machinery and buildings.
– In manufacturing, companies will be exempted from income tax for 10 years from the year
the company derives profits, or gain income tax allowance amounting to 100 per cent for
companies developing infrastructure of industrial areas.
– In food production, companies undertaking projects in the agriculture sector, crop
production and processing, livestock (excluding poultry) and fisheries will be given income
tax exemption for 10 years starting from the date the company derives profit or income tax
allowance amounting to 100 per cent on qualifying capital expenditure for five years.
– In education, operators and investors in educational projects who start operations before
Dec 31, 2015, are eligible for income tax exemption of 100 per cent for 10 years, or
investment tax allowance of 100 per cent qualifying capital expenditure within 10 years.
Such investors would be exempted from withholding tax on royalty and technical fees for 10
Abdullah said he wanted to see all the projects planned for the regional corridor
implemented soon.
“I want to see fast-track developments of the projects identified.
“Their success, however, will depend on the cooperation from the states and I hope to get a
good response.”
Meanwhile, the chief executive officer of the council management team, Datuk Jebasingam
Issace John, said the incentives would position the region as a top investment destination in
the country.
“To develop ECER, each industry cluster – tourism, agriculture, manufacturing, oil and gas,
and education – has its own incentives.”
Jebasingam said the incentives would increase productivity and help companies to compete
nationally and globally.