NATIONAL PHYSICAL PLAN-2

Federal Depart ment of Tow n and Count ry Planning

M i ni st r y of Housing and Local Gover nment

13 August 2010
The Malaysian vision of becoming a developed nation and high
income economy by 2020 is just ten years away. In dealing with
the issue, several changes have to be expedited to change this
country towards a developed nation thus resulting a more
enjoyable, favorable and sustainable quality of life.
The second National Physical Plan (NPP-2) is prepared in tandem
with the Five Year Malaysia Plan. It sets out the national strategic
spatial planning policies and measures in respect to the general
direction and broad pattern of the land use and physical
development and conservation in Peninsular Malaysia by the year
2020. In this context, the NPP-2 will facilitate the government in
strategising the implementation of national physical development
and proper channelling of resources to ensure the continuous
national growth of the country.
In line with the current transformations occurring in the country
today, the NPP-2 ensures that the physical land use of the
country will be at its optimum level; with emphasis given to the
achievements of the initiatives provided under the national
transformation programmes that is the 1Malaysia Concept, the
Government and Economic Transformation Programmes and the
10
th
Malaysia Plan. The NPP-2 acts as the main guideline that will
hold together all the strategies and policies of the nations
physical development in order to create a conducive environment
for investment, housing, trade and tourism.
The success of the policies and strategies of the NPP-2 will
depend greatly on how efficient these policies are translated and
interpreted during its implementation stage. Towards this end, all
federal and state agencies, non-governmental agencies and the
private sector shall take proactive actions in order to translate the
NPP-2 into more detailed physical development and action plans
thus achieving sustainable development and a developed nation
with high income economy status.
Dato Sri Hj. Mohd. Najib bin Tun Haji Abdul Razak
Prime Minister of Malaysia
FOREWORD
Prime Minister of Malaysia
The NPP-2 sets out the national strategic spatial planning policies
and measures in respect to the general direction and broad
pattern of land use in Peninsular Malaysia for the year 2020. It is
also the product of many negotiations and consultations with other
federal agencies and all state governments in order to ensure the
sustainable, national physical development framework of the
country is achieved. It is the general duty of all federal and state
agencies involved in plan-making to ensure that all the objectives
of the NPP-2 are realised as required by the Town and Country
Planning Act 1976, (Act 172).
The NPP-2 is intended to become the main reference document
on the nations future physical planning and development. The
spatial planning vision, policies, measures and land allocations of
the NPP-2 will be translated primarily through the State Structure
and Local Plans; and eventually through the Action Area Plans
and programmes. In this respect, the Ministry is committed to
have close working cooperation with all state governments and
other federal agencies to ensure that the development activities
from the NPP-2 are coordinated effectively. Efforts will also be
upgraded to ensure that both urban and rural development will be
dynamic and sustainable.
The Federal Department of the Town and Country Planning is
responsible for monitoring the effective implementation of all the
policies and programmes under the NPP-2 thus ensuring the
successful achievement of a developed nation by 2020.
Dato Wira Chor Chee Heung
Minister of Housing and Local Government, Malaysia
FOREWORD
Minister of Housing and
Local Government
The National Physical Plan-2 (NPP-2) will complement the Five
Year Economic Development Plan as it provides the spatial
dimension to the sectoral distribution of national resources. The
Plan provides the coordination platform for the various sectoral
plans and policies. The NPP-2 is also a response to the impact
of globalisation which requires the country to establish a
national physical framework that will enhance the countrys
global competitiveness.
The Ministry Of Housing and Local Government and Federal
Department of Town and Country Planning have assured that
the policies and strategies suggested in NPP-2 are relevant and
in line with the aspirations of the Government Transformation
Programme and the New Economic Model, premised on high
income, inclusiveness and sustainability.
The implementation of NPP-2 will require the support of the
various Federal and State agencies that have a duty to adhere
to the policies of the NPP-2. In this respect, it is hoped that the
agencies concerned will translate the policies and proposals of
NPP-2 into plans of action and include in the subsequent Five
Year Malaysia Plan.
Dato' Ahmad bin Hj. Kabit
Secretary General
Ministry of Housing and Local Government, Malaysia
FOREWORD
Secretary General
Ministry of Housing and
Local Government, Malaysia
The Second National Physical Plan (NPP-2) was approved by
the National Physical Planning Council on August 13
th
2010.
The Town and Country Planning Act, 1976 (Act 172) and its
amendments provide the legal basis for the preparation of the
National Physical Plan. Sub-section 6B (4) of the Act stipulates
that the National Physical Plan, be reviewed every five years in
tandem with the review of the Five Year Malaysia Plan.
The goal of NPP-2 is the establishment of an efficient, equitable
and sustainable national spatial framework to guide the overall
development of the country towards achieving developed and
high-income nation status by 2020. The goal was formulated
after taking into consideration several main issues and
challenges facing physical planning today such as climate
change, sustainable urban structure compact cities, decline in
biodiversity, geo-hazards, food security and green technology.
It was also formulated to support the National Key Results
Areas which emphasizes on solving issues pertaining to crime,
education, low income households, corruption and basic
infrastructure in the rural areas. The NPP-2 consists of 41
development policies that will assist in overcoming all the
perceived issues and achieve the national objective of
becoming a developed nation and high income economy by
2020.
The development strategies in the NPP-2 also emphasizes on
inclusive development through the physical relationship
between urban and rural areas so that Malaysians can enjoy a
development that is sustainable, whole, fair and balanced. The
NPP-2 is the main reference document by all related agencies
involved in physical planning and development in Peninsular
Malaysia.
Dato Mohd. Fadzil bin Hj. Mohd Khir
Director General
Federal Department of Town and Country Planning, Malaysia
FOREWORD
Director General
Federal Department of
Town and Country Planning

i
CONTENTS
CHAPTER 1
National Physical Planning Framework 1-1
1.1 Development Planning in Peninsular Malaysia 1-1
1.2 The Second National Physical Plan (NPP-2) 1-7
1.3 Functions of The NPP-2 1-8
1.4 Form and Content 1-8
1.5 Consultation Process 1-9
1.6 Plan Area 1-10
1.7 Plan Period 1-10
1.8 Users Of The NPP-2 1-11
CHAPTER 2
Goal, Objectives and Principles 2-1
2.1 Goal 2-1
2.2 Objectives 2-2
2.3 Principles 2-10
CHAPTER 3
Plan Context 3-1
3.1 Global and National Strategic Issues and Challenges 3-1
3.2 Global Setting and Development Trends 3-8
3.2.1 World Trade 3-8
3.2.2 International Collaboration 3-9
3.2.3 Regional Cooperation 3-9
3.2.4 Climate Change and Impacts to Malaysia 3-10
3.3 National Setting 3-12
3.3.1 National Population Growth 3-12
3.3.2 Economic Performance 3-17
3.3.3 Land Use Pattern 3-19
3.3.4 Current Settlement Pattern 3-24

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CHAPTER 4
Development Strategy 4-1
4.1 Conceptual Development Strategy 4-1
4.2 National Positioning and Future Economic Growth 4-8
4.2.1 Malaysia as a High Income Economy 4-10
4.3 Urbanisation 4-11
4.4 Regional Balance 4-15
4.5 Rural Development Trend and Direction 4-16
4.6 Sustainable Use of Land 4-20
4.6.1 Available Land for Development 4-20
4.6.2 Agriculture Land 4-23
4.6.3 Environmentally Sensitive Areas 4-24
4.6.4 Urban Land 4-26
4.6.5 Tourism 4-29
4.6.6 Transportation Network 4-33
4.6.7 Utilities and Services 4-37
4.6.8 Information and Communications Technology (ICT) Development 4-41
4.6.9 Community Facilities 4-41
4.6.10 Green Technology 4-43
CHAPTER 5
Policies 5-1
5.1 Setting A National Spatial Framework 5-2
5.2 Enhancing National Economic Competitiveness 5-5
5.3 Conserving Agriculture Resources and Promoting Rural Development 5-15
5.4 Sustainable Tourism Development 5-28
5.5 Managing Changing Human Settlements 5-35
5.6 Conserving Natural Resources, Biodiversity and the Environment 5-51
5.7 Integrating the National and Urban Transportation Network 5-70
5.8 Providing Appropriate Infrastructure 5-82
CHAPTER 6
Implementation Mechanism 6-1
6.1 Institutional Mechanism for Implementing the NPP 6-1
6.1.1 Key Issues on Implementation 6-1
6.1.2 Existing Agencies Involved in Spatial Planning 6-5
6.1.3 Integrated National Development Planning System 6-6
6.1.4 National Physical Planning Structure 6-6

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6.1.5 National Physical Planning Institutional Structure 6-10
6.1.6 Public Consultation in the Preparation of the National Physical Plan 6-15
6.2 Plan Implementation 6-16
6.2.1 State Structure Plans to Conform with the NPP-2 6-21
6.2.2 Advise on Strategic Infrastructure, Large Townships and Development
in ESA Areas 6-22
6.2.3 Town Planning Rules 6-23
6.2.4 Coordinating with the Economic Development Plans and Regional
Planning Initiatives 6-23
6.2.5 National Spatial Planning Policy Guidelines 6-24
6.2.6 Linking NPP Policies with Socio Economic Development Planning and
Budgetary Allocation 6-24
6.2.7 Establishing Linkages with Sector Councils 6-25
6.2.8 Establishing Linkages with Other Planning Authorities 6-25
6.3 National Physical Plan Action Programme 6-25
6.3.1 Principles 6-26
6.3.2 Components of the Action Programme 6-26
6.3.3 Implementation Model 6-35
6.3.4 Implementing Agencies 6-37
6.3.5 Implementation Approach 6-39
6.3.6 Funding Model 6-40
6.4 Plan Monitoring 6-45
6.4.1 Scope of Monitoring 6-45
6.4.2 Monitoring Agencies 6-46
6.4.3 The Monitoring Process 6-46
6.5 Review of the NPP 6-57
6.5.1 Evaluating the effectiveness of the Policies 6-58
6.6 Proposals 6-59
ABBREVIATION
GLOSSARY

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List of Figures
Figure 1.1 National Development Planning Framework 1-1
Figure 2.1 Conceptual Model of Sustainable Development 2-3
Figure 2.2 Building Blocks for Liveable Cities and Sustainable Communities 2-6
Figure 3.1 Economic Transition Model 3-4
Figure 3.2 Fragmentation of Natural Forest Cover in Peninsular Malaysia (1954-2000) 3-5
Figure 3.3 Natural Resources in the Exclusive Economic Zone (EEZ) 3-6
Figure 3.4 Population Target by States, 2020 3-14
Figure 3.5 Percentage of Population in Urban and Rural Areas by States, 2020 3-16
Figure 3.6 Existing Land Use, 2008 3-22
Figure 3.7 Urban Hierarchy Linkages 3-27
Figure 4.1 Concentrated Decentralisation Development Strategy 4-7
Figure 4.2 Concentrated Dispersal Strategy 4-14
Figure 4.3 Conceptual Strategy for Urban Rural Linkages 4-19
Figure 4.4 Land Availability for Future Development in Peninsular Malaysia 4-22
IP 1 National Spatial Framework 2020 5-4
IP 2 Concentration of Development in Conurbations 5-8
IP 3 Development and Economic Regions 5-10
IP 4 ASEAN Economic Cooperation 5-12
IP 5 Industrial Growth Centres and Potential Industrial Centres 5-14
IP 6 Prime Agriculture Areas 5-19
IP 7 Strategic Granary Areas 5-21
IP 8 Paddy Land Outside Granary Areas 5-23
IP 9 Rural Settlements and Potential Rural Economic Clusters 5-25
IP 10 Orang Asli Settlements 5-27
IP 11 Natural Tourism Resources 5-32
IP 12 Man-Made Tourism Resources 5-33
IP 13 Conurbations and Urban Hierarchy 5-41
IP 14 Major and Minor Settlement Centres 5-48
IP 15 Environmentally Sensitive Areas 5-57
IP 16 Ecological Corridors and Central Forest Spine 5-59
IP 17 Sensitive Coastal Ecosystems 5-62
IP 18 Highlands and Special Management Areas 5-64
IP 19 Water Catchment Areas 5-66
IP 20 Ground Water Resources 5-67
IP 21 Potential Affected Coastal Areas Due To Climate Change 5-69
IP 22 Integrated National Transportation Network 5-74
IP 23 National Rail Network 5-76
IP 24 National Road Network 5-78
IP 25 National Airports and Seaports 5-80
IP 26 Water Supply Resources and Water Stressed Areas 5-85
IP 27 Solid Waste Management 5-88
IP 28 Flood Prone Areas 5-90

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IP 29 Power Supply Grid 5-92
IP 30 Area Supplied by Natural Gas Distribution System 5-94
IP 31 Cyber Cities 5-96
Figure 6.1 Integrated National Development Planning System 6-7
Figure 6.2 Proposed National Physical Planning Structure 6-9
Figure 6.3 Implementation Model for NPP-2 Initiatives 6-40
Figure 6.4 Development Programme for Special Area Plans and Funding Model 6-43
Figure 6.5 Vertical Information Flows 6-54
Figure 6.6 Major Data Providers in iPLAN (Horizontal Information Flows) 6-54
Figure 6.7 Vertical and Horizontal Linkages Land Use Planning Information System, 2020 6-56
Figure 6.8 The Conceptual Framework of NPPMS 6-57
Figure 6.9 Economic and Land Use Planning Cycle 6-58
List Of Tables
Table 3.1 Predicted Impacts of Climate Change in Malaysia 3-11
Table 3.2 Estimated Population by States, 2020 3-13
Table 3.3 Population (000) in Urban and Rural Areas by States, 1991, 2000 and 2020 3-15
Table 3.4 GDP by Regions, 2000 2020 3-17
Table 3.5 Projected State GDP Sectoral Shares (%), 2000 2020 3-18
Table 3.6 Malaysian Labour Force and Employment, 1990 2010 3-18
Table 3.7 Malaysian Employment (000) by Occupational Groups, 1995, 2000 and 2020 3-19
Table 3.8 Existing Land Use by States, 2008 (000 ha) 3-21
Table 4.1 Main Development Corridors and Sub Development Corridors 4-4
Table 4.2 Malaysia Ranking of Global Competitiveness 4-8
Table 4.3 Income Group for ASEAN Countries 4-10
Table 4.4 Estimated Per Capita GDP Growth for Malaysia, 2020 4-11
Table 4.5 Total Area of Land Availability for Future Development by States (000 ha) 4-21
Table 4.6 Total Area of Prime Agriculture Areas (PAAs) by States (000 ha) 4-23
Table 4.7 Environmentally Sensitive Area Composite 4-25
Table 4.8 Total Area of Environmentally Sensitive Areas (ESAs) by States (000 ha) 4-26
Table 4.9 Estimated Urban Land Requirement by State, 2020 4-27
Table 4.10 States Tourism Attractions 4-30
Table 4.11 Major Tourism Destination Based on Its Locational Advantage 4-32
Table 4.12 Projected Water Demands for Peninsular Malaysia, 2020 4-38
Table 5.1 Agriculture Land Use in Peninsular Malaysia (Hectare) 5-15
Table 5.2 Population Projection of Main Conurbations 5-35
Table 5.3 Biodiversity and Ecosystem Services 5-51
Table 6.1 Members of the NPPC 6-10
Table 6.2 Members of the NPPC Working Committee 6-11
Table 6.3 Members of the National Physical Planning Advisory Panel 6-12
Table 6.4 Implementing the NPP-2 Policies 6-16
Table 6.5 NPP-2 Specific Actions 6-27

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Table 6.6 NPP-2 Spatial Initiatives 6-30
Table 6.7 NPP-2 Demonstration Projects 6-33
Table 6.8 The NPP-2 Spatial Initiatives, Key Implementing Agencies 6-37
Table 6.9 NPP-2 Policy Indicators 6-47
Table 6.10 Institutional Responsibility for Plan Preparation, Implementation, Monitoring
and Review of NPP-2 6-59
Na tiona l Physic a l Pla nning
Fra me work
C HAPTER 1
NATIONAL PHYSICAL PLAN

1-1
CHAPTER 1
NATIONAL PHYSICAL PLANNING FRAMEWORK
1.1 Development Planning in Peninsular Malaysia
Development planning is practised in all three tiers of the Government in Peninsular
Malaysia. At the national level, development planning is guided by the Five-Year Malaysia
Plans (FYMP), the National Physical Plan (NPP) and other sectoral national policies that
are passed by the Cabinet. They address the strategic issues of national importance and
provide the overall framework for subsequent drawing up of the other more detailed
Development Plans. Contextually, development planning in the country operates within
the stated goals outlined in Vision 2020 and the Third Outline Perspective Plan 2001-
2010 (Figure 1.1). Similarly at the state level, development is guided by the Regional and
State Development Plans, and other national sectoral policies that are formulated from
time to time by the respective state governments. Local level physical planning is carried
out and regulated through the statutory development plans, in the form of Local Plans and
Special Area Plans, prepared by the local planning authorities. It deals primarily with
more detailed and site specific land use allocations and spatial development of each
locality and community needs.
Figure 1.1 : National Development Planning Framework
LEVEL 1 : NATIONAL PLANNING
NATIONAL
PHYSICAL PLAN
5 - YEAR
MALAYSIA PLAN
SECTORAL
POLICIES/ PLANS
VISION 2020
LEVEL 3 : LOCAL PLANNING
SPECIAL AREA
PLAN
LOCAL
PLAN
LEVEL 2 : REGIONAL / STATE PLANNING
REGIONAL /
STRUCTURE PLAN
REGIONAL / STATE
DEVELOPMENT PLAN
SECTORAL POLICIES/
PLANS

1-2
An effective national physical planning system should necessarily involve both top-down
and bottom-up approaches and it is also crucial that the national spatial policies are
incorporated into and integrated with the other sectoral policies, strategies and
programmes. While the NPP sets out the general directions and priorities of the overall
physical development of the nation, the Regional, State Structure and Local Plans will in
turn provide significant more detailed strategic thrusts and targets on the states
aspirations in respect to the future development of the State and Local Authority areas. In
the event of any policy or major issue conflicts, discussions will be held with stakeholders
concerned to rationalise and reconcile any discrepancies inconsistent with national
interests and state aspirations, particularly the achievement of Vision 2020 and the
1Malaysia concept.
Malaysia practices a plan-led development system. This means that any development of
land and buildings, require planning approval from the Local Planning Authority. Planning
permission will be granted if the development is in conformity with the statutory Local
Plan, such as technical agencies requirements and public objections. In general, the town
planning system has served the country well in facilitating rapid development and
enhancing the quality of life without compromising the environmental quality and heritage
resources of the locality. The planning system is however continuously evolving to
respond positively to new emerging trends and changes, such as increasing demand for
more public engagements and appropriate spatial adaptations to combat climate change,
to face the wider uncertainties of the 21
st
century.
In preparing the national spatial framework for Peninsular Malaysia, account has been
taken into consideration of the global commitments of the Malaysian government for
concerted local plans actions as a signatory to the various international conventions and
agreements. The relevant ones with spatial implications are:
Habitat II: Habitat II seeks to ensure the provision of adequate shelter for all as well as to
strive for sustainable human settlement development in an urbanising world. In this
respect, these objectives, principles and strategies have been integrated into the
development plans prepared according to the requirements of the Town and Country
Planning Act 1976 (Act 172).
Agenda 21: Agenda 21 represents a global partnership in promoting sustainable
development. Towards this end, Malaysia has endeavoured to implement the
commitments largely through the Local Agenda 21 initiatives by all the local authorities in
their respective areas.
Convention on Climate Change: The Convention on Climate Change essentially targets
at lowering the industrial and other greenhouse gases emissions, especially carbon
dioxide, which adversely affect and change the climate system, particularly global
warming. As such, the principal spatial strategy adopted by the Malaysian government is
to maintain an effective sustainable forest management program, decreasing the urban
footprint and to encourage the use of public transport.

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Convention on Biological Diversity: The Convention on Biological Diversity primarily
aims at conserving the biological diversity and promoting sustainable use of genetic
resources while carrying out economic development. To contribute to biodiversity
conservation, substantial efforts have been made by the Malaysian government to protect
ecosystems, to maintain natural habitats particularly the tropical rainforest and wetlands,
and to establish wildlife corridors.
WTO Trade Agreements: Continuous and increasing economic globalisation and trade
liberalisation pose both opportunities and challenges to every nation, including intense
pressure to open up markets for more competition and privatisation. To meet this
challenge, sustainable growth in Malaysia needs to be driven by enhancing productivity,
innovativeness and competitiveness in which the creation of a K-economy is crucial.
ASEAN Free Trade Agreements (AFTA): The most important regional trade bloc for
Malaysia is AFTA as it directly affects her trade relations with her immediate neighbouring
countries. AFTA aims to liberalise trade between member countries by bringing tariff rates
down to 0 - 5 percent by 2008.
Plans and Policies used in the country to guide and shape developments consist of the
following:
i. Vision 2020
The long-term vision statement for the country, Vision 2020, states the aspiration of
the nation. The nation shall become, by the year 2020, fully developed along with all
the dimensions: economically, politically, socially, spiritually, psychologically and
culturally. At the same time, the country also seeks to achieve a high income nation
status by year 2020.
The strategy to achieve this Vision is by transforming the economic structure and
facilitating a high level of economic growth through an accelerated development of
the service sector in generating economic activities. Emphasis is given on promoting
innovation, creativity and high value-added elements in niche areas such as Islamic
banking and finance, tourism including health and education, shared services and
outsourcing, information and communication technology and professional services. It
will also involve an accelerated industrial development and an export-based
manufacturing sector. The manufacturing industry will create significant multiplier
effects on the other sectors of the economy, including supporting logistics and
business services. Collateral development will entail the accelerated development of
science and technology. At the same the private sector is expected to provide the
main engine of growth to achieve this Vision.
In delivering Vision 2020, the Malaysian government is vigorously promoting the
1Malaysia concept aimed to foster national unity through mutual respect and
tolerance amongst the different ethnic communities with diverse religious beliefs and
cultural practices. Towards this end, spatial planning can contribute significantly in

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creating an inclusive society through facilitating ethnically-mixed residential
development as well as the provision of public common users space, such as sport
facilities and parks to encourage more social interactions and interpersonal
relationships.
ii. The Third Outline Perspective Plan (OPP3)
The Third Outline Perspective Plan 2001-2010 (OPP3) provides broad strategic
economic directions and development priorities of the country towards achieving
Vision 2020. The OPP3 essentially forms the framework for the preparation of the
FYMP.
A central objective of OPP3 is to enhance the spirit of ethnic and social integration for
all the communities of Malaysia. Its concentration is at forging a united nation
consisting of a progressive and dynamic Bangsa Malaysia (Malaysian nation) that
lives in harmony and engages in full and fair partnership. OPP3 also focuses on
enhancing regional balance through rapid development in the less-developed states.
Efforts will be taken to diversify the economic base of the slower growing states into
manufacturing and services. Emphasis will be given to the development of
downstream activities in the agriculture sector, such as in handling, processing,
packaging and marketing of agro-products, and the development of agro-based
industries. Another aim of the OPP3 is to reduce urban-rural disparities and to
strengthen the linkages between the urban and rural economies. The OPP3 also
seeks to address the rising urban poverty which is a recent phenomenon within the
conurbation areas of the country.
iii. Five-Year Malaysia Plan
The current Five-Year Malaysia Development Plan is the Ninth Malaysia Plan, 2006-
2010 (9
th
MP). The Plan will intensify efforts to enhance the strength of the domestic
and foreign sectors by developing new sources of growth, improving the
competitiveness and resilience of the economy, and increasing the participation of the
private sector.
The major thrusts of the 9
th
Malaysia Plan are to facilitate growth and higher value-
added economic activities, increasing the capacity for knowledge and innovation,
reducing inequalities, improving the quality of life and strengthening institutional
capacity. The Plan identifies the growing sectors of the economy as services and
manufacturing, besides increasing value-added downstream activities in the
agricultural sector, such as the biotechnology industry. The government will continue
to facilitate the development of existing and new industrial clusters, besides
promoting direct foreign investments in order to face the intensifying competition
amongst countries for investments, production and markets. The implementation and
further elaboration of free trade agreements among nations will result in the
deepening of globalisation and make competition more intense.

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iv. National Physical Plan
The National Physical Plan (NPP) sets out the national strategic spatial planning
policies and measures taken to implement them in respect to the general direction
and broad pattern of the land use and physical development and conservation in
Peninsular Malaysia.
The first NPP prepared in 2005 was made under the provision of Section 6B of the
Act 172. It has been approved by the Cabinet on the 20
th
April 2005 and by the
National Physical Planning Council (NPPC) on the 26
th
April 2005. In addition,
Section 6B(4) of Act 172 states that the NPP shall be reviewed every five years in
tandem with the review of the National Five Year Development Plans, or as and
when directed by the NPPC.
The spatial planning vision, policies, measures and land allocations of the NPP will be
implemented primarily (i.e. delivery vehicle) through the State Structure Plans. In.
addition, the Federal Government shall implement the NPP through the control of
development budgeting i.e. granting financial allocation to development programmes,
particularly key national infrastructure project, of public implementing agencies on the
basis of NPP spatial policies. Under section 6B (5) of Act 172, it is incumbent upon
the implementing agencies of the Federal Government and all State Governments to
assist in ensuring that the objectives of the NPP are realised.
v. Regional Plans
Sub-section 6A(5)(b) of the Act 172 requires the Regional Planning Committee (RPC)
to prepare a Regional Plan for areas situated in two or more states where there is an
urgent need to tackle significant strategic issues of regional importance, particularly
pertaining to cross-border development and joint-facility provision. Each Regional
Plan consists of spatial policies and broad development strategies to guide and
coordinate development including key regional infrastructure provision, such as
highways and airports.
Regional Planning Committees serves to inform and assist the State Planning
Committees and the Local Planning Authorities within the region on appropriate
development measures for the region aimed at sharing and optimising the use of
capital-intensive infrastructure and social facilities, coordinate development, avoid
duplication of investments and promote the conservation of natural resources.
Regional plan / sub-regional plan may also be prepared for the conurbation covering
a number of local authority areas identified in the NPP-2.
To reduce the wide income disparities between the less-developed and more-
developed regions as well as between the rural and urban areas, Corridor
Development Plans (CDP) for the various designated regional growth corridors that
is, the Eastern Corridor Economic Region (ECER), the Northern Corridor Economic
Region (NCER) and Iskandar Malaysia, have been prepared and completed recently.

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These CDPs are essentially socio-economic orientated and project based. Currently,
the Federal Government has committed additional financial allocations, particularly
for key regional infrastructure provision, to spur accelerated development in these
economically-lagging regions. This regional development strategy is seen as a new
source of economic growth for the nation by fully exploiting the inherent potentials
and competitive strengths of the different parts of Peninsular Malaysia, for example,
beach and island resort tourism along the pristine East Coast. However, there is a
need for the integration of these regional economic master plans with the
development plan system under the Act 172. Greater emphasis should be given to
the development of regional growth centres, such as Kuantan, and strategic urban
centres within each economic region to attract higher investment, thus creating more
jobs and to catalyst economic spin-offs in developing the rural hinterlands.
vi. Structure Plans
The Structure Plan (SP) sets out the policies and general proposals for the
development and other use of land within each state; thus providing guidance for
spatial development on states issues of structural importance. The SPs interprets
national spatial policies and framework (NPP-2) as well as regional spatial policies
and development proposals (Regional Plan) at state-wide level in terms of cities,
towns, villages and countryside areas.
In essence, the SP distributes the expectations of future development within each
state; and proposes major economic and infrastructure projects for the states. The SP
also acts as a guide to investment, both by public agencies and private sectors, the
allocation / use of resources, and for the coordination of their decisions. The time
perspective for SP is normally 20 years. The current set of SPs however,
commensurate with the time horizon of Vision 2020. Except for the State of Perlis and
the Federal Territory of Putrajaya, which are in the final stage of preparation, all other
states in Peninsular Malaysia and Federal Territory Kuala Lumpur are covered with
statutory SPs. The SP for each state will provide the framework and basis for the
preparation of a statutory Local Plan covering each district of the state.
vii. Local Plans
The Local Plans (LP) are considered as an important component of the Development
Plan according to the Act 172; and serve as vehicles for more detailed and site
specified development facilitation and control at local level. In addition, the Local
Plans by their consultative process of preparation acts as contractual agreements on
the use of all land within the planning areas between the Local Planning Authorities,
the local residents and land owners. Besides being guides for development, Local
Plans also offer a basis of democratic governance and the protection of citizen
development rights. In a nutshell, LPs have direct and high impact to the daily lives
and property values of the residents at neighbourhood level.

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viii. Special Area Plans
The Special Area Plan (SAP) is part of the statutory Development Plan. It is prepared
following the same procedures of the Local Plan and has the same effect as a Local
Plan. It is an action-orientated Plan detailing out intensive and major changes in the
near future for implementation, such as redevelopment of the inner city areas. It also
includes detailed information on the type of treatment, implementing agencies,
phasing, costing and funding of a certain proposed project.
1.2 The Second National Physical Plan ( NPP-2 )
The Act 172 and its amendments provide the legal basis for the preparation of the NPP.
Sub-section 6B(1) of the Act 172 makes it a statutory duty for the Director General of the
Town and Country Planning to prepare and submit to the National Physical Planning
Council (NPPC) a Draft National Physical Plan for its approval. In this respect, the first
NPP was approved by NPPC in 2005. This framework Plan is an advisory planning policy
document and is not gazetted as a Development Plan.
To ensure its relevancy and suitability in the fast changing physical, economic, social and
natural environment, Sub-section 6B(4) of the Act 172 also stipulates that the National
Physical Plan be reviewed every five years in tandem with the review of the Five-Year
Development Plan, or as and when directed by the NPPC.
The Malaysian government recognises the importance of a quick and flexible response to
changing circumstances in the continuous national spatial planning process. Implicit in
this planning view is the need to monitor and review the performances of NPP (2005) and
the social, economic, physical, and environmental forces, including global mega trends,
such as the prevailing global financial crisis and economic downturn which may change
and undermine the basis on which the first NPP was prepared. Changing needs and
conditions of an area and its community may result in the invalidity of assumptions,
forecasts and objectives, thus requiring policy reviews and shifts.
Not all aspects of the NPP (2005) will be changed at the review stage as certain aspects
of the Plan will require permanency. This is due primarily to the long term gestation period
for spatial policies to be fully materialised as well as the need to fulfil Malaysias
commitments as a signatory to many international conventions, such as Habitat II. These
include areas designated for conservation or set aside for the protection of water
resources. Other development proposals, such as major national infrastructure
constructions may also require continual implementation over decades and follow-up
phases.
In view of this, this NPP-2 report is the product of the review undertaken on NPP (2005).
This is important as it ensures that the national spatial planning policies and strategies
remain up-to-date and relevant in keeping abreast with the fast changing economic,
social, physical and technological changes and trends as well as capable in responding

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proactively to the emerging international issues and future challenges like climate
change, biodiversity and conservation. Thus, an up-to-date realistic NPP-2 will accurately
reflect national spatial goals and strategies and will provide positive planning guidance to
what is required of planning at the federal, state and local level.
1.3 Functions Of The NPP-2
The main functions of the NPP-2 are:
i. To strengthen national development planning by incorporating spatial dimensions in
tandem with the national socio-economic policies;
ii. To establish a national spatial framework for Regional, State and Local planning;
iii. To provide physical planning policies for ensuring sustainable development as well
as mitigating and adapting the natural environment and human settlements to
climate change;
iv. To coordinate decisions of sectoral agencies by providing spatial expressions to
sectoral policies;
v. To advocate sectoral measures for implementing agencies in supporting national
spatial policies and framework; and
vi. To identify key action programmes to demonstrate and further improve innovative
spatial planning and design concepts.
1.4 Form and Content
The NPP-2 sets out the national long-term strategic spatial planning policies and
measures needed to implement them in respect to the general direction and broad
pattern of the land use, and physical development to year 2020 in Peninsular Malaysia as
a whole. The planning policy statements will be accompanied by the necessary indicative
plans, including the future national sectoral planning indicative maps and the national
spatial framework key diagram, to support and clarify the strategic spatial policies
formulated.
More specifically, the NPP-2 will determine an achievable future long term spatial
planning goal for Peninsular Malaysia including identifying strategic national spatial
issues and opportunities as well as proposing the key drivers and priorities to realise the
goal. The main physical components of the NPP-2, involves the creation of an efficient
hierarchy of settlements (such as international gateways and strategic urban hubs /
centres), an integrated national transportation network (such as national and regional
expressways, high-speed railways, and ports) as well as key infrastructure systems
including basic utilities and facilities (such as broadband communication, IT, energy,
water, knowledge, schools and health facilities). At the same time, environmentally
sensitive areas (such as forests and wetlands) and countryside (such as rural agriculture
areas) will also be conserved and preserved. The national spatial framework also intends
to indicate to the Federal Government and public agencies on the commitments to future

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spending and infrastructure investment priorities to support sustainable growth, job
creation and income generation in focused areas. As such, it will contribute significantly
towards facilitating private initiatives and enterprises to accelerate long-term economic
growth with equity, enhancing global competitiveness, promoting sustainable physical
development and conserving biodiversity.
This NPP-2 Report consists of six (6) main chapters. Chapter One (1) introduces the
global and national context with spatial implications, the planning system as well as the
legal provision and the functions of NPP-2. Chapter Two (2) sets out the goals, objectives
and principles for the spatial planning of the nation. Chapter Three (3) outlines the
planning framework and examines the current physical development context. Chapter
Four (4) highlights the proposed physical development strategy. The current NPP
Selective Concentration Development Strategy is further accentuated by the concept of
Concentrated Decentralisation in Development Growth Corridors.
Chapter Five (5) consists of a set of physical development policies supported by
Indicative Plans. All NPP-2s 41 policies have been grouped into eight (8) themes. The
current first NPPs thirty six (36) policies, have been amended, seven (7) new policies
have been added while four (4) policies have been combined into two (2) policies in NPP-
2. The Policy NPP 22 and NPP 31 in the first NPP relating to water resources has been
incorporated into policy NPP 26 in NPP-2, while policy NPP 9 and NPP 11 in first NPP
relating to conurbations has been incorporated into policy NPP 14 in NPP-2. Chapter Six
(6) highlights the issues of the NPP-2 plan implementation and proposed measures to
further enhance implementation mechanism of the NPP-2.
1.5 Consultation Process
When preparing the NPP, the Director General of Town and Country Planning is required
by law to consult the State Authority and such other authorities or bodies as the NPPC
may direct. However, a discursive and consultative approach with all relevant public
agencies and interested stakeholders at significant stages throughout the plan making
process of NPP-2 was adopted and applied.
A central feature of the strategic planning process during the review of NPP (2005) was
to encourage and enhance urban governance and participatory plan-making. National
spatial planning is a complex process as it involves a wide range of cross-sectoral
policies relating to many diverse participants and stakeholders, both horizontally and
vertically, such as the NGOs, state governments, public agencies, utility service providers
and private sector. It often is positively discriminatory between different groups and areas,
such as who to gain and lose, how much and where. For example, given the limited
resources available and need for sustainable development, many states want more
population, more federal funds for infrastructure development, opening up of more
forested areas for agriculture development, sea reclamation for urban development.
Similarly, there are sometimes multiple competing uses for the same piece of land for

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example, agriculture versus forestry or urban development. These situations are reflected
in the various Corridor Development Plans, Structure Plans and Local Plans prepared.
In this context, a series of wide ranging dialogues were carried out with Technical
Working Groups (TWG), Federal and State agencies, interested organisations and expert
groups. This is vital to afford an opportunity for discussing resource allocation and re-
allocation with the federal and state governments; and to trade-off conflicts and set
priorities between the different stakeholders based on the guiding principles and
objectives established.
Information gathered from this discursive approach has proven to be very valuable to
rationalise and improve the quality of the policies and measures. In particular, this
consultative process ensures that the state and local aspirations as well as private sector
requirements are taken into account into the NPP-2, thus fostering a sense of ownership
and commitment to the Plan.
1.6 Plan Area
The NPP-2 is currently confined to Peninsular Malaysia. For the purpose of analysing and
describing the strategy and relevant policies, four spatial regions, that is, the northern,
central, southern and eastern regions are applied similar to the economic regions used by
the FYMP. Each of these regions reflects distinctive characteristics and problems, for
example, less-developed region. The NPP-2 however does not apply to Sabah and
Sarawak as they are governed by different planning legislations.
1.7 Plan Period
Once the NPP-2 is approved, the policies of the Plan will take effect and be read together
with subsequent new addition, alteration or replacement by the NPPC. In line with Vision
2020, a ten-year timescale up to 2020 will continue to be maintained. The NPP-2 shall
have both a short term perspective in accommodating the socio-economic objectives and
project budget allocation of the FYMP and the long term perspective of Vision 2020.
However, 2020 is not intended to represent the end-date by which all national spatial
issues identified in the NPP-2 will be resolved. Within the 10-year timescale, the Plan will
at best solve the most urgent critical national issues while ameliorating the less pressing
minor ones. In addition, the planning for different sectors may require different time
horizons. Certain sectoral land allocations for example water supply system and
infrastructure network alignment such as high-speed rail, need to be set aside now and
safeguarded for development beyond the year 2020.

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1.8 Users Of The NPP-2
The main users of the NPP-2 will be the Federal and State agencies responsible for
forward planning, development and financial allocations as well as local agencies
responsible for development control and land administration. However, all other agencies
are expected to study and elaborate the implications of the NPP on their particular
sectors, such as education, public health and so on. Private sector property developers
will also find the projections of population distribution as well as the disclosure of future
national infrastructure a reliable guide for making informed investments. This will help
avoid speculative development in the private sector and future mismatch between
property development and demand. The public will also have access to the report once it
is published and made available on line on the Federal Department of Town and Country
Planning (FDTCP) website.
Readers are advised to read the report as a whole so as to get a clear understanding of
the National Physical Plannings Objectives, Strategies and Policies. Notwithstanding this,
the main contents of the NPP-2 report are the 41 Policy Statements and the Measures as
contained in Chapter 5 of the report. These policies will automatically supersede the
earlier 36 Policies contained in the NPP (2005).
G oa ls, O b je c tive s a nd
Princ ip le s
C HAPTER 2
NATIONAL PHYSICAL PLAN

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CHAPTER 2
GOAL, OBJECTIVES AND PRINCIPLES
The goal, objectives and principles of NPP-2 reflect the desire of the nation, as interpreted from
the Town and Country Planning Act 1976 (Act 172), to promote in the improvement of the
physical environment towards the achievement of sustainable development in the country. In this
context, physical planning acts as an effective instrument to create an efficient spatial settlement
pattern, an integrated infrastructure network, a sustainable rural environment and supported by
effective implementing institutions. Concurrently, spatial planning guidelines are necessary to
support the national socio-economic planning for long-term accelerated economic growth and
more balanced regional development. The technical findings and stakeholders consultative
feedbacks on the existing key issues, future major challenges, the potentials and threats assist in
refining the goal, objectives and principles thus providing the basis for formulating the strategies
and policies that, in turn, provide tangible set of actions for implementing the NPP-2.
2.1 Goal
The fundamental goal of the NPP-2 is the countrys aspiration of attaining a developed
and high-income nation status as encapsulated in Vision 2020 and the New Economic
Model (NEM). A particular onus placed on physical planning is its ability to create a better
quality and efficient physical environment in the cities, towns and rural areas that will be
the foundation for the higher quality of life and better place to live in. This is supported by
economic prosperity, environmental stability, social vibrancy and integration as
envisioned in Vision 2020. Subsumed within this overall objective is the integral need to
increase competitiveness, productivity, innovativeness, social inclusiveness, regional
balance, sustainability and a strong global positioning of the country. The NPP-2 will
provide the translation of the national sectoral policies and strategies into the physical
and spatial dimension. By developing each part of the country to its full potential, it is
envisaged that the creation of safer, greener and liveable places inhabited by healthier,
smarter, richer and sustainable communities will be achieved.
The goal of NPP-2 is:
THE ESTABLISHMENT OF AN EFFICIENT, EQUITABLE AND SUSTAINABLE
NATIONAL SPATIAL FRAMEWORK TO GUIDE THE OVERALL DEVELOPMENT OF
THE COUNTRY TOWARDS ACHIEVING A DEVELOPED AND HIGH-INCOME NATION
STATUS BY 2020

2-2
2.2 Objectives
Arising from this Goal are five (5) mutually supportive objectives as identified below:
i. To rationalise and consolidate the national spatial planning framework supported
by key strategic infrastructure for economic efficiency and global competitiveness.
ii. To optimise utilisation of land and natural resources for sustainable development
and biodiversity conservation.
iii. To promote more balanced regional development for national economic
integration and social unity.
iv. To enhance spatial and environmental quality, diversity and safety for a high
quality of life and liveability.
v. To facilitate efficient integrated inter-state connectivity and public common users
space provision for social interaction and sustainable communities in line with the
1Malaysia concept.
Objective 1: To rationalise and consolidate the national spatial planning
framework supported by key strategic infrastructure for economic
efficiency and global competitiveness
In order to sustain the high level of economic growth of around 5.5 % per annum over the
next 10 years, it is necessary to achieve a developed nation and high-income economic
status by 2020, as the country must be economically efficient and globally competitive
over the plan period. Being a small and open economy, Malaysia will continue to be
dependent on foreign direct investments as well as exports for high sustainable economic
growth. However, it is envisaged that global competition for foreign investments as well
as for export markets will become increasingly competitive in the light of the likely slow
economic growth and low consumption in developed countries arising from the current
economic downturn and financial crisis.
From the spatial planning perspective, this strive for efficiency and investment
attractiveness would involve the need to focus on development activities in selected
areas that offer the best growth potential. Urban regeneration or new development on
brownfield (previously developed) sites within existing large urban centres and key
economic development corridors will provide opportunities to use optimally the existing
and committed infrastructure, thus enabling the use of scarce resources efficiently and
the reduction of the cost of doing business / production. Within such strategic
development areas, it is therefore crucial for physical planning to create a quality living
environment with an integrated and efficient infrastructure, particularly public transport.

2-3
Objective 2 : To optimise utilisation of land and natural resources for sustainable
development and biodiversity conservation
Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs (Bruntland
Report
1
). Contemporary conceptualisation of the sustainable development concept
considers the economic and societal elements of sustainable development to be subsets
of the environment (Figure 2.1). In short, society is dependent on the well-being of the
economy; and in turn, both society and the economy are dependent on the well being of
the environment.
The model places strong emphasis on the importance of ecosystem services, which
simply put are the benefits that people obtain from ecosystems. The term implies that the
services are of value to people and that the degradation or loss of the services brings
about harmful impacts. These services are classified as (Table 5.2): provisioning,
regulating, cultural and supporting
2
.
Biodiversity, which is the variety and interactions of life on earth, is essential for the
functioning of ecosystems (ecosystem processes) and therefore the provision of
ecosystem services. Although there is no simple relationship between biodiversity and
ecosystem services, it is important to note that high levels of biodiversity (at the genetic,
species and ecosystem level) are important to ensure the resilience of ecosystem
processes. In these terms, environmental sustainability, and hence social and economic
sustainability, means that critical resource stocks (biodiversity) and ecological processes
must be safeguarded. At the same instance, depletion must be kept within acceptable
levels and losses of natural capital must be compensated for.
The core objective of land use planning is to contribute to the achievement of sustainable
development. Most activities occur on land. For the same piece of land, there are
normally many competing uses. The many economic sectors, human social activities and
environmental protection concerns vie for the limited suitable land available. The NPP-2
must seek not only to allocate adequate land for the various uses to meet their
anticipated needs but also, through sensitive
calibration of the quantum of land allocated for
each sector, seek to achieve overall efficiency and
optimum sustainable use of land such as, the right
use/ development at the right place and at the right
time. Wastage in the form of idle and low
productivity lands in any of the economic sectors
should be eliminated. Land use allocation will,
however, be very largely constrained by the
existing land use pattern, infrastructure availability
and natural topographical conditions.

1
WCED. 1987. Our Common Fut ur e. Wor l d Commi ssi on on Envi r onment and Devel opment . Oxf or d Uni ver si t y Pr ess.
2
NRE. 2008. A Common Vi si on on Bi odi ver si t y i n Gover nment and t he Devel opment Process. The Mi ni st ry of Nat ur al Resour ces and
Envi r onment , Put r aj aya.
Fi gur e 2.1 : Concept ual model of
sust ai nabl e devel opment
E En nv vi ir ro on nm me en nt t
E Ec co on no om my y
S So oc ci ie et ty y

2-4
Each economic sector is faced with a different set of problems and opportunities that will
indicate, in broad terms, its future land requirements. Agriculture for example, faces the
necessity to increase productivity rather than expansion in acreage while the forestry
sector is faced with the need to increase the acreage of forest plantations in order to
meet global demand for tropical timber, in view of declining timber stocks in natural
forests. The establishment of forest plantations however must never be at the expense of
existing natural forests.
The greatest demands for land during the NPP-2 planning period will however, come
from urban expansion. Approximately 6 million additional populations has been estimated
to live in the urban areas of Peninsular Malaysia during the 2010-2020 period, accounting
for an urbanisation rate of 75% in 2020 or equivalent to the total of 20.9 million urban
population. However, the total amount of land necessary to house this population and its
related activities in 2020 is only about 0.96 million hectares, or 7.3% of the total land area
of Peninsular Malaysia.
Within the existing built-up areas, there is still much room for infill development as well as
redevelopment for mixed-uses (non-pollutive live-work-play activities in a building) and
higher densities. In principle therefore, there is no necessity for urban expansion to
encroach into rural land that should be protected or conserved for one purpose or
another, e.g. recreation, nor is there any necessity for carrying out large scale land
reclamation works except for key strategic infrastructure development. A more compact
urban footprint as opposed to current urban sprawl is most desirable to promote viable
public transport and to protect the open countryside and forested areas as carbon sink in
combating climate change. A majority of the financial, business and services sectors will
be concentrated within the Town Centre for greater synergy and critical mass. Local
planning may however, need to be adjusted towards a more flexible land use zoning and
intensification using impact-based zoning approach to suit the location of available land.
An important role of the NPP-2 is to consolidate and standardise the categorisation and
ranking of land for example, ESA Rank 1; and to apply land categorisation and ranking to
land use control, particularly in guiding conversion of land for urban uses.
Objective 3 : To promote more balanced regional development for national
economic integration and social unity
Due to historical and physical reasons, Peninsular Malaysia has developed with a
palpable disparity between the west and east coasts. National plans in particular Third
OPP3 have set the reduction of imbalance and the inducement of more equitable
development between regions and states as a primary objective.
Improvements in the transportation network, ICT linkage and development of petroleum
and natural gas related industries have to a certain extent, improved the economically
lagging East Coast States. However, the imbalance still persists. Unequal development is
not just between the east and west coasts but also between sub-regions within the west
coast, e.g. the highly developed Klang Valley as against southern Perak or northern

2-5
Kedah, both of which generally exhibit similar socio-economic characteristics as the east
coast region.
Balance should be perceived as equal opportunity to comparable incomes and economic
growth rates, and not necessarily as similar forms of development. Each region needs to
develop based largely on its inherent strengths and comparative advantage of the
regional economy and resources, particularly human capital, in relation to the national
and global economy. As such, while the less developed regions may, because of their
relative remoteness and isolation, be less competitive to certain forms of development,
their possession of pristine lush forested highlands, lakes, beaches, scenic beauty,
cultural richness and abundant agricultural and forest products could be further exploited
to enhance tourism including resort eco-tourism, agricultural and forestry downstream
activities, resource-based and craft-based industries. Enhanced investments in
infrastructure specifically to support such activities, such as in transportation and
communications, should be directed to the less-developed regions.
Rural-urban migration should be anticipated which will also manifests itself as inter-
regional migration and will continue as part of the larger national phenomenon of
industrialisation, urbanisation as well as agriculture modernisation. Skills training for
potential migrants will be important to ensure that they integrate gainfully into the urban
economy.
Objective 4 : To enhance spatial and environmental quality, diversity and safety for
a high quality of life and liveability
The environment includes the built-environment of cities and towns, the rural environment
of farms and plantations, and the natural environment of forests and wetlands. The
country must protect and conserve the quality of its environment in all these three areas.
The government is vigorously driving performance through the National Key Result Areas
(NKRA) which reflects national issues of public importance and interests in need of urgent
resolution. The six (6) NKRAs identified are: reducing crime, fighting corruption,
expanding access to quality and affordable education, raising the standard of living of the
low income groups, strengthening infrastructure in the rural and remote areas, and
improving public transport in the medium term. As such, the planning for the 2011 Budget
and the formulation of the Tenth Malaysia Plan (2011-2015) will give focus and priority to
the NKRA. This massive and challenging government initiative is a major step forward in
realising the peoples high expectation for spatial quality and diversity including safety,
particularly crime free environment in the country.

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Figure 2.2: Key Building Blocks for Liveable Cities and Sustainable Communities
Talent & Skill
Workers
Quality
Knowledge
Centres
Efficient
Public
Transport
Affordable
Decent
Housing
Distinctive
Attractive
Environment
Supporting
Infrastructure
& Utilities
Liveable Cities &
Sustainable
Communities
Compact ci t y planni ng wi t h
mi xed- uses and hi gher densi t y
Ur ban r egener at i on i n
br ow nf i el d sit es
Hi gh qual it y of l i f e
Economi c gr ow t h and
pr osper i t y
Vi br ancy and i nnovat i ve
Soci al i ncl usi veness
Good ur ban gover nance
High speed broadband
network
Clean technology facilities
Recycling waste
Renewable energy
Water conservation
More high qualification and high paying
job opportunities
Better intellectual- stimulating
environment and merit-based reward
system
Attract well-trained migrant workers
Retain home grown intellectuals and
professionals
Quality education
Enhanced global
economic
competitiveness
Attract FDI and MNC
High value-added
business and financial
services
High technology
industries
Specialised public
infrastructure
investment in business
parks and high-tech
park
Choices of alternative
transportation
particularly MRT and
LRT
Ease traffic congestion
Integrated land use and
transportation planning
Low green house gas
emission
Transit- orientated
development (TOD)
Housing opportunities and choices
Walkable neighbourhood
Mixed communities
Cleaner, safer and greener
environment
Common user space for social
interaction and cohesion
Low street crime rate
Clean air and water
Public space and green
space
Education and health
facilities
Art and leisure amenities

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The primary objective of the Habitat II agenda calls for the creation and maintenance of
liveable and sustainable cities. Presently, the liveability agenda comes under increasing
interest and attention worldwide. Liveable cities are engines of growth and innovations
that attract and retain creative and talented workers, thus driving high income economic
growth in the country. Empirical evidences indicate that good liveability of cites is
positively related to their GDP per capita, such as in New York, London and Singapore.
However, the concept of liveability is interpreted and acted upon differently by
practitioners, policy makers and the general public. In a broad sense, liveability has the
common notions of enhancing quality of life, well being, economic competitiveness
and growth and choosing the preferred place to live.
As shown in Figure 2.2, liveability is a wide ranging and multi-faceted cross cutting issue.
It involves essentially six (6) key building blocks for creating liveable cities and
sustainable communities. These are as follows:
i. Promoting Efficient Public Transport by integrating land use and transportation
planning to reduce the need to travel and minimise journey to work. Also
important is the need to promote a coordinated and efficient public transportation
system particularly multi and inter modal transportation hubs in major urban
areas.
ii. Access to Affordable Decent Housing in cities through facilitating the provision
of a mixture of dwelling sizes, types and tenure in all new residential development
to meet the various needs of households of different size, income and character.
Efforts should also be made in expediting planning approvals for residential
development, improving accessibility of public transport regeneration of
brownfield sites in town centres and older suburbs, encouraging mixed-uses and
higher densities including promoting a strong sense of community in
neighbourhoods.
iii. Facilitating Distinctive Attractive Environment in cities that promote clean air
and water, safety and security particularly low crime rate and less car accidents.
Cleanliness and hygiene especially litter and vandalism including attractive green
spaces and public spaces for families to work, play and relax, together with arts
and leisure opportunities should also be enhanced.
iv. Providing Supporting Infrastructure and Utilities by concentrating the
increasingly scarce public financial resources in a few large conurbations
particularly Kuala Lumpur, George Town and Johor Baharu. This will provide the
national strategic infrastructure, such as high tech parks and international
seaports, necessary to gain global competitive edge with the aim of enhancing
local private initiatives as well as attracting foreign direct investments and
multinational corporations.

2-8
v. Attracting and Retaining Talent and Skill Workers by nurturing a high quality
of life in cities which in turn acts as magnets to draw in high value-added
industries and business services, thus providing more and better wage job
opportunities.
vi. Establishing Quality Knowledge Centres in conurbations that will provide
economies of scale in sharing common specialised facilities and services in an
industry cluster, such as the petrochemical hub. The agglomeration of economies
and synergies in the value supply chain will in turn reduce the cost of doing
business and generating higher returns on investments made.
Creating Liveable Cites and Sustainable Communities will see the government playing
the facilitating role in providing the most conducive investment climate, the strategic
infrastructure and incentives for private initiatives and enterprises to take the lead and
flourish. Transforming local governance to provide better urban services and land use
management at local levels is another important facet of liveable cities and sustainable
communities. Delivery systems at the local authority levels shall be improved to ensure
that national and state level policies are effectively implemented. In this respect the
government has introduced One Stop Centre (OSC) to shorten the time taken for the
approval processes for both licences and planning permission. Local plans will be
prepared for all local planning authority areas to provide a statutory basis for land use
management. The competencies of local authority staff and officials shall be improved
in return for greater accountability. Greater community participation and social
inclusiveness will be encouraged to ensure more inclusive planning at the local levels.
Liveable cites attract and retain knowledge and innovative workers who in turn draw in
cutting edge firms that will drive high income economic growth. A critical spatial planning
component of achieving liveable cities is to embrace the compact city form and building
design as opposed to current haphazard urban sprawl. As the community knows their
needs and aspirations best, citizens and private sector engagement is crucial. In a
nutshell, the incorporation and combination of the six key building blocks, as enunciated
above, will mutually reinforce each other to create more liveable cities and sustainable
communities, thus contributing significantly towards realising the 1Malaysia concept and
NEM.
In particular, the people have expressed a strong desire for wanting distinctive identity in
different parts of the physical landscape such as, creative high and low density
development, open and enclosed concepts, convenient city living and spacious
suburban living rather than, the current monotonous and uniform building designs and
place layouts. Unique landmarks include natural features of outstanding beauty such as
the rivers, mangrove swamps and trees, iconic buildings, activity nodes, focal points,
heritage routes with rich memories and gathering places, which people can easily
identify and be proud of. In this context, the Kampung Baru Malay Agriculture
Settlement, the Old Chinatown and Little India, should be retained selectively and
integrated seamlessly into the new Plans of the area. In addition, it is vitally important to
bring back the peace of mind and confidence of the public on security of life and
properties, particularly house burglary and street crimes, by making them feel safe again

2-9
through proper defensible residential and safe city planning, thus eradicating the need
to barricade themselves with high walls, close circuit televisions and private security
guards patrol.
As with advanced economies in the developed countries worldwide, it is anticipated that a
large majority of the total population in Peninsular Malaysia will live in urban areas in
2020. With the current trend of cities and towns rapid expansion, the built-environment is
in danger of deteriorating into urban sprawls as well as inner urban core decay, rising
traffic congestion, environment pollution and urban poverty. It will therefore, be essential
to re-examine urban forms, limits and standards as well as the institutions of local
planning and development control processes to ensure that a quality urban environment
will be in place. The character and integrity of individual cities need to be protected and
regenerated and appropriate measures should be introduced to ensure the separation
with good connectivity between cities within conurbations as well as measures to guide
and control the outward expansion of conurbations. Thus, cities and towns will be a
dynamic vibrant place where people choose to live in, work, invest, do business, visit and
play.
The onset of climate change is predicted to have major impacts on the nation within the
span of this century. Left unmitigated, the impacts are expected to be wide ranging, and
will have consequences on the health and safety of the human population, as well as on
the economy. As much of the impacts, such as rising sea levels, increased storm surge,
flooding and change in rainfall patterns are spatially related, there is no doubt that
addressing them in the context of spatial planning will be crucial to ensure that the nation
is able to cope with climate change. As such, the NPP-2 aims to take pre-emptive
measures by ensuring that national land use planning incorporates the appropriate
adaptation and mitigation measures to combat climate change.
For the rural environment, the shrinking rural population will have a potentially disruptive
impact and planning for the depleting rural population will need to be carried out. At the
same time, assurance that the conversion of agricultural land for urban uses should be
orderly, transparent and efficient must be emphasised. Findings of the studies carried out
indicate that there is no shortage of poor quality agriculture land for conversion to urban
uses. There is, therefore, every reason to conserve what remains of the natural
environment for the edification and survival of the present and future generations and for
the overall enhancement of the national environment.
Objective 5 : To facilitate efficient integrated inter-state connectivity and public
common users space provision for social interaction and
sustainable communities in line with 1Malaysia concept
The Malaysian government believes that Malaysias future as a successful country
depends on the ability of Malaysians of different races, religions or culture to work and
live together in peace and harmony. While 'Bangsa Malaysia' (Malaysian nation) outlined
in Vision 2020 is the ultimate objective of this journey, 1Malaysia concept provides the
key approach towards achieving the stated objective. The government enunciates

2-10
succinctly that "1Malaysia is a concept to foster unity in Malaysians of all races based on
several important values which should become the practice of every Malaysian. It
emphasises the acceptance and respect amongst the people of various races and the
diversity of the nation with uniqueness and inherent strengths in each ethnic group. An
important core element of unity stresses that all the people irrespective of race and creed
will be taken care of and no one will be marginalised (social inclusiveness).
Physical planning can contribute significantly to forge closer social integration and
stronger national unity through the provision of common facilities and mass rapid
transport system, particularly high speed train, linking all the state capitals to enable
people to meet and come together quickly, easily and affordably. In addition, spatial
planning should seek to create and maintain mixed-communities, green and common
spaces in living areas e.g. sport facilities, public parks and schools which all Malaysians
regardless of race and religion can share comfortably and happily. The provision of green
and common facilities will promote more social interaction and inter-personal relationship
at ease for all. Malaysians staying cohesive will inevitably solve all problems together
including overcoming Malaysian economic challenges, growing together, and improving
lives.
2.3 Principles
The NPP-2 was evolved from certain guiding principles; the most important being
national unity which is a prerequisite in contributing to the achievement of the sustainable
development objective. All NPP-2s policies must be acceptable with the expressed
principles. Appropriate mitigating measures and safeguards must be in place to ensure
spatial policies are consistent with the set principles. Generally, the more compatible, the
principles are to a policy, the higher the weightage and priority are likely to be given.
In making decisions about the spatial strategies and policies of NPP-2, the following
principles have been applied:
P1 Develop The Country As A Single Integrated Unit
It is important for national unity as well as efficient for global competitiveness that the
country be developed as an integrated unit rather than for states to unhealthily
compete with one another. In the interest of the nation all resources whether, natural,
manpower or financial - should be used in the most efficient and effective manner to
enable the country to focus on niche areas and activities where the country has the
competitive advantage.
P2 Deliver Sustainable Land Use Planning And Development
The core principle underpinning spatial planning is sustainable development. It is a
fundamental determinant of the quality of places and peoples lives. It shapes the
liveable human settlements, creates sustainable communities which recognises the

2-11
needs of everyone, protects the productive rural areas and unspoiled natural
environment. Sustainable development also supports a vibrant and prosperous
economy which is important to generate growth and jobs.
In shaping the cities, towns, villages and countryside, this sustainable development
principle must be promoted and integrated into all sectoral policies and operational
measures as set out in NPP-2:
i. Enhancing high economic growth, employment and income;
ii. Providing an integrated transportation network and key strategic infrastructure;
iii. Creating cohesive communities and social inclusion;
iv. Protecting effectively the environment and using prudently the natural resource;
v. Developing and conserving agricultural and tourism resources.
A sustainability appraisal was made to eliminate any spatial policies found violating
and undermining the principle of sustainable development.
P3 Promote Areas Of Greatest Growth Potential
The magnets for investments in East Asia are the city-regions such as Shanghai,
Shenzhen, Hong Kong, Singapore and Bangkok. Only the areas of greatest growth
potential in Malaysia, that is, the conurbations around Kuala Lumpur, George Town,
Johor Bahru, and Kuantan have the capabilities to rival these international city-
regions, particularly for investments in the emergent high technology-based and
knowledge-based growth sectors, particularly ICT, biotechnology, health and
educational services, financial and business services, and outsourcing and creative
services. In the context of increasingly fierce global competition for investments, trade
and markets it is judicious to focus quality infrastructure support in generating high
impact tertiary economic activities in these high priority conurbation areas, thus
creating the much needed job opportunities and high-income level earners to realise
the Vision 2020.
P4 Maximise The Use Of Existing And Committed Infrastructure
Government resources are likely to be very limited and insufficient to solve all the
national spatial issues, particularly major infrastructure network, in the short term. In
order to utilise infrastructural investments efficiently, urban expansion should be
directed to where adequate infrastructure and social facilities are in place, committed
to be put in place or can be most economically provided and maintained. The
upgrading of existing infrastructure may be possibly explored. Cheaper alternatives to
existing policies for example, the use of public transport, should also be sought.
Efforts should also be taken to encourage more urban regeneration and infill
development to reduce the speculative opening up of greenfield sites. This move will
reduce greenhouse gas emission and protect forested carbon sink in combating

2-12
climate change. At the same time, maintenance culture of the infrastructure should be
inculcated in urban administration.
P5 Protect National Heritage Areas And Avoid Disrupting Ecological Stability
Sustainable development is also the bottom line underlying spatial planning. There
should be greater resolve from all quarters to conserve the fast depleting natural
resources and biodiversity of the country such as the environmentally sensitive areas
and marine ecosystems; and manage them in a sustainable manner. In particular, a
sense of value and national pride for areas of natural beauty and ecological richness,
historical sites and areas of cultural association should be fostered. Such areas and
sites may include pristine forests, hills and wetlands, habitats for the Malaysian
wildlife and fauna, rural landscapes, particular sites and locations as well as individual
buildings of architecture merits and historical interests. Conservation must be in
tandem with the promotion of such areas, locations, sites and buildings as attractions
for international and local tourism.
The rich biodiversity (the array of ecosystems, habitats, plants and animals and their
genes) found throughout the country is an integral part of our survival and natural
heritage and also provides the country with a competitive edge in such fields as
tourism and biotechnology. More importantly, there is now a growing acceptance that
biodiversity underpins ecosystem services, which are the essential goods and
services provided by healthy ecosystems. The loss or disruption of the ecosystem
services, which include the provision of fresh and clean water, food supply and fibre,
climate regulation and pest control, is liable to incur dire and grave consequences to
human survival and the economy as well as the security and quality of life of human
populations. While the true value of these ecosystem services have yet to be
adequately incorporated into the cost of development (these are currently viewed as
externalities by economists), it is essential that spatial planning serves to maintain
biodiversity, ecological stability and consequently, its ability to provide ecosystem
services. In general, this can be achieved through integrating spatial planning and
development with the best available data as well as comprehensive and stringent
Plans and Guidelines produced by the Ministry of Natural Resources and
Environment (NRE) and its line agencies.
Guidelines on new development should be incorporated into spatial strategies and
policies. Sustainable forest management approaches, water resources management
based on the concept of Integrated River Basin Management (IRBM) and shoreline
management through Integrated Coastal Zone Management System (ICZM) should
be exercised and enforced.
Pockets of natural and rural landscapes located close to urban areas should also be
conserved for the supply of oxygen, recreation and enjoyment of the expanding urban
population, particularly the increasing number of urban children, and generally to
enhance the spatial diversity and overall quality of the living environment.

2-13
P6 Encourage The Development Of Regions Based On Their Potentials
Regions should be developed and promoted on the basis of their potentials and
comparative advantage; and public investments in infrastructural support should be
directed to reinforce these regional potentials. The east coast region, which has been
identified to possess great potential for coastal and eco-tourism, forestry-and-
agriculture-based activities, should receive public investments in the type of
infrastructure necessary to boost these forms of development while duplication of
infrastructure for forms of development more suitable for the west coast should be
avoided.
P7 Favour Public Transport Over Private Vehicle Use For Inter-Urban And Intra-
City Movement
Spatial planning should play a positive role in assisting not only to reduce carbon
emissions but also to use more green technology, like renewable energy, in mitigating
and adapting to climate change. An important adaptation measure is to encourage
the higher use of public transport over private vehicle. This will require the
development of an efficient integrated inter-urban public transport system featuring
high speed trains, low fare domestic flights, public buses on highways and city centre
transportation hubs. For intra-city travel, more efforts shall be made to develop further
the coverage and efficiency of trains, taxis and buses and their inter-connectivity.
Wherever possible, walking and cycling at local level must be promoted.
For public transportation to be economically viable, cities and towns should be in the
form of more compact development and in the higher density nodes, such as Transit
Oriented Development (TOD). Convenient multi-modal and inter-modal
transportation, such as feeder buses to LRT station, must also be in place.
P8 Strive Towards Compact, Energy-Efficient Urban Forms With Clear Identity
Impact-based land use zoning and intensification approach in plan-making and
sequential test for processing development should be adopted. Priority should be
given to the regeneration of brownfield sites in preference to the development on
greenfield areas which will likely damage the environment. In the existing city and
suburban centres, the integrated, multi-functional and higher density projects can
increase the efficiency, convenience, vibrancy and the image of the urban areas.
Transport hubs combined with office, living and shopping uses as well as TOD are
examples. This will also lead to an energy-efficient compact city form that will help to
curb urban sprawl and to reduce greenhouse gas emissions and is amenable to rail-
based public transport systems.
The spatial distribution, location and design of new development and townships
should be planned wisely to minimise the future vulnerability of climate change.
Appropriate mitigation and adaptation considerations in a changing climate should be

2-14
integrated in all spatial planning strategies and in the formulation process of
development proposals.
In the expansion of the conurbations, the integrity and functional cohesion of existing
communities should be maintained and shall not be disrupted.
Submission of rigorous justifications regarding incompatible development proposals
outside of designated city limits to the Local Planning Authority should be made
mandatory and subjected to public scrutiny and objections in line with the statutory
requirements for a Local Plan.
P9 Facilitate The Development Of The Knowledge-Based Economy
In line with the Governments move towards a high-income nation, the service sector
is expected to play a more prominent and aggressive role in generating economic
activities. To transform successfully the Malaysian economy into the knowledge-
based and technology-driven tertiary sector, it is necessary to focus and promote
innovation, creativity and high value-added elements. In this respect, conurbation and
large urban centres offer the most conducive environment in terms of infrastructure
facilities, skilled labour, market and supporting business and professional services to
attract and establish operational bases including regional headquarters, R&D centres,
innovation centres, service and outsourcing centres, procurement centres, cyber
centres, biotechnology parks and high-tech parks.
To create an impetus for national growth and increase national competitiveness, ICT
linkages and connectivity should be expanded to all parts of the country. Efforts
should be made to promote the development of a first class ICT infrastructure
network particularly high-speed broadband, throughout the country and steps taken to
develop a large pool of highly skilled ICT workers.
P10 Strengthen Urban And Rural Linkages
The government should institute programmes to support new and existing
entrepreneurs in small and medium scale enterprises (SME) from the rural growth
centres, traditional kampong, the new villages and the small and intermediate towns
to initiate agricultural projects to supply food and raw materials to the urban areas; as
well as small and intermediate industries to service the larger industries of the urban
areas.
In addition, good connectivity from key villages to job centres in small and medium
sized towns shall be provided for rural residents to earn off-farm income in order to
enhance their household income.
Pla n C onte xt
C HAPTER 3
NATIONAL PHYSICAL PLAN

3-1
CHAPTER 3
PLAN CONTEXT
The national spatial framework is an important physical guide in realising the national objective of
sustainable growth with high income and employment. This framework together with Vision 2020,
1Malaysia concept, the 10
th
Malaysia Plan and other sector policies will become the thrust in
moving Malaysia forward to become more competitive with the other global economies of the
world. The framework consisting of the economy, social and environmental aspects will become
the foundation of the countrys physical setting thus achieving the best results for national spatial
development. These 3 aspects of national development have been assessed in a holistic,
integrated and balanced approach by NPP-2 in order to achieve the desired goal.
Peninsular Malaysia is made up of the West Coast, the East Coast and the Central Highlands,
that is the Banjaran Titiwangsa, Banjaran Nakawan and Banjaran Bintang. The land use pattern
of the country is affected by the historical and economical factors where the more productive
urban economic activities and concentration of population are found in the west coast areas. The
Kuala Lumpur, George Town and Johor Bahru Conurbations in the west coast are the most
developed as compared to the other urban areas of the Peninsular. As for the eastern coast area,
the unique potentials for nature, beach and island tourism may provide a significant growth
catalyst.
Malaysia, which has its own recognised strengths and potentials in the global setting, will look
forward in seeking every opportunity to promote and attract more Foreign Direct Investments
(FDI), adopt new national growth strategies, venture into new sources of economic growth and
accelerate the rate of transformation to knowledge and high technology-based economies. At the
same time, the production of quality human capital that will enhance the countrys capability to
compete in the global market will be maximised. In resolving internal development issues, the
government must take cognisance of the world current economic financial crisis and international
convention commitments such as biodiversity and climate change.
The NPP-2 shall provide a spatial planning strategy for enhancing international competiveness
and a framework for strengthening national developmental cohesion and discipline. It added a
spatial or geographic dimension to the more purely economic and social-biased aspects of the
development plans. The spatial aspect of the NPP-2 will guide more effective national
development planning to ensure that the national resources are used efficiently and sustainably,
in particular making optimum use of existing capital and human resources.
3.1 Global and National Strategic Issues and Challenges
The spatial strategy, policies and measures of the first NPP (2005) have been
subsequently reviewed and adjusted accordingly to address the national emerging issues
identified and the future challenges faced. These are elaborated below and in the ensuing

3-2
policy themes. In shaping the national spatial strategy and framework, the emerging
strategic issues and key future challenges for all the policy themes and their spatial
implications have been taken into account and summarised as follows:-
i. Promoting the Governments 1Malaysia Concept
Malaysia is a multi-racial society with many different religions
and cultures. High sustainable growth depends largely on the
ability of all Malaysians to live and work harmoniously together.
In this respect, the 1Malaysia concept is aimed to promote more
social interaction and national unity through fostering mutual
respect and trust among the various communities and improving
connectivity between different states/ areas in Malaysia. For
example, there is a need to innovate and develop integrative
community planning concepts and approaches, including the
creation of socially and ethnically-mixed residential communities
and provision of common users space, such as sport facilities
and community centers.
ii. The Governments New Economic Model towards a High Income Economy
The World Bank Report has highlighted Malaysias
economic structure weakness, resulting in it being
caught in a middle-income trap. Malaysia is unable
to remain competitive as a high volume, low-cost
producer, yet unable to move up the value chain in
the fast-growing markets for knowledge and
innovation-based products and services.
To meet this challenge, the New Economic Model
(NEM) is geared towards moving up the economic
value chain to the high value-added tertiary sector,
helping the nation to generate a high, balanced
and sustainable economic growth thus achieving a high-income economy by 2020.
According to the Prime Minister of Malaysia, it is predicated more on innovation, high
value searching for new sources of growth, strengthening domestic demand and the long-
term integration with East Asian economies. An example of this phenomenon is a need
to produce more skilled and knowledge workers in attracting and establishing the Islamic
financial and outsource services in the conurbations; and a need to protect and enhance
nature-based touristic areas, such as scenic beaches and pristine forests, in drawing
more tourist arrivals.
iii. Accelerating Economic Growth Rates in Economically Lagging Regions
There is a wide income and development disparities between the east coast and the west
coast areas in Peninsular Malaysia. To realise inclusiveness and more regional balance,
1 MALAYSIA
PEOPLE FI RST
PERFO RM ANC E NO W

3-3
efforts and resources are directed to exploit the full potentials of different parts of the
country in particular, the key economic development corridors through implementing high
impact projects based on the various regional economic master plans prepared. For
example, there is a need to upgrade the Port of Kuantan to perform national port
functions and to support the designated Special Economic Zone in Kuantans Growth
Conurbation in order to accelerate growth in the less-developed ECER hinterland.
iv. Enhancing Economic Globalisation, Local Trade Liberalisation and International
Competitiveness
As Malaysia has a small domestic market and an open economy, it is essential for the
country to remain outward-looking and export-orientated. As such, the strategic economic
thrust is targeted mainly to capture the increasing international trade flow and export
markets, to draw higher direct foreign investment and to stimulate more home-grown
private enterprises in capitalising the various multilateral and bilateral trade agreements
entered such as ASEAN-China Free Trade Agreement and AFTA.
At the same time, the government has identified several strong emerging clusters as new
sources of growth including tourism in particular medical and education, Islamic finance,
biotechnology, renewable energy, logistics, and ICT. A competitive and innovative private
sector is expected to act as the main engine of growth. The government will serve as an
effective facilitator and enabler through the creation of the most conducive economic
investment environment for private initiatives and enterprises to thrive and grow. For
example, tax incentives are provided for promoted activities in Iskandar Malaysia in Johor
state for the setting up of creative industries and regional headquarters outsourcing/ off
shoring services, thus enhancing its growth potential.
v. Adoption of New Innovative Technologies
The Malaysian government is also striving to transform the economic structure into a
knowledge-based economy which will be driven primarily by creativity, quality and
productivity. Innovative technologies are indispensable productive tools, particularly ICT
and biotechnology, to enhance economic efficiency and quality of life; and have impacts
on people, places and potentials. As an example, the application of high speed
broadband makes it possible for certain businesses and industries to operate
competitively in the current geographic remote areas far away from the mainstream
activity centres. A case in point is the feasible option to locate Halal industry cluster in
medium-sized towns in the less-developed east coast states. The knowledge based
economy must also be productivity driven which also requires the development of key
enablers in ICT, investments in public transport infrastructure and a talent pool of skilled
workers. The country will eventually progress to the innovation era which is knowledge
driven and producing knowledge based goods and services (see Fig 3.1).

3-4
Figure 3.1 : Economic Transition Model
Export of rubber,
tin, palm oil &
timber
Manufacture of
import substitution
goods
Export textile &
electronic goods
Export high value
added electrical &
electronic goods
Knowledge-based
goods & services
Agriculture Era
Industrial Era
Technology Era
Knowledge Era
Innovative Era
Labour driven
Labour driven
Investment driven
Productivity driven
Knowledge driven
Innovative &
Human
Capital
driven
Source: Malaysia Institute of Management, April 2008.
vi. Threats of Climate Change
Changing climate phenomenon is considered the greatest long-term potentially
catastrophic threat to the world. Evidences indicate that uncontrolled human activity is
changing the global climate, particularly man-made carbon emissions which have
contributed to global warming resulting not only in permanent detrimental changes to the
natural environment, but also significant challenges to worldwide economic growth and
social stability.
To address this global environmental issue, appropriate spatial policies and measures
must be taken to adapt to and mitigate its adverse effects on Malaysia. For example,
impact of climate change is a key consideration in preparing all development plans
including incorporating policy measures to ensure that no urban development be allowed
in low lying coastal areas vulnerable to marine flooding due to rising sea-level. At the
same instance, the protection of forested areas to act as carbon sink, and the promotion
of energy efficient and eco-friendly urban development must not be neglected.
vii. Deteriorating Sustainability, Biodiversity and Avoiding Geo-Hazards
Peninsular Malaysia has suffered substantial loss in forested areas and wetlands
including forest fragmentation. Only 45% of the total land area in Peninsular was forested
in 2008. They provide valuable ecosystem services valuable for supporting human life
and well-being, especially clean water, oxygen including ecotourism. Many forested areas
have steep slopes which are geo-hazard risk areas and are landslide prone.
Nevertheless, Malaysia still remains as one of the 12 mega-diverse countries in the world
with rich biodiversity. To date, the Peninsular has lost a substantial area of forest cover
from 9.5 million hectare (1954) to 6 million hectare (2000) but somewhat stabilised to
about 5.9 million hectare (2008) which is an indication of a positive trend (see Figure 3.2).

3-5
It is imperative, therefore, to address the need for conserving or restoring ecologically
valuable natural resource and environmentally sensitive areas, and their implications to
urban form and pattern. For example, in order to stop urban sprawl and encroachment
into forest and wetlands areas, smaller urban footprint development with higher densities
and more mixed-uses/ multiple-uses development must be encouraged. It is also
important to give higher priority on the use of public transport, cycling and walking to
reduce greenhouse gas emissions and establishing ecological linkages to reconnect
fragmented forest complexes.
Figure 3.2 : Fragmentation of Natural Forest Cover in Peninsular Malaysia (1954-2000)
1954 1969 1972 1990 2000
Source : 1954, 1969 & 1972 Jomo et al. (2004) after Aitken et al. (1982: 161).
1990 Jomo et al. (2004) after Anon (1992), 2000 Stibig et al. (2002: 11).
viii. Protecting the Natural Resources within the Exclusive Economic Zone
Malaysia is also a maritime country with a long coast line with several islands, shoals and
rock outcrops in the territorial waters off the mainland of the Peninsular Malaysia. Under
the United Nations Convention on Law of the Sea (UNCLOS) any island within 12
nautical miles from the mainland is within the territorial waters of the country and 200
nautical miles as Exclusive Economic Zone (EEZ). The EEZ, gives the right to a country
to explore, exploit and manage the natural resources within the zone for economic
purposes (like fisheries and tourism), scientific researches, environment protection and
conservation such as maritime park (see Figure 3.3).

3-6
The countrys recent loss of Pedra
Branca to Singapore has created a
new awareness on the need to carry
out activities on the islands to assert
sovereignty. The resources within the
EEZ include oil and gas resources,
deep sea fishing areas and sunken
ships and treasures that portray
historical and heritage significance.
There is inevitably a need to map
these resources, develop supply bases
and have contingency plans in case of
emergencies and security responses in
the event of shipping disasters, piracy
or off shore oil spills. The
environmental impact of an offshore oil
well spillage can be quite significant on
the coastline of the East Coast States
as is evident in the recent accident
involving the British Petroleum oil
facility in the Gulf of Mexico.
Figure 3.3 : Natural Resources in the
Exclusive Economic Zone (EEZ)
Ter r i t or i al of Wat ers
Excl usi ve Economi c Zone
M ar ine Par ks Oi l Fi el ds
Gas Fi el ds
Source : WWF, PETRONAS, USGS, 2008.
ix. Inadequate National Food Security
Malaysia as a net food importer is highly exposed to external forces such as rising food
prices and volatile supply of rice in the international market due to adverse climate
conditions, natural disasters and hostilities. To achieve national food security, it is crucial
for the country to protect existing farm areas and enlarge prime agriculture land,
particularly the granary areas for rice cultivation. The challenge is for the authority
concerned to come out with acceptable fiscal incentives to offset the potential loss of
development rights and revenues of the affected states in meeting national needs to
protect and enlarge granary and prime agriculture areas in the states.
x. Low Level of Renewable Energy and Green Technology Utilisation
Until recently, the core of urban planning in the country revolved around the use of fossil
fuel private vehicles, which emit a large amount of carbon. The application of green
technology (such as renewable and low-carbon energy) in the spatial planning of urban
form and pattern as well as integrated land uses and transportation network planning is
relatively new and limited.
In the face of increasingly high oil prices and climate change concerns today, it is critical
to place a high priority on sustainable patterns of urban and rural growth. New
development/redevelopment, in terms of housing, jobs, services and infrastructure
provision, must secure the highest viable resource and energy efficiency and reduce

3-7
greenhouse gas emissions. For example, compact towns with high-density and mixed-
uses have better functional linkages and optimum space utilisation, thus are more energy
efficient compared to low-density ribbon development. Eco-towns and transit-oriented
towns are also more sustainable alternative township development. Urban forms and
patterns should seek to reduce the need to travel and to minimise long journey to work
and activities. In addition, incentives should be given to encourage the adoption of green
energy technology in buildings and development layouts.
xi. Declining Inner City Areas and Rising Urban Poverty
In general, certain groups of people living in the inner cities and large towns, especially
the low income households living in private rented flats, suffer from multiple and severe
social, economic and environmental problems and deprivations. They are also faced with
high unemployment, low income, inadequate affordable housing, poor public
transportation, decaying environment, high incidence of crime, drug abuse, and lack of
open spaces. A large proportion of the inner city population are rural migrant workers and
foreign labourers with low urban work skills and knowledge such as shifting of rural
poverty to become urban poverty trapped in urban slums. As such, urban regeneration
and inner city programmes for the disadvantaged people and deprived areas must be
undertaken to expand and improve opportunities for employment, housing, education and
leisure.
xii. Changing Demographic Structure and Peoples Lifestyles
The changing demographic structure, such as declining fertility of the population, higher
proportion of aging people and more new household formation, in the country has
significant spatial implications on jobs creation, housing needs and in the provision of
social amenities. As people become more educated, their income increase and they have
smaller size families. They expect a better standard of life and quality of environment,
including a more liveable city, a wide choice of housing locations and housing types, and
better amenities and facilities. For example, an increased number of older people implies
the need for building more old folks home and geriatric care facilities in the rural areas;
and lower labour force means the need to shift from labour-intensive to mechanised
industries and activities.
xiii. Scarcity of Future Governments Financial Resources
In the near future, government financial resources for development are likely to be
scarce, particularly for mega-infrastructure facilities and social amenities due to the slow
and volatile global economic recovery. Cutbacks in public expenditure are also likely to
occur. In addition, it is envisaged that this budgetary constraint will be further aggravated
by the peoples higher expectation of spatial quality and diversity, such as better homes
and environment. As such, the government has indicated a ceiling of RM180 billion for
the total development expenditure under the 10
th
MP (2011-2015), which is 21.7 percent,
lower than 9
th
MPs allocation.

3-8
In view of this, it is imperative to concentrate on the limited resources available for
enhancing growth in existing strategic towns in order to maximise the use of existing and
committed infrastructure, and to locate new development in areas where facilities can be
provided and maintain economically. In addition, it is essential for adjoining states to
jointly plan, develop and share the key regional infrastructure facilities, amenities and
services, including major seaports, airports, power, water, ICT, waste management and
industrial location, which are usually capital-intensive and require economies of scale.
Outcome-based and best value evaluation selection and management approaches for
every project need also be adopted.
3.2 Global Setting and Development Trends
3.2.1 World Trade
Between 2000 and 2008, world merchandise trade grew at 12 percent per annum,
reaching US$15,775 billion in exports and US$16,120 billion in imports in 2008. Malaysia
was ranked 21
st
among the exporters and 28
th
among the importers in 2008.
In terms of trade performance, Malaysia occupies the 28
th
position in the 2009 Enabling
Trade Index rankings. Efficient import procedures, a low cost regime for imports and
exports, and the quality of transport infrastructure and related transport services all
contribute to this good rating.
1
The 2008-2009 global economic crises had weakened the demand for goods and
services. Economic confidence waned and the trade sector was severely crippled. At the
end of 2008 and the beginning of 2009 due to the weaker demand in developed
economies, trade flows contracted compounded by a reduction of trade finance and
shock from the then rapidly deteriorating economic situation.
World merchandise trade expanded by only 2 percent in 2008 compared to 6 percent in
2007. The growth in 2008 was below the 5.7 percent average attained during the period
of 1998-2008.
The first quarter of 2009 saw the worst trade declines in Malaysias history, estimated at
almost 25 percent decline.
The decline in trade was reversed in mid-2009. Malaysia External Trade Corporation
(MATRADE) reported that Malaysias exports grew by 8.4% in July 2009 from June 2009.
This was the highest monthly export value ever recorded in the first seven months of
2009, an evidence of the nation's export recovery. Independently, Bank Negara also
reported a lower contraction of 3.9 percent in the country's GDP compared with a 6.2
percent decline in the first quarter of 2009. This is mainly influenced by the higher public
spending and positive growth in private consumption during the second quarter period. All

1
Source: World economi c Forum, The Gl obal Enabl i ng Tr ade Repor t 2009 . The ETI measures the countri es i nstituti ons, poli ci es,
and servi ces f aci l i tati ng the f ree f low of goods over borders and to desti nation.

3-9
major economic sectors also registered improved performance in the supply side for the
second quarter of 2009.
3.2.2 International Collaboration
The US financial crisis that started in September 2008 very quickly became a global
crisis. Malaysias major trading partners were deeply affected. Despite a reasonable
growth for the first seven months of 2008, developed economies registered at 0.8 percent
growth in 2008 compared with 2.5 percent in 2007. By contrast, developing Asia
2
grew at
5.7 percent, led by China, which registered the strongest growth of any major economy.
In 2008, world output, measured by real GDP, slowed to 1.7 percent in 2008 from 3.5
percent a year earlier, the lowest levels since 2001.
Realising a potential global economic meltdown, the multi-lateral agencies as in the
International Monetary Fund (IMF), World Bank and their regional counterparts, sought
cooperation from governments to revitalise their economies through economic stimulus
packages. All major developed countries, led by the US, stepped in with emergency
funding. In Asia, China and Japan also put in very significant amounts in the same
direction.
These international organisations played an important role to persuade governments to
coordinate their economic stimulus plans. Without coordinated efforts, the prognosis was
a global economic depression.
By mid-2009, the global economic decline had slowed down. Although the economic
news was still bad (example unemployment rates were still rising), the sentiment in the
stock exchanges around the world had turned from bleak to bullish. Trade declines had
also slowed and the prospects of an economic recovery have been better than they were
forecasted in the first half of 2009.
Malaysia introduced two stimulus packages valued at about one-third the size of the
9
th
MP budget as part of the programme to revitalise the economy. The timing of the NPP-
2 presented an opportunity to review the recent economic downturn and to reassess the
capacity of the Malaysian economy to achieve the economic targets of Vision 2020 and
the NEM.
3.2.3 Regional Cooperation
At the regional level, Malaysia continues to support the pace of economic integration of
ASEAN and in promoting trade and investment. The sub-regional development is through
the triangles growth (IMT-GT, IMS-GT and BIMP-EAGA) to promote economic growth in
the less developed areas of the sub-region. The Indonesia-Malaysia-Thailand Growth
Triangle (IMT-GT) envisions a seamless, progressive, prosperous and peaceful sub-
region with improved quality of life, i.e. an ASEAN Economic Community by 2020. To
realise this vision, the IMT-GT aims to accelerate private sector-led economic growth; and

2
Developi ng Asi a - excl udi ng Japan, Australi a and New Zealand.

3-10
help to facilitate the development of the sub region as a whole. Its objective, as stated in
the Roadmap for Development 2007-2011, is to increase intra-IMT-GT and inter-IMT-GT
trade and investment.
The Indonesia-Malaysia-Singapore Growth Triangle (IMS-GT) is geared towards
increasing competitiveness, integration and growth through comparative advantage,
economics of scale and productivity linkages. With two direct road links to Singapore and
sea links to Batam, Iskandar Malaysia is in an excellent position to take advantage of the
IMS-GT, which allows for international cooperation, human mobility and tourism.
The vision of Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth
Area (BIMP-EAGA) is the realisation of socially acceptable and sustainable economic
development, which leads to the full participation of EAGA in the ASEAN development
process. Its immediate goal is to increase trade, investments and tourism in the sub
region by facilitating;
i. The free movement of people, goods and services;
ii. Development of vital infrastructure in the sub region; and
iii. Coordination of the management of ecosystems and common resources to ensure
sustainable development.
3.2.4 Climate Change and Impacts to Malaysia
The Inter-governmental Panel on Climate Change (IPCC) predicts that without further
action to reduce greenhouse gas emissions, the global average temperature will rise by a
further 1.8 to 4.0 C in this century
3
. Global warming is predicted to have serious
consequences on humanity, including a rise in sea levels of between 18 and 59 cm,
which will endanger coastal areas and small low lying islands, as well as greater
frequencies and severity of extreme weather events. Climate change is also likely to
impact agriculture, water resources and biodiversity (Table 3.1).
As a Non-Annex 1 Party to the United Nations Framework Convention on Climate
Change (UNFCCC), Malaysias main obligations include formulating programmes
containing measures to mitigate climate change and promote sustainable management,
conservation and enhancement of sinks; and preparing for and developing plans for
adaptation to impacts of climate change. While an improved understanding of the likely
range of climatic conditions and consequent associated impacts is imperative for the
formulation of more specific measures, it is widely agreed that early pre-emptive
adaptation measures are critical to limit the damage and economic costs of these
impacts.
A national framework for combating climate change is in place, headed by the Cabinet
Committee on Climate Change chaired by the Prime Minister, a Project Steering
Committee and three Working Groups. The National Policy on Climate Change is in the
final stages of being drafted.

3
IPC. 2007. Cl i mat e change 2007: Synt hesi s Repor t . Int er gover nment al Panel on Cl i m at e Change.

3-11
Table 3.1: Predicted Impacts of Climate Change in Malaysia
Sector Impacts
Settlements &
infrastructure
Expansion of flood prone areas and increased intensity of flooding.
Increased coastal erosion and infrastructure damage in low lying coastal zones.
Loss of coastal mangrove belt if sea level rise occurs at a rate of 0.9 cm/year.
However, landward migration of the mangrove belt can happen at lower rates of
sea level rise, where there is no constraint of hinterland development.
Reduced efficiency of tidal gates and downstream drainage control.
Increased operational and maintenance costs of electricity producers due to
storm surge.
For every 1C rise in the ambient air temperature, gas and hydro turbines will
lose about 2% of power output respectively (translated to an estimated annual
loss of RM 40 million for a total of 6,600 MW of installed capacity running on gas
turbines).
Agriculture Increase of mean annual temperature to 31C will cause drought conditions to
affect 273,000ha (or 15%) of current rubber land, resulting in a crop decrease of
3% to 15%. Perlis, Kedah, Kelantan and Terengganu are likely to be most
affected.
Increased rainfall will cause rubber yield losses of between 13% and 30%.
Kelantan and Terengganu are likely to be most affected.
Drought conditions may affect 208,000ha of the present oil palm areas,
particularly in parts of Kelantan, Terengganu, Pahang, Johor, Kedah, Perak,
Negeri Sembilan and Melaka.
Paddy grain yields may decline by 9% to 10% for each 1C rise in temperature.
Prolonged drought conditions are unfavourable to rice production.
Sea level rise of 0.9 cm per year would have serious implication on some large
agricultural projects such as the Western Johor Agricultural Development
Project.
Sea level rise could affect coastal aquaculture, in particular aquaculture ponds
within riverine mangrove belts. A loss of 20% of mangroves is predicted to result
in a RM300 million loss in the prawn industry.
Susceptibility of agriculture crops to pest and infestation of diseases may
increase due to changes in temperature and rainfall.
Biodiversity Increased risk of forest fires (especially in peat soils) due to prolonged dry
spells.
Increased risk to natural ecosystems such as coral bleaching. However, the long
term impacts on biodiversity and ecosystem services are difficult to predict due
to the complexity of ecological processes.
Extinction of plant and animal species which are sensitive to changes in the
micro-climate.
Water
resources
Warm spells may cause increased water demand/ water stress and algal
blooms.
Saline intrusion into surface and groundwater may decrease freshwater
availability, especially in Kelantan and Terengganu.
Large storms increase the rate of sedimentation of rivers and reservoirs, loss of
soil nutrients and risk of slope failures of riverbanks and hills.
Source: Malaysias Initial National Communication to UNFCCC (MOSTI, 2000) and Study of the Impact of Climate Change on the
Hydrologic Regimes and Water Resources of Peninsular Malaysia (NAHRIM, 2006)

3-12
3.3 National Setting
3.3.1 National Population Growth
Between 2000 and 2008, Malaysias population was estimated to have increased from
23.3 million to 27.7 million, at an annual growth rate of 2.2% per annum.
For Peninsular Malaysia, there has been a slowing of population growth rates from 2.5%
per annum between 1991-2000 to 2.2% per annum during the 2000-2010 period; and the
future growth rate is expected to decline further at 2.1% per annum between 2000-2020.
By the year 2020, it is projected that Peninsular Malaysia will have an estimated 28
million people (Table 3.2).
The slowing population growth is similar to other rapid urbanising countries, and is
attributable to a declining fertility rate. This decline is due largely to more people staying
single longer to further their tertiary education, resulting in fewer or delayed marriages,
and having fewer children as they pursue their careers. The rising cost of raising a family
may also have contributed to the declining population growth.
i. Regional Population Pattern
With Malaysias population estimated at the national level, an important issue is its
distribution to regions and states. As population is a critical parameter for planning, it
is important to ensure that it is accurately estimated in order to avoid misallocation of
public investments and improve the effective utilisation of public resources.
Although the 2020 population forecasts of most State Structure Plans comply with
the NPP population targets, a few did not. To meet the aspiration of States, the
NPP-2 adopted the population forecasts of State Structure Plans that have adhered
to the NPP targets. A population forecast review has been undertaken and
adjustments were consulted with the stakeholders concerned.
The strategic population target issue is What level of population can the state
economic structure support? Job opportunities, affordable housing, conducive living
environments, low cost of living, friendly communities and neighbourhoods are the
major determinants that influence the level of population. Without employment
opportunities in the state, outmigration of the labour force can be expected.
Similarly, people will migrate to a state if there are better job opportunities available.
The Central Region is forecasted to have the highest rate of population growth at
2.5% per annum between 2000 and 2020. The high growth rate is due mainly to the
inter-state migration where people would move to the Central Region for the reasons
mentioned earlier. Table 3.2 shows the population by states for the past three
censuses and the forecasted population for 2020. Map 3.1 shows the 2020
estimated population.

3-13
Table 3.2: Estimated Population by States, 2020
State/ Region
Population Size % Distribution
Annual Population
Growth Rate (%)
1980 1991 2000
2020
(mil)
1980 1991 2000 2020
1980-
1991
1991-
2000
2000-
2020
Perlis 148,276 190,182 204,450 0.26 1.3 1.3 1.1 0.9 2.29 0.81 1.21
Kedah 1,116,140 1,364,504 1,649,756 2.36 9.8 9.2 8.9 8.4 1.84 2.13 1.81
Pulau Pinang 954,638 1,116,801 1,313,449 1.99 8.4 7.5 7.1 7.1 1.44 1.82 2.10
Perak 1,805,198 1,974,893 2,051,236 2.72 15.8 13.3 11.1 9.7 0.82 0.42 1.42
Northern Region 4,024,252 4,646,380 5,218,891 7.33 35.2 31.4 28.2 26.2 1.32 1.30 1.71
Selangor
1,515,537 2,413,567 4,188,876
7.05
13.3 16.3 22.6
25.2
4.23 6.32 2.84
W.P. Putrajaya 0.28 1.0
W.P. Kuala Lumpur 977,102 1,226,708 1,379,310 2.20 8.6 8.3 7.4 7.9 2.09 1.31 2.36
Negeri Sembilan 573,578 722,017 859,924 1.17 5 4.9 4.6 4.2 2.11 1.96 1.55
Melaka 464,754 529,199 635,791 0.90 4.1 3.6 3.4 3.2 1.19 2.06 1.75
Central Region 3,530,971 4,891,491 7,063,901 11.60 30.9 33.1 38.1 41.5 3.01 4.17 2.51
Johor 1,638,229 2,162,357 2,740,625 4.18 14.3 14.6 14.8 14.9 2.56 2.67 2.13
Southern Region 1,638,229 2,162,357 2,740,625 4.18 14.3 14.6 14.8 14.9 2.56 2.67 2.13
Pahang 798,782 1,081,148 1,288,376 1.82 7.0 7.3 7.0 6.5 2.79 1.97 1.74
Terengganu 540,626 808,556 898,825 1.28 4.7 5.5 4.9 4.6 3.73 1.18 1.78
Kelantan 893,753 1,207,684 1,313,014 1.75 7.8 8.2 7.1 6.3 2.77 0.93 1.45
Eastern Region 2,233,161 3,097,388 3,500,215 4.85 19.5 20.9 18.9 17.3 3.02 1.37 1.64
Peninsular Malaysia 11,426,613 14,797,616 18,523,632 27.96 100 100 100 100.0 2.38 2.53 2.08
% of Peninsular
Malaysia
83.1 80.5 79.6
East Malaysia 2,318,628 3,582,039 4,751,058 16.9 19.5 20.4 4.03 3.19
MALAYSIA 13,745,241 18,379,655 23,274,690 100 100 100 2.68 2.66
Source: (1) 1980 & 1991 - General Report of the Population Census, Volume 1 and 2, Census 1991, DOS
(2) 2000 - Population Distribution and Basic Demographic Characteristics, Census 2000, DOS
(3) 2020 - National Physical Plan-2, 2010
National Physical Plan-2

3-14
- 2
Source: National Physical Plan-2, 2010
FIGURE 3.4 : POPULATION TARGET BY STATES, 2020
2000 (000)
2020 (000)
Northern Region
Central Region
Southern Region
Eastern Region

3-15
ii. Urban-Rural Population
The level of population in urban areas will continue to intensify and urbanisation is
expected to reach about 75% by the year 2020. The Central Region will be the most
urbanised region in the country. It is already the most developed and industrialised region
with a concentration of large urban centres in the Klang Valley. The urban population in
Peninsular Malaysia would increase by 8.86 million from year 2000 to 2020, expected to
reach about 21 million in year 2020.
By year 2020 half of the Eastern Region population would still be located in rural areas
(Table 3.3). Kelantan will still have more people in rural areas than in urban areas by year
2020. Kedah and Perlis will have almost equal numbers of rural and urban population,
whereas the rest of the states will have more urban than rural population. W.P. Kuala
Lumpur and W.P. Putrajaya, by definition, do not have any rural population.
Table 3.3: Population (000) in Urban and Rural Areas by States, 1991, 2000 and 2020
State/ Region
1991 2000 2020
Urban % Rural % Urban % Rural % Urban % Rural %
Perlis 48.8 26.6 135.0 73.4 70.1 34.3 134.4 65.7 104.4 39.8 158.1 60.2
Kedah 423.3 32.5 879.0 64.5 648.0 39.3 1,001.8 60.7 1,118.2 47.3 1,245.7 52.7
Pulau Pinang 798.3 75.0 265.9 25.0 1,052.1 80.1 261.4 19.9 1,711.5 86.0 278.5 14.0
Perak 1,006.8 53.6 870.6 46.4 1,203.9 58.7 847.4 41.3 1,890.5 69.5 829.7 30.5
Northern Region 2,277.2 51.4 2,150.5 45.6 2,974.0 57.0 2,244.9 43.0 4,824.5 65.8 2,512.1 34.2
Selangor
1,726.6 75.2 570.6 24.8 3,667.5 87.6 521.4 12.4
6,304.3 89.4 744.8 10.6
W.P. Putrajaya 281.5 100.0 - -
W.P. Kuala Lumpur 1,145.3 100.0 - - 1,379.3
100.
0
- - 2,200.0 100.0 - -
Negeri Sembilan 290.8 42.0 402.1 58.0 459.3 53.4 400.7 46.6 697.0 59.8 468.2 40.2
Melaka 196.0 38.7 310.3 61.3 427.3 67.2 208.5 32.8 669.2 74.0 235.1 26.0
Central Region 3,358.7 72.4 1,283.0 27.6 5,933.3 84.0 1,130.6 16.0 10,152.0 87.5 1,448.1 12.5
Johor 989.9 47.8 1,079.8 52.2 1,787.5 65.2 953.1 34.8 3,076.4 73.6 1,103.9 26.4
Southern Region 989.9 47.8 1,079.8 52.2 1,787.5 65.2 953.1 34.8 3,076.4 73.6 1,103.9 26.4
Pahang 317.2 30.4 727.8 69.3 540.9 42.0 747.5 58.0 1,179.6 65.0 635.5 35.0
Terengganu 340.7 44.5 425.6 55.5 437.5 48.7 461.3 51.3 831.9 65.0 448.1 35.0
Kelantan 395.5 33.5 785.8 66.5 448.9 34.2 864.1 65.8 919.5 52.6 829.8 47.4
Eastern Region 1,053.3 35.2 1,939.2 64.8 1,427.2 40.8 2,073.0 59.2 2,931.0 60.5 1,913.4 39.5
Peninsular
Malaysia
7,679.1 54.3 6,452.5 45.7 12,122.1 65.4 6,401.5 34.6 20,983.9 75.0 6,977.5 25.0
Source: (1) 1991 - Preliminary Count Report for Urban and Rural Areas, Census 2000, DOS
(2) 2000 - Population Distribution and Basic Demographic Characteristics, Census 2000, DOS
(3) 2020 National Physical Plan-2, 2010
National Physical Plan-2

3-16
- 2
Source: National Physical Plan-2, 2010
FIGURE 3.5 : PERCENTAGE OF POPULATION IN URBAN AND RURAL AREAS BY STATES, 2020
Urban
Rural
Northern Region
Central Region
Southern Region
Eastern Region

3-17
3.3.2 Economic Performance
i. Gross Domestic Product (GDP)
The global economic and political problems since 1997 have had a profound impact on
the Malaysian economy. By 2010, Peninsular Malaysias GDP will reach RM436 billion (in
2000 prices), up from about RM297 billion in 2000. The economic growth of the 9MP was
forecasted at 6% p.a., but actual performance is estimated at only 2.7%. Compared to the
Vision 2020 target, this is a shortfall of 26%. Between 1991 and 2010, the real economy
grew at 5.4% p.a. compared to the Vision 2020 target of 7% p.a.
The government launched two economic stimulus packages in 2008-2009; and
announced new economic measures in the second half of 2009 (see section 4.2). To
achieve a developed and high income nation status by 2020, the EPU has forecasted an
annual average growth rate of GDP at 5.5% for Malaysia between 2010 and 2020.
Hence, by 2020, the estimated GDP for Peninsular Malaysia will be RM744 billion in 2000
prices, using the 10
th
MP economic growth estimates.
The states in the Central Region will grow faster than the country as a whole, while
Selangor and W.P. Kuala Lumpur will have the largest GDP by 2020. The east coast
states will also grow moderately over this period and will be faster than the country as a
whole.
Table 3.4: GDP by Regions, 2000-2020
Region
GDP RM million in 2000 Prices
Average Annual Growth
Rate (%)
2000 2005 2010 2015 2020
2000-
2005
2000-
2010
2000-
2020
Northern Region 63,748 80,663 93,300 122,100 159,600 4.8 3.9 4.7
Central Region 146,694 186,738 218,700 285,900 373,600 4.9 4.1 4.8
Southern Region 36,435 46,090 53,000 68,700 89,800 4.8 3.8 4.6
Eastern Region 50,361 65,148 71,000 92,700 121,000 5.3 3.5 4.5
Pen. Malaysia 297,238 378,639 436,000 569,400 744,000 5.0 3.9 4.7
Note : GDP at 2000 prices for 2000, 2005 and 2010 are extracted from EPU unpublished data. Beyond 2010, GDP estimates are
based on overall growth and the 2010 share, rounded to nearest 100. Economic growth 2010-2020 is estimated at 5.5% p.a.
Source : Computed from unpublished state GDP data, EPU and 10MP Circular.

3-18
ii. Sectoral Contributions and Projections
Table 3.5 shows the estimated figures for the projected state GDP by sectoral shares.
Table 3.5: Projected State GDP Sectoral Shares (%), 2000-2020
State
Primary (%) Secondary (%) Tertiary (%)
2000 2020 2000 2020 2000 2020
Perlis 12.6 4.3 33.3 32.9 54.1 62.8
Kedah 18.3 8.1 22.5 26.2 59.2 65.7
Pulau Pinang 1.0 0.3 45.5 44.5 53.5 55.2
Perak 19.9 7.9 27.3 28.2 52.8 63.9
Selangor 3.2 0.8 59.7 62.6 37.1 36.6
W.P. Kuala Lumpur 0.0 0.0 19.7 13.1 80.3 86.9
Negeri Sembilan 9.8 5.4 42.6 46.2 47.6 48.4
Melaka 4.4 1.5 36.4 34.9 59.2 63.6
Johor 11.9 5.0 40.7 46.5 47.4 48.5
Pahang 21.3 10.4 19.3 22.9 59.4 66.7
Terengganu 56.3 9.5 18.7 39.4 25.0 51.1
Kelantan 16.5 8.1 16.1 12.4 67.4 79.5
Note: (1) The shares of economic shares to GDP by states are based on Table 1, unpublished GDP by sectors from EPU
for the period 20012010. GDP estimates are not adjusted for bank charges and import duties.
(2) Estimates for 2011-2020 are based on trends in sectoral growth for period 2001-2010 and adjusted for implied of
sectoral development at national level.
(3) Selangor includes W.P. Putrajaya
Source: Unpublished data, EPU 2001-2010
iii. Malaysian Employment
In terms of the labour force and employment scenario, the unemployment rate will remain
low for the planning period, estimated at about 3.5%. By 2020, the labour force will have
reached 12.4 million and total employment will have reached almost 12 million (Table
3.6).
Table 3.6: Malaysian Labour Force and Employment, 1990 2010
1990 1995 2000 2005 2010
AAGR (%)
1990
-
1995
1995
-
2000
2000
-
2005
2005
-
2010
Labour Force (000) 7,042.0 8,254.0 9,571.6 11,290.5 12,406.8 3.23 3.0 3.4 1.9
Total Employment (000) 6,686.0 7,999.2 9,274.6 10,894.8 11,976.0 3.65 3.0 3.3 1.9
Employment-Population Ratio 0.37 0.39 0.39 0.41 0.41 - - - -
Workers-household Ratio 1.43 1.78 1.89 - - - - - -
Unemployment (000) 356 254.8 297.0 395.7 430.8 - - - -
Unemployment Rate (%) 5.1 3.1 3.1 3.5 3.5 - - - -
Source: 7
th
MP, 8
th
MP & 9
th
MP

3-19
The occupational structure in 2020 would have more knowledge workers related to management,
professional and technical expertise. The largest proportional change is expected in the service
industry as well as the craft and related retail trade. Occupations expected to decline include plant
and machine operators and assembly workers (Table 3.7).
Table 3.7: Malaysian Employment (000) by Occupational Groups
1
,
1995, 2000 and 2020
Occupational Group
2000 2005 2020
(000) % (000) % (000) %
Senior Officials & Managers
2
639.9 6.9 777.4 7.7 1,157.1 8.2
Professionals
3
537.9 5.8 555.1 5.5 693.5 4.9
Technicians & Associate Professionals
4
1,112.9 12.0 1,266.8 12.6 2,073.1 14.7
Clerical Workers
5
890.4 9.6 992.3 9.9 1,354.4 9.6
Service Workers & Shop & Market Sales
Workers
6 1,205.6 13.0 1,483.7 14.8 3,120.5 22.1
Skilled Agricultural & Fishery Workers
7
1,391.2 15.0 1,268.6 12.6 1,199.5 8.5
Craft & Related Trade Workers
8
844.0 9.1 1,145.5 11.4 2,153.8 15.3
Plant & Machine Operators & Assemblers
9
1,493.2 16.1 1,427.5 14.2 1,145.4 8.1
Elementary Occupations
10
1,159.5 12.5 1,128.3 11.2 1,212.9 8.6
Total 9,274.6 100.0 10,045.2 100.0 14,110 100.0
Notes:
1
This classification is based on Malaysia Standard Classification of Occupations 1998.
2
Includes general managers, department managers and senior government officials.
3
Includes graduate teaching professionals, accountants and auditors and computer system designers and analysts.
4
Includes non-graduate teachers, supervisors and engineering and computer support technicians.
5
Includes administrative clerks, accounting and finance clerks and telephone operators.
6
Includes cooks, travel guides and waiters.
7
Includes farm workers, plantation workers and forestry workers.
8
Includes mechanics and fitters, carpenters and tailors.
9
Includes equipment assemblers, drivers and machine operators.
10
Includes street vendors, domestic helpers and cleaners and construction and maintenance labourers.
For year 2010-2020 - Estimates based on past trends from 2000-2007.
Source: 9
th
.MP and DOS, Labour Force Survey report Malaysia, 2007.
3.3.3 Land Use Pattern
The land use pattern for Peninsular Malaysia in 2008 was categorised into four major land
uses:
Land Use Area (ha.) %
Built-up areas 759,900 5.8
Agriculture 6,268,300 47.5
Forests 5,902,000 44.8
Water Bodies 251,500 1.9
Total Land Area 13,181,700 100
Source : GIS data, National Physical Plan-2, 2010

3-20
i. Built-up Areas
Built-up areas are defined in the NPP-2 as areas under predominantly urban use
comprising a variety of land uses such as residential, commercial, industrial and
institutional uses together with their supporting facilities such as roads, public utilities,
open spaces, parks and vacant lands.
Peninsular Malaysias existing built-up areas account for 759,900 hectares or 5.8% of the
total land area. Out of these, most of the built-up areas are located in the Central Region
where the large urban centres of W.P. Kuala Lumpur, Selangor, Port Dickson, Seremban
and Melaka are found (Table 3.8 and Figure 3.6). Urban centres are essentially activity
nodes and population concentrations.
W.P. Kuala Lumpur and W.P. Putrajaya have the most heavily built-up areas; and out of
its total acreage, built-up areas represent about 92.6% and 72.7% respectively. At the
other end, Kelantan has only 2.6% classified as built-up.

3-21
Table 3.8: Existing Land Use by States, 2008 (000 ha)
State Built-Up % Agriculture % Forest % Water Bodies % Total
Perlis 5.8 7.1 62.2 76.4 11.6 14.3 1.8 2.2 81.4
% 0.8 1.0 0.2 0.7 0.6
Kedah 52.2 5.5 531.1 56.1 344.7 36.4 18.7 2.0 946.7
% 6.9 8.5 5.8 7.4 7.2
Pulau Pinang 36.1 34.6 58.0 55.6 7.8 7.5 2.4 2.3 104.3
% 4.8 0.9 0.1 1.0 0.8
Perak 78.3 3.7 903.1 43.1 1,050.2 50.1 65.0 3.1 2,096.6
% 10.3 14.4 17.8 25.8 15.9
NORTHERN
REGION
172.4 5.3 1,554.4 48.1 1,414.3 43.8 87.9 2.7 3,229.0
% 22.7 24.8 24.0 35.0 24.5
Selangor 143.7 18.1 384.0 48.3 247.8 31.1 20.3 2.6 795.8
% 18.9 6.1 4.2 8.1 6.0
W.P. Putrajaya 3.2 72.7 0.7 15.9 0.0 0.0 0.5 11.4 4.4
% 0.4 0.0 0.0 0.2 0.0
W.P. Kuala
Lumpur
22.4 92.6 1.2 5.0 0.1 0.4 0.5 2.1 24.2
% 2.9 0.0 0.0 0.2 0.2
N. Sembilan 57.1 8.6 446.3 67.1 158.1 23.8 3.9 0.6 665.4
% 7.5 7.1 2.7 1.6 5.0
Melaka 29.2 17.7 129.5 78.3 5.3 3.2 1.4 0.8 165.4
% 3.8 2.1 0.1 0.6 1.3
CENTRAL
REGION
255.6 15.4 961.7 58.1 411.3 24.8 26.6 1.6 1,655.2
% 33.6 15.3 7.0 10.6 12.6
Johor 162.4 8.5 1,202.0 63.0 508.5 26.7 34.8 1.8 1,907.7
% 21.4 19.2 8.6 13.8 14.5
SOUTHERN
REGION
162.4 8.5 1,202.0 63.0 508.5 26.7 34.8 1.8 1,907.7
% 21.4 19.2 8.6 13.8 14.5
Pahang 80.2 2.2 1,450.5 40.4 2,024.8 56.4 36.8 1.0 3,592.3
% 10.6 23.1 34.3 14.6 27.3
Terengganu 50.1 3.9 537.9 41.5 656.3 50.7 50.6 3.9 1,294.9
% 6.6 8.6 11.1 20.1 9.8
Kelantan 39.2 2.6 561.8 37.4 886.8 59.0 14.8 1.0 1,502.6
% 5.2 9.0 15.0 5.9 11.4
EASTERN
REGION
169.5 2.7 2,550.2 39.9 3,567.9 55.8 102.2 1.6 6,389.8
% 22.3 40.7 60.5 40.6 48.5
TOTAL 759.9 5.8 6,268.3 47.5 5,902.0 44.8 251.5 1.9 13,181.7
% 100 100 100 100 100
Note : The total area of each states might be different with the actual area caused by the slight inaccuracy of GIS data. However, the
variation is marginal and acceptable for this macro spatial analysis.
Source : GIS data, National Physical Plan-2, 2010
Total forest land is based on data from Forestry Dept., 2008
National Physical Plan-2

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- 2
FIGURE 3.6 : EXISTING LAND USE, 2008
Source: National Physical Plan-2, 2010
Built-up Area
Agriculture
Forest
Water Bodies
Highway
Federal Road
State Road
Railway
State Capital
Major River

3-23
ii. Agriculture
Agricultural areas, especially those surrounding urban centres, are threatened by urban
sprawl. With population increase and rapid economic growth, agriculture lands are
increasingly encroached and converted to meet the additional housing needs as well as
commercial floor space and industrial land demands. Although continuous loss of
agriculture land occurs, planned growth must be adopted to ensure that wastage of other
valuable agricultural land does not happen or are at least reduced to a minimum.
Identification of Prime Agriculture Areas (PAAs) is important in order to prioritise the
agricultural land to be conserved and supported based on existing and potential major
food and primary commodities production areas. PAAs identified by NPP-2 that must be
conserved are as follows:-
a. Granary areas comprising Muda (MADA), Kemubu (KADA), IADA Kerian-Sungai
Manik, IADA Barat Laut Selangor, IADA Pulau Pinang, IADA Seberang Perak, IADA
Terengganu Utara (KETARA) and IADA Kemasin-Semerak;
b. Paddy land outside granary areas;
c. Agriculture areas designated as Permanent Food Production Park (PFPP);
d. Agriculture areas without dry season and with short dry season;
e. Agriculture areas on Class 1, Class 2, Class 3 and peat/ organic soils.
In 2006, the overall PAA areas have increased by 18.9% as compared to the Agriculture
Land Use Map of 2000. This is mainly due to the increase in oil palm cultivation in the
Rank 1 and Rank 2 areas. Oil palm cultivation in Rank 1 areas has increased by 34.9%
and those in Rank 2 areas have increased by 40.4%. Agriculture areas identified under
Class 1 and Class 2 soil also have increased by 7.64%. However, paddy areas, including
granary areas, have decreased by 7.9% from 2000 to 2006.
iii. Forest
According to the statistics from the Forestry Department of Peninsular Malaysia, 5.9
million hectares or 45% of the total land area of Peninsular Malaysia was forested in
2008. Of this, about 4.8 million hectares was forest reserves managed under sustainable
forest management, with 2.0 million hectares classified as protection forest and the
remaining 2.8 million hectares as production forests.
Forest loss and fragmentation of forest cover is a major issue. While the protected areas
are relatively secure, forest reserves are easily de-gazetted into state land forests, and
subsequently converted to agriculture. Between 2001 and 2005, over 40,000 hectares of
forest reserves were excised in Peninsular Malaysia. In addition, the area within forest
reserves planted with rubber, oil palm and other crops jumped from 4,686 hectares in
2005 to 38,387 hectares in 2007.
The largest remaining blocks of lowland dipterocarp forests, which are prime habitats for
large mammals such as the elephant, tiger, wild ox and rhinoceros, include Taman

3-24
Negara and its surrounding forest reserves, Endau-Rompin National Park, Krau Wildlife
Reserve, as well as forest reserves such as Ibam Forest Reserve (Pahang) and Lenggor
Forest Reserve (Johor). Most other remaining lowland forests occur in patches, too small
or isolated to sustain viable populations of large mammals in the near future.
While significant portions of the two major peat swamp forest complexes in North
Selangor and South-east Pahang have been severely degraded or converted for
agriculture, there is now a noteworthy effort to sustainably manage and rehabilitate these
important carbon sinks.
Forest ecosystems in the coastal zones are probably the most severely threatened due to
high development pressure. As a result, only remnants of unique coastal forests remain,
such as Gelam Forests on the east coast, coastal hill dipterocarp forests in Terengganu
and Perak as well as freshwater swamp forests in the Sedili area of Johor.
iv. Water Bodies
Water bodies, which include major rivers, reservoirs and ponds, account for about 1.9%
of Peninsular Malaysia. This category also includes ex-mining ponds which are strongly
represented in Perak.
There are relatively small areas ascribed to water bodies for Melaka (1.4 ha.), Perlis (1.8
ha.), Pulau Pinang (2.4 ha.) and Negeri Sembilan (3.9 ha.).
Areas attributed to water bodies in Kedah and Selangor at 2.0% and 2.6% of the two
states area respectively, is a minuscule 18,700 hectares and 20,000 hectares compared
to the 65,000 hectares for Perak and 50,600 hectares for Terengganu.
3.3.4 Existing Settlement Pattern
The existing settlement pattern is a product of the countrys past and present economic
and socio-political changes where the various modes of production and transportation
have determined the geographical spread of activities, and hence of the people.
Along the development process of Malaysia, changes in the political settings, consumer
preferences, lifestyles and technology have resulted in new and evolving economic
circumstances. These circumstances bring about changes in the centres of production,
urban form and also in settlement patterns. Owing to social factors, reluctance of the
people to adjust and the desire for full recovery of the costs of infrastructure and other
heavy investments, the changes take its pace slowly.
The emergence of a new economic regime does not necessarily wipe out the settlement
pattern generated by a previous regime but rather, in some circumstances, modifies and
builds upon it. Changes in the economic regime can, however, occur very rapidly, a
process likely to be enhanced with the rapid spread and adoption of technology. This

3-25
process has and is likely to continue to impact upon the present settlement pattern in
Peninsular Malaysia.
The present pattern for the Peninsular includes a dominant zone of relatively well-
developed cities and towns, plantations and commercial farms along the West Coast from
the foothills of the central mountain range to the coast. The larger cities and towns are
mainly engaged in manufacturing and the provision of services. The smaller towns
provide local retail services and government-sponsored services to the public, with
scattered incidences of manufacturing. However, there remain pockets of subsistence
farming within this zone as well as a concentration of such subsistence farming within the
northern periphery of the zone in eastern Kedah and in Perlis.
To the east of the main Mountain Range, there is no clear zone of development and
human settlements. The population centres are generally scattered but with
concentrations in the Kelantan delta, the Terengganu estuary area and the western
foothills of Pahang, along the East Coast and along the rivers. Most of the settlements
still engage in semi subsistence farming. Within the same area are also the more recent
human settlements from the previous Regional Development Authorities of southern
Kelantan (KESEDAR), central Terengganu (KETENGAH), JENGKA, south-east Pahang
(DARA) and south-east Johor (KEJORA).
Industrial activities have penetrated into Kuantan, Southern Terengganu and Central
Pahang. Tourism has also become important to the coastal zone and offshore islands.
However, the East coast of the Peninsular is generally less well developed than its
western half.
A system of roads, rails, ports and airports supports the settlement pattern of the country.
Generally, however, the communication and transportation network is better developed
on the West Coast than on the East Coast. A highway (North-South Expressway) runs
the length of the West Coast while another highway (East Coast Expressway) to the East
Coast is now a reality. A railway also runs the length of the West Coast, while the railway
on the East Coast runs only half its length and through the middle of the country rather
than along the coast. The three major ports (that are Port Klang, Port of Tanjung Pelepas
and Penang Port) and Kuala Lumpur International Airport (KLIA) are located on the West
Coast. The infrastructure system reflects the economic dominance of the West Coast.
Over the past few decades, Peninsular Malaysia has been experiencing rapid
urbanisation with the proportion of the Peninsulars population living in urban areas
increasing from 26.7% in 1970 to 65.4% in year 2000. Not only has the population shifted
towards urban areas but the urban population itself has also become more concentrated
into a small number of conurbations, namely the towns and urban areas around Kuala
Lumpur, George Town and Johor Bahru. These three conurbations account for almost
54% of the Peninsulars population and likely to increase to 75% by year 2020.
Urbanisation is characterised not only by rural-urban migration but also in-migration to the
conurbations resulting a vast decrease in the population economies of the villages and

3-26
rural areas. Although most villages retain their older residents, remote villages are likely
to atrophy and disappear. With a few notable exceptions, major and minor urban centres
outside the conurbations are also losing their share of the urban population in favour of
the conurbations.
The settlement pattern as envisaged in the National Urbanization Policy is as follows:
i. National Growth Conurbation: Kuala Lumpur Conurbation
The Kuala Lumpur Conurbation, which encompasses Kuala Lumpur, Putrajaya, Shah
Alam, Klang, Nilai and Seremban, is proposed as the National Growth Conurbation.
Effectively, the Kuala Lumpur Conurbation stretches from Kuala Selangor in the north to
Port Dickson in the south. The Kuala Lumpur Conurbation is to provide for a potential
population of 10.37 million or 37% of the Peninsular Malaysia population by year 2020.
A major issue for the Kuala Lumpur Conurbation is the need for further in-depth studies to
address the need for creating and sharing of more space, particularly mixed-uses and
higher density in previously developed areas as well as a mass rapid transit system in
view of environmental aspects and implications on the quality of life within the
conurbation. This review should also establish zones of green lungs to provide for identity
of communities as well as regional recreational space.
ii. Regional Growth Conurbation
The strengthening of the Regional Growth Conurbations is aimed to spread effectively the
opportunities in realising a more balanced social, economic and physical development
across Peninsular Malaysia. At the same time, this is intended to counterbalance the
tendency of over-concentration of economic activities and people in Kuala Lumpur
Conurbation. Regional Growth Conurbations are of city-region spatial scale where the
core urban areas draw people for work and services, such as shopping and leisure. To
drive the development of the surrounding regions, the areas must be of sufficient size and
critical mass. In this respect, the economic performance of the city-region will improve
significantly through stronger functional linkages in the supply chain and agglomeration
economies. In addition, the Regional Growth Conurbations, like Kuantan, will link out to
the wider regional hinterland in ECER, to catalyst and support the development of the
smaller towns, villages and rural areas.
National Physical Plan-2

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- 2
FIGURE 3.7 : URBAN HIERARCHY LINKAGES
Source: National Physical Plan-2, 2010
National Growth Conurbation
Regional Growth Conurbation
Sub-regional Growth Conurbation
State Growth Conurbation
District Growth Conurbation
Major Trasportation Linkages

3-28
The Regional Growth Conurbations are as follows:
Northern Region George Town Conurbation
This is an area which is based in Pulau Pinang and the adjacent areas of southern
Kedah and northern Perak. This conurbation has been referred to as the George
Town Conurbation for the Northern Region.
In the case of George Town Conurbation, the proposed conurbation area will extend
into three states, namely: Pulau Pinang, southern Kedah, and northern Perak. The
George Town Conurbation is expected to provide a support population of about 2.4
million by year 2020.
Southern Region Johor Bahru Conurbation
The Johor Bahru Conurbation is expected to provide for a population of 2.4 million by
2020. The area is envisaged to cover the southern part of the state stretching from
Tanjung Pelepas in the west to Pasir Gudang in the east.
Eastern Region Kuantan Conurbation
The strategic location, infrastructural facilities and comparative advantage has
warranted Kuantan as a Regional Growth Conurbation, although on size alone it
functions at a lower level. It is expected the Kuantan Conurbation extending into
southern Terengganu will emerge with a population of about 1.4 million by year 2020;
and will function as a focus point for the East Coast growth.
iii. Sub-Regional Growth Conurbations
Ipoh and Melaka will play the role as Sub-Regional Growth Conurbations to support the
Regional Growth Conurbations. In the post-2020 period subject to development of high-
speed rail connections, Melaka could potentially represent a southern growth (connective)
conurbation to the Kuala Lumpur Conurbation.
iv. State Growth Conurbations
The remaining state capitals, namely: Kota Bahru, Alor Setar, Kuala Terengganu and
Kangar perform the next layer of the hierarchical functions of central importance. They
functions as the main administrative, commercial, financial, social and cultural centre
serving the whole state. However, many state capitals are not likely to grow economically
in the current fierce global competitive climate.

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v. District Growth Conurbations
Within the Peninsular context, there exist a number of distinct lower order conurbations
which are manufacturing and service centres in their own right. These conurbations cater
not only to the international markets but also to local rural areas. Examples of these well-
established towns are Muar-Batu Pahat-Kluang Conurbation and the emerging centres of
Temerloh Conurbation and the Lumut-Setiawan-Manjung Conurbation.
vi. Major and Minor Settlement Centres
Towns between 10,001 to 100,000 populations are classified as Major and Minor
Settlement Centres. Some of the these settlement centres except for those towns located
within the spheres of influence of the conurbation and special features towns like
Temerloh-Mentakab, Lumut-Sitiawan-Manjung or bigger towns like Muar-Batu Pahat-
Kluang are diminishing. This is a result of the impact of the changing structure of the
Malaysian economy.
Major and Minor Settlement Centres which are also known as Small and Intermediate
towns had developed based on trade with and services to their hinterlands, including
administrative services. The hinterland economies which are mainly based on agriculture
however, have not expanded. Either such towns industrialise like those within the sphere
of influence of the conurbations, or expand their economies based on a special feature,
their growth will remain constrained. At the same time, due to rising incomes in the major
urban centers, these smaller towns are faced with the pressure of out-migration of the
younger population. The result is generally a population decline, although the total
economies of the towns may not decline.
The process of decline is likely to be slow as the older generation of shopkeepers will
cling on to their businesses in spite of the continuous marginalisation that they face. But
their children would be unlikely to continue their businesses and are more likely to
migrate out, contributing to the out flow of population into the conurbations.
On the other hand, major and minor settlement centres that are located within the
expansion sphere of the conurbations are likely to be absorbed and become satellite
towns or suburbs to the main metropolis of the conurbation. They are likely to experience
very rapid population growth and dramatic changes in their employment base. In the last
decade, several towns, such as Nilai, Rawang, Balakong, Senai and Ulu Tiram have
gone through this experience. As transportation facilities such as highways and fast train
connections from the conurbations extend further out, more major and minor settlement
centres will benefit from development expansion from the urban cores.
Artificial injection of investments into those towns that are declining does not make for
economic efficiency. Government policies should not aim at stemming the demographic
changes but in helping the major and minor settlement centres become small prosperous
places. They are still needed by the rural population even if the rural areas can only
sustain a limited trading population. Entrepreneurs from these towns should provide the

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linkage between the urbanised economy of the cities and the rural areas. They should be
supported in their agricultural, service and other enterprises. Educational and training
programmes to help prepare the younger population to migrate and integrate into the
urban economy must be encouraged.
vii. Rural Growth Centres
Rural Growth Centres (RGC) and rural settlements are areas whose settlements have
with a population of less than 10,000 people. RGCs are key central villages that could
conveniently serve a rural hinterland made up of several rural settlements. They are
provided with basic social facilities and local services to serve the surrounding
settlements. These settlements include traditional villages, new villages outside urban
areas, fishing villages, agricultural estates settlements, Orang Asli settlements, FELDA
and FELCRA settlements. At present, rural settlements are nested with the category of
land identified as agriculture.
The main source of income for these settlements is farming, mainly the cultivation of oil
palm, rubber, paddy and fruits orchards. Vegetable farming are carried out at specific
locations such as Cameron Highlands, Lojing, Johor Bharu, Muar, Batu Pahat, Tumpat
and Sepang; while other crops such as field crops, spices and herbs are grown in small
areas. To supplement their income, they also rear livestock and aquaculture production.
For the fishermen, most are involved in coastal fishing.
In the process of urbanisation and rural out-migration, many of the rural settlements are
likely to become depopulated and are no longer economically viable. It may become
necessary to consolidate the rural population at the RGCs, which will also make it
possible for the services provided to be improved and enhanced. Rural services
especially education and health should be re-examined to match them with the emergent
new structure of the rural population.
The biggest issue or challenge in the rural settlements is relatively low income of the rural
population which is mainly dependent on farm income. The main reason for this is that
the size of agricultural land owned or worked by each farmer is too small to enable them
to earn a decent income. Even the FELDA farmers who are considered to be the best
example of farmers with good income only has 3.2 hectares of land per family, while
RISDA reported that the average holdings for small holders is 2.3 hectares Many farmers
in the traditional villages only work on farms with less than 2 hectares of land.
De ve lop me nt Stra te g y
C HAPTER 4
NATIONAL PHYSICAL PLAN

4-1
CHAPTER 4
DEVELOPMENT STRATEGY
The development strategy has an important bearing on the economic performance and the quality
of life in Peninsular Malaysia. The preferred development strategy in Peninsular Malaysia seeks
to make the country an attractive place to live, work, play, invest, do business, and visit. To
achieve this, adequate and suitable land to support business initiatives, sustain economic growth
and provide key enabling infrastructure and utilities must be allocated. At the same time, liveability
must be enhanced, urban regeneration facilitated, the environment protected and natural
resources used prudently.
It is anticipated that around 75% of the total population in Peninsular Malaysia will be living in the
urban areas in 2020. In this respect, provision will be made for accommodating approximately 4.7
million additional people between 2010 and 2020. Approximately 1.92 million new jobs, mostly in
the tertiary services will need to be created over the next 10 years to support the increasing
proportion of people in the working age group, the likely reduction of jobs in the agriculture sector
and some labour-intensive including low value-added manufacturing industries. All in all, it is
estimated that about 200,000 hectares of urban land will be required to meet the future
development needs of Peninsular Malaysia over the next 10 years. In determining the preferred
strategy, the major global and national issues, opportunities and needs have been taken into
account which will provide the main basis for the formulation of the national spatial policies.
4.1 Conceptual Development Strategy
The development strategy from NPP (2005) was revised and fine-tuned to provide a
geographical expression and proactive spatial responses to changing circumstances
including the international conventions commitment such as biodiversity and climate
change. The prevailing global economic slowdown, government public expenditure
cutback, the 1Malaysia and high-income concept, regional growth corridors and other
national strategic development thrust , such as the OPP3, the 9
th
MP, the National
Urbanisation Policy (NUP), IMP3, NAP3 including forestry, tourism, environment
conservation and biodiversity, transportation, energy and green technology was also
reviewed and analysed.
To realise the national socio-economic objectives for global competitiveness, national
unity, sustainable development and high quality of life, the spatial expression of these
national sectoral policies and strategies requires the country:-
i. To rationalise and consolidate the national spatial planning framework supported
by key strategic infrastructure;
ii. To achieve a highincome economy;
iii. To promote more balanced regional development;

4-2
iv. To optimise utilisation of land and natural resources;
v. To secure spatial and environmental quality and diversity; and
vi. To facilitate integrated inter-state connectivity and social integration.
NPP (2005)s spatial policies and development proposals was based on a Selective
Concentration Development Strategy which is essentially a spatial planning response
to deal with the intense competition arising from the increasingly economic globalisation
and trade liberalisation. More importantly, the pre-requisite was to generate a high level of
sustainable growth, particularly through rapid industrialisation, in achieving Vision 2020.
In this connection, specific development focus is directed towards three distinct
geographic areassuch as such as West Coast, East Coast and the Central Highlands,
each exhibiting relatively similar characteristics, issues and development potentials.
The development strategy for the West Coast Region is to facilitate urban and industrial
expansion and to ensure the optimal use of infrastructure, thus concentrating
development in the three priority growth conurbations of Kuala Lumpur, George Town
and Johor Bahru. Key strategic infrastructures in designated international gateways and
national hubs, such as high-speed broadband ICT network, expressways, seaports and
airports, will be developed to support high valueadded economic growth in each of the
main conurbations. The private sector, particularly direct foreign investment, will
spearhead this high accelerated growth.
The focus for the East Coast will be in the Kuantan Conurbation for industrial and service
sector development, whereas development initiatives in Kota Bahru will concentrate on
cross-border trade with Thailand. The tourism potential of the Region will also be fully
exploited and greatly enhanced with the population participating actively in the modern
economy through education and social development programmes. There is of course the
immense potential for positioning Kuala Terengganu as the international tourism gateway
for the East Coast Region in view of the vast and varied tourism products available in the
state, and the upgrading of the airport to an international status.
The development focus for the Central Highlands is to establish and protect a contiguous
Central Forest Spine through the integration of forest reserves for biodiversity
conservation, limit and control unsustainable urban and agriculture expansion, and
enhance the tourism potential of the highlands.
In line with economic structure transformation of the nation to a high-income tertiary-
based economy and promotion of the 1Malaysia concept, the national spatial structure
needs to be rationalised and realigned accordingly to facilitate the attainment of a high
sustainable economic growth and strong social cohesion. In this respect, the NPP (2005)
development strategy was further built upon and strengthened by introducing an
additional dimension of Concentrated Decentralisation in Development Corridors.
The Development Corridor concept was introduced in recognition of the current market-
driven development trends, the importance of efficient accessibility for the country highly
export-dependent economy, and the need to optimise the use of the existing and

4-3
committed infrastructure and urban services in the strategic urban centres in the light of
likely financial constraint for new capital-intensive infrastructure provision.
The main thrust of the revised development strategy is to concentrate the nations scarce
resources to a few priority urban centres with the greatest growth potential for job creation
along the key economic corridors such as Bentong and Temerloh-Mentakab while
protecting the rural areas and natural environment. Spreading the limited resources thinly
all over the country will result in ineffective outcomes and detrimental environment
impacts. Future new urban development and regeneration will be focussed largely in
selected urban conurbations and key strategic urban nodes within the growth corridors to
avoid urban sprawl, to preserve the villages and rural areas and to accelerate
development in less-developed regions. As the main engines of growth, these selected
urban centres will generate spin-offs to catalyse the development of their surrounding
fledgling hinterlands, thus strengthening the urban-rural functional linkages and economic
synergies. As such, the government will endeavour to support the growth of the selected
strategic urban centres through implementing high-impact flagship project initiatives and
key infrastructure facilities. Some examples of the initiatives are Agriculture Collection,
Processing and Packaging Centre and Halal Industrial Park.
These Development Corridors will be promoted and developed as Main Development
Corridors and Sub-Development Corridors to serve different supply / producer chain
functions and markets. The main development corridors are characterised by
conurbations and key urban nodes linked by expressways and proposed high-speed
train, and served by major ports and airports. As international gateways and core
economic zones, major high technology-driven and knowledge-based initiatives and
enterprises, such as multimedia activities, biotechnology research, creative industries and
specialised market tourism development like MICE, will be promoted and supported to
serve niche national and specific export markets.
Sub-Development Corridors are important regional corridors to spread development and
improve the quality of life throughout the country, especially in economically lagging
regions. They involve primarily strategic small and medium-sized towns, including special
feature towns. Sub-Development Corridors will be served by highways which provide
easy connectivity between the conurbations and large towns with surrounding villages
and rural areas. They function essentially as local service centres, job centres, supply
and marketing gateways for exploiting and accessing the ecotourism and agricultural
resources in the interior hinterland (Table 4.1 and Figure 4.1).

4-4
Table 4.1: Main Development Corridors and Sub Development Corridors.
Development Corridors Key Physical Characteristics Focal Development Initiatives
Main Development Corridors
1. North-South Corridor This corridor, which stretches from
Kangar in the north to Johor Bahru in the
south (875km), is the most developed
growth corridor in the Peninsular. It is
also the most urbanised part of the
country with most of the major towns and
the capital cities located in this corridor.
Focus Growth Sectors
Urban development, industrial
development, knowledge-based sectors,
services sector, agriculture:
Core Industrial Belt.
Most of the knowledge-based clusters
including Education Hubs.
Important Food Belt with four of the
main granary areas.
Supported by a Regional Rail, North-
South Expressway and three major
ports (Penang, Port Klang and Tg.
Pelepas) and major international
airports (KLIA, Penang, Langkawi and
Senai).
Conurbation Plans for the
conurbations of Kuala Lumpur,
George Town and Johor Bahru.
Manage urban growth to prevent
urban sprawl through sustainable
growth management strategies.
Promote and support high-tech and
knowledge-based economy.
Planned Industrial Belt for high value-
added industrial cluster development.
High Speed Rail to reinforce corridor.
New Coastal Highway to supplement
the North-South Expressway.
2. East Coast Corridor This corridor stretches from Kota Bahru
in the north to Johor Bahru in the south,
a distance of 689km.
Focus Growth Sectors
Tourism, oil, gas and petrochemical,
industrial clusters, knowledge-based
sectors, agriculture:
Potential to be the principal mainland
coastal and island tourism destination.
Oil, Gas and Petrochemical Hub.
Resource and agro-based industrial
cluster development in selected nodes.
Mainland coastal tourism focused in
Desaru, Rompin, Mersing, Kuala
Pahang, Kuantan, Dungun, Besut,
Merang and Tumpat.
Development of industrial clusters in
selected nodes in the conurbation of
Kuantan, Kuala Terengganu and Kota
Bahru.
Establishment of a SEZ to spearhead
regional development.
Development of Petrochemical Hubs
in Kertih and Gebeng.
Development of Education Hubs
including universities and centres of
higher learning (UMP, UMT and
UMK).
New Road Expressway (LPT2 and
LPT3 to the north).
High Speed Rail link from Kuantan to
Kota Bahru in the north
3. Central East-West
Corridor
This corridor stretches from Kuala
Lumpur to Kuantan in the East Coast
(260km) and is the main east-west
growth corridor.
Focus Economic Sectors
Industrial clusters, agriculture, tourism
development:
Important secondary industrial
corridor.
Major conduit to spread development
to the East Coast.
Potential logistics link between Asia-
Pacific countries and countries in West
and South Asia.
Focussed industrial cluster
development in selected nodes and
industrial spill-over from the Klang
Valley especially in Bentong.
Establishment of a SEZ in the
Kuantan Conurbation.
High speed rail network.
Development of District Conurbation
in Temerloh-Mentakab.
Controlled Development of the
Genting- Bukit Tinggi- Janda Baik
SMA.

4-5
Development Corridors Key Physical Characteristics Focal Development Initiatives
Entertainment City of Genting
Highlands.
Supported by the Federal Road 2 and
the East Coast Highway 1 (LPT1).
Sub-Development Corridors
4. North-South Sub-
Corridor
This sub-corridor extends from Kota
Bahru in the north to Segamat in the
south (584km).
Focus Economic Sectors
Agriculture, tourism, industrial cluster
development (especially resource- and
agro-based industry):
Provides gateway towns and
connectivity to the main ecotourism
destinations (Taman Negara and the
Main Range).
Important agriculture zone especially
for fruits, crops, herbal biotechnology
centres and highland agriculture.
Connectivity to focal poverty areas of
western Pahang and south Kelantan.
Supported by Central Spine Link (FR
8 and FR 9) and a railway line.
Primary Ecological Link (PL1) has
been identified at Sg. Yu (north of
Kuala Lipis) for wildlife crossing
especially for tigers and elephants.
New major highway proposed under
the HNDP2 (Highway Network
Development Plan 2) to link Segamat
to Gua Musang (a need for animal
viaducts within the ecological links
identified in this Corridor).
The Special management Areas
(SMAs) involving Camerons-Lojing-
Kinta Highlands, Bukit Frasers, and
the Genting-Bukit Tinggi-Janda Baik
will be the focus of highland tourism
and agriculture.
Key towns identified for focussed
investment in ecotourism, livestock,
herbal parks, and crops under the
ECER Master plan will include Kuala
Krai, Tanah Merah, Gua Musang,
Kuala Lipis, Bentong, Raub and
Temerloh-Mentakab.
5. East West Sub-
Corridor
Stretches from Pulau Pinang to Kota
Bahru (386km).
Focus Economic Sectors
Tourism, cross border trade:
Important road link for the Trans
National border towns.
Direct road link from Kota Bahru to
Penang.
Developed primarily as security
corridor to combat insurgencies.
Important ecological habitat and
wildlife reserves including the Royal
Belum State Park, Temenggor Forest
Reserve and ecotourism destinations
at Pulau Banding.
A Primary Ecological Link (PL2) has
been identified from Gerik to Jeli (a
need for animal viaducts especially for
elephants in selected locations and a
stay on agriculture development along
this corridor).
Major highway link from Penang-
Kulim-Pengkalan Hulu-Gerik-Jeli-
Rantau Panjang under the HNDP2.
Integrated Cross-Border Development
Initiatives involving Pengkalan Hulu,
Bukit Bunga, Rantau Panjang,
Pengkalan Kubur and the
corresponding Thai Towns.
6. Lumut-Gua Musang-
Kuala Terengganu
Sub-Corridor
Stretches from Lumut-Ipoh-Cameron-
Gua Musang-Kuala Terengganu (586
km).
Focus Economic Sectors
Industrial cluster, tourism:
Lumut-Sitiawan-Manjung
Conurbation.
Important industrial local corridor
(Lumut-Ipoh).
Important highland eco-tourism
corridor (Ipoh-Tasik Kenyir).
Lumut Naval Base
Sri Iskandar New Town
PETRONAS University
Two Primary Ecological Links have
been identified in this corridor.
Key initiatives relating to highland
agriculture and township development
have been identified at Lojing, Gua
Musang (crops, livestock, herbs) and
Tasik Kenyir (tourism) under the ECER
Master plan.

4-6
Development Corridors Key Physical Characteristics Focal Development Initiatives
7. Kuantan-Muar Sub-
Corridor
Important sub-corridor connecting Muar-
Segamat-Muadzam Shah-Kuantan
(336km).
Focus Economic Sectors
Agriculture, tourism, cluster industrial
development:
Agriculture development for oil palm,
crops and livestock.
Connectivity to Ramsar site of Lake
Chini and Tasik Bera and the Endau-
Rompin National Park.
Inland Port at Segamat.
Supported by Federal Route 12.
Potential to be developed as an
important Agriculture Belt in the
country.
Development of a new major highway
linking the towns of Kuantan-Muadzam
Shah-Segamat-Muar under the
HNDP2.
National Physical Plan-2

4-7
- 2
Source: National Physical Plan-2, 2010
FIGURE 4.1 : CONCENTRATED DECENTRALISATION DEVELOPMENT STRATEGY
State Growth Conurbation
District Growth Conurbation
National Growth Conurbation
Regional Growth Conurbation
Sub-Regional Growth Conurbation
Major Port
ICT Hubs
Forest Spine
National Park
Special Tourism Zone
Special Management Area (SMA)
Main Development Corridors
1. North-South Corridor
2. East Coast Corridor
3. Central East-West Corridor
Sub-Development Corridors
4. North-South Sub-Corridor
5. East West Sub-Corridor
6. Lumut-Gua Musang-Kuala
Terengganu
7. Kuantan-Muar Sub-Corridor
Development Corridors

4-8
4.2 National Positioning and Future Economic Growth
Malaysia is closely integrated with the global economy, with the value of trade (exports
and imports) of goods and services being equivalent to twice the GDP. Export-oriented
industries contracted 24.7% in the beginning of 2009 as a result of the global financial
crisis and weakening global demand. Negative growth was recorded in major sub-
sectors, particularly in E&E, wood products, textiles and rubber products. The domestic-
oriented industries also contracted by 18.7% in January 2009 mainly due to the decline in
construction-related industries.
There has been a steady recovery in trade since the first half of 2009. Between January
and July 2009, exports have grown at an average of 5.4% month on month, and total
trade has grown by 6.6%. The worst month was probably January 2009 where trade was
almost 30% below its previous year level.
The total FDI in Malaysia over the period for the year 2003-2008 was RM146.4 billion for
the approved investments in the manufacturing sectors. FDI started to shift away from
Malaysia some 15 years ago; and the trend is continuing as other developing countries
compete to give more incentives.
Table 4.2 shows Malaysias position in the global competitiveness ranking based on the
World Competitiveness Scoreboard Ranking.
1
The global competitiveness index ranking
for Malaysia improved from 30
th
place in year 2000 to 21
st
place in 2008 amongst 134
economies ahead of several developed economies. Malaysias ranking however fell 3
places to 24
th
position in year 2009. In terms of the competitiveness scoreboard ranking,
Malaysia has become more competitive over the past 9 years becoming 18
th
position in
2009 as compared to 27
th
position in 2000. Its ranking also improved to 10
th
place in year
2010 and has overtaken several developed countries including Netherlands (12
th
place),
Denmark (13
th
place) Britain (22
nd
place), Thailand (26
th
place) and is even more
competitive than South Korea (23
rd
place). The top three pole positions are held by
Singapore (1
st
place), Hong Kong (2
nd
place) and the United States of America (3
rd
place).
To remain competitive, the country needs to strive and maintain this achievement by
continuing to implement policies, processes and procedures that are transparent and
streamlined that can reduce the cost of doing business.
Table 4.2: Malaysia Ranking of Global Competitiveness
Malaysia 2000 2005 2008 2009
Global Competitiveness Index rankings
1
30 24 21 24
World Competitiveness Scoreboard Ranking
2
27 28 19 18
Source: 1. Various Issues of Global Competitiveness Report.
2. IMD World Competitiveness Yearbook.

1
The World Economi c Forum: Gl obal Competi ti veness Repor t discusses the mi croeconomic and macroeconomi c foundati ons of
nati onal competi ti veness.

4-9
The key economic issues in the next five years that will influence significantly Malaysias
economic planning are:
i. The global economic recovery and its impact on trade;
ii. The need to restructure the policy environment to remain competitive, and continue to
attract investments; and
iii. The measures and actions needed to ensure that development reaches those in
need, and maximise the potential for reaching the goals of Vision 2020.
Recognising the limits to the current policies, the Prime Minister announced the New
Economic Model which is expected to raise the productivity of workers through innovation
and knowledge in year 2009. This will hopefully result in higher incomes. Similarly, there
will be a greater emphasis on domestic consumption.
In June 2009, the government liberalised foreign investments in major sectors. Foreign
investment regulations were relaxed, while 27 service sectors were liberalised from
Bumiputera (indigenous) ownership requirements, as a means to improve its investment
climate. In this aspect, the Government has set up a private equity firm whose mandate is
to help to develop Bumiputera entrepreneurs.
These strategies have been detailed out in the Tenth Malaysia Plan (10
th
MP) and five (5)
National Mission Thrust (KRAs) were announced. The 10
th
MP strategies are expected to
raise GNI per capita of RM38,845 in year 2015, which puts Malaysia on track to become
a developed nation. The private sector will have a very important role to play in the New
Economic Model.
With these strategies, the Economic Planning Unit (EPU) has forecasted that the GDP
will grow at 6.0% p.a. for the 10
th
MP period. Given these trends, Peninsular Malaysias
GDP will reach about RM740.3 billion in 2020.
The IMP3 (2006-2020), aims to drive industrialisation to a higher level of global
competitiveness with an integrated approach towards industrial and economic
development. The IMP3 places significant emphasis on transformation and innovation of
the manufacturing and services sectors. The IMP3 strategy has moved beyond
manufacturing cluster-based strategy to include other sectors such as services, SMEs,
and etc. The IMP3 implementation plan has a regional component which seeks to
balance out the potential inequity in outcomes. Malaysia is also shifting towards the
services sector in order to stay ahead of the competition. Skilled workforce is needed to
support the shift. English is also an advantage in moving up the services sector. As such,
the development strategy and framework of the NPP-2 has undergone a spatial
makeover to integrate closely with the holistic manufacturing-services development
strategy adopted by the IMP3.

4-10
4.2.1 Malaysia as a High Income Economy
The Governments assessment of the current Malaysian economy is that it is in a middle
income trap, which means that it is squeezed between low wage manufacturers which are
experiencing slow growth, and the high skilled economies which Malaysia are hard
pressed to generate new growth drivers as efficiency gains are over. The current GDP
per capita for Malaysia is estimated at USD$6,970 in year 2008 (refer to Table 4.3) which
puts the country in the upper middle income bracket. This situation has come about
because other developing countries are also using the same strategies as Malaysia, and
they have comparative advantage in low wages or natural resources availability. The
Government has announced that they want to move toward a high income economy. In
this regard, it has tried to devise new strategies in new service sector areas, pursue
knowledge-based development strategies, encourage and support innovation and ideas
driven by talents in many economic sectors. This plan and strategy is supported by a
change in policies to support activities that create greater value added, generate new
sources of economic growth, and leverage knowledge based activities in traditional such
as economic sectors. Thus, the Government continues to build knowledge and skills in its
workforce, attract foreign investment that bring in new technology or new markets, and
support local firms that pursue innovation-based strategies. The IMP3 strategy seeks to
transform Malaysian industries into globally competitive firms. Malaysia has initiated the
Multimedia Super Corridor (MSC) and Biotechnology-Valley developments in order to
spearhead this direction. Vision 2020 articulates this strategy; and has been translated
into sectoral policies. The NEM released in April 2010 has provided a strategic direction
for Malaysia to escape the middle income trap.
Table 4.3: Income Group for ASEAN Countries
INCOME GROUPS GNI PER CAPITA (USD$) ASEAN COUNTRIES
High Income > 11,906 Brunei, Singapore
Upper Middle Income 3,856 11,905 Malaysia (USD$6,970 - 2008)
Low Middle Income 976 - 3,855 Indonesia, Philippines, Thailand
Low Income < 975 Cambodia, Laos, Myanmar, Vietnam
Source: World Bank, 2009
All these strategies are intended to give Malaysia a fillip to its economic growth. The
intended outcome is to propel Malaysia to become a developed nation with a high level of
income. A high income nation is estimated to have an annual income of US$13,426 per
capita by 2020 (RM46,991 at conversion rate of US$1 = RM3.50). To reach this level of
growth, the economy would have to grow at a much higher rate. Table 4.4 below shows
that the conservative per capita GDP (2000 prices) is estimated at RM27,000 by 2020 for
Peninsular Malaysia which is in the upper middle income range. It is imperative therefore,
that the objectives of the NEM and its roll out strategies are effectively implemented by
the government to achieve the target of USD15,000 per capita by 2020.

4-11
Table 4.4 : Estimated Per Capita GDP Growth for Malaysia, 2020
Region
Per capita GDP (RM) in 2000 Prices Average Annual Growth (%)
2000 2010 2020 2000-2010 2010-2020
Northern Region 12,215 14,714 21,774 1.9 4.0
Central Region 20,767 24,883 32,887 1.8 2.8
Southern Region 13,294 15,322 21,483 1.4 3.4
Eastern Region 14,388 16,133 25,156 1.2 4.5
Pen. Malaysia 16,046 18,965 26,879 1.7 3.5
Malaysia 15,170 17,762 24,898 1.6 3.4
Source: Computed from unpublished state GDP data, EPU and MP circular
4.3 Urbanisation
In the last several decades, Malaysia has been experiencing accelerated urbanisation as
a result of the structural economic change from heavily dependent on mining and
plantation agriculture to manufacturing and services. There has, however, not only been
rapid urbanisation but also, in the census decade 1991-2000, a less obvious but highly
significant trend in urban development. There is the centripetal concentration of the urban
population in a small number of city-regions, namely the conurbations around Kuala
Lumpur, George Town and Johor Bahru.
Malaysia possesses a strong urban hierarchy which has been developed since the early
19
th
century. This hierarchy continues to provide a sustainable geographical base for
further industrialisation and economic modernisation of the country. Today, a pattern of
polycentric interdependent urban centres has emerged, with the Kuala Lumpur
conurbation being the advanced city supported by the George Town, Johor Bahru and
Kuantan conurbations (Figure 4.1). To avoid the Kuala Lumpur conurbation emerging as
a single overwhelming primate city, pre-emptive actions should be taken to forestall any
further concentration of population and productive capacity into one single super
conurbation.
The NPP-2 recognises that these trends are part of the international processes
associated with globalisation and transformation into the K-economy. These processes, in
combination with the nations desire to achieve a high income economy, suggest that the
present trend for urban development to concentrate in the larger centres for higher
efficiency and high value-added growth sometimes at the expense, but not at the
exclusion, of rural areas and the smaller urban settlements will continue. At a
macroeconomic level, given the present stage of economic growth, enhanced economic
performance, particularly high technology and knowledge-based services, will also
continue to require that development generally be focused on core centres rather than be
spread thinly over a broad but relatively underdeveloped economic landscape.

4-12
All evidences indicate towards a more rapid growth of urban areas in the future, and a
concentration of this growth on existing large urban centres of activities. As such, most of
the urban population is anticipated to be living and working in the four major conurbations
of Kuala Lumpur, George Town, Johor Bahru and Kuantan. The four growth conurbations
are seen as the main engines of growth to generate the required jobs and enhanced high
income, thus ensuring quality of life for all in living areas. The conurbations are expected
to contain almost 70% of the urban population of the Peninsular by 2020.
It should be noted that a special case is made of the Kuantan Conurbation. Although
clearly not in the same league as George Town and Johor Bahru conurbations, it was
selected for its infrastructural support which is at par with the other two conurbations. The
Kuantan Conurbation development strategy is intended to create a regional balance by
making it possible to develop a substantial critical mass centre on the East Coast as a
base for an economic spread effect.
The National Urbanisation Policy (NUP) acknowledges the rapid rate of urbanisation that
is taking place in Peninsular Malaysia. Based on past and current trends, it is expected to
accelerate in the future to reach 75% urbanisation level in Peninsular Malaysia by 2020,
almost at par with other advanced countries.
For the NPP-2, enhanced performance of the economy, particularly with respect to
attracting foreign direct investment, suggests the need for a pattern of continuing
concentration of urban development in selected centres, particularly conurbations. With
the rapid expansion and spread of the conurbations, an ad-hoc non-sequential
development resulting in high infrastructure costs, loss of recreational space and green
lungs, as well as inner city decay, are some of the emerging imminent threats in urban
development.
The challenge for the national, state and local level planning authorities is to manage and
direct effectively the urban growth, both in the fast growing conurbations and in the slow
growing or declining urban areas. These planning authorities should maximise the
development benefits, control potential side effectssuch as. traffic congestion and
pollution, and play a positive role in achieving Vision 2020. Spatial planning should aim to
create urban centres offering all residents within urban areas a high quality of life and
acceptable levels of facilities such as schools, colleges, hospitals and parks as well as
good quality urban transport and utilities.
Urban centres outside of the four major conurbations are anticipated to grow slowly; and,
over time, lose their share of the urban population. Many major and minor settlement
centres, except for those lying within the sphere of influence of the conurbations, are
likely to decline in population. For local authority planners, this should be seen as a
challenge to enhance productivity and efficiency of the major and minor settlement
centres, and create small prosperous places to avoid more population loss. There are
presently a number of major and minor settlement centres that have shown strong
indications of becoming the nucleus of future conurbations. These include Mentakab-
Temerloh, Lumut-Sitiawan-Manjung and Muar-Batu Pahat-Kluang. There are also a

4-13
number of small centres that possess special features, such as Rantau Panjang, a border
gateway town, which may provide a basis for the development of niche activities. At the
same time, the capabilities of state capitals to service their surrounding populations
should, also be supported.
Other challenges are addressing the problems of economically lagging regions including
urban and rural poverty. More efforts will be directed to catalyse and transform the rural
and urban settings to become more attractive, prosperous and liveable areas with
improved income levels and lifestyles. These factors essentially concern effective
planning and managing sustainable human settlements, both urban and rural.
The NPP-2 advocates the strategy of concentrated decentralisation in key economic
development corridors to achieve the over-arching regional development objectives of
growth, equity and sustainability. This strategy envisages a system of functional urban
hierarchy with efforts on the rejuvenation of intermediate towns (major settlements) which
will have sufficient levels of population and activity concentration for economic efficiency
and agglomeration economies. The future development of urban centres and
conurbations will be guided to and shaped into a compact poly-nucleated urban structure
where a cluster of urban centres are economically and functionally linked to each other,
thus generating significant interdependencies and synergistic growth for mutual benefits
(Figure 4.2). In drawing up the plans for the Conurbations, it is important that focus be
given to growth management strategies such as delineation of urban limits/ urban growth
boundaries, and moving towards TOD in ensuring sustainable urban development. Action
programmes, such as urban revitalisation and high impact strategic regional
infrastructure, must be initiated to spur accelerated development in economically
depressed regions and focus poverty areas.

4-14
Figure 4.2 : Concentrated Dispersal Strategy
It is envisaged that a significant portion of the countrys GDP is produced within the urban
areas. The principal engines to drive growth and innovation will be found in the National
and Regional Growth Conurbations of Kuala Lumpur, George Town, Johor Bahru and
Kuantan. Besides regional functions, the Regional Growth Conurbations are expected to
play appropriate international and national roles to balance growth across the urban
hierarchy and keep the pace and level of urbanisation in the dynamic Kuala Lumpur
Conurbation manageable. For example, Kuantan Conurbation will serve as the premier
national petrochemical hub to cater for the demands of the Asia-Pacific markets. The
urban form of these conurbations will have a metropolitan core area that is linked to a
cluster of urban centres in the region by an efficient public transport system and high
speed broadband internet connectivity. Another example is Kuala Lumpur functions as
the core city linked closely to a ring of surrounding urban centres such as Petaling Jaya,
Putrajaya, Kajang, Rawang, Klang etc.
This city-region concept can also be adapted across the whole spatial scale of the
settlement pattern and hierarchy. The concept of functional urban hierarchy is important
not only to optimise the viable provision and utilisation of quality urban services and
infrastructure, but also an important tool to achieve regional balance and equitable
development, particularly ensuring the minimum acceptable level of services are provided
for in all urban areas.
As the country embraces towards higher urbanisation trends, there has to be greater
commitment from the government to be ready to meet up with any challenges and come
out with more innovative and creative strategies to combat the challenges. This should,
amongst others, include having a full Ministry for Sustainable Urban Development, the
setting up an Urban Research Institute and the establishment of an Urban Development
Programme and Funds to support Local Authorities in financing significant infrastructure
components of inner city redevelopment, brownfield regeneration and environment
conservation initiatives in special areas.

4-15
4.4 Regional Balance
Regional balance is interpreted as equal access to equitable levels of real income and
personal development opportunities and not necessarily as equal opportunities or right to
the same forms of development. It is generally acknowledged that not all places have the
same opportunity for development and growth potential, such as establishing and
operating high-tech industry. The overriding aim is to narrow the gaps and growth rates
between regions in the country. High development potential areas will however be given
greater priority in the short term.
Land and natural resources of the less developed regions, which are not fully harnessed,
should be further developed to its full potential in order to move up the value chain and
productivity thus helping to reduce regional imbalances. Resource-based, forestry-based
activities and industries, downstream agriculture-based activities, resort/eco tourism,
craft-based industries and other niche activities must be encouraged and supported. In
other words, viable economic activities that built on inherent resource strength and
competitive edge of the specific region should be directed to the less developed regions.
Appropriate serviced SME enterprise parks, incentives and strategic infrastructure in
these regions, especially the provision of special economic zones as well as ICT and
transportation network in potential tourism areas, should be enhanced to facilitate their
development. This will expedite their integration into the K-economy activities to promote
regional balance. In particular, this includes an early extension of the national expressway
to Kelantan state.
Regional balance has also to be interpreted as setting the stage to enable future
sustainable development to be carried out to all potentials parts of the country. Hence,
the inclusion of the emerging Kuantan Conurbation as an urban-region that will be
promoted, along with George Town and Johor Bahru Conurbations. Kuantan will act as a
reception area for the emergent and advanced economic growth sectors.
The modernisation of agriculture and enhancement of agricultural incomes, however, will
remain a basic factor in the eradication of regional imbalance. Out-migration from the less
developed regions should be anticipated and desirable in the national development
strategy to facilitate farm consolidation and labour productivity improvement. There is an
urgent need to strengthen educational, technical training and social development
programmes into the less developed states to encourage these populations to integrate
more effectively into the urban economy of the conurbations.
The notion of achieving regional balance has been one of the cornerstones of national
development that has underpinned most of the FYMP. The 3-tier federal system of the
government has also contributed to regional balance with development funds being
allocated equitably amongst the states according to their respective needs, resources and
priority.
Presently, the federal government seeks to spearhead and enhance the economic
performance in the regions to support high and sustainable national growth. To enable

4-16
accelerated regional economic development, specific strategies have been devised and
applied for the four economic regions in Peninsular Malaysia, that is, the Central Region,
Southern Region, Northern Region and the Eastern Region. This regional approach has
identified key local economic development corridors along the Growth Corridors for
implementing high impact catalytic initiatives. Examples of the economic development are
the agropolitan and special economic zones, in respect of NCER, ECER and South Johor
Economic Region (SJER) involving Iskandar Malaysia. To support the regional economic
initiatives of the nation, the NPP-2 has proposed the formulation and reinforcement of the
four main growth conurbations as international gateways and national cum regional hubs
for each of these Economic Regions, namely:-
Central Region - Kuala Lumpur Conurbation;
Northern Region - George Town Conurbation;
Eastern Region - Kuantan Conurbation; and
Southern Region - Johor Bahru Conurbation.
These conurbations are catalytic in spearheading development within the economic
regions. While the conurbations in the West Coast are more evident, the incipient
Kuantan Conurbation in the East Coast may need special Government assistance in
terms of both fiscal and non-fiscal incentives including the development of an integrated
social and physical infrastructure. One of the key economic instruments used is the
designation of the Special Economic Zone (SEZ) that would attract both public and
private investments in the region.
4.5 Rural Development Trend and Direction
Establishing strong urban-rural linkages is crucial in ensuring sustainable development of
the rural areas. Rural areas are normally characterised by poor accessibility to the urban
centres where the rural population is almost totally dependent on marketing farm produce
and income. Lack of technological innovation and support also will also result in low
productivity and low incomes. Poverty in the initial stages of development is often
associated with smallholding agricultural activities in rural areas (Scenario 1 in Figure
4.3).
To improve the attractiveness of rural areas, adequate non-farm job opportunities, higher
income, enhanced quality of living, better social facilities, improved access and
connectivity are essentially important and must be introduced. The symbiotic relationship
between rural and urban settlements must be strengthened through improved
connectivity and transportation routes so that the urban job opportunities in larger towns
can provide additional employment to farmers and village dwellers within travelling
distance from their homes. This situation will also allow workers to live in the rural areas
and work in nearby urban centres. This also will improve rural household income and
allow families to live in villages where the cost of living will be lower than in urban areas.

4-17
The constant government investments in rural areas have resulted in improved
accessibility and personal skills. Improved rural roads have enabled rural residents to
commute to non-farm work in job centres which are mainly found in the nearby larger
urban centres. Non-farm incomes have been increased with the introduction of resource-
and agro-based industries, as well as job opportunities (part time and seasonal) in the
retail and services sector in the small- and medium-sized towns.
Commuting to work in the urban centres due to employment in the non-farm sector has
led to higher household incomes. However, small land holdings, inadequate local farm
workers, and technological support including low market prices for agriculture produce
have often resulted in the abandonment of farms and a general decline in farm income
(Scenario 2 in Figure 4.3).
The NPP-2 has proposed a need to move to Scenario 3 (see Figure 4.3) where there is
cross-sectoral convergence of economic activities (such as agro and industrial
biotechnology), and closer economic integration between the rural areas and urban
centres. Rural development programmes introduced must recognise the important roles
of small towns and Rural Growth Centres (RGCs) as integral components of successful
rural development. At the same time enhanced linkages between rural growth centres
and job centres in larger urban centres must be further strengthened.
The key strategies to create prosperous, thriving and sustainable rural communities are:-
a. Improving agricultural productivity and value-add in the supply and marketing
chain by consolidating farm smallholdings and introducing cooperative farming
with professional management.
b. Developing human resource which is the main driving force to productivity and
innovation.
c. The use of technology including access to broadband Internet and establishment
of rural community ICT centres should be greatly encouraged and facilitated.
d. Providing good accessibility, particularly regular public transport services, from
the minor settlement centres and rural growth centres to the job centres in larger
urban centres to facilitate off-farm work commuting.
e. Creating opportunities for a range of non-farm income through developing
competitive, diverse and thriving rural enterprises including agro- and eco-tourism
initiatives, rural industries, Collection, Processing and Packaging Centres (CPPC)
for agriculture produce and One-District-One-Product initiatives.
f. Incorporating rural settlements and villages into the local authority areas so that
basic standards of building, sanitation and infrastructure are adhered to. The lack
of control on building structure and renovations in the villages has often resulted
in an overall deterioration of the quality of the physical environment and overall
built environment of these villages.
g. Upgrading intermediate towns and rural growth centres for providing quality social
and business services as well as creating secondary and tertiary job
opportunities.

4-18
Setting up of industries, particularly small and medium industries (SMI), would be the
most likely choice for the above purpose. The SMIs should capitalise on the strength of
the rural economic clusters prevalent in local areas. The Government must play a
facilitator role by providing the most conducive investment environment for private
initiatives and enterprises to grow and prosper. The most appropriate vehicle for this
programme is the government-related institutions and Government-Linked Companies
(GLCs).
In many rural settlements, including FELDA, the villagers are also involved in agricultural-
based downstream activities, such as the production of traditional cakes, sauces,
crackers, chips, handicraft and tailoring. The most successful example of the One Village
One Industry program or SAWARI, is the model carried out by FELDA, where one region
produces one type of product. Through this program, many FELDA settlers were able to
increase their income, while certain products are even exported. Some districts have
already been successful through this activity, such as Tumpat for sambal daging, Kuala
Kangsar for labu sayong and Marang for keropok lekor. These activities should be further
strengthened, developed and extended.

4-19
Figure 4.3 : Conceptual Strategy for Urban-Rural Linkages
Minor
Growt h
Cent res/
RGCs /
Villages
Job
Cent res
Almost totally dependant on farm income
Low productivity
Low technical and professional skills
Low income
SCENARIO 1
Initial
Relationship
Between Rural
& Urban Area
SCENARIO 2
Improved
Accessibility &
Personal Skills
SCENARIO 3
Future
Consolidation
of Farms &
Expansion of
Non-farm
Employment
Poor accessibility to urban centres
Improved accessibility to job opportunities
Enhanced physical accessibility to
urban job centres
Commuting to works to job centre
Increase in non-farm income
Increase in household income
Static or decline in farm income
Farms abandoned
Decline in agriculture jobs
Improved technical & professional skills
Farm consolidation& other institutional changes
Increase farm productivity and introduce CPPCs
Increase both farm & non-farm incomes
Create non-farm employment in, service sector, tourism, rural industries,
CPPC, One-District-One-Product, etc.
Capitalising on the strength of rural economic clusters prevalent in the area.
Integrated small towns / RGC development strategy by providing adequate
social facilities and infrastructure improvement
Broadband access and Rural ICT Centres
Strengthening employment
opportunities in major centres
Continue strengthening of
manufacturing & service
sectors employment
opportunities
Good transport accessibility
Minor
Growth
Cent res /
RGCs /
Villages
Job
Cent res
Minor
Growt h
Cent res /
RGCs /
Villages
Job
Cent res
Growth Conurbations
(National, Regional / State / Intermediate)
Major Growth Centres
Apart from providing equitable income, the rural areas should be upgraded and improved
to increase the quality of life and the surrounding environment. This can be achieved
largely by providing adequate social facilities, such as community centres and playfields,
infrastructure improvement, sanitation, solid waste disposal and drainage facilities.
Although most of the rural areas have been provided with these basic infrastructures,
more needs to be done to improve the quality whilst making sure that all rural settlements
have these minimum levels of basic facilities.
One of the most deprived rural areas is the Orang Asli (Aborigines) settlements. Most of
the Orang Asli people can be considered as hardcore poor. Although there is a major
government effort to provide each household with a decent house and agricultural land,
there are still however, many who are without proper houses and landless to generate a
decent living income.

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Further to this the Government has formulated a policy on the land alienation and
development of land for the Orang Asli through the National Land Council Meeting No. 65
(dated 4
th
Dec. 2009). The following terms were approved:
i. Two to six (2-6) acres of farm land (ladang) and a housing plot measuring
(5000sq. ft. - acre) according to the capability of the State Authority should be
given to each household.
ii. Alienation of land is to the Head of Household (Ketua Isi Rumah) as defined
under Section 3 Aboriginal Peoples Act 1954 (Act 134).
iii. Perpetuity tenure.
iv. The Restrictions in Interest on the land are:
The land cannot be rented, charged or be disposed except with the approval
of the State Authority in consultation with the Director General of the Orang
Asli Affairs Department
The first land owner may not transfer the land for a period of 15 years
The land can only be transferred to the Orang Asli
This policy is generally binding on all State Authorities in Peninsular Malaysia.
Notwithstanding this, this policy has received objections from the Peninsular Malaysia
Orang Asli Association (POASM) which has called for the recognition of a larger Cultural
Realm (Wilayah Adat Orang Asli) for the Orang Asli, which among others includes, the
settlement area, cemeteries, holy sites, subsistence farming areas, herbal areas, hunting
grounds, orchard areas, recreational areas and virgin jungle areas.
The NPP-2 proposed that the Orang Asli be provided with proper houses with land for
cultivation including land titles that must be safeguarded from falling into the hands of
non-Orang Asli. Agricultural land should be developed solely for their benefit and within it,
their settlement should be built. The spatial planning and economic model used in FELDA
and FELCRA schemes can be adapted and applied to develop the agricultural land for
Orang Asli. However, this land should be commercially managed by an appropriate
agency such as FELCRA or a suitable land cooperative. To ensure equitable income, the
land to family ratio should be at least 6-10 hectares per family.
4.6 Sustainable Use of Land
4.6.1 Available Land for Development
The land supply for development refers to the available land for further urban expansion
in the future. The Peninsular-wide land use analysis shows that built-up areas accounted
for a small proportion or about 3.3% of the total Peninsulars land in 2000, and about
5.8% in 2008. The phenomenon of urban growth in the Peninsular, reinforced by the
significant contribution by urban-based economic activities to GDP, has resulted in an
impression of broad scale urban sprawl.

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An assessment was undertaken to establish not only the gross area of additional land
required for future urban growth and economic activity needs in Peninsular Malaysia up to
year 2020 but also to identify at state level the likely directions of urban growth. The land
use assessment took into considerations the findings and forecasts of the sectoral studies
made on agriculture, environment, utilities and transport aspects.
The land available for future development has taken into account the need for optimising
land use without compromising the conservation of all the precious national assets and
heritages, particularly ecologically valuable land. This appraisal utilised a map sieving
technique where four main constraint areas were filtered out in determining land available
for development, namely:-
i. Existing Built-up Area;
ii. Physical Constraint Area;
iii. Prime Agriculture Area (PAA) Rank 1 and 2; and
iv. Environmentally Sensitive Area (ESA) Rank 1, 2 and 3.
By placing an embargo on the above constraint areas for development, the remaining
land was classified as available land for urban development (Figure 4.4). Table 4.5
presents the total area of land available for future development by state. The result of the
sieving technique showed that about 820,960 hectares of total land in Peninsular
Malaysia are available land for future development.
Table 4.5 : Total Area of Land Availability for Future Development by States (000 ha)
State Area (ha)
Perlis 0.99
Kedah 20.07
Pulau Pinang 13.82
Perak 161.25
Selangor 73.21
W.P. Putrajaya 0.03
W.P. Kuala Lumpur 0.25
Negeri Sembilan 29.77
Melaka 37.88
Johor 314.75
Pahang 124.29
Terengganu 19.99
Kelantan 24.66
TOTAL 820.96
Source: National Physical Plan-2, 2010.











Areas with Physical Constraints
(Contour > 300m & Slope > 25 Degrees)
Existing Built-up Area
Environmentally Sensitive Areas (ESA) Rank 1, 2 and 3
Prime Agriculture Areas (Rank 1 and 2)
Constraint Land
Land Not Subject to
Development Limitations
Available Land
State Capital
State Boundary
FIGURE 4.4 : LAND AVAILABILITY FOR FUTURE DEVELOPMENT IN PENINSULAR MALAYSIA
Source: National Physical Plan-2, 2010

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4.6.2 Agriculture Land
The Third National Agriculture Policy (NAP3) seeks to enhance the performance of the
rural sector through the optimal use of resources; and proposes to reduce the cost of food
imports. Among the measures incorporated into the NPP-2 to fulfil and support these
requirements is the designation of Prime Agriculture Areas (PAA).
Identification of PAAs is important to prioritise the agricultural land to be conserved based
on existing major food production areas. The established criteria from the first NPP were
utilised with further improvements imputed in this analysis. Below are the criteria and rank
used to identify the PAAs:-
i. Granary areas (eight existing granary areas).
ii. Paddy areas outside the granary areas.
iii. Agricultural areas designated as Permanent Food Production Parks which include
food crop, animal husbandry and aquaculture industry zones.
iv. Agricultural areas on peat or organic soils.
v. Agricultural areas on Class 1 and Class 2 soils.
vi. Agricultural areas on Class 3 soils.
vii. Agriculture areas in agro-ecological regions without dry season.
viii. Agricultural areas in agro-ecological regions with short dry season.
Table 4.6 provides the total area by state for PAA in Peninsular Malaysia and their
ranking. A total area of about 4.8 million hectares has been designated as PAA. The state
with the largest PAA is Pahang, followed by Johor and Perak.
Table 4.6 : Total Area of Prime Agriculture Areas (PAAs) by States (000 ha)
State Rank 1 Rank 2 Rank 3 Total
Perlis 13.4 14.3 27.7 55.4
Kedah 70.6 65.7 225.9 362.3
Pulau Pinang 11.8 2.9 18.5 33.2
Perak 40.3 70.7 627.0 738.0
Selangor 19.3 28.9 281.2 329.4
W.P. Putrajaya - - 0.6 0.6
W.P. Kuala Lumpur - - 0.3 0.3
Negeri Sembilan - 3.5 373.1 376.6
Melaka - 3.8 124.6 128.4
Johor - 101.1 998.3 1,099.4
Pahang - 56.8 1,064.0 1,120.8
Terengganu 5.7 28.6 323.9 358.2
Kelantan 29.8 41.4 168.3 239.6
TOTAL 190.9 417.7 4,233.4 4,842.2
Source: National Physical Plan-2, 2010.

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It is proposed that all PAAs should be conserved as part of the countrys need to be self-
sufficient in food production and for national security interest. In recognition of this, the
agriculture sector has been earmarked as the new third engine of growth for the nation.
As the PAAs are generalised locations, detailed studies at state and local levels should
further refine the precise delineation of these invaluable areas.
4.6.3 Environmentally Sensitive Areas
Environmentally Sensitive Areas (ESA) refer to areas that are of critical importance in
terms of the goods, services and life-support systems they provide such as water
purification, pest control and erosion regulation. In addition, they also refer to areas that
harbour the wealth of the nations biodiversity.
As such, it is important that these areas remain untouched by development, conserved or
sustainably managed depending on the type, characteristic and level of sensitivity/
importance involved. Based on these criteria, the ESA areas are ranked as ESA 1, 2 or 3.
Each rank is assigned the following management criteria:
ESA Rank 1 No development, agriculture or logging shall be permitted except
for low-impact nature tourism, research and education.
ESA Rank 2 No development or agriculture. Sustainable logging and low
impact nature tourism may be permitted subject to local
constraints.
ESA Rank 3 Controlled development whereby the type and intensity of the
development shall be strictly controlled depending on the nature of
the constraints.
A composite analysis is used to derive the ESA Categories, based on three broad ESA
criteria such as areas important for biodiversity; areas important for life support (although
it should be noted that areas important for biodiversity are almost always also important
for life support); and areas vulnerable to hazards (Table 4.7).

4-25
Table 4.7: Environmentally Sensitive Area Composite
Rank Criteria
Protection of Biodiversity
1 Existing and proposed Protected Areas (PA).
Important small habitats outside the PA system: Turtle landing sites, salt licks, important plant
areas, limestone outcrops and natural wetlands of high conservation value.
2 All other forests and wetlands outside of Protected Areas.
3 Marine Park islands.
Life Support System
1 Catchments of existing and proposed dams.
3 Catchments of water intake and groundwater recharge zones.
Hazard Risk Area
1 Areas above 1,000m contour.
2 Areas between 300m 1,000m contour.
3 Areas between 150m - 300m contour.
Areas with erosion risk above 150ton/ha/yr.
Areas experiencing critical or significant coastal erosion.
Source: National Physical Plan-2, 2010.
In addition, a 500m buffer zone is provided for around ESA Rank 1 and 2 areas.
The analysis process requires the entire data layer to be overlaid to produce an output
that contains the spatial combination of information with attributed data layer. In the
process of ranking, attribute databases are adjusted by setting the condition and linking
selected database to the spatial feature. The conditions are built by formulating queries
such as the highest rank value such as Rank 1, from respective data layer which will be
applied when both areas are overlapped. This process requires inputting the ranking
value inside the attribute for all sub-analysis data layer.
Using the same process, all completed sub-analysis data layers of biodiversity protection,
life support system and hazard risk were combined to form Environmental Sensitive
Areas (ESAs). The ranking values were inputted according to the sensitivity of the sub-
analysis data layer.
Table 4.8 gives the total area by rank for each state. Total areas of 4.7 million hectares as
Rank 1 ESA, 3.6 million hectares as Rank 2 ESA, and 3.8 million hectares as Rank 3
ESA have been identified. Pahang state possesses the most ESA, followed by Perak,
Johor and Kelantan states.

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Table 4.8 : Total Area of Environmentally Sensitive Areas (ESAs)
by States (000 ha.)
State Rank 1 Rank 2 Rank 3 Total
Perlis 32.6 9.2 27.6 69.4
Kedah 222.0 251.0 373.6 846.6
Pulau Pinang 3.8 19.1 39.6 62.5
Perak 1,087.0 320.2 471.9 1,879.1
Selangor 268.5 147.1 306.5 722.1
W.P. Putrajaya - - 3.9 3.9
W.P. Kuala Lumpur 0.4 3.3 7.2 10.9
Negeri Sembilan 115.6 184.6 352.9 653.1
Melaka 8.1 13.5 88.4 110
Johor 617.5 322.1 652.3 1,591.9
Pahang 1,192.2 1,468.9 814.1 3,475.2
Terengganu 403.1 533.8 316.6 1,253.5
Kelantan 784.3 351.2 313.0 1,448.5
TOTAL 4,735.1 3,624.0 3,767.6 12,126.7
Source: National Physical Plan-2, 2010
4.6.4 Urban Land
i. Future Urban Land Needs
Future urban land required to meet the projected development needs involves various
policy decisions and planning standards, such as urban-rural population ratio, degree of
intensification of development, extent of mixed-development, desirable urban form and
pattern. In estimating the land required for urban purposes, two major factors were
considered. The first factor is the demand for land generated by the increase in urban
population such as housing and job needs; and secondly, urban land availability
assessment without jeopardizing priority and other key land uses such as agricultural
production for food security, biodiversity conservation or geo-hazard risk areas.
The additional urban land needed for new urban uses by each state in the NPP (2005)
was determined by using the projected urban population growth over the gross average
density of 25 persons/ha, which gave an estimated total of 768,610 ha. of urban land
required in Peninsular Malaysia up to year 2020.
The urban density in 2020 based on the State Structure Plans is lower than the average
urban density of 25 persons per hectare as proposed by the NPP (2005).
This implies an over allocation or inefficient use of future urban land resulting in wastage
of resources in providing unwanted or underutilised infrastructures. In this respect, it is
useful to carry out a review on the urban land required especially for those states which
show very low urban densities such as Perlis, Kedah, Negeri Sembilan, Pahang and
Terengganu. There is also a need to undertake a further comparative benchmark study

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and adopt accordingly a suitable higher urban density to ensure the optimal use of land in
an environmentally sustainable manner.
To cater the needs for the increase in urban population up to the year 2020, the NPP-2
has estimated that a total of around 959,700 ha. of land will be required for urban uses or
its equivalent, accounting to approximately 7.3% of Peninsular Malaysias total land area
(Table 4.9).
Table 4.9 : Estimated Urban Land Requirement by States, 2020
State
Additional Urban
Population 2008-2020
(000)
Additional Urban
Land Required
(000 ha)
Estimated Urban
Land/ Built-Up Area
2020
000 ha %
Perlis 20.0 0.8 6.6 8.1
Kedah 330.7 13.2 65.4 6.9
Pulau Pinang 470.9 13.9 50.0 47.9
Perak 488.8 19.6 97.9 4.7
Selangor 1,866.7 60.2 203.9 25.6
W.P. Putrajaya* 225.8 0.7 3.9 88.6
W.P. Kuala Lumpur* 569.7 0.1 22.5 93.0
Negeri Sembilan 128.7 5.1 62.2 9.3
Melaka 122.7 4.9 34.1 20.6
Johor 850.6 34.0 196.4 10.3
Pahang 511.5 20.5 100.7 2.8
Terengganu 283.9 11.4 61.5 4.7
Kelantan 384.2 15.4 54.6 3.6
TOTAL 6,254.2 199.8 959.7 7.3
Note : Designated urban density is estimated based on the existing and targeted urban density in State Structure Plans
and 1
st
NPP whichever is higher. Design density of 25 ppha is used where the existing built up density in the state is
lower. For the States of Selangor, W.P. Putrajaya, W.P. Kuala Lumpur and Penang, the current density is used to
estimate the urban land requirement.
* The whole of W.P. Kuala Lumpur and W.P. Putrajaya are almost developed for urban use in 2008 (92.6% and
72.7%). Urban redevelopment with the same or higher urban density is needed to support the targeted urban
population in 2020.
Source: National Physical Plan-2, 2010.
ii. Supply of Land for Development
Land requirement for future urban use should be allocated without intruding into
specialised or specific use such as PAA or ESA. Much of these land requirements can be
met by redevelopment of brownfield sites (such as previously developed land) or infill
development with higher densities and mixed-uses without sacrificing greenfield sites
from the urban fringes.
Applying the same rigorous criteria at state level shows that five states namely Perlis,
Kedah, Pulau Pinang, Selangor and W.P. Kuala Lumpur, will need to utilise either land
designated as PAA or ESA.

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For Perlis, Kedah and Pulau Pinang, given the significance of the granary areas and the
enormous investment made in the irrigation schemes, the use of the lower ranked ESA
land may be given priority in favour to the use of the PAA lands to overcome the apparent
shortfall in land required for future urban use. However, considerable care must be taken,
particularly in the use of water catchments and water recharge areas.
With respect to Selangor, W.P. Kuala Lumpur and Putrajaya the analysis of land required
for future urban use and lands not subject to limitations reveals that even if some of the
lowest rank ESA lands were to be assigned for urban use, there is still a need to utilise
PAA lands for urban uses. Given the present pattern of urban land use development
within these states, priority should be given to urban land use consolidation over the use
of PAA in the interests of efficiency and effective use of national resources.
Innovative spatial planning measures must be taken to reduce further loss of PAA and
ESA Rank 3 lands including adopting higher gross densities, encouraging mixed-
development in town centres, infill development, rehabilitation and redevelopment of
under-utilised buildings sites particularly institutional uses such as railway land and
prisons. Other physical planning measures includes creating and sharing spaces, flexible
land use zoning in built-up areas, relocating non-central uses, and decentralising land-
extensive uses to land surplus states. Urban sprawl should be avoided while new
development, especially townships in greenfield sites, can only be permitted if such
development cannot be carried out in the existing town centres or urban fringes. Specific
Development Plans for the conurbations should indicate in greater detail, areas to be
consolidated, delineation of urban limits and the provision of green corridors and green
belts as part of the need to conserve and protect PAAs and ESAs.
iii. Housing
A general assessment of the projected needs for year 2020 shows that future housing
need can be accommodated within the designated urban centres without converting forest
lands or environmentally sensitive areas into housing. However, the shortage of
affordable housing in the conurbations and larger towns is a key issue that must to be
tackled urgently. Land speculation should be further reduced by exercising the lapse of
planning permission according to sec. 24 of the Act 172.
A major challenge in spatial planning is to change the mindset from the present
perception that all lands adjacent to urban areas are ripe for development. In reality,
considerable waste of resources can occur when approved land for conversion was made
without a thorough assessment of demand. As the urban areas expand, this process of
increasing supply versus maturing of demand will be exacerbated. Effective management
and dissemination of information to the appropriate authorities on supply and demand for
urban purposes, land suitability, incorporation of PAA and forest lands in conurbations
into green belts designation should be made to avoid housing mismatch, property
overhangs and inefficient use of lands adjacent to urban areas.

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Identification of routes, recognising long lead times and need for operational efficiencies
required by public transport, should also be assessed in the managed release of future
urban land and conurbations. Assessments must also be made in considering the
capacity and cost of upgrading existing infrastructure and utilities, such as water supply,
electricity and road space for future urban growth.
iv. Industry
The Third Industrial Master Plan (IMP3), 2006-2020, aims to drive industrialisation to a
higher level of global competitiveness with an integrated approach towards industrial and
economic development. The implementation plan for IMP3 has a regional component
which seeks to balance out the potential inequity in outcomes.
Within the industrial sector, the focus is to develop key industrial or economic clusters in
all locations with a competitive advantage. The key cluster areas are shown in IP5. They
will be developed further along with the necessary enabling factors such as infrastructure,
skills and conducive government policies to further enhance the attractiveness of these
clusters.
Industrial activities will be promoted along the main growth corridors identified in the Plan
where urban based industrial activities are located, and in selected industrial zones/
nodes within the conurbation areas. Adequate infrastructure, utilities and logistics support
should be provided within these industrial belts to further optimise their land use potential
as well as separation buffers for residential areas.
General manufacturing industries will be promoted in intermediate cities and secondary
urban centres to diversify the economic base of the region and provide opportunities for
non agriculture-based employment. Resource-based industries will be developed at
resource locations depending on the type of industry. Rural industries will be located in
minor local centres and RGCs to better serve the rural community and benefit from the
infrastructure and services already available in these small towns.
4.6.5 Tourism
Tourism will be promoted as the second engine of growth for the nation, particularly with
the recent liberalisation of the tourism sector to enhance its global competitiveness.
Malaysia, as a preferred attractive destination, is being packaged by type of attraction
product categories and aggressively promoted by all the states. Table 4.11 highlights the
states tourism attraction resources and their locational advantages. It is essential for
each state to ensure that these tourism resources are properly managed and preserved.

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Table 4.10: States Tourism Attractions
State Promotion Caption
Perlis: Little Northern
Gem
Perlis prides itself on natural beauty and quaint, tradition country charm.
Kedah: The Rice Bowl
of Malaysia
Kedahs landscape takes on different hues depending on the seasons of the rice
fields. The countryside is greenest when the newly planted paddy is spouting,
turns a golden yellow at harvest time.
Pulau Pinang: The
Pearl Of The Orient
Penang attracts food enthusiasts and those who love exciting beaches and rich
cultural experiences.
Perak: The Silver State Peraks Main Range mountains cut across the state, standing in dramatic
juxtaposition to the flat, steaming plains.
Melaka: Historical City Melaka is seen as one of Malaysias premier tourist destinations, with its unique
heritage and multitude of museums and delicious food.
Kuala Lumpur: The
Capital City
Kuala Lumpur is where the new embraces the old, where modern sophistication
meets colourful tradition.
Putrajaya: Intelligent
City
Putrajaya is the new Federal Government Administrative Centre. It is a modern
city, which is rapidly growing and practises the concept of intelligent garden city.
Negeri Sembilan: Land
of Quite Grace
Negeri Sembilan is well-known for its rich Minangkabau heritage which is still
evident in the unique architecture and matrilineal society here.
Pahang: Adventures off
the Beaten Track
Nearly two-thirds of Pahang is blanketed in ancient virgin rainforest, making in a
magnificent enclave of lush greenery and exotic wildlife.
Kelantan: The Cradle
of Malay Culture
Kelantan is a prime centre for Malay culture, crafts and religion.
Johor: Southern
Gateway
Johors vast landscape is characterized by plantations and is punctuated by
spectacular national parks and quaint fishing villages.
Terengganu: Beach
Paradise
Terengganu has a strong cultural personality and is blessed with some of the best
islands in the country.
Selangor: The Golden
Gates
Selangor is home to suburban ideals and highly developed infrastructure while still
preserving some of the finest nature reserves.
Source : Ministry of Tourism, 2009
Tourist arrivals to Malaysia have been growing between 3.5 to 14% since 2005-2007; and
have increased to 10 percent per annum, higher than the targeted growth of 6.9 percent
within 2001-2005. This highlights the strengthening effect of the sector and the emerging
importance of Malaysia as a preferred tourist destination in the world. The 9
th
MP has
forecasted that tourist arrivals to Malaysia will grow at an average annual rate of 8.4
percent per annum to reach 24.6 million arrivals by 2010.
The four tourism development zones identified by the National Tourism Policy will be
further emphasised in NPP-2. Integrated approach on planning and tourism
implementation for sustainable tourism is also highlighted in the 9
th
MP. At the state level,
identification of the main tourism products and potential tourism zone/ corridors is made
in the State Structure Plan. A balanced tourism development strategy aimed at both
international and domestic markets should be adopted. This strategy requires the federal
and all state governments including the private sector, to develop sustainably and
promote actively the tourism attraction products in line with visitors preferences, provision
of high quality support facilities and infrastructure both for domestic and international
markets, while ensuring that these resources are properly preserved and maintained.

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Fast depleting natural resources, such as pristine forests, hills and wetlands, the heritage
sites and cultural lifestyles need to be protected and managed properly in a sustainable
manner. Serious efforts should be taken by the government and tourism players to reduce
the development pressure exerted on the natural resources of the country. Diversifications
of products from natural to man-made will be a good option. High density urban and man-
made tourism development need to adopt focused and concentrated strategy in special
demarcated urban tourism areas, while rural tourism areas need to be further preserved
and protected from conflicting land uses. Tourism cities, towns and zones need to have
clear demarcated boundary.
Priority needs to be given to tourism within identified tourism towns and zones, according
to their potentials. Future development of designated tourism towns and zones requires
monitoring to ensure the sustainable protection of existing and potential tourist attraction
areas as national assets. Special tourism guidelines must be prepared within designated
tourist areas, taking into consideration of their carrying capacities. Controlled development
by means of land use zoning, land use classes restrictions, design guidelines and heritage
and culture preservations management plans need to be planned and adopted for all
tourism zones. Priority should also be placed on the following tourism activities, in line with
the recent sustainable tourism approaches and emerging tourists preferences:
i. International shopping for ASEAN region and other international visitors within
the main conurbations (Kuala Lumpur, Johor Bahru and Pulau Pinang) and
international gateway towns;
ii. Urban tourism including shopping, health, medical, educational, festivals, sports,
MICE tourism and others within the urban areas with readily available supporting
infrastructure, facilities and human resources. This also includes special roles
tourism cities/towns such as Putrajaya and Cyberjaya as intelligent cities;
iii. Coastal tourism within high and medium density tourism towns/zones, marine
parks, island gateways and rural coastal districts, such as Melaka, George Town,
Langkawi and Kuala Terengganu;
iv. Rural cultural tourism with an emphasis on the development and protection of
tangible and intangible assets within traditional kampongs, beaches and islands
such as Alor Gajah, Kuala Pilah and Kuala Lipis;
v. Development and protection of national tangible and intangible heritage zones,
routes and values such as World Heritage Cities, Perak heritage sites, Royal and
Heritage towns, Malaysian traditional and multicultural heritage lifestyles; and
vi. Development and protection of natural heritage assets such as National Parks,
State Parks, marine park islands, highlands and hill stations, wetlands and
RAMSAR sites, beaches, birds and turtle landing sites, firefly habitats and all
other eco-tourism sites.

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Table 4.11: Major Tourism Destinations Based on Locational Advantage
Tourisms Destination Categories Areas
Shopping Cities/Town Kuala Lumpur
Johor Bahru
Penang
Border Towns Bukit Kayu Hitam
Padang Besar
Rantau Panjang
Coastal Tourism Towns Kuah, Langkawi Geo-Park
Port Dickson
George Town - Tg. Bungah - Bayan Baru
Lumut
Kuala Terengganu
Kuantan
Eco-Tourism (Non-Coastal) Gateway
Towns
Jerantut
Gua Musang
Gerik
Kuala Lipis
Kuala Berang
Segamat - Bekok
Island Gateways Mersing/Kuala Rompin
Kuala Besut - Merang
Kuala Terengganu - Marang
Kuala Perlis - Kuala Kedah
Port Klang
Lumut
Rural Coastal Tourism Zone Cherating - Kijal
Alor Gajah
Yan - Seberang Perai Utara
Muar - Pontian
Mersing - Desaru
Sabak Bernam - Kuala Selangor
Kelantan and Terengganu Coastal Districts
Eco-Coastal Tourism Zone (islands and
wetlands)
Johor Marine Park
Kedah Marine Park
Terengganu Marine Park
Pulau Pinang National Park
Pulau Sembilan State Park
Klang Islands
Kukup Island
Tg. Tuan, Upeh Island
Setiu Wetland, South East Pahang Peat Swamp Forests
Kuala Gula - Matang - Segari - Melintang
Taman Alam Kuala Selangor

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Tourisms Destination Categories Areas
World Heritage City/National Heritage
Sites/Heritage Town/Royal Town
George Town and Melaka
Beruas, Lenggong, Sg. Lembing, Lembah Bujang
Taiping, Kota Bharu, Kuala Terengganu, Klang, Kuala Lipis
Kuala Kangsar, Pekan, Seri Menanti, Alor Setar
Hill stations Cameron Highlands
Genting Highlands and Bukit Tinggi
Frasers Hill
Penang Hill
Source : National Physical Plan-2, 2010
4.6.6 Transportation Network
The development of a comprehensive transportation network for the country is essential
as a means of integrating and maximising the various state economies comparative
advantages for the benefit of the nation as a whole.
IP 22 indicates the conceptual Integrated National Transportation Network for Peninsular
Malaysia to support the NPP-2 Development Strategy.
The transportation network strategies comprise the following aspects:-
i. Network Configuration
ii. National Gateways and Transportation Nodes
iii. Urban Transportation and Intelligent Transport Systems
i. Network Configuration
The road and rail networks should be appropriately linked to facilitate multi-
modalism, in order to achieve an integrated national transportation system.
a. High-Speed Rail System
Based upon the efficiency criteria, a 300 kph high-speed rail system is proposed
consisting of a West Coast line, an East Coast line and two cross lines spanning
and linking together the two coastal spines.
The high-speed rail system is proposed as a bulk mover both for people and for
goods servicing all existing conurbations and state capitals. It should also connect
all the major gateways and ports (seaports, inland ports and airports) in the
country.
As the high-speed train proposals along the West Coast, to the East Coast and
the East-West links have a long term horizon, corridor alignments need to be
identified and incorporated into lower tier plan to be protected as part of the
staged implementation of these programmes.

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b. Road Network
The expressway system is to be extended to ensure effective linkages between
the various states. A minimum of three highway crosslink will be provided to
bridge the West Coast and East Coast expressway systems.
The extensive network of lower hierarchy roads such as the federal and state
roads shall be upgraded to support and complement the national expressway
system. The present network of roads should be further strengthened leading to
the formation of a ladder pattern configuration (see IP 24).
ii. National Gateways and Transportation Nodes
a. Kuala Lumpur International Airport
The largest gateway for international arrivals into the country is the Kuala Lumpur
International Airport (KLIA).
With an annual throughput of 27.5 million passengers per annum (mppa), KLIA is
operating currently at about 60.0% of its existing capacity of 40 mppa. KLIA has
an expandable ultimate capacity of some 50 mppa. Given the availability of some
40.0% spare capacity, the most urgent task is for KLIA to create a critical mass
which is large enough to become self-generating.
Externally, KLIA is strategically situated midway of the international air routes
from Europe, Middle East and Indian Sub-Continent (at the north) to the
Australasia and Oceania countries (at the south), and is equally strategic for
travel from the East Asian countries (China, Japan, Korea and Taiwan) to the
South African Continent. Strategic alliances with airlines flying these routes may
accentuate its role and appeal as an international hub and attraction.
KLIA must be made into an integrated national transportation hub whereby
travellers bound for external destinations generated locally within the natural
hinterland and are channelled efficiently and multimodally through KLIA (IP 25).
KLIA must be made into an integrated national transportation hub whereby
travellers bound for international destinations either generated locally or within
the natural hinterland are channelled efficiently and multimodally through KLIA
(IP 25).
b. KL Sentral
KL Sentral shall be the national transportation hub linking the major
transportation nodes in the country with a range of multimodal services. Being the
central station, KL Sentral shall be the confluent point of the nations high-speed
rail system and the meeting point of the Express Rail Link, the KTM Commuter
Line, the Light Rail Transit and the KL Monorail.

4-35
To be a truly effective urban transportation interchange, KL Sentral must be well
served by efficient feeder bus systems and be integrated with well-designed
network for non-motorised transport modes such as walking and cycling.
c. Airports
Five international airports are proposed to support the overall NPP-2 transport
development strategy (IP 25).
i. Kuala Lumpur International Airport (KLIA),
ii. Penang International Airport (Pulau Pinang),
iii. Sultan Ismail International Airport (Johor Bahru),
iv. Sultan Mahmud International Airport (Kuala Terengganu), and
v. Langkawi International Airport.
The development of Sultan Ismail International Airport in Johor Bahru is planned
to be integrated with the Port of Tanjung Pelepas as one of the cargo
transhipment mega hubs for the region.
d. Sea Ports
Existing sea ports and designated functions are (IP 25).
National Ports : Port Klang, Port of Tanjung Pelepas, Penang
Port, Kuantan Port
Regional Ports : Kemaman Port, Kertih Port
Coastal and Feeder Ports : Pasir Gudang Port, Tanjung Langsat Port,
Langkawi Port, Kuala Kedah Port, Lumut
Port, Tanjung Keling Port, Tok Bali Port
Port Klang, Port of Tanjung Pelepas (PTP), Penang Port and Kuantan Port are to
be the major national ports, albeit each with different focuses.
The Port of Klang, with its central location and proximity to the nations domestic
hinterland, is to be established as the national hinterland port with extensive inter-
modalism and efficient land bridging services to other ASEAN countries such as
Singapore, Thailand, Cambodia, Myanmar and Laos. PTP on the other hand, is to
concentrate on its development to be a regional transhipment hub for South-East
Asia with an extensive maritime feeder service to all ASEAN countries.
The maritime services by Port Klang and Port of Tanjung Pelepas should be
complemented and strengthened by the Ports of Penang and Kuantan. Main
shipping lines, which prefer to load and unload goods at the Northern Region of the
Peninsular Malaysia, can do so at Penang Port. Similarly, Kuantan Port could cater
for ships going to the Eastern Region of the Peninsular and from the Pacific Rim

4-36
countries and the East Asia Region that do not navigate en route the Straits of
Melaka.
The development of an efficient and extensive intermodalism, feeder and hub port
system in freight transportation should be readily promoted. The setting up of a
National Commission on Intermodal Transportation (NATCIT) or equivalent to help
develop the intermodal development in the country to a globally competitive level is
therefore needed. This will certainly improve the competitive edge of the national
ports in their endeavours to become the leading top ports in the South-East Asian
region. While the ports of Port Klang and PTP have excellent growth in the
throughput, there is however a need for government support to strategise and
provide the necessary infrastructure and associated facilities for deep water port in
both Penang and Kuantan. The positioning of these four national ports will also
serve as a catalyst to develop the respective conurbation areas and their regional
hinterland.
iii. Urban Transportation and Intelligent Transport System
The urban transportation strategy will focus on the development of an integrated,
efficient and reliable urban transportation system in all major urban centres of
Peninsular Malaysia. The emphasis will be on the need to have a more efficient, safe
and comfortable public transport system to enable a modal shift from private car
usage.
It is proposed that for major urban centres in Malaysia, the modal split target of 30:70
by year 2020 between public and private transport and long term modal split ratio of
50:50 be adopted as a city mission. Kuala Lumpur presently has a modal split ratio of
20:80 in favour of private transport while the National Key Result Areas (NKRA) is
targeted to achieve 25:75 model split in Klang Valley by year 2012.
A fully integrated network system will require the creation of one single multimodal/
multifunction transportation authority to oversee public transportation including rail
systems, bus routing and other para transit modes. Detailed conurbation studies will
be required to prioritise provision of infrastructure to achieve the modal split and
coordinate the location of fixed track networks in areas of greatest demand. For the
lower order urban centres which are not likely to exceed the 500,000 population
mark, transport system should rely more upon buses.
The use of Intelligent Transport Systems (ITS) will complement the development of
modern urban public transport facilities. This system relying upon advanced
electronics communications and IT for monitoring and tracking real time information
on traffic flows and volumes is to better manage limited road space. The present
level of ITS infrastructure is to be expanded in the three main conurbations.

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4.6.7 Utilities and Services
The main physical aspects in providing appropriate Infrastructure and utilities involve the
following strategies:-
i. Supply/source - supply must be sufficient and secure to meet demands.
ii. Coverage/accessibility - infrastructure shall be accessible to meet demands.
iii. Reliability/quality - infrastructure shall be sufficiently reliable and of the quality to meet
the demands.
iv. Sustainability - infrastructure shall be developed in a sustainable manner to
safeguard the environment and to be able to meet future demands.
In addition to the above, infrastructure shall be provided in an equitable manner, where
access to appropriate levels of infrastructure shall be made available to all levels of the
population.
i. Water
Apart from conserving water resources, the development strategy for water supply
involves increasing supply and distribution systems to meet projected demands.
Production capacity for the whole of the country is expected to increase from 11,917
million litres per day (MLD) in the year 2000 to 18,482 MLD by the year 2010. New
dams, water intakes, water treatment plants and distribution systems will need to be
constructed to meet future demands.
To ensure an efficient water supply distribution system, measures such as reducing
non-revenue water, enforcement against water thefts, pipe and meter replacements,
the use of GIS for distribution systems, rehabilitation and upgrading works to
distribution systems and water treatment plants will need to be upgraded and
continually monitored.
To address anticipated water shortage and uneven distribution, inter-basin and inter-
state water transfers will be implemented. Interim measures to address water
shortages includes rain water harvesting, the use of storm water in ponds for non
potable use and groundwater development. Non-structural measures such as water
conservation and the use of water saving devices will also need to be encouraged.
Accessibility to potable water in remote and rural areas will also be a priority. Water
supply coverage to rural population will increase to 100% in the states of Johor,
Kedah, Melaka, Negeri Sembilan, Pahang, Perak, Perlis and Pulau Pinang. Coverage
to the rural population in Selangor, Terengganu and Kelantan is expected to be 99.5%,
98.0% and 70.0% respectively by year 2010. These figures are expected to improve
further in the future once additional rural water supply projects are implemented.
The most fundamental of these services is the provision of water to meet the varying
demands of the urban population, agriculture and industry. The National Water

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Resources Study up to year 2050 (NWRS) has estimated the demand for domestic,
industrial and irrigation in Peninsular Malaysia to increase from 10,833 million m
3
/year
of water in year 2000 to 13,900 million m
3
/year in year 2020, an increase of 22.0%
(Table 4.12).
Table 4.12 : Projected Water Demands for Peninsular Malaysia, 2020
Demand Sector Units
Year
2010 2020
Domestic million m
3
/yr 2,987 3,862
Mld 8,184 10,582
Industrial million m
3
/yr 2,592 3,561
Mld 7,101 9,756
Sub Total million m
3
/yr 5,578 7,423
Mld 15,285 20,338
Irrigation million m
3
/yr 6,517 6,517
Mld 17,857 17,857
Total
million m
3
/yr 12,095 13,940
Mld 33,142 38,195
Source: NPP-2 Infrastructure and Utilities Technical Report, 2001
The per capita water availability for Peninsular Malaysia in year 2050 is projected to
decrease approximately 3,000 m
3
/year. It is projected that Negeri Sembilan will face
water shortage by year 2010, Pulau Pinang and Melaka by year2020. Selangor and
Perlis will be in the same category by year 2050. The water-rich states are Perak,
Johor, Pahang, Terengganu and Kelantan.
Serious consideration to the protection of water sources and to the future water needs
of both the urban and rural areas must be given top priority. Water surplus and water
stressed areas have been identified and these have been matched against water
source catchments, dams, and water recharge and aquifer areas (see IP 26).
Apart from the water transfer programmes, other specific proposals for water
management include the designation of thirty eight (38) dam sites and the protection
and rehabilitation of existing rivers and water bodies through the use of buffer zones
and conservation of wetlands, peat areas and lakes (inclusive of ex-mining ponds).
ii. Sewerage
In line with the need to create world-class cities, a major commitment to sewerage
treatment will be required. The thirteen (13) sewerage projects comprising ten
sewerage treatment plants and three central sludge treatment facilities will increase
service totals to 14.4 million people.

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The level of service of sewerage facilities will need to be upgraded with priority given
to densely populated areas within the main conurbations of Kuala Lumpur, George
Town, Johor Bahru and Kuantan. Within the main conurbations and major settlements
regional sewerage treatment plants and systems are required to increase efficiency of
the sewerage systems. Priority will also be given to the offshore islands and
Environmentally Sensitive Areas such as marine parks and nature reserves and tourist
destinations where appropriate sewerage systems shall be put in place to safeguard
their sensitive environments.
iii. Drainage
Under the NPP-2 development strategy, drainage and flood mitigation programmes for
the period up to 2020 are to address flood problems for the main conurbation areas of
Kuala Lumpur, George Town, Johor Bahru and Kuantan.
Traditional flood mitigation approaches shall be integrated with source control
measures based on Manual Saliran Mesra Alam (MSMA). Flood risk maps for
Peninsular Malaysia must be prepared to ensure that adequate provision and
consideration is given to this aspect for future physical and land use planning. To this
end, contemporary approaches in flood mitigation based on preventive measures
which focus on avoidance of flood prone areas for development are to apply. An
exception can be allowed for agricultural activities, for which a suitable risk must be
factored in for flooding. The principle is to curb intrusion of urban uses into wetlands
and flood plain areas that serve as natural flood storage facilities. This environment
friendly policy promotes conservation of wetlands whilst the flora and fauna provide
regional level active and passive recreational facilities for urban residents.
iv. Solid Waste Management
The National Strategic Solid Waste Management Master Plan provides various
strategies and measures to improve solid waste management. Among the physical
aspects of this Master Plan includes the construction of solid waste facilities to enable
the proper collection, treatment and disposal of solid waste.
Among the facilities that have been constructed include the transfer station at Kuala
Lumpur and the sanitary landfill at Bukit Tagar, Selangor and Selong, Johor. It is
expected that additional regional sanitary landfills and other facilities such as thermal
waste treatment plants, transfer stations and sanitary landfills will also be built.
Upgrading of existing unsanitary landfills will also be carried out. In addition, old
unused dumping sites will be properly closed.
Apart from the construction of physical facilities, public awareness campaigns will be
carried out. Efforts will also be carried out to achieve waste minimisation, reuse,
recovery and waste recycling target of 22% by 2010.

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v. Electricity
The peak demand for electricity supply is expected to increase steadily in tandem with
the increase in domestic, commercial and industrial consumers.
To meet the electricity demand growth, more new efficient power plants will be built
and proposed to be located at the peripheries of the main conurbations of Kuala
Lumpur, George Town, Johor Bahru and Kuantan. In line with the national aspirations
of green energy, more hydro power plants will be constructed to reduce the use of
fossil fuels. Two new hydroelectric power plants at Ulu Jelai and Hulu Terengganu are
currently being implemented. In addition renewable energy solutions such as solar
power, wind, wave and biomass will also be promoted. Energy Efficiency systems and
Energy Demand Management systems will also be implemented to ensure efficient
and productive use of energy.
The steady growth in demand will require the transmission and distribution of
electricity being strengthened to improve the adequacy and reliability of supply. 500kV
and 275kV transmission will form the backbone of transferring large amounts of power
from the power plants to the load centres in Peninsular Malaysia, where the power is
distributed to the consumers via an extensive distribution network. Amongst the
completed transmission projects are the 500kV line from Gurun-Air Tawar in the north,
Air Tawar to Kapar in the central region, Pasir Gudang-Yong Peng in the south and
the connections from three large power stations namely Manjung Power Station,
Tanjung Bin Power Station and Jimah Power Station. More 500kV transmission lines
will be added as the power station expands to cater for the electricity demand growth.
Cross-border power interconnections with neighbouring ASEAN countries have been
in place since 1981 and today the power systems of Peninsular Malaysia, Singapore
and Thailand are interconnected to enable exchange of power. The high voltage direct
current (HVDC) transmission links between Peninsular Malaysia and Sarawak and
also between Peninsular Malaysia and Sumatra will ultimately pave the way for the
establishment of the ASEAN power grid.
vi. Natural Gas
The Peninsular Gas Utilisation Pipeline (PGU) and the Natural Gas Distribution
System (NGDS) have enabled many areas within Peninsular Malaysia to be served by
piped natural gas. The main consumer of natural gas is the power sector, followed by
the non-power sector. A small amount is exported to Singapore.
The NGDS will be further expanded by another 640 km to 2,005 km by 2010 to meet
the demand of new growth areas. In addition to the expansion of the NGDS, measures
to promote the use of natural gas for vehicles (NGV) will also be made. Additional
NGV stations are expected to be constructed to support the use of NGV.

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4.6.8 Information and Communications Technology (ICT) Development
The National Information Technology Agenda (NITA) is a strategic framework for IT
programme development at federal, state and local government level. It is intended to
draw in the participation of the private and non-government sectors as well as the
community at large. The thrust of NITA is seen as a triangle in which infrastructure,
software applications and people are inextricably linked. The goal is to create a
stimulating working and living environment that provides all Malaysians with equal access
to information and knowledge.
While the Multimedia Super Corridor (MSC) located within the Kuala Lumpur conurbation
serves as a catalyst to expand IT-related industries and to provide an enabling
environment for the orderly development of IT industry in the country, other IT centres will
include George Town Conurbation and Johor Bahru Conurbation in its linkages to
Singapore. The use of ICT should be encouraged in areas where there is concentration of
activities rather than dispersed. This is primarily due to the need for sophisticated back up
services in urban centres which would not be available in the more remote locations.
Within the context of the NPP-2, the National and Regional Growth Conurbations of Kuala
Lumpur, George Town, Johor Bahru and Kuantan are to be developed as intelligent
cities. The programme shall be followed by all capital cities in the country to form a
nationwide network of intelligent cities linked to the global information highway.
Internet and wireless technologies represent two of the fastest developing technologies in
the telecommunications field. A backbone network such as the one covering the MSCs
386 route km high speed broadband fibre optic cable linking Kuala Lumpur City Centre
(KLCC), Putrajaya, Cyberjaya and KLIA have been completed.
An extensive fibre optic network of 62,600 km has been installed linking states and major
towns across the country enabling high capacity broadband transmission capable of
carrying data, audio and video. With the four satellite gateways at Kuantan, Melaka in
Peninsular Malaysia and Labuan, Semantan (Kuching) in East Malaysia, connections to
countries around the Indian and Pacific Oceans are available. The migration to third
generation (3G) mobile communications technology will free up Internet access without
limitations to physical constraints.
Adoption of Internet-based services such as e-commerce and provision of broadband
access on flat rate bandwidth-based pricing mechanism will promote Internet usage and
the uptake of Internet-based applications. These facilities will allow Malaysia to compete
in the higher order high-value services at the international level.
4.6.9 Community Facilities
The nationally significant community facilities are the public universities and hospitals.
These are due largely to the comparatively large land area involved, large capital
investment and maintenance costs required, and the important contribution they make to

4-42
economic and social development of the country. For example, a public university located
in a particular state can offer specialised courses tailored to produce skilled manpower to
exploit the inherent strengths and potential in the state thus helping to reduce regional
imbalance.
i. Public Universities
Public universities play a pivotal role in nurturing skills and talents in a move towards a
high technology-driven and knowledge-based economy for the country. Besides being
a centre of knowledge and excellence, they also serve as research and development
test beds for creative ideas and innovations. Close collaborations between universities
and industries can provide the platform to create world-class industrial leaders in new
advanced growth products, services and technologiessuch assuch as such as
renewable energy technology.
Presently, there are 20 public universities in Peninsular Malaysia and this has
exceeded the proposed total number of universities in NPP (2005).
In line with the National Urbanisation Policy (NUP), universities should be located in
National, Regional, Sub-Regional Growth and State Growth Conurbations. This is to
provide the public amenities based on the hierarchy of town, as well as, to support the
business community in conurbations that require various facilities of high quality.
ii. Public Hospitals
At present, there are 91 public hospitals in Peninsular Malaysia. It is essential that the
future locations of new hospitals should relate to catchment areas in terms of distance
served and public transport availability. Other factors that should be considered are
the provision of ample space for expansion of hospitals to health complexes like
nurses training and accommodation, R&D and recreation. The hospital is proposed to
be located in National Growth, Regional Growth, Sub-Regional Growth, State Growth
and District Growth Conurbations.
Community facilities are important for meeting a wide range of social needs. These
facilities are provided in convenient locations at a local level. The community facilities
should be conveniently available and affordable to the society that may not have
access to any other similar options.
Most community facilities are provided at developed areas, especially in main city
centres and large housing areas. However, the less developed areas still suffer from
the lack of these facilities particularly the Orang Asli settlement and also remote rural
area. In addition, disabled peoples will need more barrier-free-facilities enable them to
participate actively in activities with the mainstream society. To ensure equal
opportunities for all the citizens, proper facilities should be provided or capable to meet
the special needs of the disadvantaged or handicapped groups such as ramps for
wheelchair. Adequate places of worship and cemetery sites should be suitably and
adequately allocated to meet the religious needs of the multi ethnic population.

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4.6.10 Green Technology
Green Technology is the development and application of products, equipment and
systems used to conserve the natural environment and resources. It helps to minimize
and reduces the negative impact of human activities. Although this technology is still new
in Malaysia, many strategies and programmes have been listed by the Ministry of Energy,
Green Technology and Water in order to promote the Green Technology. There are five
objective of Green Technology which includes:-
i. To minimize growth of energy consumption while enhancing economic development;
ii. To facilitate the growth of the Green Technology industry and enhance its contribution
to the national economy;
iii. To increase national capability and capacity for innovation in Green Technology
development and enhance Malaysias competitiveness in Green Technology in the
global arena;
iv. To ensure sustainable development and conserve the environment for future
generations; and
v. To enhance public education and awareness on Green Technology and encourage
its widespread use.
The National Green Technology Policy has been launched by the Prime Minister of
Malaysia on July 2009. The policy includes setting up a legislative and regulatory
framework that will support the development of green technologies, as well as to promote
a culture of resource use optimisation. One of the strategies is the creation of a Green
Technology Fund, which would operate under the concept of the polluter pay principle.
Establishment of National Green Technology Council and Malaysia Green Technology
Agency will be an effective agency to coordinate and implement the Green Technology
initiatives and programmes in Malaysia.
Polic ie s
C HAPTER 5
NATIONAL PHYSICAL PLAN

5-1
CHAPTER 5
POLICIES
The primary focus of development strategy in the NPP-2 is to ensure that Malaysia is globally
competitive for investments in the manufacturing and services sector. The sub-sectors
concerned are electronics, knowledge and communications technology, bio-technology,
education and health tourism and other related sub-sectors. In order to do so the strategy shall
support, promote and enhance the infrastructure and general development of the regions that
have the highest potential in attracting such investments and can provide the competitive edge
over similar regions in neighbouring countries. In this respect, the NPP-2 shall adopt a
development strategy of Concentrated Decentralisation.
The NPP-2 also proposes to simultaneously promote and support the development of resource,
agriculture and craft-and-culture-based industries and services. These include forestry and
timber products manufacturing, traditional artisan crafts and manufacture, agricultural
downstream activities, eco-tourism and general tourism. Cross-border trade and cross-border
linked development in regions where such resources and opportunities are located should also
be encouraged. At the same time, high value food production and commercial agriculture should
be developed intensively in the rural areas.
The NPP-2 shall, therefore, provide a spatial planning strategy for international competitiveness
and a framework for national developmental cohesion and discipline. The spatial framework
avoids internal conflict and provides a basis for inter-state co-operation and mutual support.
Without prejudice to global competitiveness, the NPP-2 shall simultaneously promote co-
operation among Malaysias close neighbours.
The spatial framework while attempting to promote economic growth will also address the need
for conserving the natural resources, biodiversity and the quality of the physical environment of
the nation. The nations rich biodiversity must be protected and well harnessed to meet the long
term sustainability of the natural resources.
The NPP-2 has proposed a development strategy which consists of 41 policies. These policies
are divided accordingly into eight (8) development themes and supported by key implementation
measures.
Theme 1 Setting a National Spatial Framework
Theme 2 Enhancing National Economic Competitiveness
Theme 3 Conserving Agriculture Resources and Promoting Rural Development
Theme 4 Sustainable Tourism Development
Theme 5 Managing Changing Human Settlements
Theme 6 Conserving Natural Resources, Biodiversity and the Environment
Theme 7 Integrating the National and Urban Transportation Network
Theme 8 Providing Appropriate Infrastructure

5-2
These policies will be implemented by the relevant Federal and State agencies. The policies and
measures formulated shall provide the guidelines for the implementation of the NPP-2. While the
NPP-2 is an exercise in national discipline on physical planning, provision for debate, discussion
and consensus is ensured in the formulation process and in the five-year reviews. At the same
time, local initiatives and programmes by the states and local authorities are encouraged as long
as they conform to the overall framework of the NPP-2.
5.1 Setting A National Spatial Framework
The spatial framework of the NPP-2 shall provide the general direction of physical
development for the nation. It shall form the basis on which more detailed Development
Plans such as Structure Plans and Local Plans, as well as other sectoral plans are to be
drawn up and conforms to the national objectives and 10
th
Malaysia Plan. The spatial
framework will ensure that national resources are optimally used, duplication in
infrastructure investment is avoided and more sustainable development in the States are
achieved. The plan-led development approach does not however, impute a rigid
centralised planning structure, but rather a system that is sufficiently flexible to
accommodate top-down and bottom-up inputs current in the countrys system of
planning. Aspirations of the State governments and local authorities were taken serious
consideration in the formulation of the policies in NPP-2.
NPP 1
The NPP shall serve as the national spatial planning framework in order to achieve an
integrated and sustainable land use planning, coordinated with other sectoral policies.
IP 1 : NATIONAL SPATIAL FRAMEWORK 2020
Measures:
i. All Development Plans (Structure Plans and Local Plans) or other sectoral Plans and
Policies shall conform to the provisions of the National Physical Plan (NPP-2).
ii. For the purpose of uniformity, Development Plans shall apply the standards and criteria of
the NPP-2 in terms of:
a.Land Use Classification
b.Urban Hierarchy
c. Classification of ESA areas
d.Classification of PAA Areas
iii. Existing Development Plans (that is, the Structure Plans and the Local Plans) shall be
reviewed in order to comply with the provisions of the NPP-2.

5-3
iv. Population targets as provided in the NPP-2 may, within a stipulated + / - 5% variant range
or as the State Planning Committee (SPC) deems fit, be adhered to as the basis for the
preparation of State Structure Plans. The + / - 5% variant range may also be applied for
the planning of key national public infrastructure and social facilities, as well as for the
approval of all development applications of national importance.
v. The NPP shall provide the spatial framework for the formulation of the FYMP particularly in
deciding public investments concerning key infrastructural facilities, conservation and
urban development.
vi. Relevant spatial policies and strategies from the NPP-2 shall be formulated and integrated
into other national sectoral policies by all related Federal and State agencies.
vii. Prioritisation of national capital investment decisions particularly key infrastructure projects
shall be in line with the NPP-2.
Growth Conurbations
Eco Tourism Area
Island Tourism
Main Centre
Built-up Area
Paddy within Granary Areas
Prime Agricultural Area
(Other than Paddy Granary Areas)
Forest Spine
Forest & Wetlands (Outside
Forest Spine)
Other Agricultural Areas
Water Bodies
Territorial Waters
International Airport
Domestic Airport
Sea Port
Expressway
Major Highway
KTM Double Track Fast-
Rail
High-Speed Rail Corridors
Existing Railway
Source: National Physical Plan-2, 2010
KTM Double Track Fast-Rail
IP 1: NATIONAL SPATIAL FRAMEWORK 2020

5-5
5.2 Enhancing National Economic Competitiveness
The Ninth Malaysia Plan (9MP) has five (5) thrusts that will enhance the national
development of the country. The five (5) thrusts are as follows:-
Thrust 1 : Moving the economy up the value chain;
Thrust 2 : Raising the capacity for knowledge and innovation;
Thrust 3 : Addressing persistent socio-economic inequalities;
Thrust 4 : Improving quality of life; and
Thrust 5 : Strengthening Government capacity to implement.
In terms of Urban Growth Strategy, the NPP-2 will focus on the four (4) main
conurbations of Kuala Lumpur, George Town, Johor Bahru and Kuantan. This strategy
will be complemented by the state capitals and new urban areas that will be the prime
centres for urban-based economic growth.
The selected urban centres will be the primary recipients for private sector investments,
whether foreign-based or local. Established sectors such as electrical and electronics,
ICT, new knowledge-based service sectors and other services such as in transport and
logistics, health, educational, finance, business and management services will also be
catered for. There are many opportunities for these sectors to build long lasting inter-
industry linkages that would give the urban-based service sector an economic
advantage. There will be two components to this strategy: directly exporting services or
making available export services so that international firms can relocate their operations
in this country.
The IMP3s strategic thrust of global competitiveness will be enhanced by strengthening
trading and industrial capacities, promoting the growth of manufacturing and services
sectors and developing conducive environments for increased investment. The
technological basis of Malaysian industries shall be strengthened through enhanced
industry-university linkages, the use of ICT and advances in green technologies and the
establishment of centres of excellence. The IMP3 has also taken equity and balanced
regional development into consideration.
With regards to spatial dimensions, the NPP-2 has proposed that the targeted growth
areas of IMP3 will be accommodated into the urban conurbations (for example,
knowledge-based and services sectors) and in the rural areas (such as agriculture and
resource based industries). Targeted growth areas will be promoted by encouraging
multinational companies to invest or expand and also provide support for local firms to
take advantage of proximity and growth potential.
The NPP-2 has also made provisions for the integration of the Corridor Development
Regions into the National Spatial Framework, the promotion of border area development
and strengthening economic cooperation with its ASEAN neighbours.

5-6
In promoting regional development and reducing regional disparities, the Government
has identified three (3) regional growth corridors in the Peninsular Malaysia, namely
NCER, ECER and Iskandar Malaysia. Specific strategies and project initiatives have
been identified in their respective Master Plans which will be implemented over the time
frame of each Plan. There is a need to integrate all these proposals into the overall
national spatial framework.
The NPP-2 corridor development approach focuses development initiatives in selected
nodes. Its primary objective is to spur growth in the less developed regions in the East
Coast states of Kelantan, Terengganu and Pahang. These states have abundant land
and natural resources and a distinctive cultural heritage that should be optimally
developed. The improved connectivity and linkages to this region via road, rail and air
will help them become more competitive, in supplying products and services to urban-
based areas and export markets.
In a similar manner, the border areas present opportunities in terms of international
regional cooperation. Both Malaysia and its neighbours will have the benefit of an
enlarged economic region to pursue their own different strategies, such as developing
infrastructure projects jointly in order to integrate these regions or to foster trading thus
adding to their comparative advantage. The ASEAN region with a population of more
than 500 million is a large captive market. Malaysia can therefore play an active role in
harnessing the economic potential of the region especially in areas of education, town
planning, transportation, regional tourism, port related activities and transhipment
facilities.

5-7
NPP 2
Future urban growth centres shall be concentrated in strategic conurbations.
IP 2 : CONCENTRATION OF DEVELOPMENT IN CONURBATIONS
Measures:
i . Urban-based economic activities will be concentrated in the main conurbations of Kuala
Lumpur, George Town, Johor Bahru and Kuantan to promote efficiency in land use and
infrastructure planning and should be globally competitive.
i i . Urban-based economic activities should be located outside the conurbations only where
there are adequate infrastructure and available local human and natural resources.
i i i . The development of industrial and economic clusters, will be promoted within the
conurbation areas to achieve economies of scale.
i v. The development of private and public educational and training facilities in existing urban
centres will be encouraged to facilitate transition into the k-economy and to act as a
catalyst for economic growth.
v. Knowledge-based activities and cyber cities should be located in the main conurbations
and other selected urban growth centres in line with the criteria set by the Multimedia
Super Corridor (MSC) Implementation Council.
vi . The use of existing infrastructure facilities such as highways, railways, airports, and
seaports should be optimised to support the overall objectives of development.
National Physical Plan-2

5-8
- 2
Source: National Physical Plan-2, 2010
Forest Spine
National Park
Special Tourism Zone
National Growth Conurbation
Regional Growth Conurbation
Sub-Regional Growth Conurbation
State Growth Conurbation
District Growth Conurbation
Urban Growth Centre
Major Port
ICT Hubs
Special Management Area
(SMA)
High Speed Rail
Major Highway
I P 2
IP 2: CONCENTRATION OF DEVELOPMENT IN CONURBATIONS

5-9
NPP 3
The corridor development approach shall be adopted in planning the less developed
regions to foster greater economic growth and development in order to reduce regional
imbalances.
IP 3 : DEVELOPMENT AND ECONOMIC REGIONS
Measures:
i. Development initiatives especially urban and industrial development, agriculture and
tourism, should be focused in selected locations within the development corridors and in
particular the Main Development Corridors (North-South Corridor, Central East-West
Corridor and the East Coast Corridors).
ii. Transportation network, infrastructure and urban services along development corridors will
be optimized and enhanced.
iii. Economic diversification through the widening of the economic base of the less developed
states should be encouraged by the following means:
a. Strengthening both agricultural upstream investment activities and downstream
processing of agricultural products to increase rural income levels.
b. Strong nature/natural tourism potential areas, particularly in the East Coast States
shall be conserved and developed on a sustainable basis.
c. Resource-based and craft-based clusters shall be promoted in the less developed
states and regions to serve as catalysts for growth and employment.
d. Cross border trade will be enhanced.
iv. Infrastructural facilities, especially related to ICT and transportation network in agricultural
and areas of tourism potential will be strengthened to facilitate and expedite integration
into the modern economy.
v. Provision of educational technical training and social development programmes in the less
developed states will be strengthened in anticipation of the need for segments of these
populations to integrate more effectively into the urban economy.
vi. Programmes shall be developed to encourage the East Coast States to develop their
recognized skills in crafts such as batik, silver ware, songket, boat building and wood
carving into internationally recognized niche market production centres.
vii. Development proposals of the Regional Growth Corridor Master Plans should be
integrated with the Structure and Local Plans of the respective states and local authorities.
National Physical Plan-2

5-10
- 2
Source: National Physical Plan-2, 2010
Central Region
Eastern Region
Northern Region
Southern Region
State Capital
East Coast Economic
Region (ECER)
Highway
Domestic Airport
1. North-South Corridor
2. East Coast Corridor
3. Central East-West Corridor
Main Development Corridors
Sub- Development Corridors
4. North-South Sub-Corridor
5. East West Sub-Corridor
6. Lumut-Gua Musang-Kuala Terengganu
7. Kuantan-Muar Sub-Corridor
Iskandar Malaysia
Northern Corridor
Economic Region
(NCER)
Railway/ Mass Transit
System
International Airport
Sea Port
I P 3
IP 3: DEVELOPMENT AND ECONOMIC REGIONS

5-11
NPP 4
Cooperation in physical planning and economic development between Malaysia and its
ASEAN neighbours shall be strengthened.
IP 4 : ASEAN ECONOMIC COOPERATION
Measures:
i . The economic opportunities of neighbouring countries and the Growth Triangles in the
northern, eastern and southern parts of Peninsular Malaysia and assisting the
development of Cambodia, Lao Peoples Democratic Republic, Myanmar and Vietnam
(CLMV) shall be capitalised.
i i . Inter regional development initiatives between East and West Malaysia, and with the
ASEAN neighbours especially by enhancing transport linkages and promoting regional
tourism and providing higher education opportunities shall be strengthened.
i i i . Inter-regional cooperation with ASEAN neighbours by effectively capitalising their
respective comparative economic advantages and optimising the use of their
infrastructure, land and other natural and human resources shall be promoted.
i v. Special Economic Zones (SEZ) in participating member states of the Growth Triangles to
cater for new areas of regional co-operation such as Halal food processing and cross-
border trade shall be established.
v. The potential for exporting professional services and forging cooperation in town planning
with Sabah and Sarawak and with the ASEAN countries through the national planning
institutes of member states and countries shall be examined.
National Physical Plan-2

5-12
- 2
Inter-regional Sea Port
Shipping Routes
Trans-Asian Transportation Network
Growth Triangle
Growth Area
ASEAN
Source: National Physical Plan-2, 2010
I P 4
IP 4: ASEAN ECONOMIC COOPERATION

5-13
NPP 5
Planning for industrial development shall adopt the holistic development strategy of the
IMP3 of achieving global competitiveness via transformation and innovation of the
manufacturing and services sector.
IP 5 : INDUSTRIAL GROWTH CENTRES AND POTENTIAL INDUSTRIAL CLUSTERS
Measures:
i . The IMP3 Target Growth Areas for Manufacturing and Services will be promoted in areas
where comparative advantages and agglomeration economies exist:-
a. The main conurbations and urban areas shall provide an integrated network of
Infrastructure facilities including social amenities that support the capacity of industrial
and service-related firms to compete in the global market place.
b. The location of target growth areas shall be encouraged in selected
conurbations, depending on their respective comparative advantages.
i i . New industrial estates, including Halal parks and industrial clusters, will be supported by a
detailed programme identifying potential occupants, activities, linkages and viability
studies.
i i i . Technological basis for industrial-services development, such as using supply chain
management, ICT and green technologies will be strengthened.
i v. University-industry linkages and collaboration at the local and international levels will be
strengthened and establish centres of excellence for industrial and related research will
also be established.
v. Heavy or pollution-generating activities shall not be permitted in / or adjacent to designated
nature / ecotourism areas.
vi . Special Economic Zones (SEZ) will be developed in selected locations to promote regional
development and enhance the export potential of the country.
National Physical Plan-2

5-14
- 2
Source: Third Industrial Master Plan (IMP3), 2006
Seaport
Domestic Airport
International Airport
Industrial Estate
Highway
Railway
ICT Hubs
Federal Road
Identified Industrial
Clusters (IMP3 and
corridor Master Plan)
Industrial Growth Central Level 2
Industrial Growth Central Level 1
Industrial Growth Central Level 4
Industrial Growth Central Level 3
I P 5
IP 5: INDUSTRIAL GROWTH CENTRES AND POTENTIAL INDUSTRIAL CENTRES IP 5: INDUSTRIAL GROWTH CENTRES AND POTENTIAL INDUSTRIAL CENTRES

5-15
5.3 Conserving Agriculture Resources and Promoting Rural Development
Agricultural areas have reduced over the years due to pressure from urban development
(Table 5.1). More land, especially those adjacent to town, industries and housing areas
will be taken up for urban development. However, areas outside urban development
zones should remain as agricultural areas, particularly those areas which are fertile or
have special functions such as paddy land. The 9MP (2006-2010) has specifically
targeted agriculture as the third engine of growth. New Agriculture programmes were
advocated to be carried out through modernisation, commercialisation, value added
schemes, ICT, biotechnology, and marketing improvements. Downstream activities are
encouraged especially for oil palm and rubber sub sectors, while areas with high
potential are to be further developed for aquaculture, deep-sea fishing, herbs,
ornamental fish and horticulture. The Plan also calls for Malaysia to be a Regional Halal
Food Hub.
Table 5.1: Agriculture Land Use in Peninsular Malaysia (Hectare)
Crops 1997 2002 2006 Difference (06-02)
Paddy 410,000 405,800 331,036 -74,764
Oil Palm 2,174,500 2,466,500 2,816,513 +350,013
Rubber 1,759,100 1,560,000 1,284,912 -275,088
Other Crops 1,632,400 1,716,700 808,099 -908,601
Total 5,976,000 6,149,000 5,240,560 -908,441
Source: MOA Inc., Agriculture Statistical Handbook 2006, 2008.
In order to ensure balanced development, certain highly productive agricultural areas
(Prime Agricultural Areas) must be protected. Among these areas are paddy land
(especially granary areas) and areas with high agricultural productivity such as soils of
Class 1 and 2 (and to a lesser extent soils of Class 3). Other areas that should be
protected include agricultural areas in agro-climate with no dry season and short dry
season and agricultural land on peat soils.
Paddy land are categorised as granary areas and non-granary areas. The granary areas
have been developed at a very high cost and can be planted with paddy at least twice a
year. The eight (8) granary areas in Peninsular Malaysia must be conserved as a food
security measure since rice is Malaysias staple food and only 7% of the worlds rice
production is available in the market. Potential urban development in these areas must
be directed to other adjacent areas, outside the granary areas. The ninth granary area is
expected to be developed in the near future in the districts of Pekan and Rompin. Paddy
land outside the granary areas should be provided with proper irrigation and drainage
systems to ensure that these areas will also be highly productive. Using paddy land for
urban development should be restricted as it can be costly due to its low lying terrain
and flood prone tendencies. As almost no new paddy land will be developed in
Peninsular Malaysia, the target of providing 70% rice sufficiency lies in the
modernisation and use of new technologies which could raise average production levels.

5-16
Peninsular Malaysia has a short fall in food production. According to the Agriculture
Statistical Handbook 2008, the import bills for foodstuff have increased over the years
from RM12.69 million in 2003 to RM23.37 million in 2007. Agricultural land use data
show that most of the agricultural areas are planted with oil palm and rubber (2.8 million.
ha and 1.28 million. ha respectively), followed by paddy (331,036 ha), mix horticulture
(326,768 ha), orchards (184,828 ha), coconut (104,555 ha) and vegetables (16,913 ha).
As such more concerted effort should be directed towards food production. Areas
currently under food production, especially those developed commercially for
Permanent Food Production Park (PFPP) should be conserved. Currently only
government land is utilised for PFPP. It is recommended that more large land holdings
belonging to individual farmers should also be included in this programme. PFPP should
also include areas used for animal production and Aquaculture Industrial Zones (Zon
Industri Akuakultur ZIA).
Existing agricultural land on peat soil is currently one of the most productive areas for oil
palm and pineapple in this country and should continue to be used for agriculture. Apart
from giving high yields, peat soil is not suitable for urban development due to the thick
organic matter which is not suitable for the construction of buildings and is prone to
flooding. The development on new peat land should be restricted as they threaten the
existing and natural ecosystems. If development is to be undertaken, it should be done
in a sustainable manner.
Peninsular Malaysia has 26 agro-climatic regions for lowland crops and two (2) agro-
climatic regions in the highlands (areas above 300 meters above sea level). These
areas can be generally grouped into five (5) regions namely:
i. Highlands
ii. Regions with a clear and regular dry season
iii. Regions with a short but fairly regular dry season
iv. Regions without regular dry season
v. Areas predominated by organic soils
The most productive region within this group is the region without regular dry season.
These areas should remain under agriculture unless they are within areas designated
for urban development. Much of these areas are found in Johor, Selangor, Central
Pahang and the northern coastal area of Perak.
Agricultural productivity is also dependent on soil suitability (soil-crop suitability). Soil-
Crop Suitability Classification categorises soils into five (5) Classes as follows:
Class 1: Soils with no limitation or only minor limitations to crop growth
Class 2: Soils with one or more moderate limitations to crop growth
Class 3: Soils with one serious limitation to crop growth
Class 4: Soils with more than one serious limitations to crop growth
Class 5: Soils with at least one very serious limitation to crop growth

5-17
Soils of Class 1 and 2 are highly productive and should be devoted for agriculture,
unless they fall within the urban growth boundary. Where possible, Class 3 soils should
be conserved for agriculture unless there is a strong and urgent need for development.
The rural areas should be continuously developed to enable the rural population to have
higher income and better quality of life. The rural population includes those living in
traditional villages; new villages; FELDA, FELCRA and Orang Asli settlements;
plantation quarters; fishing villages and rural housing schemes. This is in line with the
NKRA's objectives of "Raising living standards of low-income households" and
"Improving rural basic infrastructure". Some of the key strategies to be adopted include
rural farm consolidation, providing Agriculture CPPCs and the expansion of non-farm
employment (rural tourism, services, general manufacturing) in key intermediate towns
(job centres) serving the rural cluster. Broad band access will be enhanced and public
transportation to job centres will be improved allowing commuting for work to generate
extra income for the rural population.

5-18
NPP 6
Prime Agricultural Areas (PAA) shall be conserved only for agriculture purposes and
urban development shall be restricted.
IP 6 : PRIME AGRICULTURAL AREAS
Measures:
i . Agricultural land will be prioritised to conserve Prime Agricultural Areas (PAA) in the
following order of importance:
a. Strategic granary areas.
b. Paddy land outside granary areas.
c. Agricultural land designated as Permanent Food Production Park (PFPP)which
could include areas for crop production, animal husbandry, aquaculture and aviculture.
d. Existing agriculture areas on peat / organic soils.
e. Agriculture areas on Class 1 and Class 2 soils.
f. Agriculture areas on Class 3 soils.
g. Agriculture areas without regular dry season.
h. Agriculture areas with short dry season.
i i . The above PAA shall be categorized into Rank 1, Rank 2 and Rank 3 as an indication of
their importance.
a. Rank 1: This area shall remain as paddy land and not be developed for other purposes.
The area under Category 1 is:
Granary areas.
b. Rank 2: These areas shall remain as agriculture areas unless it is within the city and
town limits. The areas under this category are:
Paddy land outside granary areas.
Agricultural land designated as Permanent Food Production Park (PFPP) or
popularly known as Taman Kekal Pengeluaran Makanan (TKPM).
Agriculture areas on peat / organic soils.
Agriculture areas on Class 1 and Class 2 soils.
c. Rank 3: These areas shall remain as agricultural areas unless they are designated to
be developed for other uses. The areas under this category are:
Agriculture areas on Class 3 soils.
Agriculture areas without regular dry season.
Agriculture areas with short dry season.

5-19
Source: National Physical Plan-2, 2010
Paddy Rank 1
(Within Designated Granary Areas)
Permanent Food Production Park (Corp)
Agriculture within Peat/ Organic Soil
Permanent Food Production Park (Aquaculture)
Agriculture within Soil Class 1 and 2
Paddy Outside Granary Areas Agriculture within Soil Class 3
Agriculture area Without Dry Season
Agriculture area With Short Dry
Season
State Capital
Rank 1 Rank 2 Rank 3
IP 6: PRIME AGRICULTURAL AREAS

5-20
NPP 7
The eight (8) strategic granary areas comprising Muda (MADA), Kemubu (KADA), IADA
Kerian-Sungai Manik, IADA Barat Laut Selangor, IADA Pulau Pinang, IADA Seberang
Perak, IADA Terengganu Utara (KETARA), and IADA Kemasin-Semerak shall be
conserved for paddy cultivation.
IP 7 : STRATEGIC GRANARY AREAS
Measures:
i. The eight (8) strategic granary areas shall be gazetted as paddy land.
ii. The urban limits for all urban centres in these areas shall be demarcated in the Local and
Structure Plans.
iii. Paddy land outside the established urban limits shall not be converted to other uses
except for paddy related activities.
iv. Future urban development shall be directed away from the granary areas. In unavoidable
circumstances, urban development should only be allowed in the form of high rise
development to minimise land loss.
v. Water catchments in granary areas shall be identified and conserved to ensure adequate,
clean and quality water supply for paddy cultivation.
vi. Fiscal measures shall be introduced to assist the state governments that are required to
conserve their granary areas.

5-21
Source: Dept. of Agriculture, 2006.
Paddy Rank 1
State Capital
IP 7: STRATEGIC GRANARY AREAS

5-22
NPP 8
Existing potential paddy land outside granary areas shall be provided with the proper
infrastructure to increase productivity and yields.
IP 8 : PADDY LAND OUTSIDE GRANARY AREAS
Measures:
i. Existing potential paddy land outside granary areas shall be conserved as paddy land.
Where necessary, such areas may be converted to granary areas by providing the
necessary infrastructure.
ii. Existing potential paddy land shall be provided with proper irrigation, drainage systems
and road network for the mobility of machinery.
iii. Productivity shall be increased through the use of new technology and mechanisation to
achieve higher yield.
IP 8: PADDY LAND OUTSIDE GRANARY AREAS

5-23
Source: Dept. of Agriculture, 2006.
Paddy Rank 1
(Within Designated Granary Areas)
Paddy Outside Granary Areas
State Capital

5-24
NPP 9
Rural areas and Rural Growth Centres (RGCs) shall be developed to ensure higher
income and better quality of life for the population.
IP 9 : RURAL SETTLEMENTS AND POTENTIAL RURAL ECONOMIC CLUSTERS
Measures:
i. A National Rural Development Policy shall be prepared to provide a framework for
integrated development of rural areas and rural growth centres including FELDA
Settlements.
ii. Integrated rural planning shall be adopted taking cognizance of the roles of neighbouring
urban centres and rural tourism opportunities in providing off-farm employment, improving
public transport systems and increasing Internet access.
iii. Small rural farmlands shall be consolidated to allow for better management and
economies of scale in production.
iv. Appropriate economic activities shall be developed in rural areas such as one district one
product, agropolitan, homestay, agriculture-based industry, cottage industry, handy craft
and agro-tourism.
v. Rural growth centres (RGCs) shall be provided with quality infrastructure and amenities
such as roads, clean water, drainage, electricity, ICT, proper housing, sanitation, schools
and clinics.
vi. The existing RGCs shall be reviewed and their implementation programmes shall be
expedited. The Structure Plans and Local Plans shall identify the RGCs as effective rural
service centres.
vii. Social and commercial services and public facilities shall be consolidated in the RGCs.
viii. Public transportation services between the RGCs and the main urban centres providing
off-farm employment shall be improved.
ix. Public investment in infrastructure shall be concentrated in RGCs to support resource-
based economic activities, craft-based industries, rural tourism initiatives, agriculture-
based and forestry-based downstream activities.
x. Historical, heritage, cultural and architectural value villages should be selected as
prospective RGCs. Where any such village is not selected, a special programme shall be
created for it to be conserved.
xi. Residents of villages where the population is too small, too isolated or uneconomic to
service shall be encouraged to be relocated to RGCs.
National Physical Plan-2

5-25
- 2
Source: National Physical Plan-2, 2010
Off Farm Job Centres
Major Road
Conur bat i ons
(Ref er t o Fi gure 3.7)
Settlements
Forest
Agriculture Areas
Isl and Tour i sm-based
Highland Tourism and highland Agriculture
Eco-Tour i sm, Agr i cul t ur e and Agr o For est based
Ur ban, Agr i cul t ur e and Agro-based Indust ry
I P 9
IP 9: RURAL SETTLEMENTS AND POTENTIAL RURAL ECONOMIC CLUSTERS

5-26
NPP 10
The Orang Asli communities shall be spatially and economically integrated into the
mainstream of all development initiatives.
IP 10 : ORANG ASLI SETTLEMENTS
Measures:
i. Specific areas shall be reserved and allocated for the Orang Asli communities to
enhance their economic and social well being.
ii. The Orang Asli shall be provided with proper houses in planned villages with adequate
community and suitable transportation facilities according to the needs and customs of
the respective Orang Asli communities.
iii. Suitable agriculture land and extension services and facilities shall be provided for the
economic well being of the Orang Asli.
iv. Orang Asli communities shall be provided with quality amenities such as schools, clinics,
roads, clean water and electricity.
v. Agricultural land allocated to Orang Asli shall be developed commercially either by
themselves or by the appropriate government agencies.
vi. Animal husbandry and aquaculture shall be introduced as integrated agricultural
development where appropriate.
vii. Appropriate economic activities and programmes shall be introduced for the Orang Asli
to take an active part in rural economic development programmes such as, agropolitan,
homestay, agriculture based industry, cottage industry, handy craft, eco and agro-
tourism.
National Physical Plan-2

5-27
- 2
Source: National Physical Plan-2, 2010
Orang Asli Settlements
Major Road
Lake
Forest
Built-Up Area
Agriculture Areas
I P 10
IP 10: ORANG ASLI SETTLEMENTS

5-28
5.4 Sustainable Tourism Development
Good sustainable tourism principles refer to a suitable balance between the
environmental, economic and socio-cultural aspects of tourism development in order to
guarantee its long-term sustainability. The 9MP emphasises that Malaysia has to
continuously meet its commitments to tourism declarations pertaining to sustainable
tourism and climate change.
The two main issues faced by the country is staying competitive and remaining as a safe
destination. At a more local level, there are also issues in conserving the natural
resource attractions and protecting rural areas from the continuous pressure on
conversion for urban and tourism developments. In this respect, the National Ecotourism
Plan has been reviewed to keep up to current trends and expectations in the local and
global eco-tourism initiatives.
The importance of regional cooperation for tourism growth within the region has been
recognized by ASEAN. Opportunities within the region have led to the expansion of the
national and low cost air carriers to more destinations within the region. Increased
mobility of visitors and demand for tourism services in the APEC region and its
importance to national economic competitiveness is well-acknowledged by the
Government. Tourism will continue to be one of the major forces of economic growth in
the future, particularly with the nations liberalisation of the sector to enhance its global
competitiveness.
Uncontrolled tourism development in both urban and rural areas has created negative
impacts on coastal tourism cities/towns, rural and natural resources. While many
established coastal tourism towns such as Langkawi, Penang and Port Dickson face
tremendous growth, there are many unresolved issues relating to low maintenance and
cleanliness of tourism products. This has led to congestion, lack of tourist safety, erosion
of beaches, low sea water quality, low accessibility levels during peak seasons and low
quality of services.
Sea reclamation projects proposals in many states also pose a threat to the natural
tourism resources such as marine parks, islands, forests, wetlands, turtle landing sites,
resting sites for migratory birds and water catchments. Many rural cultural and heritage
products such as traditional kampungs and rural areas also face physical and cultural
changes due to urbanisation.
Malaysia has been identified as one of the top 30 emerging destinations for tourism.
Product diversification such as new focuses to MICE and health tourism for example
requires high expenditure to build world class facilities in order to accommodate effective
functions. The Government should also establish and promote sustainable tourism
development as a national priority optimising the use of environmental resources,
maintaining essential ecological processes and helping to conserve natural heritage and
biodiversity.

5-29
Popular destinations need to be revitalised and rebranded to keep up to tourist
expectations. Heritage, multiculturalism and the 1Malaysia lifestyles need to be nurtured
and promoted worldwide and continuously as the Truly Asia concept. The challenge is
to keep up to the international tourists expectations and to keep them coming back to
the country.
The tourism industry needs to grow in profit and size and be viable in providing long-
term operations and ensure a fair distribution of socio-economic benefits to all
stakeholders. This includes creating stable employment, income-earning opportunities
and social services to host communities and contributing to poverty alleviation.
Sustainable tourism development requires the cooperation and informed participation
from all relevant stakeholders and political leadership to ensure wide participation and
constant monitoring of impacts and corrective measures are made from time to time.
NPP 11
Natural tourism resources, the authentic multi-cultural and historical heritage of the
country shall be conserved.
Measures:
i. Resource protection and management measures shall be efficiently and effectively
implemented in all tourism resource areas.
a. Tourism areas should be zoned properly according to their merits in order to
safeguard tourism resources from being over-developed or tampered with by
unsuitable scale of development.
b. The quality of tourism resources including establishing the limits of acceptable
change and resources sharing by neighbouring states through a special tourism
committee should be protected, monitored and managed continuously.
ii. The nations biodiversity and tourism corridors should be conserved. At the same time,
tourism accreditation/ certification schemes should also be provided for international and
national level products in order to improve their environmental performance.
iii. The need to promote the authenticity, living heritage and culture of the nation should be
recognised and strengthened. The involvement of community-based tourism in order to
contribute to inter-cultural understanding and respect should also be encouraged and
promoted.
iv. The inter-dependent relationship between environmental conservation (including the
development in Environmental Sensitive Area) and tourism must be recognised and
promoted.

5-30
v. The tourism industry shall be made responsible in good environmental practices,
through adherence to environmental legislation and encouragement of conservation and
sustainable use of natural resources.
vi. The tourism players must be encouraged to practice responsible tourism practices with
the following code of practices:
a. Contribute to the local economy
b. Respect culture and invest in social capital
c. Promote local guide tours and activities
d. Efficient and sustainable use of resources
e. Responsible waste management
f. Commit to protecting the local environment
g. Develop capacity for continuous improvement
h. Manage sites within limits of acceptable change.
NPP 12
Tourism development zones in each state shall focus on specialised regional niche
products based on their locational advantages and availability of resources
IP 11 : NATURAL TOURISM RESOURCES
IP 12 : MAN-MADE TOURISM RESOURCES
Measures:
i. The National Tourism Policy, 2004 shall be reviewed to incorporate the spatial aspects
of tourism development including recommendations to guide appropriate approaches for
sustainable tourism development. The Revised National Tourism Policy will include
development guidelines and management practices which are applicable to all forms of
tourism destination. The National Tourism Policy will also guide the following:
a. Avoid unhealthy competition, promote complementary efforts in tourism
development and packaging between neighboring states and countries.
b. Achieve cooperation and coordination in tourism development and promotion among
the public sector and the other various sector stakeholders (private sector,
communities and the civil society).
c. Promote community-based tourism and facilitate investments in tourism industries.
ii. A high standard of quality tourism products shall be provided and maintained through
the:
a. Identification of uniquely differentiated tourism areas of outstanding natural beauty
with strong tourism potential
b. Continuous revitalization of existing products

5-31
c. Diversification and the introduction of new product mix and infrastructure based on
tourist preferences including the needs of domestic tourists through continuous
market research and analysis of the countrys competitive advantages.
iii. To promote development of tourism products within the tourism zones according to their
locational advantages:
a. International shopping to be enhanced in designated major urban centres, border
towns and other free trade zones in order to maximise tourist and excursionist
gateway capture for economic benefits.
b. Health, wellness, sports and events tourism shall be further developed in all major
cities/ towns with readily available supporting infrastructure while more wellness
zones providing traditional therapies should be promoted within coastal resorts and
rural destinations.
c. Medical tourism shall be further expanded in the main conurbations of Kuala
Lumpur, George Town, Johor Bahru and Kuantan.
d. Educational tourism shall be further developed in the existing institutions of higher
learning and new Educational Cities/ Towns will be established providing conducive
environments for students development and equipped with the appropriate facilities.
e. The nations importance as Meetings, Incentives, Conventions and Exhibitions
(MICE) destination shall be supported through continuous infrastructure
developments in all major cities.
f. Nature based ecotourism shall be sustainably developed and promoted in natural
areas such as highlands, coastal areas, marine park islands, national and state
parks, geological sites, wetlands and RAMSAR sites, birds, turtle landing sites and
firefly habitats.
g. Authentic multicultural and historical heritage tourism resources and products shall
be sustainably developed, protected and promoted in heritage cities/ towns, heritage
zones and sites and rural districts.
National Physical Plan-2

5-32
- 2
Jetty
Hill Station
National Ecotourism Sites
White Water Rafting
Lake / Dam
Forest
Wetland
Sea
Marine Park
Tourism Product
Eco-tourism Gateway Town
Airport
Mountain
Turtle Landing
Site
Roads
Highway
Source: State Structure Plans and Tourism Malaysia, 2009
I P 11
IP 11: NATURAL TOURISM RESOURCES
National Physical Plan-2

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- 2
Source: State Structure Plans and Tourism Malaysia, 2009
World Heritage
Heritage Town/ Royal Town
Entertainment City
Coastal Tourism Town
National Border Towns
Special Role Centre
Highway
Roads
Shopping
Sea
Highland Tourism Town
Homestay
Tourism Product
Jetty
Airport
I P 12
IP 12: MAN-MADE TOURISM RESOURCES

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NPP 13
High quality tourism infrastructure and facilities shall be provided to enhance tourists
comfort and safety without compromising the quality of the environment.
Measures:
i. Gateway towns to ecotourism and island destinations shall be promoted for a wide
range of tourism related businesses where support facilities, including tourist
accommodation, transport, travel agents, licensed tourist guides, food and beverages,
souvenirs and takeaways shall also be provided.
ii. The tourism industry should be encouraged to prepare for resort-specific crisis and
industry-wide disaster situations, such as planning for emergency evacuation facilities,
emergency response and community resilience.
iii. Efficient and comprehensive transportation system (air, water, rail and road) and
accessibility shall be planned and improved, to support tourism growth and expansion of
integrated tourism packages. This includes the need for providing:-
a. Coastal scenic routes as tourism attractions for rural areas
b. Good accessibility to all tourism zones/ products
c. Emergency routes, evacuation facilities and other safety aspects of tourist journeys
and activities in tourist zones are monitored regularly by the authorities, agencies
and resort operators
iv. High quality, clean and value for money accommodation facilities need to be provided
for all range of tourist segments. They shall be of appropriate scale and located close to
other tourist facilities and infrastructure based on tourist demand and within the limits of
acceptable change for the particular location.

v. Other support infrastructure such as information technology, clean toilets, money
changing facilities, transit facilities, safety boxes and facilities to cater for domestic
tourists, family tourists and independent travellers shall be provided for within the
tourism zones.
vi . Continuous maintenance and adequate financial support shall be taken to protect the
tourism product and ensure tourist satisfactions.

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5.5 Managing Changing Human Settlements
While there is symbiotic relationship between urban centres and rural settlements, this
Section is focussed largely on cities and towns. Rural settlements, particularly Rural
Growth Centres (RGCs) and Orang Asli settlements, and their potential rural economic
clusters are dealt with in Section 5.3: Conserving Agriculture Resources and Promoting
Rural Development.
The level of urbanisation in Peninsular Malaysia has increased from 54.3% to 65.4% in
the inter-censual period 1991-2000 and is expected to increase to 75.0% by 2020.
During the plan period of the NPP-2 the intensification of urbanisation will be the
dominant feature of Malaysian geography and economics. Urbanisation is also marked
by the increasing primacy of the four main conurbations of Kuala Lumpur, George Town,
Johor Bahru and Kuantan around which conurbations are being formed. The fastest
growing towns in the period 1991-2000 have been those that cluster around these cities
(the suburbs) - the ten fastest growing towns in the period concerned being Subang
Jaya, Skudai, Batu 9 Cheras, Pasir Gudang, Kulim, Kajang, Shah Alam, Gelugor,
Ampang Jaya and Klang. The four main conurbations will continue to grow faster than
the rest of the country and attract in-migration. Population projection of the four main
conurbations is as shown in Table 5.1.
Table 5.2: Population Projection of Main Conurbations
Conurbations Year 2000 (in million) Year 2020 (in million)
Kuala Lumpur 4.8 10.37
George Town 1.3 2.42
Johor Bahru 1.0 2.40
Kuantan 0.5 1.38
Total as % of Peninsular Population 41.1% 60.4%
Source: The population projection of Kuala Lumpur Conurbation is based on the study of Rangka Kerja Penyelarasan
Pengurusan Pertumbuhan Kuala Lumpur Conurbation and George Town Conurbation is based on 1
st
NPP. For Johor
Bahru and Kuantan Conurbations, the population projections are based on SJER Master Plan and ECER Special
Economic Zone (SEZ).
The formation of an emerging fourth conurbation is also taking place around Kuantan in
the East Coast of Peninsular Malaysia. The selected strategy of concentrated
decentralisation in development corridors based on the main conurbations will reinforce
the functions and development of these four conurbations.
Vision 2020 and the OPP3 are based on a high level of economic growth through
accelerated industrial development and an export-based manufacturing sector. The
9MP also confirms that the growing sectors of the economy are services and
manufacturing. It further identifies a need for the promotion of FDIs and recognises that
industrialisation for the future will be faced with intensifying competition among countries
for investments and markets. These challenges and the economic planning strategies
formulated focus a dependence on the urban areas for the countrys future
development.

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They also imply a general freedom of location for investors in accordance with the
imperatives of particular businesses. International investors are likely to prefer locations
that have the supporting physical infrastructure and close proximity to other businesses
and industries in order to gain low transactional costs and agglomeration of economies
including supporting infrastructure to support the lifestyle of their knowledge workers.
Such a lifestyle requires social, recreational and sports clubs, a variety of entertainment
and outlets for cultural expression, international schools, luxurious shopping and
convenient access to international travel. In a nutshell, liveable cities and conurbations
attract and retain talent and knowledge workers who in turn draw in cutting edge
industries and high value-added services that will drive high income economic growth
(see Figure 2.2). These conditions however, can only be provided by the highly
urbanised conurbations.
The strategy of concentrated decentralization in development corridors avoids impinging
on the capability of our most dynamic urban centres to compete with other urban
centres in the West Pacific region and sustain their competitiveness. The implied
outlook for Peninsular Malaysia is therefore, a continuing process of concentration of
productive investments, employment and population in the main conurbations.
The present trend in urbanisation towards primacy of the main cities may be modified
but not countered, as past policies in rural urbanisation has shown such as in the
example of the Regional Development Authority (RDA) areas. Any attempt to direct
industrial development to areas dictated by the Government may result in ineffective
public investments, loss of Malaysias competitiveness in attracting FDIs and losing local
investments to foreign competitors thus jeopardising achieving the objectives of Vision
2020.
Modification of the current development trend may include a continuing support for the
development of selected and limited locations in the less developed regions such as
Kuantan and South Terengganu in the form of a cone development within key
economic growth corridors. Each of these selected urban centres should specialise in its
economic activity based on its inherent resource potentials to cater for niche markets,
for example, NCER on agriculture production for the Middle East markets. The main aim
is to encourage a balance in the geographical development of the country and to
strengthen the base for further industrialisation of these regions. It also includes
channelling overspill and excess development to other conurbations located between
the main conurbations such as Ipoh, Melaka, Temerloh-Mentakab, Lumut-Sitiawan-
Manjung and Muar-Batu Pahat-Kluang.
The Major and Minor Settlement Centres (small and intermediate towns) including some
state capitals in general, have generally not developed as fast as the main conurbations
and have experienced population loss between 1991-2000. Public investments in
infrastructure in order to attract development in the sectors facing global competition to
the major and minor centres will not be cost-effective. Developmental viability should,
therefore, depend on sectors that are not subject to intense global competition such as
resource-based manufacturing, resource-based services, craft-based industries,

5-37
downstream agricultural activities, forestry, as well as the general modernisation of the
agricultural sector.
There are a few exceptions, particularly towns that have a potential in those sectors
related to in-situ resource development, in niche sectors which are not subject to
intensive international competition. These towns may be referred to as Special Feature
Towns. They include among others towns located close to sites of outstanding natural
beauty or areas of natural, archaeological or historical attraction that can become tourist
resort towns (such as Tanah Rata and Port Dickson) and new bases for ecotourism
(example: Raub and Kuala Lipis) including towns that support a particular mining
operation such as in Kertih. State Governments may direct infrastructural investments
that are appropriate to the type of development into these exceptional areas.
Urban sprawl and the consequential deterioration of the urban environment within the
conurbation is an issue in the continuing expansion of the conurbations. While the
conurbations themselves should be encouraged to grow in order to absorb development
investments, individual cities within the conurbations should not lose form, character and
functional efficiency. Urban planning at the local level should seek to nurture a liveable
environment in the individual cities, maintain the integrity of relationships between the
city cores and suburbs and minimise travel time between centres and peripheries. The
conurbations should not become a chaotic and continuous mass of undifferentiated
urban uses, imposing upon its inhabitants journeys to work, school, shopping or play,
that are unnecessary, long, or that criss-cross with one another.
Liveable cities and sustainable communities can be achieved by shifting from the
conventional haphazard urban sprawl to a compact city form and building design. In
order to create liveable cities, resources must be given priority in rejuvenating
community and vitality to the existing city centres and older suburbs. Liveable cities
concept also places emphasis on promoting mixed-uses, higher densities, public
transport and pedestrian accessibility, optimum use of existing infrastructure,
environmental improvement, and the protection and provision of open spaces. Compact
building design permits more green and open spaces to be provided and protected,
such as parks, urban forest, wetlands and prime agriculture land. Building design,
particularly multi storey buildings and car parks should be constructed with more
efficient use of land and resources. Compact city concepts are necessary for the
provision of an efficient public transport system due to the minimum levels of density
required to make public transport networks viable. On a per-unit basis, it is also cheaper
to provide and maintain utility services such as water, sewer, electricity and telephone
services in compact neighbourhoods rather than in dispersed communities. Since the
community knows their needs best, it is important to engage community participation
from the public and private sector in the plan-making process.
An important element of a compact city is the integration of mixed land uses into the
communities, particularly in the city centre, based on the pollutive impact use zoning
approach which is non-pollutive live-work-play activities. The close proximity of mixed
uses (such as housing, businesses and services) allows for efficient functional linkages

5-38
and offers an alternative to driving, like walking and cycling, thus helping to reduce
greenhouse effects. Mixed land uses can generate a sizable population critical mass
and commercial base to support a viable public transport system. It can enhance the
vibrancy, security and vitality of an area particularly town centre and neighbourhood
centres, by increasing the number of people on the street, shopping areas and public
spaces, thus enhancing economic activities in commercial centre and revitalising
community life.
The inner cores of the conurbations have also experienced a loss of their share of
population to the suburbs and satellite towns in the last decade. The main cause of this
population movement out of the core cities may be attributed to the increasing cost of
living in the cities especially the middle and lower income groups. Only the subsidised
low-cost housing manages to retain a proportion of the low income groups in the cities
while the middle income group are not subsidised. A situation may develop in which the
city centres are populated by the richest and the poorest population. This is however
not a desirable social mix.
To address the housing syndrome of this middle-income and lower middle-income
groups, adequate affordable housing, in terms of size, type and tenure, must be made
available in the cities and large towns according to local needs. City living, particularly in
innovative high rise buildings, will be encouraged; and more affordable homes will be
built in all new residential development, especially in brownfield sites, through expediting
planning permission and providing incentives, such as mixed uses and higher densities.
In this way, the city will have a higher living population and more economic activities.
Mixed communities will be promoted and provision of common users space, such as
playing fields and playgrounds, should be provided to foster more social interactions and
cohesion in line with the 1Malaysia Concept.
The out-migration of population from the inner cities may make way for the conversion
of old housing areas to commercial and office uses, but many areas are left to decay as
the rate of abandonment outpaces the rate of redevelopment. The decay of inner city
areas will increasingly become an issue over the next two decades. To achieve an
economically vibrant and thriving city, the main spatial development thrust will be
directed towards regenerating existing town centres and older suburbs. Urban policies
need to be put in place to guide the planning of cities, particularly the older cities in the
main conurbations. Greater effort needs to be made at the local planning level to deal
with the design and renewal of specific sites and locations as well as any other
impediments to redevelopment such as land tenure issues.
The aspiration to attain developed nation status and to enjoy the quality of urban life of a
developed country involves the adoption of a developed country standards for the
physical environment. Present planning standards, particularly standards of open space
provision, recreational parks and facilities, need to be reviewed. Standards and quality
of infrastructure provision, such as in water supply, sewerage, street and drain
cleanliness need to be monitored, reviewed and compared with other international
standards.

5-39
Malaysia is still experiencing property overhang which had immobilised capital and
resources due to speculative development. In order to prevent future property
overhangs approving authorities must be cautious with the approval of development
applications and be guided by realistic projections of housing and property demand.
Approval of land conversion should not be at a rate faster than five years ahead of
projected demand for development land.
The policies for managing human settlements should also be integrated with the
sectoral policies in agriculture, conservation of resources and the environment and other
sectors that have an impact on land use. For example, the agricultural policy of
conserving the strategic granary areas would require that urban development be
diverted away from cities located in the midst of granary areas like Alor Setar. Such
diversion could be to areas just outside the paddy growing land or to other cities and
towns in the state. The details of urban diversion would be matters for state and local
planning to address, while national policies should include financial assistance to states
involved with the necessity for such urban diversion.
National policies on human settlements should also encourage local initiatives in so far
as they do not contradict with the national spatial framework. Federal financial
allocations shall also be made available to support local programmes that conform to
the National Physical Plan (NPP-2).
NPP 14
The concentration of urban growth shall be accommodated in the conurbations which
shall be planned and developed in an integrated manner in line with the National
Urbanisation Policy.
IP 13 : CONURBATIONS AND URBAN HIERARCHY

Measures:
i. The levels of conurbations proposed for priority development are as follows:-
Level Designation Area Indicative Population Range
1 National Growth Conurbation Kuala Lumpur Conurbation > 2.5 million
2 Regional Growth Conurbation George Town Conurbation
Johor Bahru Conurbation
Kuantan Conurbation
1.5 2.5 million
3 Sub-regional Growth
Conurbation
Ipoh Conurbation
Melaka Conurbation
500,001 1.5 million
4 State Growth Conurbation Alor Setar Conurbation
Kota Bharu Conurbation
Kuala Terengganu Conurbation
Kangar Conurbation
300,001 500,000
5 District Growth Conurbation Muar-Batu Pahat-Kluang Conurbation
Lumut-Setiawan- Manjung Conurbation
Termeloh Conurbation
100,001 300,000
Source: National Urbanisation Policy, 2006

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Regional Plans for conurbations shall be prepared for each of the conurbation areas.
Conurbation plans shall, amongst other things, address such matters as new townships
and growth centres within the conurbations, urban limits, green belts, transportation,
water supply, sewerage systems, solid waste disposal, industrial estates and flood
mitigation.
ii. Additional development that cannot be accommodated within the prescribed urban limits
of existing cities and towns shall be directed to new towns and growth centres located
within the conurbation boundaries.
iii. In delineating city limits, land between individual cities and towns shall be set apart from
development. Such land shall form green belts. Policy guidelines shall be formulated to
provide for the creation, maintenance and control of green belts.
iv. Isolated forest reserves, PAA and ESA Ranks 1 and 2 shall form part of green belts.
v. Development control of land designated as PAA and ESA shall be enforced in the green
belts. Generally, development in the green belts shall be restricted to the use of land for
recreational purposes. Types of suitable recreational activities shall depend on
environmental sensitivity of the area.
vi. Land conversion and development applications shall be assessed on the basis of
sequential test to minimise speculative development.
vii. State land within urban limits shall be reserved for public use such as, open spaces and
community facilities where appropriate.
viii. While inter-city movements within conurbations shall be facilitated by mass transit
systems, land use planning in the conurbations shall aim at minimising the necessity for
inter-city travel.
ix. A hierarchy of infrastructure, social and recreational facilities shall be established within
each conurbation to promote greater efficiency in public investments and the use of
public facilities.
National Physical Plan-2

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- 2
Source: National Urbanisation Policy (NUP), 2006
District growth Conurbation
Towns Within Conurbation Major Settlement Centre
Sub-Regional Growth Conurbation
Regional Growth Conurbation
National Growth Conurbation
District Growth Conurbation
State Growth Conurbation
I P 13
IP 13: CONURBATIONS AND URBAN HIERARCHY

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NPP 15
The growth of the four main conurbations of Kuala Lumpur, George Town, Johor Bahru
and Kuantan shall be supported to enhance their global competitiveness.
Measures:
i. In addition to the general support for services and manufacturing, the global
competitiveness of the main conurbations for local and foreign direct investments in the
k-economy growth sectors of ICT, health and education tourism and biotechnology shall
be given special attention and support.
ii. The provision of infrastructure and facilities particularly in power supply, housing,
recreation, entertainment and environmental quality, which are necessary to support the
k-economy sector shall be enhanced and improved.
iii. Where necessary and appropriate, specific areas shall be identified and developed
within the conurbations for housing ICT and biotechnology enterprises.
iv. Integrated mass transit systems shall be developed in the main conurbations to enhance
the efficiency of the conurbations.
v. The aspiration to develop and promote Kuala Lumpur as a World Class City shall be
supported.
vi. Overspill industries and services from the main conurbations shall be encouraged to be
located in the sub-regional growth conurbations and future conurbations of:-
a. Ipoh
b. Melaka
c. Temerloh-Mentakab
d. Lumut-Sitiawan-Manjung
e. Muar-Batu Pahat-Kluang




5-43
NPP 16
High priority shall be given to achieve energy efficient compact cities.
Measures:
i. Transit oriented development (TOD), high intensity and mixed development shall be
promoted to achieve energy efficient and liveable compact cities and towns.
ii. Infill development and the use of brownfield sites within urban areas shall be
encouraged to better utilise existing and committed physical and social infrastructure.
iii. Appropriate incentives shall be provided to stimulate urban regeneration and infill
development.
iv. Local planning shall create opportunities for urban regeneration in the major towns and
cities not only for the purpose of economic growth but also for the purpose of enhancing
the living environment.
v. The linkage and identity between the core areas of individual cities and their peripheries
shall be defined and maintained.
vi. Individuality and physical separation of cities, towns and villages shall be maintained.
vii. The development limits and urban growth boundaries of individual cities, towns and
villages shall circumscribe to the horizontal expanse of the cities, towns and villages
respectively.
viii. Local planning shall be sensitive to the conservation of historical, cultural and
architecturally outstanding areas to enhance the character and uniqueness of individual
cities.
ix. Development Plans shall identify the relevant issues related to climate change and shall
aim to achieve green neighbourhoods.

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NPP 17
Towns with special features shall be identified and the development projects to enhance
their special features shall be supported with appropriate infrastructure.
Measures:
i. Special features and functions of selected towns shall be developed and enhanced in
accordance to their respective economic potentials by providing adequate support
facilities.
Special features towns are listed below:-

Special Function Town State
Other Special Feature Towns
Coastal Resort Town
Mersing
Desaru
Johor
Kuah Kedah
Port Dickson Negeri Sembilan
Kuala Rompin
Cherating
Pantai Sepat
Pahang
Dungun
Marang
Penarik-Merang
Kuala Besut
Terengganu
Pangkor
Lumut
Perak
Batu Feringgi
Tg. Tokong
Penang
Tumpat Kelantan
Highland Town and Hill Stations
Tanah Rata (Cameron Highlands)
Genting Highlands
Frasers Hill
Pahang
Lojing Kelantan
Bukit Bendera (Penang Hill) Pulau Pinang
Bukit Larut (Maxwell Hill) Perak
Gunung Jerai Kedah
Nature Based / Eco-tourism
Pontian Kecil
Segamat
Johor
Jerantut
Bera
Pahang
Jerteh
Marang
Terengganu
Dabong
Gua Musang Kelantan

5-45
Special Function Town State
Other Special Feature Towns
Nature Based / Eco-tourism
Alor Gajah
Ayer Keroh
Jasin
Melaka
Historical / Heritage Town
George Town Pulau Pinang
Teluk Intan
Gerik
Lenggong
Taiping
Perak
Klang Selangor
Malacca Town Malacca
Kuala Lipis Pahang
Royal Town
Pekan Pahang
Kota Bharu Kelantan
Kuala Terengganu Terengganu
Kuala Kangsar Perak
Arau Perlis
Alor Setar Kedah
Sri Menanti Town Negeri Sembilan
Klang Selangor
Special Role Town
Putrajaya Federal Territory
Cyberjaya Cyber City Selangor
Special Industry Town
Tanjung Malim Proton City Perak
Prai Heavy Industry Pulau Pinang
Gurun- Heavy Industry
Kulim Hi-Tech industries
Kedah
Senai Aviation & Logistic Hub Johor
Kertih - Oil, Gas & Petrochemical
Teluk Kalong Heavy Industry
Terengganu
Gebeng Petrochemical, Palm Oil &
Bio-Diesel, Logistics
Peramu - Automobile
Tg Agas- Marine Based industry
Pahang
Communications and Transportation
Nodes
Lumut Setiawan Manjung
Perak
Gerik
Temerloh Mentakab Pahang
Gua Musang Kelantan
Gemas Negeri Sembilan
Border Towns
Padang Besar Perlis
Bukit Kayu Hitam
Kota Putra
Kedah
Pengkalan Hulu Perak
Bukit Bunga
Rantau Panjang
Pengkalan Kubor
Kelantan
Source: National Physical Plan-2, 2010

5-46
ii. The special features and functions of special feature towns shall be expressed through
responsive and effective urban design.
iii. All Border Towns shall be planned taking into consideration the existing situation and
development proposals across the borders. Cross border cooperation shall be
promoted.
iv. Comprehensive Development Plans covering both sides of the borders shall be
prepared by the Federal Government and as a Joint Development Strategy (JDS)
through the ASEAN sub-regional development cooperation in IMT-GT (northern border
towns) and IMS-GT (in the case of Johor Bahru).





5-47
NPP 18
Major and Minor Settlement Centres shall be sustained and developed in accordance with
their local economic potentials.
IP 14 : MAJOR AND MINOR SETTLEMENT CENTRES
Measures:
i. Public amenities and facilities in all Major and Minor Settlement Centres shall be
maintained at a level that can commensurate with the needs of their population.
ii. Resource-based industries, craft-based industries, value-added agricultural activities,
ecotourism and similar industries and services in Major and Minor Settlement Centres
shall be supported by the necessary infrastructure for such developments.
iii. Urban development shall be coordinated with national policies relating to land use, such
as the National Agricultural Policy (NAP) to safeguard food producing areas. Large scale
urban expansion shall not be allowed in towns located within designated granary areas.
Such development should be diverted to locations not reserved for rice production.
iv. Inter-state border towns shall be planned and developed in a coordinated manner with
emphasis on the identity of the respective states. Examples of inter-state border towns
are:-
Nibong Tebal-Permatang Keling-Parit Buntar
Tanjung Malim-Ulu Bernam
Tampin
Gemas
Endau-Tanjung Gemuk
Kemaman-Chendur
Kuala Besut-Tok Bali
Comprehensive Development Plans covering the border towns shall be prepared, based
on interstate cooperation, addressing cross border issues and coherent urban design
principles.
National Physical Plan-2

5-48
- 2
Source: Nation Urbanisation Policy (NUP), 2006
Major Settlement Centre
Conurbation
Minor Settlement Centre
I P 14

5-49
NPP 19
Sufficient affordable housing with adequate community facilities, including security
facilities and services, shall be provided in major urban centres to meet the requirements
of the population.

Measures:
i. Adequate housing equipped with infrastructure, public facilities and amenities shall be
provided based on affordability.
ii. Housing in major urban centres shall be planned to achieve the target of one dwelling
unit per household.
iii. In major urban centres, the target of zero squatters shall be achieved by 2020.
iv. Safety and security shall be ensured in all neighbourhoods. Crime Prevention through
Environmental Design (CPTED) shall be adopted in both public and private sector
housing schemes.
v. Local Plans shall identify areas for public housing ensuring proximity to places of work,
good accessibility and taking into consideration the needs of the various ethnic groups of
society including the disabled and senior citizens.
vi. New implementation strategies such as land readjustment and land pooling shall be
adopted as a strategy for land assembly of fragmented land parcels in meeting housing
needs.
vii. Public common users space shall be provided for social interaction and sustainable
communities.
NPP 20
Planning standards and urban development policy guidelines shall be designed to meet
the requirements of a developed nation.
Measures:
i. Existing planning standards shall be benchmarked against the standards of other more
developed country and upgraded where appropriate with the view of ensuring better
quality of life for Malaysians. Upgrading may be selective to ensure that higher
standards adopted are practical and appropriate to the local culture, climate and other
conditions.

5-50
ii. The implementation of enhanced standards shall be carried out gradually to avoid any
potential drastic impact on land and house prices.
iii. The adoption of enhanced planning standards should be monitored and reviewed over
an extended period of time.
iv. Planning standards to be reviewed shall include space standards for public facilities as
well as private sector development.
v. The quality and range of municipal services provided shall be monitored and reviewed to
commensurate with the aspirations of a developed country.
vi. Uniform planning standards and detailed policy guidelines on urban development shall
be formulated to meet the requirements of a developed nation while addressing relevant
issues of climate change and achieving green neighbourhoods.
NPP 21
A designated central authority shall be responsible for publishing on a regular basis,
information pertaining to land use development.
Measures:
i. The central authority responsible to publish on regular basis information on land use
development shall be the Federal Department of Town and Country Planning (FDTCP).
ii. Every local planning authority shall be required to supply to the designated central
authority, at regular intervals, information on planning approvals and the issue of
Certificates of Completion and Compliance (CCC) within their respective areas.
iii. Every district land office and the State Director of Lands and Mines shall be required to
supply to the designated central authority, at regular intervals, information on land
conversions approved in the districts.
iv. The designated central authority shall determine the frequency of publication in
consultation with stakeholders and the frequency of reporting by the local planning
authorities and land offices.
v. The designated authority shall, in consultation with the stakeholders, determine the
format for reporting and publication and the type of information to be included.
vi. All Development Plans shall include programmes designating when land is ripe for
development and its conversion to urban use. Approval for the conversion of land from
agriculture to urban use shall adhere to such programmes. Where conversion is well
ahead of development there should be a moratorium on land conversion. The rate of
conversion should be no more than five (5) years ahead of projected development.

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5.6 Conserving Natural Resources, Biodiversity and the Environment
Malaysia is recognised as one of 12 mega-diverse countries in the world which is the
rich biological diversity contained in the many forms of forest, freshwater and marine
habitats. In Peninsular Malaysia alone, there are about 8,300 species of vascular
plants, 229 species of mammals, 742 species of birds, 1,031 species of insects and 290
species of freshwater fish. The warm tropical waters off Peninsular Malaysia harbour an
extensive network of coral reefs, mudflats, mangroves and seagrass beds which contain
globally significant marine species, such as one of the worlds largest populations of
endangered green sea turtles, as well as other endangered species such as hawksbill
turtles, dugongs and whale sharks.
The importance of conserving these species, habitats, ecosystems and associated
ecological processes for the sustained well-being of human populations should not be
underestimated. Biodiversity provides essential goods, services and life-support systems
that are very much needed for human existence and survival. (Table 5.2).
Table 5.3 : Biodiversity and Ecosystem Services
Biodiversity & Ecosystems
Provisioning Services Regulating Services Cultural Services
Products obtained from
ecosystems
Benefits obtained from regulation of
ecosystem processes
Non-material benefits obtained from
ecosystems
Food
Fresh water
Timber
Fuel wood
Fibre
Biochemicals
Genetic resources
Climate regulation
Pest regulation
Runoff/flood regulation
Water purification
Pollination
Erosion regulation
Spiritual & religious
Recreation & ecotourism
Aesthetic & inspirational
Educational
Cultural heritage
Supporting Services
Services necessary for the production of all other ecosystem services
Soil formation Nutrient cycling Primary production Provision of habitat
Oxygen
production
Source: A Common Vision on Biodiversity (NRE, 2008)
Since late 19
th
century habitat conservation has been in practise in the country. In 1994,
Malaysia ratified the United Nations Convention on Biological Diversity (CBD) and in
1998 formulated the National Policy on Biological Diversity which provides direction and
strategies on the conservation and management of biological diversity in the country. At
present, forests still cover approximately 44.8%, of Peninsular Malaysias land mass
whereas protected areas (including forest reserves having protection status)
encompasses 13% of the landmass. The marine park system includes an area of over
2,199 km
2
encompassing the waters surrounding 71 islands.
Despite many ongoing efforts on conservation, habitat loss and fragmentation of species
and ecosystem services is still prevalent in Peninsular Malaysia. While the protected
areas are relatively secure, forest reserves are easily de-gazetted and subsequently

5-52
converted to agriculture or other uses. Between 2001 and 2005, over 40,000 hectares of
forest reserves were excised in Peninsular Malaysia. In addition, the area within forest
reserves planted with rubber, oil palm and other crops jumped from 4,686 hectares in
2005 to 38,387 hectares in 2007. The loss and fragmentation of forests has led to the
degradation of ecosystem services, a decline in wildlife populations as well as increased
incidences of human-wildlife conflicts. Such as, addressing the loss of forest cover and
the problem of fragmentation is crucial in the effort to protect the nations biological
heritage.
The conservation values of ecosystems outside protected areas are often overlooked in
favour of resource exploitation. Limestone hills, for example, which harbour a high
proportion of endemic species due to long periods of isolation, are usually regarded only
as resources to be exploited for aggregate or marble. As such, national level studies to
prioritise such areas for conservation or utilisation are urgently needed.
The coastal zones of Peninsular Malaysia are experiencing rapid urbanisation, including
large-scale reclamation for ports, industrial zones and aquaculture, all of which are
associated with habitat loss and pollution. Waters and corals in marine parks continue to
be degraded by development and pollution from marine parks islands. All of these
undermine the value of the ecosystem services provided by the coastal zone such as
catch fisheries and tourism. Many important coastal and marine ecosystems such as
seagrass beds, turtle landing sites and water bird sites need to be protected in order to
reduce more incidences of habitat loss.
Highlands have unique characteristics that make them attractive for tourism and
agriculture. However, uncontrolled development in the highlands, especially in Lojing
and Cameron Highlands, are causing problems such as flash floods, landslides and
sedimentation of rivers. These in turn affect aquatic biodiversity and the functions of
rivers for clean water supply, recreation and tourism. There is a need to strictly control
the expansion of urban and agriculture development in the highlands, implement better
management practices and formulate statutory plans for key hill stations.
The protection of water catchments, along with rivers and groundwater recharge zones,
is central to ensuring an adequate supply of good quality water and sustainable land use
planning. The true economic value of forested catchments and clean rivers must be
recognised and realised. The construction of dams, which have major environmental and
social consequences, should not be seen as the only means for water resource
development. Instead, the incorporation of water demand management measures and
enhancement of distribution networks must be given equal emphasis.
Finally, the nation needs to proactively address the anticipated impacts of global climate
change. Although not a main contributor to climate change, Malaysia is nevertheless
vulnerable to its effects. The Intergovernmental Panel on Climate Change (IPCC)
predicts that without further action to reduce greenhouse gas emissions, the global
average temperature will rise by a further 1.8 to 4.0 C this century.

5-53
The projected global warming is predicted to have serious consequences, including a
rise in sea levels of between 18 and 59 cm which will endanger coastal areas and small
low lying islands. Climate change is also expected to lead to greater frequency and
severity of extreme weather events, cause substantial biodiversity loss and adversely
affect water resources and agriculture.
Malaysias main obligations as a Non-Annex 1 Party to the UNFCCC include formulating
adaptation strategies to combat the impacts of climate change and promoting
sustainable management, conservation and enhancement of carbon sinks. While an
improved understanding of the likely range of climatic conditions and associated impacts
is imperative for the formulation of more specific measures, it is widely agreed that early
pre-emptive adaptation measures are critical to limit the damage and economic costs of
these impacts (see Table 3.1).
On the whole, better land use planning, management and more stringent protection at
every level of environmentally sensitive areas is imperative in ensuring the wise use of
natural resources, biodiversity and ecosystem services in Peninsular Malaysia. In
addition, State Governments must be provided with the opportunity to move away from
their dependence on a very narrow revenue base, namely exploitation of natural
resources and land taxes.
Therefore, it is vital that adequate platforms and economic incentives for the
implementation of environmental protection and biodiversity conservation programmes
and safeguards at the state level are established.

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NPP 22
Environmentally Sensitive Areas shall be integrated in the planning and management
of land use and natural resources.
IP 15 : ENVIRONMENTALLY SENSITIVE AREAS
Measures:
i. The wise use and conservation of Environmental Sensitive Areas in Peninsular
Malaysia shall be in accordance with the management criteria specified in the table
below. In addition, all levels of spatial planning shall take into account the Guidelines
for Managing Biodiversity in the Landscape
1
.
ESA Categories and Criteria:-
Rank Environmentally Sensitive Areas Management criteria
ESA
Rank 1
Existing and proposed Protected Areas.
Important small habitats outside the PA system: Turtle
landing sites, salt licks, important plant areas, limestone
outcrops and natural wetlands of high conservation value.
Catchments of existing and proposed dams.
Areas above 1,000m contour.
No development, agriculture or
logging shall be permitted
except for ecotourism
2
,
research and education.
ESA
Rank 2
All other forests and wetlands outside of Protected Areas.
500m buffer zone around Rank 1 areas
3
.
Areas between 300m 1,000m contour.
No development or agriculture.
Sustainable logging and eco-
tourism may be permitted
subject to local constraints.
ESA
Rank 3
Marine park islands.
500m buffer zone around Rank 2 areas
3
.
Catchments of water intake and groundwater recharge
zones.
Areas between 150m - 300m contour, all areas with erosion
risk above 150ton/ha/yr, all areas experiencing critical or
significant coastal erosion.
Controlled development
whereby the type and intensity
of the development shall be
strictly controlled depending on
the nature of the constraints.
ii. Structure Plans and Local Plans shall detail out the ESAs identified in the NPP to
include other ESAs that may be of importance at the state or local levels. ESA
categories and corresponding management criteria in the NPP shall be retained in the
Structure Plans and Local Plans. Additional management criteria shall be elaborated
in the Structure and Local Plans for all ESA types falling under ESA Rank 3.

1
NRE. 2009. M anagi ng Bi odi ver si t y i n t he Landscape A Gui del i ne f or Pl anner s, Deci si on M aker s and Pr act i t i oner s.
M i ni st r y of Nat ur al Resour ces and Envi r onment . Put r aj aya.
2
The Nat i onal Ecot our i sm Pl an (M i ni st r y of Cul t ur e, Ar t s and Tour i sm 1997) adopt s t he Wor l d Conser vat i on Uni on
(IUCN) def i ni t i on f or ecot our i sm, i .e.: Envi r onm ent al l y r esponsi bl e t r avel t o r el at i vel y undi st ur bed nat ur al ar eas i n
or der t o enj oy and appr eci at e nat ur e (and any ot her accompanyi ng cul t ur al f eat ur es). One t hat pr omot es
conser vat i on, one t hat has l ow vi si t or i mpact and one t hat pr ovi des f or benef i ci al l y act i ve soci oeconomi c
i nvol vement of l ocal popul at i ons.
3
The w i dt hs of t hese buf f er zones may be r evi sed at t he l ocal l evel t o t ake i nt o consi der at i on si t e-speci f i c
const r ai nt s.

5-55
iii. The boundaries of all ESAs shall be delineated in the Structure and Local Plans.
Eventually, these boundaries should be clearly demarcated on the ground.
iv. There shall be adequate buffer zones between ESA (Rank 1 and 2) and urban or
agriculture development. Guidelines for land use in buffer zones shall be established.
Permanent buildings should not be permitted in buffer zones. The buffer zones may
be utilised for agro-forestry, subject to the above guidelines. Within the designated
conurbations, ESA buffer zones may be incorporated into the green belts.
v. In order to retain the present amount of natural forest cover, there shall be no further
excision of permanent forest reserves. In addition, forest plantations shall only be
developed outside of permanent forest reserves.
vi. Fiscal measures shall be introduced to enable state governments to offset potential
revenue loss as a result of biodiversity conservation initiatives. Studies shall be
carried out to formulate the most appropriate mechanisms, which may include
Payment for Ecosystem Services (PES) schemes such as public payment
instruments, carbon trade and biodiversity offsets.
vii. The respective State Biodiversity Biotechnology Committees shall be further
strengthened. These committees shall advise the respective state governments on all
matters pertaining to biodiversity conservation, protected areas management, access
and benefit sharing, including biosafety and bioprospecting.
viii. The Protected Area (PA) system shall be expanded to include a full representation of
natural habitat types in Peninsular Malaysia. To achieve this, a PA System Plan shall
be developed for Peninsular Malaysia, taking into consideration all previous
proposals for PAs. Some of most important areas that have been proposed are:-
Ulu Muda (Kedah)
Gunung Jerai (Kedah)
Sungai Merbok mangroves (Kedah)
Bintang Range (Kedah and Perak)
Temengor (Perak)
Pondok Tanjung freshwater swamp forest (Perak)
Frasers Hill National Park (Pahang)
South-east Pahang peat swamp forest (Pahang)
Gunung Panti (Johor)
Sg Sedili Kecil & Sedili Besar wetlands (Johor)
Setiu wetlands (Terengganu)
Kenyir and Tembat (Terengganu)
Terengganu Hills (Terengganu)
Upper Nenggiri/ Perias basin (Kelantan)
Pergau and Gunung Basor (Kelantan)
Gunung Chamah (Kelantan)

5-56
Limestone hills with high conservation value such as Gunung Jaya and Gua
Panjang in Kelantan; Serdam, Gelanggi and Jebak Puyoh in Pahang; Gunung
Datuk, Rapat, Lanno and Kantan in Perak; and Batu Caves in Selangor.
Coastal hill dipterocarp forests such as Segari Melintang and Teluk Muroh in
Perak; and Bukit Labohan in Terengganu.
A stepwise approach is recommended to formulate the Plan, with the Protected Area
Master list for Peninsular Malaysia
4
as a starting point. The Plan shall also include
strategies and action programmes in order to strengthen management effectiveness
and sustainable financing of PAs.
ix. National Action Plans shall be formulated to guide the wise use, conservation and
protection of high conservation value areas which are at present generally outside of
protected areas, in particular limestone hills, natural wetlands, important plant areas
(IPA)
5
, and important bird areas (IBA)
6
.

4
NRE. In pr ep. The M ast er l i st of Pr ot ect ed Ar eas i n M al aysi a. M i ni st r y of Nat ur al Resour ces and Envi r onment .
Put r aj aya.
5
A st udy on Im por t ant Pl ant Ar eas i s cur r ent l y on-goi ng. Cont act FRIM f or f ur t her i nf or mat i on.
6
Yeap, C.A., Sebast i an, A.C. and Davi son, G.W.H. (com pi l er s). 2007. Di r ect or y of Impor t ant Bi r ds Ar eas i n M al aysi a:
key si t es f or conser vat i on. Kual a Lumpur . M al aysi an Nat ur e Soci et y (M NS Conser vat i on Publ i cat i on No. 8)
National Physical Plan-2

5-57
- 2
Source: National Physical Plan-2, 2010
ESA Rank 3
ESA Rank 2
ESA Rank 1
State Capital
State Boundary
I P 15
IP 15: ENVIRONMENTALLY SENSITIVE AREAS

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NPP 23
A Central Forest Spine shall be established to form the backbone of the Environmentally
Sensitive Area network.
IP 16 : ECOLOGICAL CORRIDORS AND CENTRAL FOREST SPINE
Measures:
i. The Central Forest Spine (CFS) shall be planned and managed as an integrated unit
which forms the backbone of the ESA network. The non forested areas within the
indicative CFS boundary shall also be treated as ESAs and the necessary management
regimes shall be formulated. Further studies shall be undertaken to formalise this
concept.
ii. The CFS Master Plan
10
shall be implemented in order to establish ecological linkages to
re-connect the most important forests complexes across Peninsular Malaysia. Additional
ecological linkages shall be identified at the Structure and Local Plan levels. Special Area
Plans will be prepared to manage and conserve the ecological linkages that have been
identified.
iii. Land use planning at all levels should strive to prevent or minimise further habitat
fragmentation. In this regard, the CFS Master Plan, the National Tiger Action Plan
11
as
well as the Guidelines for Managing Biodiversity in the Landscape
12
should be referred to,
in particular for highways, railways, pipelines and plantations, which pose the greatest
threat for habitat fragmentation.
iv. Care shall be taken to minimise habitat fragmentation in particular for developing areas
around Raub-Kuala Lipis-Gua Musang which is located at the heart of the CFS between
the Main Range and Taman Negara. These areas are crucial for the integrity of the CFS
and shall be planned and managed as environmentally sensitive areas.
v. A model project shall be undertaken to develop the Conservation District concept in
districts that have a high percentage of ESAs, especially within the CFS. The project shall
include organisational set-up, funding, strategies, programmes and training. The
programmes and measures will act as tools for the local Government to effectively
incorporate biodiversity conservation and environmental protection particularly, the
relevant measures contained in the NPP-2 into land use planning, management and
administrative protocols.



10
TCPD. 2009. Cent r al For est Spi ne 1 A M ast er pl an f or Ecol ogi cal Li nkages. Town and Count r y Pl anni ng Dept . (DTCP), Kual a
Lumpur .
11
Depar t ment of Wi l dl i f e and Nat i onal Parks Peni nsul ar M al aysi a. 2008. Nat i onal Ti ger Act i on Pl an f or M al aysi a. Kual a Lumpur .
12
NRE. 2009. M anagi ng Bi odi ver si t y i n t he Landscape A Gui del i ne f or Pl anner s, Deci si on M aker s and Pr act i t i oners. Mi ni st r y of
Nat ur al Resour ces and Envi ronment . Put r aj aya.
National Physical Plan-2

5-59
- 2
Source: Central Forest Spine: Master Plan of Ecological Linkages (by FDTCP), 2010
Pr i mar y Li nkages
Secondary Li nkages
For est Cover
Pr i mar y Li nkages
For est Compl exes
1 KEDAH SINGGORA FOREST COM PLEX
2 BINTANG HIJAU FOREST COM PLEX
3 M AIN RANGE FOREST COM PLEX
4 GREATER TAM AN NEGARA FOREST COM PLEX
5 BENOM FOREST COM PLEX
6 CHINI BERA FOREST COM PLEX
7 SOUTH EAST PAHANG PEAT SWAM P FOREST
8 ENDAU ROM PI N SEDILI FOREST COM PLEX

I P 16
IP 16: ECOLOGICAL CORRIDORS AND CENTRAL FOREST SPINE

5-60
NPP 24
Sensitive coastal and marine ecosystems shall be protected and managed in a
sustainable manner.
IP 17 : SENSITIVE COASTAL ECOSYSTEMS
Measures:
i. Coastal reclamation shall not be encouraged except for the development of ports of
strategic national importance. Coastal reclamation shall not be permitted in or adjacent to
sensitive ecosystems such as marine parks, mangroves, mudflats, coral reefs, seagrass
beds, turtle landing sites and major tourism beaches. All proposals involving coastal
reclamation shall be referred to the National Physical Planning Council.
ii. A National Plan of Action for wetlands shall be formulated to ensure the wise use and
sustainable management of natural wetlands. The conversion of natural wetlands to other
land use shall only be carried out for the development of critical infrastructure where the
wetlands are found to have low value in terms of supporting biodiversity and ecosystem
services.
iii. Seagrass beds, which are wetland habitats critical for marine fisheries and conservation
of the dugong, shall be gazetted as protected areas. A National Seagrass Action Plan
shall be formulated to ensure the protection of the most important seagrass beds.
iv. The National Plan of Action for Sea Turtles shall be referred to and adopted. Important
turtle and terrapin nesting sites, in Pasir Panjang beach (Perak), Cherating beach
(Pahang), Chakar Hutang, Penarik, Telaga Papan, Geliga and Kijal beaches
(Terengganu), Pulau Upeh, Padang Kemunting, Pasir Gembur, Kem Terendak beaches
(Melaka) and all Marine Turtle Management and Conservation Centres shall be
protected. In addition, other nesting sites shall be identified and ranked as ESA 1. All
degraded sites shall also be restored.
v. Waterbird sites of international importance shall be conserved and sustainably
managed
15
. These are located on the west coast, in particular Teluk Air TawarKuala
Muda in Kedah and Sebarang Perai, the Matang mangroves in Perak, and the north-
central coast of Selangor.
vi. Islands within marine parks shall be managed in a manner that will protect the rich marine
biodiversity in the waters around them. Development and tourism management on the
islands shall be in line with the each respective Marine Park Management Plan.
Appropriate solid waste and wastewater management systems must also be in place.

15
Li , Z.W.D. and Ounst ed, R. (eds.). 2007. The St at us of Coast al Wat er bi r ds and Wet l ands i n Sout heast Asi a: Resul t s of Wat er bi r d
Sur veys i n Mal aysi a (20042006) and Thai l and and M yanmar (2006). Wet l ands Int ernat i onal , Kual a Lumpur , M al aysi a.

5-61
vii. Coastal planning and development shall take into account the strategies and measures
contained in the Rancangan Fizikal Zon Persisiran Pantai Negara
16
and the various
Integrated Shoreline Management Plans (ISMP).
viii. Ecosystem Based Fisheries Management (EBFM) shall be used as a management tool to
ensure the sustainable management of marine fisheries. Specific conservation actions on
the basis of EBFM shall include the development of recovery and management plans for
all major fisheries, as well as the gazettement of additional Fisheries Prohibited Areas
and important fishery habitats.

16
FDTCP. 2010.Nat i onal Coast al Zone Physi cal Pl an (NPP-CZ). Feder al Depar t ment of Tow n and Count r y Pl anni ng (FDTCP), Kual a
Lumpur.
National Physical Plan-2

5-62
- 2
Source: National Physical Plan-2, 2010
Critical Costal Erosion Area
Turtle Landing Site
Seagr ass Beds
Coast al l Hi l l Di pt er r ocarp For est
Important Waterbirds Site
State Capital
Wetlands
Marine Park
I P 17
IP 17: SENSITIVE COASTAL ECOSYSTEMS

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NPP 25
Land development in the highlands shall be strictly controlled to safeguard human safety
and maintain environmental quality and biodiversity.
IP 18 : HIGHLANDS AND SPECIAL MANAGEMENT AREAS
Measures:
i. All development shall adhere to the Guidelines on Development Planning in Hills and
Highlands
23
.
ii. Development strategies for agriculture and tourism on hills and high lands shall be
properly planned and well integrated together to optimise and benefit the use of
resources.
iii. New golf courses including medium and heavy industries shall not be permitted in the
highlands.
iv. A National Highland Policy shall be formulated to guide development in the highlands.
Development within the SMA;
v. Following recommendations on the Study for the Sustainable Development of the
Highlands of Peninsular Malaysia by EPU
24
, future urban and agriculture development in
the highlands shall only be permitted in two Special Management Areas (SMA):-
a. Cameron Highlands-Kinta-Lojing; and
b. Genting Highlands-Bukit Tinggi-Janda Baik.
Within the SMA, future agriculture development shall only be permitted outside forest
reserves and water catchment areas.
vi. No new development shall be permitted in the Frasers Hill SMA. Existing development
shall adhere to the strategies and guidelines contained in the Development Coordination
Study in Bukit Fraser
25
.
vii. Special Area Plans shall be formulated for the Cameron Highlands-Kinta-Lojing SMA,
Genting Highlands-Bukit Tinggi-Janda Baik SMA and Frasers Hill SMA as well as for
Bukit Larut (Maxwell Hill), Penang Hill and Gunung Jerai. Development in these hill
stations shall be restricted to eco-tourism, focusing on refurbishment and upgrading of
existing facilities. No new hill stations shall be allowed.


23
Feder al Depar t ment of Tow n and Count r y Pl anni ng (FDTCP) 2009. Gar i spanduan Per ancangan Pembangunan di
Kaw asan Buki t dan Tanah Ti nggi . M i ni st r y of Housi ng dan Local Gover nm ent .
24
EPU. 2002. St udy f or t he Sust ai nabl e Devel opment of t he Hi ghl ands of Peni nsul ar M al aysi a . Economi c Pl anni ng
Uni t , Pr i me M i ni st er s Depar t ment . Put r aj aya.
25
DOE. 2008. Devel opment Coor di nat i on St udy in Buki t Fr aser , Pahang. Depar t ment of Envi r onment . Put r aj aya.
National Physical Plan-2

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- 2
Mountain (>1000 meters a.s.m.l)
Highland (>300 meters a.s.m.l)
Special Management Areas
Hill Station
State Capital
Source: National Physical Plan-2, 2010
18
IP 18: HIGHLANDS AND SPECIAL MANAGEMENT AREAS

5-65
NPP 26
All surface and ground water resources shall be safeguarded and managed sustainably.
IP 19 : WATER CATCHMENT AREAS
IP 20 : GROUND WATER RESOURCES
Measures:
i. Catchment areas of existing and proposed dams shall be gazetted as water catchments
to avoid further encroachment of incompatible land uses into such areas.
ii. Structure and Local Plans shall identify and delineate water intake catchments and
ground water recharge zones as ESA Rank 3 areas requiring special land use
management. The type and intensity of development shall be strictly controlled
depending on the nature of the constraints.
iii. All existing and future land use activities within water intake catchments and recharge
zones should not jeopardise nor add to the cost of water treatment for human
consumption. New industrial development and other activities that could be a source of
water borne pollution shall not be permitted whilst existing industries shall be required to
adopt appropriate environmental management measures to protect public health and
water quality.
iv. The use of public wells and important ground water resources catering for commercial,
industrial and agricultural activities shall be monitored, particularly to avoid over-
extraction. Drainage controls shall be imposed close to important ground water areas
such as peat swamps and freshwater swamps to maintain the water table required to
sustain these ecosystems.
v. Water bodies shall be managed to protect the aquatic biodiversity, with the objective of
sustaining living rivers. River and lake reserves shall be established to protect river water
quality, maintain the integrity of aquatic habitats, alleviate flooding and where required, to
function as ecological corridors.
vi. Water demand management measures shall be implemented. In addition, Integrated
Water Resource Management (IWRM) and Integrated River Basin Management (IRBM)
approaches shall be adopted to incorporate sustainable water resource use into land use
planning.
vii. Strategic Environmental Assessments (SEA) shall be used to rationalise the need for
new dams.
National Physical Plan-2

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- 2
Source: National Water Resources Study, 2000
Existing Dam Catchment
Proposed Dam Catchment
Water Intake Catchment
Major River
Water Body
I P 19
IP 19: WATER CATCHMENT AREAS
National Physical Plan-2

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- 2
Source: Hydro-Geological Map of Peninsular Malaysia 1
st
Edition, 2008 (by Dept. of Minerals and Geoscience)
Very High
High
Medium
Major River
Low
I P 20
IP 20: GROUND WATER RESOURCES

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NPP 27
The spatial planning framework shall incorporate mitigation and adaptation measures
against the impacts of climate change.
IP 21 : POTENTIAL AFFECTED COASTAL AREAS DUE TO CLIMATE CHANGE
Measures:
i. Future planning of settlements and infrastructure in coastal zones shall be located away
from areas vulnerable to rising sea levels/ storm surges, with setback policies extended
as appropriate. Risk assessment and vulnerability mapping shall be carried out, as early
warning and emergency response systems against any environmental disaster.
ii. Shoreline stabilization structures (such as dikes and sea walls) shall be strengthened in
critical areas of high economic value or strategic importance.
iii. Natural barriers, especially mangroves shall be protected and expanded. Further
conversion of mangroves for development shall not be allowed.
iv. The efficiency of irrigation for agriculture shall be improved to optimise water use in
agriculture. Diversified farming, inter-cropping and crop rotation, integrated pest
management as well as other land management and farming techniques shall be further
applied. Crop suitability shall be assessed periodically in order to adapt to the impacts of
climate change on crop productivity.
v. The maintenance of key ecosystem processes, such as migration, breeding, pollination,
seed dispersal is vital to ensure the resilience of biological diversity to climate change.
Key to this is the protection of the full range of ecosystem in Peninsular Malaysia and the
maintenance of connectivity between habitats through the establishment of ecological
corridors.
vi. Green technology shall be actively promoted as a means to mitigate climate change.
New developments shall incorporate greater energy efficiency and utilise renewable
energy sources.
vii. The energy consumption in the transportation sector shall be reduced by enhancing
public transportation, promoting pedestrian and cycling facilities and providing incentives
for cleaner fuels and cleaner vehicles.
viii. Water demand management shall be given priority over supply management. Rainwater
harvesting, water storage and conservation programmes shall be expanded. Water
catchment areas shall be protected to ensure adequate water supply while adequate
buffer riparian zones shall be provided in agriculture and plantations to prevent erosion
and sedimentation in rivers.
ix. Forests and peat lands are important carbon sinks. Existing forest reserves shall be
conserved in order to limit the amount of carbon released into the atmosphere.
National Physical Plan-2

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- 2
Source: National Physical Plan-2, 2010
Current Storm Surge Zones
Future Storm Surge zones
Areas < 1M above mean sea Level
State Capital
I P 21
IP 21: POTENTIAL AFFECTED COASTAL AREAS DUE TO CLIMATE CHANGE

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5.7 Integrating the National and Urban Transportation Network
The road and expressway network of Peninsular Malaysia is well developed, especially
on the West Coast, although the expressway system has yet to be extended to the East
Coast. On the other hand, road travel for people is generally slow and tedious. While air
travel is much faster, it involves considerable non-travel time, including movement from
city to airport, processing and waiting time. Air transport for the passenger becomes
worthwhile when the travel time is at least several times longer than the non-travel time.
This becomes the case when the distance between departure point and destination is
sufficiently far apart. The average distance between major cities of the Peninsular,
particularly the main conurbations, is about 300 km. This makes air travel seem much
faster only in comparison with road travel or travel by the existing rail service, that is, in
the absence of any real alternative. A high-speed rail service would completely change
the perspective and provide a different paradigm for the development of Peninsular
Malaysian cities.
The National Physical Plan (NPP-2) proposes that an integrated national transportation
system be developed in which railway forms the core system for people and goods
transportation while the road system provides both an alternative mode and an
articulation of the system. The two must be well integrated in order to work efficiently
and effectively. The two networks of road and rail must also interact and interlink to
facilitate multimodal movement of goods and people.
The national expressway system is as yet incomplete. Its extension to the East Coast,
particularly to link the East Coast cities of Kota Bharu, Kuala Terengganu and Kuantan
to the West Coast conurbations, must be given priority. Supporting and complementing
the national expressway system shall be an extensive network of lower hierarchy roads
such as the federal and state roads. These are essential for traffic dispersal from the
expressway system, for local access and particularly for access to the rural areas.
Although the linkage between urban areas and rural areas may utilise all the different
levels of highways and roads as well as railways or even air service, the most critical
part of the system will be the state roads, particularly the kampung (village) roads.
The rail system using high-speed design criteria is yet to be fully developed as a means
not only to link effectively the different parts of the country but also to unify the different
elements of the national transportation system. Given the distribution pattern of the main
urban centres, a national high-speed rail transport system shall best serve as a
comprehensive unifying system linking all state capitals and designated conurbations.
When performing at a speed of 300km/h or more, the high-speed rail will be the most
optimal and appropriate choice in terms of journey time, carrying capacity and safety.
Apart from considering the latest technologies in rail transport, the execution of the high
speed network should also include an evaluation of upgrading the present meter gauge
(1.0m) to the internationally accepted standard gauge (1.435m).
In view of the length of about 900km of the Peninsular and a width of about 300km with
KL located in the midway, the high speed rail system is the most optimal interstate

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public transport mode for the country. As such in the long run, the fast train network
should serve as the basis for people movement in the country. Malaysia has also to
move towards a comprehensive electrified rail based network to underpin the economic
transformation of the country from an industrial phase to the new economic model that
emphasises on growth of the high value add manufacturing and services industry.
Complementing the inter-state high-speed rail, the main urban conurbations should
have their own light and mass rail transits (LRT and MRT) for urban areas. Railway
stations will become the focal points of urban life and activity and community places in
addition to being transportation interchanges.
In relation to sea traffic, Malaysia acts as a regional transhipment hub and its ports also
serve as regional hinterland ports. As a transhipment hub, Malaysia functions as the
transfer point for different shipping lines where cargo is off-loaded from one ship to other
ships and forwarded to different port destinations. Seaports and inland ports are
oriented essentially for the transportation of goods rather than people. The most
important objective of a port is to ensure the efficient and speedy transfer of goods from
inland transport to maritime transport and vice versa.
Port Klang, Port of Tanjung Pelepas (PTP), Penang Port and the Kuantan Port should
be promoted as major national ports with a different focus. With its central location and
close proximity to the nations domestic hinterland, Port Klang should focus on being the
regional hinterland port with extensive inter-modalism and efficient land-bridging
services to other ASEAN countries. PTP, given its locational characteristic on the other
hand, should concentrate on being a regional and international transhipment hub
capturing the overspill from Singapore. Penang Port will serve as the main national port
in Northern Region while Kuantan Port will be developed as the main national port to
serve the East Coast Region and an important transhipment and container port to serve
the ASEAN countries and the East Asia Region.
For air traffic, KLIA has the strategic potential to be a competitive hub for air travel
between the northern and the southern hemisphere. The strength of KLIA lies in its large
hinterland of some 23 million potential travellers. The key for KLIA to unlock its latent
potential is to galvanise its large hinterland together with the country's vast potential for
tourism to generate a critical mass which would entice a greater number of airlines to
operate from KLIA. In this respect, there is a need to look at the positioning of the
Malaysian airports to promote more LCCT terminals and a more liberal policy towards
designating domestic airports to facilitate regional air travel especially from the ASEAN
countries. Malaysian Airports should capture the demand for increased air travel within
the ASEAN region and not limit themselves within the confines of national air space.
Domestically, with the introduction of the high-speed train as the trans-peninsular
transportation spine, domestic air travel will become increasingly less significant, and so
will regular, scheduled domestic air services. Tourism-related chartered services may
then assume a more significant role.

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Within most urban centres, the transportation system is neither balanced nor
sustainable. In order to achieve a reasonable degree of sustainability there is a need to
have a more efficient, safe and comfortable public transport system to permit a modal
shift from private car usage. Kuala Lumpur for example, with a current modal split of
about 20:80 in favour of private transport, reflects an obvious imbalance between public
and private vehicle usage. Due to the existing imbalance and number of cars more road
infrastructure will need to be provided unless a shift of mode from private transport to
public transport is imposed. The National Key Result Areas (NKRA) targeted to achieve
25:75 modal split in Klang Valley by year 2012. Hence, a modal split of 30:70 is
proposed as a national strategy for all major urban centres by year 2020 and 50:50
modal split in future.
In the immediate future, road transport shall continue to provide the basic mode of travel
for the movement of people and goods. While the expressway network substantially
caters for inter-state movement in the West Coast, the older federal and state roads still
cater for substantial interstate and local movements.
This network, which was laid down many decades ago, urgently needs upgrading in
terms of road alignment, widening and village by-passes to enhance road safety and
cater for the high volumes and faster travel speeds of todays motor vehicles. This
programme should focus on all federal and main rural-urban roads that are hindering the
growth potential of rural areas which are capable of servicing the conurbations and
rural-urban commuters.
NPP 28
An integrated national transportation network shall be established in recognition of the
inter-relationship between land use and transport.
IP 22 : INTEGRATED NATIONAL TRANSPORTATION NETWORK
Measures:
i. A National Transport Policy and a Master Transportation Services Network Plan
incorporating the role and function of road, rail, sea and air facilities and services at a
national level shall be developed.
ii. The hierarchy and function of the road system shall be defined to complement rather
than duplicate each other.
iii. To facilitate emergence of an integrated landuse transportation network, studies shall be
undertaken to identify movement corridors and for these corridors to be subsequently
incorporated into the Structure and Local Plans.

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iv. Transportation Corridors shown in Structure and Local Plans shall be protected from
alternative land uses.
v. Transport corridors shall not fragment important forest blocks and ecological corridors
identified in the CFS Master Plan for Ecological Linkages
27
. Transport corridors shall
go around the forest blocks and ecological corridors including incorporating wildlife
crossing structures such as viaducts and tunnels (see also NPP 23).
vi. While implementation of a transportation network may be undertaken incrementally, the
overall work programme shall be consistently executed to achieve modal integration.
vii. All main public transport terminals shall be developed in each of the main urban
conurbations, state capitals and urban growth centres, as seamless multi-mode
integrated hubs catering for buses, taxis, private cars, LRT, MRT and interstate trains.
viii. A hierarchy of transportation systems comprising rail, road, sea and air services to link all
states economic activities of the Peninsular Malaysia shall be established. The high-
speed rail shall act as the core system supported by the road network.








27
Cent r al For est Spi ne (CFS): M ast er Pl an f or Ecol ogi cal Li nkages FDTCP, 2009.
National Physical Plan-2

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- 2
Source: National Physical Plan-2, 2010
International airport
Domestic Airport
National Sea Port
Regional Sea Port
Coastal Sea Port
Main Centre
Expressway
Major Highway
High-Speed Rail Corridors
KTM Electricfied double Track Rail
KTM Single Track Rail
I P 22
IP 22: INTEGRATED NATIONAL TRANSPORTATION NETWORK

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NPP 29
A national integrated high-speed rail system shall be established to complement the
existing rail network.
IP 23 : NATIONAL RAIL NETWORK
Measures:
i. A National Railway Master Plan shall be prepared incorporating both the high-speed rail
network and the KTM electrified double track programme covering both passenger and
freight movement.
ii. The existing programme to complete the National electrified double track rail linking
Kuala Lumpur to Padang Besar to the north and Kuala Lumpur to Johor Bahru in the
south shall be given priority.
iii. Corridors for the high-speed rail system shall be established and implemented in phases.
iv. All state capitals and major conurbations should be linked via the high-speed rail network
with the rail stations acting as focal points for community and transportation activities.
v. The priority route for implementation of the high-speed system shall be the Kuala
Lumpur-Johor Bahru-Singapore link, followed by the Kuala Lumpur-George Town link
and subsequently north to Bangkok, as part of the Trans-Asian Railway to reinforce the
North-South Development Corridor.
vi. A new East West rail link will be established connecting Kuala Lumpur-Kuantan-Kuala
Terengganu and Tumpat.



National Physical Plan-2

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- 2
Source: National Physical Plan-2, 2010
Main Centre
High-Speed Rail Corridors
KTM Electriffied Double Track Rail
KTM Single Track Rail
I P 23
IP 23: NATIONAL RAIL NETWORK

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NPP 30
The national road network shall be further extended for regional travel and for local
access.
IP 24 : NATIONAL ROAD NETWORK
Measures:
i . The future road network shall be supported and integrated with the proposed high speed
rail system.
i i . The expressway and highway system shall be extended to cover both the West Coast
and the East Coast regions in which a minimum of three cross-links should be provided
to better integrate the Western Coast Area, Central Highlands and Eastern Coast Area.
i i i . Supporting and complementing the national expressway system shall be an extensive
network of lower hierarchy roads such as highways and primary roads (federal and state
roads), essentially for traffic dispersal from the expressways, the rail system and for local
access.
i v. A road functional hierarchy as established under the HNDP
29
2007 study by HPU shall
be used as a framework for the National Road Network.









29
Nat i onal Hi ghw ay Net w or k Devel opment Pl an 2 Hi ghw ay Pl anni ng Uni t , 2008.
National Physical Plan-2

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- 2
Source: Highway Network Development Plan (HNDP), 2007
Expressway
Major Highway
Minor Highway
Primary Road
Towns
State Capital
I P 24
IP 24: NATIONAL ROAD NETWORK

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NPP 31
Major airports and seaports shall be developed according to their complementary functions
to enhance the nations economic competitiveness and facilitate tourist arrivals.
IP 25 : NATIONAL AIRPORTS AND SEAPORTS
Measures:
i. Planning and development shall support the functions and roles of the international airports as
follows:
a. KLIA as the main international gateway and the regional hub of South-East Asia.
b. Penang International Airport as the major hub serving the industrial, commercial and tourism
needs of the northern region.
c. Langkawi International Airport shall complement Bayan Lepas and support the role of Pulau
Langkawi as the major site for exhibitions, conventions and tourism.
d. Sultan Ismail International Airport as the major hub of the southern region and to support the
function of the Port of Tanjung Pelepas. Sultan Mahmud International Airport will be
upgraded to international status and serve as the main tourism gateway to the East Coast
region.
ii. Other domestic airports are to be upgraded to facilitate arrivals of charted international flights.
iii. Planning and development shall support the functions and roles of major seaports as follows:-
a. National Ports:
Port Klang - regional hinterland port providing for eventual land-bridge services to Asian
countries. To remain as the national load centre in terms of international cargo movement,
it shall be characterized by a high level of connectivity with the surrounding countries
(through various infrastructural developments such as the Trans-Asian Railway) and a
strong emphasis on multi-modal and inter-modal.
Port of Tanjung Pelepas - international and regional transhipment hub for the Asia Pacific.
Kuantan Port as a main international and regional container and transhipment hub serving
the East Coast Economic Region and the East Asia Region
Penang Port focuses on shipping lines from the west, and serves as the main port for the
Northern Region.
b. Regional Ports:
Kertih and Kemaman Port will be integrated with Kuantan Port to serve as the main
shipping hub for the east coast states and serve the oil, gas and petrochemical sector
c. Coastal Ports:
Pasir Gudang, Langkawi, Lumut, Kuala Kedah, Tanjung Langsat, Tanjung Keling and Tok
Bali.
These ports shall provide for the efficient bulk movement of goods and also serve as intermodal
and multimodal hubs.
National Physical Plan-2

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- 2
Source: National Airport Master Plan, 2010 and National Physical Plan-2,
International Airport
Domestic Airport
National Sea Port
Regional Sea Port
Coastal Sea Port
Main Centre
Major Road
Inland Port
I P 25
IP 25: NATIONAL AIRPORTS AND SEAPORTS

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NPP 32
The Transit Oriented Development (TOD) concept shall be promoted as the basis of urban
land use planning in order to ensure viability of public transport.
Measures:
i. The main railway terminals shall be developed as integrated multi-mode transportation
terminals and foci for commercial, residential and social activities and be equipped with
disabled - friendly facilities.
ii. Feeder bus and park-and-ride facilities shall be provided to promote the railway stations
as transportation hubs of the towns in suitable locations.
iii. Covered walkway linkages shall be provided to connect the railway stations with other
major landmarks or developments in the town centres.
iv. For major towns, the railway station and its immediate areas shall be designated for
high-density commercial and residential development.
v. For those cities with their own rail networks, the stations shall be designated as the foci
providing mixed-use services and activities.
vi. The main conurbations of Kuala Lumpur, George Town, Kuantan and Johor Bahru shall
incorporate LRT, MRT and BRT (Bus Rapid Transit) routes into the urban fabric where
appropriate.
vii. The present LRT routes in the Kuala Lumpur conurbation shall be better integrated and
extended to service the new outer growth centres.


NPP 33
An integrated public transportation system shall be established in all major urban
centres.
Measures:
i. Comprehensive integrated land use-public transport studies shall be carried out in all
major conurbations.
ii. Transportation in all major urban centres shall adopt a modal split target of 30:70 by
year 2020 and a long term target of 50:50 between public and private transport.
iii. An integrated, regular and frequent public bus service shall be provided in all urban
settlements.

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iv. An integrated mass rapid transit system shall be adopted for urban settlements with
populations of more than 0.5 million.
v. Traffic management measures including Intelligent Transport Systems (ITS) shall be
adopted to enhance traffic efficiency.

5.8 Providing Appropriate Infrastructure
Providing appropriate infrastructure is one of the key enabling initiatives that support the
economic growth of the nation. Principally the NPP-2 provides the framework for the
delivery of integrated infrastructure service.
The key infrastructure services that are addressed in this plan relate to water supply,
sewerage systems, solid waste management, drainage and irrigation, power supply and
distribution, natural gas supply, communications and multimedia, river and coastal
management.
There is need to provide adequate land areas and reserves for all strategic infrastructure
installations. This is particularly so for installations that may have significant
environmental and social impacts such as regional sewerage treatment facilities, power
plants and waste disposal sites. Securing land in advance for these infrastructure should
be given priority especially in the conurbation areas as it is common for most local
communities to adopt the NIMBY (not in my backyard) attitude towards such facilities.
Many of these nationally significant infrastructure projects are also capital intensive and
will require the advice of the NPPC before it is implemented.
As land becomes scarce, the use of common or shared infrastructure facilities and
reserves should also be promoted as a means of maximising and increasing land use
efficiency.
Sustainable development of infrastructure by the application of green technology has
also been included in the NPP-2 together with measures on sustainable / green
applications such as recycling of waste, rain water harvesting and energy efficiency in
buildings.
In line with the governments objective for more equitable distribution of infrastructure
facilities, new policies have been introduced to provide appropriate levels of
infrastructure to all levels of settlements in order to reduce the digital and infrastructure
divide between urban and rural areas.
Recent technology developments in infrastructure provision has also been included to
take into consideration the need for nuclear power plants, the application of green
technology, the creation of cyber cities and cyber centres and the introduction of HSBB
(high speed broadband) to enhance internet connectivity within the knowledge based
economy.

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NPP 34
The NPP-2 shall provide the spatial framework for the delivery of integrated infrastructure
services at the national and regional levels and to the main conurbations.
Measures:
i. National agencies responsible for infrastructure planning and services shall adopt the
NPP-2 as the basis for planning and coordinating provision of infrastructure services.
They include:-
a. Water supply and distribution;
b. Sewerage;
c. Waste management;
d. Drainage systems;
e. Power supply and distribution;
f. Natural Gas Supply and distribution; and
g. Communication and multimedia.
i i . National infrastructure agencies shall oversee state and local level agencies to ensure
programmes are consistent with the intent of the NPP-2.
i i i . The NPP-2 population projections and distribution proposals shall be the reference for
infrastructure service supply and distribution programmes.
i v. Proactive proposals for delivery of services shall be adopted to enhance efficiency and
reduce costs and delays in the delivery of the services.
v. Enhanced management of infrastructure services shall be achieved by ensuring that all
infrastructure services / providers maintain records of their facilities using Geographic
Information Systems (GIS).
vi . Adequate land reserves, corridors and right-of- ways shall be provided for infrastructure
facilities in all Structure Plans and Local Plans.
vi i . The use of common infrastructure facilities such as common utility trenches, common
utility reserves and shared facilities shall be applied by the local authorities to maximise
land use efficiency in infrastructure planning.
vi i i . The application of green technology in the provision of all infrastructures and utilities
shall be made a priority to ensure sustainable infrastructure development and to
enhance and protect the environment.





5-84
NPP 35
Appropriate water supply infrastructure including source works, treatment plants and
transmission and distribution networks shall be provided to all settlements.
IP 26 : WATER SUPPLY RESOURCES AND WATER-STRESSED AREAS
Measures:
i. Nationwide studies on water shall be carried out to encompass issues such as water
demand, water supply sources, inter-basin water transfers, inter-state water transfers
and distribution networks.
ii. Emphasis shall be given to sustainable development of water resources including
alternative sources for water supply, water conservation, reduction of water loss and
water demand management.
iii. Planning of water supply infrastructure shall take into consideration projected demands;
spatial development and land use as outlined in the National Physical Plan -2 and the
Structure and Local Plans.
iv. Adequate land reserves, corridors and right of ways shall be provided for water supply
infrastructure facilities in all Structure Plans and Local Plans.
v. The provision of a safe, adequate and reliable water supply for all the population shall be
the priority in water supply infrastructure planning.
vi. Appropriate technology and infrastructure shall be provided to ensure that rural areas
and remote areas will have access to adequate potable water.



National Physical Plan-2

5-85
- 2
Source: National Water Resources Study, 2000
Notes:
1. This indicative plan is based on the National Water Resources
Study 2000-2050 (NWRS).
2. Since the completion of the NWRS, inter basin and interstate
water transfer projects have been implemented to alleviate the
water-stressed areas.
Existing Dam Catchment
Proposed Dam Catchment
Water Intake Catchment
Major River
Water-Stressed Area
State Capital
I P 26
IP 26: WATER SUPPLY RESOURCES AND WATER-STRESSES AREAS

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NPP 36
Appropriate sewerage facilities shall be provided for all areas, with adequate collection,
treatment and disposal of sewage and sludge.
Measures:
i. A National Sewerage Policy shall be formulated to encompass issues such as priority
areas, appropriate technology for rural areas, setting appropriate targets, land
reservation and sludge treatment and disposal, recycling and reuse of effluent and bio-
solids and water demand management.
ii. Adequate land reserves, corridors and right of ways shall be provided for sewerage
infrastructure facilities in all Structure Plans and Local Plans.
iii. Priority shall continue to be given to the rationalisation and centralisation of the sewer
networks and treatment systems for the main conurbations, major urban settlements and
tourist activity areas and islands.
iv. Sewerage policies shall be extended to encompass all land use activities in urban areas.
To optimise delivery cost and efficiency, centralised sewerage treatment plants and
mains network should be proactively planned in accordance with the spatial policies for
new growth urban areas.
v. Appropriate technology solutions to sewerage treatment should be applied in rural and
low density housing areas.


NPP 37
All settlements shall be serviced by an integrated network of solid waste disposal and/or
recovery facilities.
IP 27 : SOLID WASTE MANAGEMENT
Measures:
i. Solid-waste disposal and/or recovery system of facilities may include intermediate
treatment, transfer or other necessary facilities and shall be monitored at all times by the
appropriate health and environmental agencies.
ii. Adequate land reserves, corridors and right of ways shall be provided for solid waste
management facilities in all Structure Plans and Local Plans.
iii. The system of facilities shall be shared by as many urban centres as feasible, taking into
consideration the local road infrastructure and the location of these facilities.

5-87
iv. The location of the facilities shall comply with the national guidelines as contained in the
National Strategic Plan for Solid Waste Management, taking into consideration the
prevention of any health hazard, and adverse effect on the environment and the
surrounding population.
v. Due to long-term health and environmental factors, abandoned or closed dumpsites and
other contaminated sites shall not be utilised for human habitation.
vi. Waste generation management, waste reduction and separation of waste at source shall
be promoted. Active promotion of recycling of waste shall be instituted with respect to
solid waste collection and disposal in accordance with the National Strategic Plan for
Solid Waste Management.
vii. Appropriate solid waste management facilities shall be provided in areas such as islands
and rural tourism areas that are compatible with the locality.
viii. Producers of scheduled waste shall ensure that all scheduled waste will be properly
collected, transported, treated and disposed in a safe and environmentally responsible
manner, in accordance to prevailing environmental regulations.





National Physical Plan-2

5-88
- 2
Source: National Strategic Plan for Solid Waste Management, 2005
Note:
2. Location of the facilities is merely indicative. Further detail
study will be done to ascertain their location.
Sanitary Landfill
Material Recovery
Facilities
Transfer Station
Thermal Treatment Plant
Waste Flow
District Boundary
State Capital
I P 27
IP 27: SOLID WASTE MANAGEMENT

5-89
NPP 38
Drainage infrastructure shall be provided in all settlements to eliminate the incidence of
major floods, minor floods and pollution.
IP 28 : FLOOD PRONE AREAS
Measures:
i. Studies should be undertaken to evaluate the impact of flood frequency of main river
systems on human and economic activities.
ii. Adequate land reserves, corridors and right of ways shall be provided for drainage
facilities in all Structure Plans and Local Plans.
iii. All developed areas shall be provided with appropriate drainage systems that cater for
both the quantity and quality of storm water runoff.
iv. Development within flood prone areas shall be carried out only after due consideration of
the risk of the occurrence of major floods. Appropriate measures such as flood
protection works or raising of platform levels shall be carried out to prevent major flood
damages to settlements.
v. Land utilised for rivers, streams, main drains and detention / retention ponds shall be
designated as drainage or river reserves.
vi. The Manual Saliran Mesra Alam (MSMA) proposals shall be applied in all urban areas
including at source control measures and erosion and sediment control.
vii. For rural areas and areas not subject to MSMA proposals but subject to flooding,
appropriate flood mitigation measures must be adopted.
viii. To enhance the quality of urban life, the MSMA retention system and riverbank system
shall be integrated to create continuous urban parkway networks and act as buffer
zones.
ix. In conjunction with the implementation of the MSMA proposals, measures such as the
reuse and recycling of rainwater shall be developed and applied.


National Physical Plan-2

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- 2
Source: Drainage and Irrigation Department (DID), 2001
Flood Prone Areas
(1 Years Average Recurrence Interval)
Flood Prone Areas
(100 Years Average Recurrence Interval)
Major River
State Capital
Note:
1. Flood mitigation schemes have been implemented to
protect many urban areas such as Kuala Lumpur from
floods.
I P 28
IP 28: FLOOD PRONE AREAS

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NPP 39
As strategic assets, electricity generation plants, transmission and distribution mains
shall be located strategically to provide a reliable and efficient supply of electricity to
consumers.
IP 29 : POWER SUPPLY GRID
Measures:
i. Adequate land reserves, corridors and right of ways shall be provided for electricity
infrastructure facilities in all Structure Plans and Local Plans.
ii. Positioning of transmission and distribution networks should include impact evaluations
on land use and aesthetics, particularly in nature tourism locations.
iii. Renewable energy such as energy from solar, wind, wave, geothermal and biomass are
to be promoted to complement traditional power generation sources.
iv. Alternative energy sources such as nuclear energy shall be evaluated with due
consideration to its spatial and environmental impacts.
v. Energy Efficiency Systems, Energy Demand Management systems and Energy
Conservation shall be promoted to ensure efficient and productive use of energy.



National Physical Plan-2

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- 2
Source: Tenaga Nasional Berhad, 2009
500 kV O/H
275 kV O/H
275 kV U/G
132 kV O/H
132 kV U/G
Hydro Power Station
Major Sub-Station
State Capital
Thermal Power Station
I P 29
IP 29: POWER SUPPLY GRID

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NPP 40
Natural gas processing plants, transmission and distribution pipe networks shall be
located to provide a reliable and efficient supply of natural gas to consumers.
IP 30 : AREAS SUPPLIED BY NATURAL GAS DISTRIBUTION SYSTEM
Measures:
i. The use of natural gas through the existing and future natural gas supply distribution
networks shall be promoted. The NPP-2 population projections and distribution proposal
as well as demand of industrial activities shall be taken into consideration in the planning
of the natural gas supply and distribution network.
ii. Appropriate reserves and corridors for natural gas infrastructure facilities shall be
provided in Structure Plans and Local Plans.
iii. The use of natural gas for vehicles (NGV) shall be enhanced by locating NGV stations at
appropriate locations.



National Physical Plan-2

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- 2
Source: PETRONAS and Statistics of Piped Gas Distribution Industry (2007) from Energy Commission
Gas Pipeline
Export Terminal
Gas Processing Plant
Metering Station / City Gate
Regional Office
IP 30: AREAS SUPPLIED BY NATURAL GAS DISTRIBUTION SYSTEM

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NPP 41
Communications network facilities and infrastructure shall be provided to all settlements.
IP 31 : CYBER CENTRES
Measures:
i. Communications shall be considered as an essential service to all settlements. All
developments shall facilitate early planning and deployment of communications network
facilities and infrastructure including last mile access and appropriate back haul facilities.
ii. Adequate land reserves, corridors and right of ways shall be provided for
communications infrastructure facilities in all Structure Plans and Local Plans.
iii. Appropriate communication facilities and infrastructure shall be provided in the
underserved areas and to underserved groups within the community to ensure the digital
divide in access to ICT is minimised.
iv. Broadband facilities and infrastructure shall be deployed with high speed broadband in
high economic impact areas including the four major conurbations and broadband to the
general public in other areas.
v. Access to communication shall be supported by a common nationwide backbone
infrastructure for diversity and national security requirements.
vi. The growth of cyber cities and cyber centres shall be promoted to encourage wider use
of ICT.
National Physical Plan-2

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Source: Multimedia Development Corporation (MDeC), 2009
Cyber Centres (as of Year 2009)
State Capital
Major Road
Note :
1. This indicative plan shows existing cyber centres as of December 2009.
Additional cybers centre and cyber cities in
several other locatios have also been planned
I P 31
IP 31: CYBER CITIES
Imple me nta tion M e c ha nism
C HAPTER 6
NATIONAL PHYSICAL PLAN

6-1
CHAPTER 6
IMPLEMENTATION MECHANISM
6.1 Institutional Mechanism for Implementing the NPP
The Federal Department of Town and Country Planning (Act 172 ) is statutorily required
to prepare the National Physical Plan (NPP); and to keep it under review in tandem with
the review of the FYMP. While it is the general duty of Act 172 to monitor and report
progress of the implementation of the NPP to the NPPC, it does not have direct
responsibilities, in terms of authority and financial resources to implement the policies and
proposals of the NPP especially at the state and local levels. In this context, planning
permission are granted by the relevant local authorities while implementation are done by
the appropriate public implementing agencies such as highways by Public Works
Department (PWD).
Successful implementation of the NPPs policies and proposals depend not only on the
formulation of useful viable policies, but also on the operation of an effective mechanism
to implement the policies. The NPP is a continuous plan making process and must not be
allowed to become irrelevant, out of date and degenerate into a static blueprint. As such,
regular monitoring of the assumptions and forecasts on which the policies are based; and
the periodic up-dating of the policies and measures are utmostly necessary.
Monitoring is crucial not only to ensure that the NPP remains valid and relevant but also
to determine whether the policies and measures are effectively implemented. In the
event of particular policies being found to be unsatisfactory, remedial action may be
considered necessary, and the options available and their likely effects will require further
assessment and evaluation.
6.1.1 Key Issues on Implementation
i. Long Gestation Periods to Implement Spatial Development Policies
The development of conurbations, major infrastructural projects and national
conservation strategies take a long to implement and require consistent commitment
on the part of the government and private sectors.
ii. Weak Monitoring and Up-Dating Capability
To collect the necessary data and assess its implications, the National Physical
Planning Division of the Act 172 must have the continuous up-dating capabilities, in
terms of manpower and financial resources, in carrying this multiplicity of plan making
process. Capacity of relevant federal and state agencies has to be strengthened to
enhance monitoring and updating capability.

6-2
iii. Absence of a National Land Use Database for Strategic Zones and Urban
Centres
Monitoring both the policy performance of the NPP itself and the social, economic,
physical, environmental and technological changes likely to affect policy validity is
very much dependent on an effective information system. The information sources
available include published data from Federal Government Departments and relevant
agencies; and also the primary data provided by surveys conducted by state
governments, particularly from the state structure plans, and local authorities. Public
utility service authorities provide data for progress of infrastructure development and
services rendered.
The Census, as a source of data for key socio economic information such as
population, employment and housing matters, is of vital importance. As the Census is
carried once in every ten years, only estimates are made for inter-censual years. As
with other data sources, data need to be compiled for the NPPs designated strategy
zones, conurbation areas and urban centres. Although Development Plans are
required to apply standards and criteria for example, land use classification of the
NPP to facilitate uniformity of measurement and comparative analysis, some
development plans use their own standards, thus making aggregation and
disaggregation of data difficult and inaccurate. These pose serious data constraints to
monitor and assess policy compliance and policy performance.
To address this issue, Act 172 , should be responsible as the central authority to
collect and publish on regular basis information on land use development, akin to the
annual Property Report published by the Valuation Department. All relevant
departments and agencies are required to supply the necessary land use information,
including approved land conversion, planning approval and Certificate of Compliance
and Completion, to Act 172 at regular intervals in order to keep land use information
updated. Complementing the National Land Use Database is up-to-date Ordnance
Survey Maps indicating natural and man-made features and cadastral data for the
country especially, for the major towns and settlement areas. It may be necessary to
establish a continuous programme with JUPEM to provide updated Ordnance Survey
Maps indicating as-built information and topographic data for urban areas.
iv. Lack of Suitable Policy Indicators
It is extremely difficult to set any specific development targets in the short term for
measuring and evaluating the policy achievement for the NPP. To overcome this
problem, each of the NPPs policy statement is characterised by one or more
quantifiable policy Indicators. Information of many policy indicators however were not
easy and time-consuming to obtain. Some of the policy indicators have shown little
relevance in evaluating how successful the policies have been implemented. In view
of this, it is important to carry out a thorough assessment of the existing policy
indicators; and to carefully identify suitable policy indicators for which relevant data is
readily available sufficiently accurate and easy to use.

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v. Poor Incorporation of National Spatial Planning Aspects into Sectoral Planning
and Development
In many sectoral master plans, little attention was given to incorporate national spatial
planning aspects into sectoral planning and development, such as highways
traversing environmentally sensitive areas without appropriate mitigating measures.
In this connection, Act 172 , as custodian of the NPP, should endeavour to hold more
road shows to promote and market the NPP to the stakeholders. This is because the
new innovative planning concepts and strategies are not easily understood and
implementing agencies are unsure whether to adopt them. Act 172 should also
engage actively and jointly work with other government agencies, NGOs, utility
service providers, private sector players and community interest group, both in the
preparation of NPP and the relevant sector master plans.
vi. Need for the National Physical Planning Advisory Panel (NPPAP)
There is an urgent need to establish a high level consultative panel of spatial planning
experts to advice the government on new spatial planning directions, innovative
planning approaches and principles of sustainable development. This panel acts as a
forum for communication and consultation between the government, the private
sector and the citizens on issues related to spatial planning.
The membership of the panel is by invitation. It is important that the private sector
and communitys views and opinions on national spatial planning issues and solutions
are taken into consideration. The panel comprises representatives who have high
ability and experience in the field of spatial planning. Its members should consists of
Professional Bodies/ Institutes; Non Governmental Organisation (NGO) related to
development, conservation and the environment; Research Institutes and
Universities; Eminent National and International Planning Experts, Business Councils
such as FMM and REHDA; amongst others. The Act 172 shall act as the Secretariat
to the Panel.
vii. Establishment of Spatial Planning and Development Research Institute (SPDRI)
The national spatial policies formulated need to be supported and complemented by
other national planning and design guidelines / standard documents, as for example
the sustainability appraisal guideline. This will give practical detailed advice on the
formulation and use of national spatial policies in preparing the more detailed plans
and layout plans. There is an urgent need for more R&D initiatives particularly with
respect to national spatial planning as the country becomes more developed. There is
also a need to establish a national Spatial Planning and Development Research
Institute (SPDRI) to complement all the efforts made by the Federal Act 172 .

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viii. Setting up the National Physical Plan Action Programme
The National Physical Plan Action Programme will include key demonstration projects
on best planning practices and planning models that could be applied in the country.
Before these new planning ideas can be rolled out and replicated throughout the
country, they must be tried and tested as pilot and demonstration projects on the
ground. The programme will also include key initiatives that are necessary to not only
prepare the NPP and keep them in review but also action programmes related to the
monitoring of indicators. Research on the effectiveness of the NPP policies and the
necessary information technology to support the national effort shall also be included
in the programme.
It is proposed that a NPP Action Programme be set up with adequate funding under
the FYMP. Through this action programme, it is possible to foster international
collaboration as well as industry research partnership. Not only will it take physical
planning to the next higher level, it can also showcase our excellence in physical
planning worldwide.
ix. Linking NPPs Policies with Budgetary Allocation
As mentioned earlier, Act 172 has no executive power and direct financial resources
to implement and enforce the NPP-2. Besides being directed by the NPPC, it can
convince the implementing agencies to implement the NPPs policies in order to
promote sustainable growth in the national and public interests.
The NPP-2 policies can be implemented by controlling development budget. This
implies that decision makers for development programmes and budget allocation
must give priority to development proposals / projects if they are consistent with
NPPs spatial policies and development proposals. The Act 172 has to take this
matter forward with the relevant authorities.
x. Compensation Payment for Loss of Development Rights
The states have been facing relatively scarce resources and revenue due to
increased public expenditure. They have to provide more and better public
infrastructure and social amenities to meet the needs of the people in their states. At
the same time, most states are experiencing heavy pressure for development to meet
the housing and job demand of their population.
All states depend heavily on revenues derived from exploiting state land and the
natural resources such as, alienation of state land, land conversion from agriculture to
residential development, log extraction from forests etc. However, the policies of
NPP-2, call for the protection of environmentally sensitive areas, prime agricultural
areas and concentration of new development in Brownfield sites within existing major
urban centres.

6-5
In this respect, it is proposed that most states request the Federal Government to
provide adequate compensation to the State Government affected to offset the loss of
rights of development and resultant revenues. If this proposition is agreed to in
principle, an acceptable compensation payment formula needs to be worked out. This
may also involve amending the relevant constitutional provisions of Article 109 of the
Federal Constitution to enable Federal Government to make grants to States for
conserving Environmentally Sensitive Areas (Rank 1) and granary areas.

6.1.2 Existing Agencies Involved in Spatial Planning
Town and Country Planning comes within the concurrent list under the Federal
Constitution which means that both the Federal Government and State Governments
have shared powers with respect to formulating laws and policies on spatial planning and
procuring funds.

The Act 172 is the main department entrusted with the responsibility for spatial planning
at the federal level. Although there are several ministries and agencies involved in spatial
planning, the Act 172 will however exercise technical leadership and ensure that spatial
planning is coordinated.
The NPP is one of the tools through which coordination can be achieved. Therefore it is
important that these Ministries are represented in the NPPC. Some of the key ministries
that play an important role in spatial planning are the Ministry of Housing and Local
Government, Ministry of Natural Resources and Environment, Ministry of Rural and
Regional Development, Ministry of Federal Territories and Urban Well-being, Ministry of
Works, Ministry of Transport, Ministry of Agriculture and Agro-based Industry, and the
Ministry of Energy, Green Technology and Water.
There are also other national councils that are related to physical development. These
councils include the National Housing Council, National Water Resources Council,
National Biodiversity Council, Environmental Quality Council, Green Technology Council,
National Minerals Council, Regional Planning Council and National Information
Technology Council. It is important that linkages and constructive engagements are
established with these Councils when preparing the NPP-2.
The newly formed Public Land Transport Commission (SPAD) also should be included in
spatial planning to coordinate integration of the nations public land transportation system,
especially in major urban areas.

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6.1.3 Integrated National Development Planning System
The main forum in charge of spatial planning is the NPPC which is established by law
under the Act 172. Essentially there are three parallel streams relating to the different
components of national development planning (Figure 6.1):-
a. National socio-economic development planning under the National Economic
(Planning) Council and the National Development Planning Committee (NDPC).
b. National Physical Planning under the National Physical Planning Council (NPPC).
c. Project Implementation and Monitoring under the National Development Council.
All three streams of development planning have parallel functions that relate to
organisations at the Federal and State levels. In this respect, it is important to forge
horizontal linkages and working cooperation with one other particularly at the Secretariat
and Technical Working Committee levels. At a functional level it is important that Act 172
is represented in the NDPC and similarly the EPU is represented in the NPPC Working
Committee.
6.1.4 National Physical Planning Structure
The proposed national physical planning system is shown in Figure 6.2. Under this
proposal there will be five inter related bodies and committees related to National
Physical Planning:-
a. National Physical Planning Council (NPPC)
b. NPPC Working Committee
c. National Physical Planning Advisory Panel (NPPAP)
d. National Physical Planning Agency
e. Spatial Planning and Development Research Institute (SPDRI)
The functions of these bodies are discussed in Section 6.1.5.
The NPPC Working Committee is chaired by the Secretary General of the Ministry
responsible for Town Planning and consists of relevant heads of government agencies
and departments. The Secretariat to the NPPC Working Committee is the Federal
Department of Town and Country Planning (under Act 172). A National Physical Planning
Advisory Panel (NPPAP) is also proposed to be set up to advice the Minister on current
matters and issues relating to physical planning. This is similar to that practised in
Denmark and Holland. The committee members of the three related committees and
councils are also different. The NPPC will be the highest physical planning council in the
country and will comprise Federal and State Ministers. The NPPC Working Committee
will comprise mainly related Ministries and Departments while the NPPAP will include the
NGOs, Professional Institutes, Business Councils and special interest groups.

6-7





6-8
The Act 172 will be the main agency responsible for preparing the NPP. The Act 172 will
issue call circulars to both Federal and State agencies to furnish the department with
information and project proposals that have a bearing on national physical planning
through the NPP-2 Land Use Planning Intelligent System (iPLAN). Similar to the process
of preparation and review of the national development plan, Inter Agency Planning
Groups (IAPG) will be established to prepare and review policy papers. The IAPG may
also be further reduced to smaller Technical Working Groups (TWG) to discuss technical
reports. Technical working papers should be based on current issues affecting town and
country planning.
The NPPC may also issue Planning Guidelines similar to the Planning Policy Guidelines
(United Kingdom) to all the state governments from time to time. Once the Draft Plan has
been prepared, it will be reviewed by the NPPC Working Committee before it is submitted
to the NPPC for approval. The approved plan will be further endorsed by Cabinet.
Policies and proposals that are within the jurisdiction of the Constitutional Councils such
as the NLC, NCLG and the NFC may be further tabled to the respective councils. The
decisions of these constitutional councils are generally binding on the states.

6-9
Figure 6.2: Proposed National Physical Planning Structure
Federal Town and
Country Planning
Department
Parliament
Cabinet
National Physical Planning Council
Secretariat : FDTCP
Constitutional Councils
National Physical
Planning Advisory Panel
National
Land
Council
National
Council for
Local
Government
National
Finance
Council
Chairman : Minister Of
Town Planning
NGOs Business
Council, Special
Interest Group
Professional Bodies
Element National and
International Planning
Expert s
Research Institutes
and Universities
Secretariat : FDTCP
NPP Working Committee National Physical
Planning Agency
Research
Institute
Chairman : Secretary
General of MHLG
Deputy Chairman : DG
of Town & Country
Planning
Head of Government
Agencies/ Depts.
Secretariat : FDTCP
Spatial Town
and Country
Planning
Institute
IAPG
TWG
State DTCP
Chairman :
Menteri Besar
Technical Departments
Secretary : Director State
DTCP
Municipal Planning
Department
Chairman : PM
Federal Minister
State MB
Secretary : DG of Town and
Country Planning
State Planning Committee
Local Planning Authority
Sector Councils
National
Biodiversity
Council
Water Resources
Council
National
Housing
Council
Environment
Quality Council
National Information
Technology Council
Green
Technology
Council

6-10
6.1.5 National Physical Planning Institutional Structure
i. The National Physical Planning Council (NPPC)
The NPPC is established under the Section 2A(1), Act 172. The functions of the
council are:-
a. To promote town and country planning as an effective instrument for the
achievement of sustainable development.
b. To advise the Federal and State Governments on matters related to town and
country planning. This would include formulation of national policies and matters
that are referred to it by State Governments and any other Councils and
Committees duly established.
c. To approve the Draft National Physical Plan and to review in tandem with the
Five Year Development Plans To coordinate physical development at a national
and regional level to ensure a sustainable form of development.
d. To establish a Regional Planning Committee where necessary for planning areas
that consists of two or more states.
e. To formulate a uniform set of planning rules and guidelines for the country.
f. To advise the State Planning Committees on planning applications and plans
which are referred to the council for its advice.
g. To give directions to the Director General of Town and Country Planning
consistent with the provisions of the Act.
h. The Council may also perform any other functions incidental or consequential to
the Act.
The current members of the NPPC are shown in Table 6.1.
Table 6.1: Members of the NPPC
The permanent members under the Act 172 are:
1. A Chairman, being the Prime Minister
2. A Deputy Chairman, being the Deputy Prime Minister
3. The Minister
4. The Minister responsible for housing and local government, if he is not also the
Minister responsible for town and country planning
5. The Minister of Finance
6. The Minister responsible for Land
7. The Menteri Besar or Chief Minister of every state
8. The Minister responsible for the Federal Territory
9. Not more than 7 other members to be appointed by the Chairman

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The other seven member appointed by the Chairman are:
1. Minister of Works
2. Minister for Rural and Regional Development
3. Minister of Transport
4. Minister of Agriculture and Agro-based Industry
5. Minister of Energy, Green Technology and Water
6. Chief Secretary to the Government (KSN)
7. Attorney General
The Director General of Town and Country Planning is the Secretary of the Council
ii. NPPC Working Committee
The functions of the Committee are as follows:
a. Discuss and review issues related to national physical planning before it is
decided by the NPPC.
b. Establish the broad terms of reference for the preparation and review of the NPP.
c. Review the Draft NPP before it is tabled to the NPPC for approval.
d. Identify spatial planning issues / projects / programmes that may have financial
implications that require the attention of the NDPC or the National Finance
Council.
e. Review all Planning Policy Guidelines (PPG) for approval by the NPPC.
f. Review strategic planning applications that are referred to the NPPC for its advice
under Section 22(2A) Act 172.
The members of the NPPC Working Committee are as follows (Table 6.2):
Table 6.2: Members of the NPPC Working Committee
1. Secretary General (KSU) of the Ministry of Housing and Local Government as the Chairman
2. KSU Ministry of Finance
3. KSU Ministry for Land
4. KSU Ministry for the Federal Territories
5. KSU Ministry of Works
6. KSU Ministry for Rural and Regional Development
7 KSU Ministry of Transport
8. KSU Ministry of Agriculture and Agro-based Industry
9. KSU Ministry of Energy, Green Technology and Water
10. KSU Ministry of Natural Resources and Environment
11. State Secretary of every State
The Director General of Town and Country Planning is the Secretary of the Committee

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iii. National Physical Planning Advisory Panel (NPPAP)
The NPP-2 proposes that a National Physical Planning Advisory Panel be set up to
advice the Minister on issues concerning Town and Country Planning in the Country
(Table 6.3). This Committee is an important aspect of the consultative process in the
preparation of the NPP. The proposed functions of this Panel are:-
a. Advise the Minister on issues concerning town and country planning in the
country.
b. The members of this committee are required to prepare Briefs to be discussed
which will also serve as inputs to the preparation and review of the NPP.
c. Highlight the concerns and complaints of the public with respect to physical
planning.
The membership of the committee is by invitation and should include the following
(Table 6.3):-
Table 6.3: Members of the National Physical Planning Advisory Panel
1. Minister responsible for Town Planning as the Chairman
2. Director General of Town and Country Planning as Secretary
3. Members of Professional Bodies / Institutes
4. Non Governmental Organisation (NGO) especially those related to development, conservation
and the environment
5. Research Institutes and Universities
6. Business Councils such as FMM and REHDA
7. Eminent national and international planning experts
8. Other special interest groups
The Secretariat will be provided by Federal Department of Town and Country Planning
iv. Federal Department of Town and Country Planning
The National Physical Planning Agency is the Federal Department of Town and
Country Planning. Under Act 172, the Director General of Town and Country Planning
is required to prepare the NPP-2. The key functions of this Department are:-
a. Advise the Federal Government on all matters pertaining to the use, development
and the conservation of land.
b. Act as the Secretariat to the NPPC and carry all related works.
c. Promote a comprehensive system of town and country planning through the
formulation of laws, methodology, procedures, research, planning studies and
standards.
d. Translate national socio economic objectives into spatial plans.
e. Assist the state authorities, local governments and government agencies in
preparing Development Plans such as Structure Plans and Local Plans.
f. Publish statistics, bulletins and research on town and country planning.

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This will require the existing National Physical Planning Division under the Federal
Department of Town and Country Planning (Act 172) be strengthened in order to
keep the NPP in review. This will also entail increased staffing with sufficient skills as
well as enhancing the GIS capabilities of the Department.
v. Spatial Planning and Development Research Institute (SPDRI)
It is imperative that as the country gets more urbanised, greater efforts are made in
advancing research in town and country planning. The NPP should benefit from the
latest R&D in spatial planning. As such, it may be necessary that the Government
establishes an urban research institute for Spatial Planning and Development in order
to have a continuous R&D and training programme on national physical planning.
This institute should preferably be an autonomous self regulating research institute
that is supported by Government grants. It could be modelled after Institute of
Strategic and International Studies (ISIS) with full powers to hire and fire staff. It is
also important that the Research Institute has a full complement of a multidisciplinary
research team including urban planners, urban designers, engineers, economist,
environmentalist, transportation planners and social impact analysts to undertake
research on the different facets and issues affecting town and country planning. Part
of the responsibility of the Research Institute is to assist the Director General of Town
and Country Planning and the NPPC in formulating planning policy guidelines and
prepare the necessary research papers and publications. This institute could be a
public-private partnership involving the Government, the Malaysian Institute of
Planners (MIP), Universities and the private sector such as REHDA. International
funding for the project could also be sourced through bilateral arrangements with
leading international agencies.
Alternatively the institute could also be set up as a Centre of Excellence in any one of
the leading research universities in the country for a start.
It is common to have research institutes to support a national spatial planning
programme. Examples include KRIHS in Korea, Habitat (Nairobi), International
Centre for Sustainable Cities (Canada) and International Institute for Urban
Environment (Netherlands). To provide an idea of the structure of proposed Spatial
Planning and Development Research Institute (SPDRI), a quick look at some
research institutes, with similar objectives, provides an insight on what form SPDRI
can take in the future. The institutes listed here are:
Institute of Strategic and International Studies (ISIS) is a private limited company
set up under the Company Act in 1983. It is non-profit entity and Malaysias first think-
tank. It undertakes research in various strategic areas and provides consultancy
services. Its research cover areas of national interest such as defence, security and
foreign affairs, national and international economic affairs, nation-building, science,
technology, industry, energy and natural resources, and international understanding
and cooperation.

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Lincoln Institute in the USA which was set up to improve the dialogue about urban
development, the built environment, and tax policy in the United States and abroad
especially through research, training, conferences, demonstration projects,
publications, and multimedia to provide high quality, nonpartisan analysis and
evaluation of regulatory, planning and policy decisions.
Korea Research Institute for Human Settlements (KRIHS) is established in 1978
to address spatial policy issues and promote a more efficient use of land resources in
South Korea. It is a government research agency and in 1999, it comes directly under
the Prime Ministers office through the Korea Council of Economic and Social
Research Institutes, a supervisory body of research institutes engaged in economics
and social studies. KRIHS undertakes research on spatial topics such as regional and
urban development, infrastructure, land use, transportation and geospatial
information.
The International Centre for Sustainable Cities (ICSC) was set up in 1993 as a
partnership between the three levels of government in Canada, private sector, and
civil society organizations. It is governed by a Board of Directors from private, public
and civil society organizations. ICSC has a small number of core staff and is
supported by an international panel of advisors, partners, organizations and
associations, and other cities. The ICSCs objective is to translate urban sustainability
into practical actions by bringing together business community, civil society
organizations and governments. To promote practical actions, the ICSC does
demonstration projects on urban design, land-use planning, transportation, solid
waste, urban greening, energy efficiency, disaster mitigation, poverty eradication,
governance, and multi-party participatory process. In addition, it sets up a platform to
share knowledge and innovations on urban planning among cities through a system
known as Sustainable Cities: Plus Network. It advocates peer learning networks by
linking cities up to share knowledge and learn from each other. Funding is through
the sale of its services, grants, and contributions from private and public sectors,
international agencies, foundations and individuals. Among its major donors is the
Canadian International Development Agency (CIDA).
The International Institute for Urban Environment (IIUE), based in Netherlands,
promotes sustainable urban development through research and demonstration
projects. It has links to funding programmes in the European Union, helping to obtain
EU funding for demonstration projects, and finding partners for project proponents,
and coordinating projects. Some demonstration projects of IIUE include the Triodos
(an assessment of sustainability of office buildings), MILUnet or Multifunctional
Intensive Land Use Network (a project to tackle urban sprawl and the dysfunctional
development of urban, suburban and rural areas), and Climate Proof Cities (a project
to establish a network and partnerships among European cities on how to adapt to
climate change) IIUE is currently working on projects that include Child Friendly
Cities, ENGINE which focuses on the identity of peri-urban cultural heritage in North
West Europe, RISE, a project on sustainable regeneration of post-war high-rise

6-15
residential areas that are suffering from bad image and deprivations, and Living
Green.eu partnership which looks at the use of energy technologies.
As a supporting measure the Ministry of Housing and Local Government has also set
up a Training Institute which aims to provide training to staff of the local authorities on
matters pertaining to town planning, management of solid waste, housing
management, local government management, landscape planning, local government
laws and enforcement.
vi. Inter Agency Planning Group (IAPG) and Technical Working Group (TWG)
IAPG and TWG comprising representatives from various government agencies and
NGOs should be established prior to the preparation of the next review of the NPP.
The IAPG will accordingly frame the TOR for the next review. The review will
essentially address national spatial issues identified by the IAPG in the subsequent 5
year period. There is a need to formalise the NPP- IAPG similar to what is done for
the preparation of the FYMP by EPU and the Annual Budget Dialogs by Treasury.
The IAPG could be established by the 8 themes of the NPP-2. The members of the
IAPG will provide the necessary data inputs and discussion papers to be deliberated
on current planning issues for inclusion into the Review. The Secretariat will be
provided by the Act 172 . This should be a continuous programme of engagement
and not a one off attempt each time the NPP is being prepared. Specific TWGs could
also be established as and when needed to address key issues pertaining to the
distribution of population and growth targets by regions and states.
6.1.6 Public Consultation in the Preparation of the National Physical Plan
Public participation in the NPP-2 shall take the form of consultation with the State
Authorities and utility boards and service providers as well as dialogues with selected
NGO groups. The Act 172 requires the Director General of Town Planning to consult
every State Authority and such other bodies as the NPPC may direct (Section 6B(3) Act
172).
Extensive publicity must be given when preparing and reviewing the NPP. The concerns
of the stakeholders have to be taken into consideration while preparing the NPP. Other
avenues for public participation could include:
i. Focus group discussions;
ii. Dialogue sessions similar to the Budget Dialogues;
iii. Creating an interactive opinion survey through electronic media; and
iv. Exhibitions, seminars and workshops.

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6.2 Plan Implementation
The policies of the NPP-2 cover a wide range of issues that have a bearing on the
physical development of the country. These will be implemented by various Federal and
State agencies responsible for administering them. The measures suggested to
implement these policies are contained in Chapter 5. The principal implementing agencies
identified to implement these policies are shown in Table 6.4. In tandem with the FYMP
and the project planning cycle, these agencies will have to take proactive actions to
translate these policies into action plans, programmes and projects. A concerted effort will
be made to ensure that these projects are included in the subsequent FYMP. This will
also require the forging of horizontal linkages with the economic and project planning
cycles (Section 6.2.6). Some of the key measures taken to implement are described
below.
Table 6.4: Implementing the NPP-2 Policies
Policies
Principal Implementing
Agencies
Key Enabling Initiatives
NPP 1
The NPP shall serve as the national
spatial planning framework in order to
achieve an integrated and sustainable
land use planning, coordinated with
other sectored policies.
Federal and State
Agencies, Act 172
Translate the strategies and proposals of the NPP
into the Structure Plan (SP), Local Plan (LP) and
Special Projects of the Ministries.
NPP 2
Future urban growth centres shall be
concentrated in strategic
conurbations.
Federal and State
agencies, SEDC, Min. of
Education, MDeC, Act 172 ,
MOT
Locate urban-based activities such as industrial
enterprises, privatized educational and training
institutions, cyber cities and main infrastructure
facilities in strategic urban centres.
NPP 3
The planning of less developed
regions shall adopt the corridor
development approach to foster
greater economic growth and
development in order to reduce
regional imbalances.
EPU, Corridor
Implementing Agencies
(ECERDC, NCIA,IRDA),
Act 172 , Min. of Tourism,
Min. of Works, Min. of
Human Resources
Encourage economic diversification especially in the
agriculture and tourism sectors as well as bridging
the digital divide, accelerating the construction of key
infrastructure and providing technical training and
social development programmes.
NPP 4
Cooperation in physical planning and
economic development between
Malaysia and its ASEAN neighbours
shall be strengthened.
EPU, Min. Foreign Affairs,
State agencies, Act 172 ,
Professional Services,
Development Corporation,
MOF
Promotion of projects in the Regional Growth Areas,
establishment of Special Economic Zones, exporting
professional services and cross border
developments.
NPP 5
The planning for industrial
development shall adopt the holistic
development strategy of the IMP3 of
achieving global competitiveness via
transformation and innovation of the
manufacturing and services sector
MITI, SEDC, Act 172 , MOF The spatial identification of new industrial, service
clusters and special economic zones.
NPP 6
Prime Agricultural Areas (PAA) shall
be conserved only for agriculture
purposes and urban development
shall be restricted.
Act 172 , DOA, MADA,
Kada, IADA Krian- Sg.
Manik, IADA Barat Laut
Selangor, IADA Pulau
Pinang, IADA Seberang
Perak, KETARA, IADA
Kemasin-Semerak
Act 172 ensures that this policy is adhered to in
all development plans (SP and LP).
All these areas must be clearly demarcated in all
development plans (LP and SP).
Respective MOA agencies should ensure that
their respective areas are not encroached.

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Policies
Principal Implementing
Agencies
Key Enabling Initiatives
NPP 7
The eight (8) strategic granary areas
comprising Muda (MADA), Kemubu
(KADA), IADA Kerian-Sungai Manik,
IADA Barat Laut Selangor, IADA
Pulau Pinang, IADA Seberang Perak,
IADA Terengganu Utara (KETARA),
and IADA Kemasin- Semerak shall
be conserved for paddy cultivation.
Act 172 , DID, DOA, MADA,
KADA, KETARA, IADA
Pulau Pinang, IADA Kerian-
Sg. Manik, IADA Seberang
Perak, IADA Barat Laut
Selangor, IADA Kemasin-
Semerak, MOA, MOF
Gazette the strategic granary area
Act 172 ensures that this policy is adhered to in
all development plans (SP and LP).
All these areas must be clearly demarcated in all
development plans (LP and SP).
Respective MOA agencies should ensure that
their respective areas are not encroached.
Development can only take place in these areas
after discussion and approval by the respective
agencies.
DID must ensure that the irrigation and drainage
systems in these areas are not encroached by
development.
DID must ensure that the irrigation and drainage
systems are maintained and improved.
NPP 8
Existing potential paddy land outside
granary areas shall be provided with
the proper infrastructure to increase
productivity and yields
Act 172 , DID, DOA, MADA,
KADA, KETARA, IADA
Pulau Pinang, IADA Kerian-
Sg. Manik, IADA Seberang
Perak, IADA Barat Laut
Selangor, IADA Kemasin-
Semerak, MOA
Act 172 must ensure that this policy is taken into
consideration in all development plans.
DID must ensure that proper irrigation and
drainage systems are provided.
PWD must ensure that road networks are
provided.
DOA must ensure that these areas are not
encroached by development.
Development can only take place in these areas
after due consultation and approval.
DID must maintain and improve the irrigation and
drainage systems.
NPP9
Rural areas and Rural Growth
Centres (RGC) shall be developed to
ensure higher income and better
quality of life for the population.
FELDA, FELCRA, KEMAS,
District Office, Local
Council, DOA, RISDA,
DOV, DOF, LPP, MARDI,
Act 172 , Min. of Rural and
Regional Development,
MARA
FELDA, FELCRA, JHEOA, must ensure that their
respective areas are developed.
State Authorities and Local Council provide
leadership in developing rural areas.
Act 172 ensure that rural areas are not left out in
development strategies.
PWD should provide the basic infrastructures.
Economic activities must be brought to rural areas
by respective government agencies.
DOA, DOV, DOF strengthen/ introduce agriculture
based industries to rural areas.
NPP 10
The Orang Asli communities shall be
spatially and economically integrated
into the mainstream of development
initiatives.
Land office, JHEOA, Act
172 , FELCRA, District
office, Local Council, PWD,
DOA, RISDA, DOV, DOF,
Suruhanjaya Koperasi
Malaysia
State Authorities should provide land to Orang Asli
for agricultural and settlement purposes.
JHEOA should ensure that this policy is adhered.
Land cooperatives agencies should develop the
area commercially.
Act 172 should include this policy in the statutory
development plans PWD should provide the basic
infrastructure.
NPP 11
Natural tourism resources, the
authentic multi-cultural and historical
heritage of the country shall be
conserved.
Act 172 , State EPU, LA,
Min. of Culture, Arts and
Heritage, MOTOUR
Setting up of Joint-State Tourism Planning
Committees which should also include the private
sector and NGO participation.
Preparation of Action Plans for critical areas and
provide necessary tourism infrastructure including
signage, accommodation, access roads, sewerage
and solid waste disposal.
Preparation of Action Plan for all tourism zones
and corridors, including the demarcation of the
boundaries for purpose of development control.

6-18
Policies
Principal Implementing
Agencies
Key Enabling Initiatives
NPP 12
Tourism development zones in each
state shall focus on specialised
regional niche products based on their
locational advantages and availability
of resources.
State EPU, Act 172 , LA,
Ministry of Tourism
Malaysia State Office,
NGOs, MOTOUR
Review the National Tourism Policy to incorporate
spatial tourism development principles and
recommendations.
Participation of all relevant stakeholders to ensure
wide participation and consensus building to
achieve sustainable tourism.
Constant monitoring of impacts and introducing
the necessary preventive and / or corrective
measures whenever necessary.
Maintain a high level of tourist satisfaction and
meaningful experience to the tourists; raising their
awareness about sustainability issues and
promoting sustainable tourism practices amongst
them.
Inventories of existing baseline/ current state of
tourism product/ resources and economic activities
within the country/ states and their borders, and
continuous monitoring of the impacts.
NPP 13
High quality tourism infrastructure and
facilities shall be provided to enhance
tourists comfort and safety without
compromising the quality of the
environment.
MOTOUR, Marine Park
Dept., Ministry of Tourism
(State Office), Dept. of
Museums (Federal and
States), Forestry Dept
Peninsular Malaysia, Dept.
of Wildlife and National
Parks, MOHE, MAB, Min. of
Works, Malaysian Hotel
Association (MAH),
MATTA, LA, Act 172
Preparation of Tourism Master Plan for all states
which will also include the planning of tourism
infrastructure and support facilities, the culture
heritage plan, nations biodiversity and tourism
corridor.
Preparation of Disaster Preparedness Action Plan
for all major tourism destinations.
Preparation of a comprehensive set of tourism
product inventories at state levels and monitoring
and reporting of their condition to Tourism
Malaysia annually.
NPP 14
The concentration of urban growth
shall be accommodated in the
conurbations which shall be planned
and developed in an integrated
manner in line with the National
Urbanisation Policy.
Federal and State
agencies, Act 172 , EPU
Prepare appropriate regional plans for the
conurbations.
Identify and give priority to projects aimed at
reducing regional disparities.
Establish consultative committees involving local
authorities.
NPP 15
The growth of the four main
conurbations of Kuala Lumpur,
George Town, Johor Bahru and
Kuantan shall be supported to
enhance their global
competitiveness.
Federal and state agencies,
Act 172 , EPU
Establish Regional Planning Committees for the
conurbations and other support initiatives in ICT,
health, education, tourism and public transport
systems.
NPP 16
High priority shall be given to
achieve energy efficient compact
cities.
Federal and state agencies,
Act 172 , LPA, State EPU
Undertake comprehensive urban planning
including the establishment of urban limits in the
LPs.
NPP 17
Towns with special features shall be
identified and the development
projects to enhance their special
features shall be supported with
appropriate infrastructure
Act 172 , MOTOUR , IMT-
GT, EPU
Prepare appropriate development programmes to
enhance the special features of the Special
Feature Towns.
NPP 18
Small and intermediate towns shall
be sustained and developed in
accordance with their local
economic potentials.
Federal and state agencies,
Act 172 , Ministry of Rural
and Regional Development,
DOA
Provide public amenities, encourage resource
based and craft industries to develop major and
minor settlement centres.
Coordinate the planning and development of inter-
state border towns.

6-19
Policies
Principal Implementing
Agencies
Key Enabling Initiatives
NPP 19
Sufficient affordable housing with
adequate community facilities,
including security facilities and
services, shall be provided in major
urban centres to meet the
requirements of the population.
MHLG, State Authorities,
LA, Private Sector, REHDA
Assess existing housing situation (supply,
demand, price, etc) to formulate housing
programmes especially for urban centres.
Provide adequate infrastructure, public facilities
and amenities in housing area.
NPP 20
Planning standards and urban
development policy guidelines shall
be designed to meet the
requirements of a developed nation.
Federal and state agencies,
Act 172
A comprehensive review of existing planning
standards should be carried out.
NPP 21
A designated central authority shall be
responsible for publishing on a regular
basis, information pertaining to land
use development.
Federal and State
Agencies, Act 172 , SA, LA,
State Director of Land and
Mines, Land and Survey
Mapping, MRSA, MyGDI,
Private Sector
Act 172 shall be designated as the central
authority charged with the responsibility to publish
on regular basis information on land use
development.
Structure Plans and Local Plans shall identify
such areas and propose development projects in
consultation with the private sector.
NPP 22
Environmentally Sensitive Areas
shall be integrated in the planning
and management of land use and
natural resources.
DOF, DOE, Act 172 ,
Wildlife Dept., Local
Authority, State Authority,
Regional Development
Agencies (NCIA, ECERDC
& IRDA)
Demarcate ESA and buffer zones in SP and LP.
NPP 23
A Central Forest Spine shall be
established to form the backbone of
the Environmentally Sensitive Area
network.
DOF, DOE, Wildlife Dept.,
Act 172
Identify Central Forest Spine in the Development
Plans and draw up appropriate management
plans for the CFS.
NPP 24
Sensitive coastal and marine
ecosystems shall be protected and
managed in a sustainable manner.
DID, Act 172 , Wildlife Dept,
Fisheries Dept., Marine
Dept., DOE
Identify and protect mangrove forest, turtle
landing sites, marine parks and landing sites for
migratory birds .These areas have to be protected
by law or identified as ESA in the SP and LP.
Identify the resources in the Exclusive Economic
Zone (EEZ) and develop in appropriate manner.
NPP 25
Land development in the highlands
shall be strictly controlled to safeguard
human safety and maintain
environmental quality and biodiversity.
EPU, Dept of Land and
Mines, LPA, Act 172 , PWD
(Slope Dept)
Apply existing guidelines and recommendations of
the Study for Sustainable Dev. of the Highlands of
Peninsular Malaysia, EPU 2002.
Prepare Special Area Plan for Special
Management Area (SMA).
NPP 26
All surface and ground water
resources shall be safeguarded and
managed sustainably.
DMG, DID, Water
Authorities, DOF, DOE, Act
172 , SA
Demarcate surface and ground water resource
and recharge areas and establish appropriate
management plans.
NPP 27
The spatial planning framework
shall incorporate mitigation and
adaptation measures against the
impacts of climate change.
NAHRIM, Act 172 , DMG,
DID, DOA, MMD
Determine the impacts of climate change and
apply the adaptation measures to reduce the
damage of those impacts.
NPP 28
An integrated national transportation
network shall be established in
recognition of the inter-relationship
between land use and transport.
EPU, MOT, Min. of Works,
PWD, Act 172 , SPAD
Prepare an Integrated Land Use- Transportation
Policy.
NPP 29
A national integrated high-speed rail
system shall be established to
complement the existing rail
network.
MOT, Act 172 , MOF, EPU Prepare a feasibility study; identify rail-based
corridor and transportation hubs in SP and LP.

6-20
Policies
Principal Implementing
Agencies
Key Enabling Initiatives
NPP 30
The national road network shall be
further extended for regional travel
and for local access.
HPU, PWD, Act 172 ,
MOW, LLM
Develop the major roads within the growth
corridors.
NPP 31
Major airports and seaports shall be
developed according to their
complementary functions to
enhance the nations economic
competitiveness and facilitate tourist
arrivals.
EPU, MOT, MOF, Port
Authorities, Marine Dept.
Prepare a National Port Master Plan.
Enhance support infrastructure and facilities at
major airports and seaports.
NPP 32
The Transit Oriented Development
(TOD) concept shall be promoted as
the basis of urban land use planning
to ensure viability of public
transport.
MOT, LPA, Act 172 Identify TOD in Regional Plans for conurbation,
SP and LP.
NPP 33
An integrated public transportation
system shall be established in all
major urban centres.
EPU, MOT, Act 172 , LPA,
SPAD
Prepare an Integrated Land Use Transportation
Network Plan for urban area.
Introduce compact city development and
integrated public transportation system in all major
urban centres.
Encourage the use of public transport facilities
including bus and rail in all major urban centres.
NPP 34
The NPP-2 shall provide the spatial
framework for the delivery of
integrated infrastructure services at
the national and regional level and
to the main conurbations.
Act 172 , MHLG, MEGTW,
Solid Waste Commission,
DID, EC, MCMC, Dept. of
Sewerage Services, SPAN
National policies required on all aspects of
infrastructure, such as sewerage, water, energy,
green technology ,etc.
NPP 35
Appropriate water supply
infrastructure including source
works, treatment plants and
transmission and distribution
networks shall be provided to all
settlements.
Act 172 , State Planning
Authority, MEGTW, SPAN,
State Water Authorities
Formulate and implement the National Water
Policy and National Water Resources Study.
NPP 36
Appropriate sewerage facilities shall
be provided for all areas, with
adequate collection, treatment and
disposal of sewage and sludge.
Act 172 , MEGTW, SPAN,
IWK
Formulate a National Sewerage Policy.
NPP 37
All settlements shall be serviced by
an integrated network of solid waste
disposal and/ or recovery facilities.
Act 172 , MHLG, Solid
Waste & Public Cleansing
Commission, Dept. of Solid
Waste & Public Cleansing
Promote waste generation management and
identify waste treatment plants in major urban
areas.
NPP 38
Drainage infrastructure shall be
provided in all settlements to
eliminate the incidence of major
floods, minor floods and pollution.
Act 172 , DID, LA Implement Urban Storm Water Management
Manual (MSMA) and formulate drainage
guidelines for rural settlements.
NPP 39
As strategic assets, electricity
generation plants, transmission and
distribution mains shall be located to
provide a reliable and efficient
supply of energy to consumers.
Act 172 , MEGTW, EC Provide adequate power and locate power plants
and distribution mains compatible to the
surrounding land use.

6-21
Policies
Principal Implementing
Agencies
Key Enabling Initiatives
NPP 40
Natural gas processing plants,
transmission and distribution pipe
networks shall be located to provide
a reliable and efficient supply of
natural gas to consumers.
Act 172 , MEGTW, EC Formulate a national policy on gas utilisation and
supply.
NPP 41
Communications network facilities
and infrastructure shall be provided
to all settlements.
Act 172 , MEGTW, MCMC Extend cyber city concept to other parts of the
country, bridge rural-urban digital divide and
promote the use of ICT in all levels of government
and private sectors.
6.2.1 State Structure Plans to Conform with the NPP-2
The proposals of the NPP-2 will be implemented through the respective Structure Plans
which will have to conform generally to the proposals of the NPP-2. As Structure Plans
are gazetted documents, they will additionally provide the statutory basis for implementing
the policies.
This is generally instituted through the following ways:
i. While reviewing the Structure Plan, the State Director of Town and Country Planning
(the Director) is required to examine the provisions of the NPP-2 and other national
economic, social, physical, environmental and conservation policies.
ii. The Draft Structure Plan must include matters prescribed by the State Planning
Committee (SPC) and the NPPC. This would suggest that the NPPC may issue
planning guidelines from time to time and it would be necessary on the States to
conform to these guidelines in the Structure Plans.

iii. In considering the approval of the Draft Structure Plan, the SPC is required to consult
with the NPPC for its direction and advice. Should the SPC fail to reach a decision
within 6 months of its submission, the State Director may refer the Draft Structure
Plan to the NPPC for a decision.
iv. Additionally it is proposed that a Certificate of Conformity be issued by the NPPC to
the respective State Directors before the Draft Structure Plan is released for public
objections.

6-22
6.2.2 Advise on Strategic Infrastructure, Large Townships and Development in ESA
Areas
According to the subsection 22 (2A) Town and Country Planning Act 1976 (Act 172), all
applications for planning permission involving the following categories of national interest
must be submitted to the NPPC for advice. The applications submitted under this section
involves:-
i. The development of a new township for a population exceeding 10,000 or covering
an area of more than 100 hectares or both;
ii. A development for the construction of any major infrastructure or utility projects such
as airports, seaports, railway lines, highways, erections of dams, main power stations
and toxic waste disposal sites; and
iii. A development affecting hill tops or hill slopes in areas in areas designated as
environmentally sensitive in a development plan (RT)
The relevant State Planning Committee (SPC) is required to refer these applications to
the NPPC for its advice. In practice, these applications will firstly be evaluated by the
NPPC Monitoring Committee (Mesyuarat Jawatankuasa Kawal Selia MPFN) before it is
forwarded to the NPPC Working Committee. This monitoring committee is chaired by the
Director General Town Planning and represented by key technical departments and the
relevant local authority. Generally the NPPC is consulted for general planning advice as
well as advice on planning applications. General Planning Advise is usually given to
concept plans and master plans involving large development projects which have national
interest. With respect to project applications for planning permission that were referred to
the NPPC, the most common were for New Town Developments. Very few major
infrastructure and utility projects nor developments on hill slopes were referred to the
NPPC.
Since the NPPC only meets once during every four months in a year, most project
proponents see this as a cumbersome process and it is very often at the discretion of the
SPC if these applications are referred to the NPPC.
Due to this, classification under paragraph 22(2A)(b) Act 172, Nationally significant
infrastructure project means a project wihich consists of any of the following:
i. Airports development;
ii. The construction of seaports facilities;
iii. The construction of railway lines;
iv. Highways development;
v. High scale bridge development;
vi. The construction of solid waste/ hazardous waste disposal sites;
vii. Development relating to oil refineries/ gas pipe-lines facilities;
viii. The construction of integrated public transportation terminals;
ix. The construction of dams or reservoir;
x. The construction of a power generating station, independent power plant and
electric lines;

6-23
xi. The construction of a nuclear centre; and
xii. The construction of memorial parks.
It may also be necessary to amend the Act 172 to include coastal land reclamation
projects under Section 22(2A) to bring it within the purview of the NPPC to provide
advice. Despite the policy statements in the NPP forbidding coastal land reclamation for
urban development purposes, many states continue to do so as a means of enhancing
state revenue. This is an aspect that needs to be monitored and controlled as such
initiatives can have dire environmental and coastal consequences to neighbouring states
and the marine and coastal ecosystems.
6.2.3 Town Planning Rules
The NPPC may make Rules with respect to any matter as stipulated by section 58(1A) of
Act 172. The rules made by the Council will prevail over the rules made by the State
Authority (Section 58(1B) Act 172). To date no rules have been made by the Council. All
amendments to the Act 172 and related Acts that affects spatial planning must be first
deliberated by the Council for its advice.
6.2.4 Coordinating with the Economic Development Corridor Plans and Regional
Planning Initiatives
The three economic development corridors initiatives in the Peninsular were formed to
reduce regional imbalance and bring about equitable growth and ensure comprehensive
and widespread economic development. The three regional authorities, i.e. ECERDC,
IRDA and NCIA are established by law to spearhead development in their respective
regions. As these are committed government programmes, regional planning initiatives of
the Act 172 should complement the efforts made by the Corridor Authorities and facilitate
the implementation of the projects identified in NPP-2. The Act 172 should also continue
to exercise close consultation with the Corridor Authorities in rationalising the relevant
statutory plans that are the NPP, Structure Plans and Local Plans to accommodate the
proposals of the Regional Development Plans.
The Act 172 allows for the establishment of a Regional Planning Committee (RPC) and
for the preparation of the Regional Plans for the respective areas. Under the Act 172,
Regional Planning Committees (RPC) is only established if the planning area transcends
two or more state boundaries. In this respect, the RPC may become relevant for the:

i. Conurbation areas of Kuala Lumpur, Kuantan and George Town;
ii. Special Management Areas (SMA) of Cameron-Kinta-Lojing Highlands; and
iii. Integrated River Basin Studies that transcend state boundaries.
The Regional Planning Division of the Act 172 is in charge with performing the executive
secretarial tasks of the RPC and establishing a framework for regional planning in the
country. In this context it may be necessary that all the Regional Economic Master Plans

6-24
are referred to the NPPC for its advice in order to streamline these Plans with the
statutory planning system established under the Act 172.
6.2.5 National Spatial Planning Policy Guidelines
National Spatial Planning Policy Guidelines are material considerations in reviewing
planning applications by the respective local planning authorities. The NPPC may issue
such guidelines from time to time. This is similar to the UK where Secretary of State for
the Environment issues Planning Policy Guidelines, Mineral Policy Guidelines and
Regional Planning Guidelines from time to time.
There are more than 24 Planning Policy Guidelines issued by the British Government and
includes guidelines on Green Belts, Housing, Industrial and Commercial Development,
Town Centres and Retail Development and Transport. It is relevant for the NPPC to issue
such guidelines especially on current issues affecting planning in the country such as
hillside development, urban densities, public transport, sports and recreation, affordable
housing and environmentally sensitive areas. These guidelines are necessary to
complement the NPP-2.
6.2.6 Linking NPP Policies with Socio Economic Development Planning and Budgetary
Allocation
National socio-economic planning and project planning processes are well
institutionalised in the country. National socio-economic planning takes the form of the
OPP and the FYMP. The NPP-2 on the other hand provides the spatial component to
National Development Planning.
In translating the proposals of the NPP-2 into projects and programmes the following
actions need to be taken:
i. Federal and State agencies should refer to the NPP and make project bids in
conformity to the recommendations of the NPP-2 (refer Circular No. 2, Year 2006
NPP).
ii. The NDPC and EPU should give priority to projects that are recommended by the
NPP.
iii. The director general of Act 172 should be a permanent member of the NDPC to
ensure that the aspirations of the NPP-2 are incorporated in the subsequent National
Development Plans.
iv. Act 172 should be included in the project budgeting and programming process.
v. The IAPG for the FYMP relating to physical planning should be chaired by the
Director General of Act 172 .

6-25
6.2.7 Establishing Linkages with Sector Councils
Related sector policies are made by the relevant Ministries, Central Agencies and Sector
Councils. Some of these councils are established under the Constitution such as the NLC,
NCLG and the NFC while others are set up administratively such as the National Water
Resources Council. In preparing the NPP, the director general of Act 172 is required to
take into consideration the National Urbanisation Policy and other national policies and
consult relevant authorities and bodies. The following actions may be taken to forge
linkages with these councils.
i. Hold focus group discussions and dialogue sessions with the relevant councils while
preparing the NPP-2.
ii. The NPP-2 shall take into consideration the relevant national sector policies when the
plan is prepared.
iii. Include members of the various councils in the IAPG and TWG and have them
prepare technical working papers as inputs to the NPP-2.
iv. Strategic recommendations that affect land and local government may be deliberated
in the respective NLC and the NCLG to ensure compliance by the State and Local
Authorities.
6.2.8 Establishing Linkages with other Planning Authorities
There is a need to establish strong linkages with planning authorities at the state and local
levels. The main planning authorities at the State level are the State Authorities and the
State Planning Committees while at the local level, the Local Planning Authority (LPA) is
the Local Authority (LA). As for areas outside the local authority, the State Director of
Town Planning is the Local Planning Authority (LPA). The Structure Plans have to
conform to the NPP and similarly the Local Plans with the Sructure Plans. All draft
Structure Plans (SP) will be referred to the NPPC for advice before it can be approved by
the relevant State Planning Committees (SPC). The NPPC may issue letters of non
conformity to Structure Plans (SP) that are contradictory in essence to the objectives and
policies of the NPP. The Director General of Act 172 may also issue circulars and
directions of the Council to the relevant planning authorities from time to time. It is also
important that state land use information is made readily available to Act 172 . This will be
realised through the establishment of the iPLAN at the Act 172 with linkages to the State
Planning Information System (SPIS) (refer section 6.4.3).
6.3 National Physical Plan Action Programme
To support the NPP-2 policies, the NPP-2 should have an action programme that relate to
urban planning and conservation initiatives. These programmes could include innovative
demonstration projects as well as integrated projects and programmes that involve inter-
agency collaboration. A Development budget has to be allocated to implement some of
the key projects identified.

6-26
Coordination and cooperation amongst authorities and agencies at all levels of
government are important for the successful implementation of the Action Programme.
The proposed initiatives are not restricted to Act 172 initiatives, but other ministries,
federal agencies and state and local authorities could also be involved. Effective
coordination will be required especially when spatial initiatives cross national, state and
local jurisdictions. The Act 172 should develop a common platform for all parties
concerned to work and cooperate jointly to carry out the spatial initiatives.
Although the proposed initiatives are spatial in nature, they often incorporate a range of
technical skills outside of planning. Getting relevant skills entail recruitment of adequate
human resources and investment in retraining and skills upgrading. Another important
risk is finding adequate financial resources. The current economic conditions will
constrain the availability of federal funds. Finding funds for the Action programme should
not be limited to bidding for federal funds. There must be a flexibility built into the
programme to enable the Act 172 to seek alternative funding sources via partnerships
with private sector and non-governmental organizations (NGOs), or partnerships with
international or supra-regional agencies with similar programmes and objectives.
6.3.1 Principles
The principles underlying the NPP-2 Action programme are:

i. Initiatives are to be linked directly to NPP-2 policies for consistency;
ii. Initiatives have national or regional significance;
iii. Initiatives should be spatial and planning-oriented;
iv. Initiatives with spatial implications that cut across physical and jurisdictional
boundaries;
v. Initiatives that can be factored into the federal development budget for financial
allocations.
6.3.2 Components of the Action Programme
There are 3 components of the Action Programme, namely:-
NPP-2 Specific Actions;
NPP-2 Spatial Initiatives; and
NPP-2 Demonstration Projects.
The NPP-2 Specific Actions are key initiatives necessary to further enhance the NPP-2
preparation. The NPP-2 spatial initiatives are the relevant national sector master plans
and policies that are currently absent or lacking that is necessary to complement the
NPP-2. It is important that relevant line agencies and ministries prepare these plans and
policies so that they are better integrated in the NPP-2. The NPP-2 Demonstration
Projects on the other hand are key projects initiated by the Act 172 in partnership with
Local Authorities and Development Agencies to implement pilot projects that could be
bench marked for the development of a more comprehensive nationwide programme.

6-27
i. NPP-2 Specific Actions
The objectives of NPP-2 Specific Actions are:

a. To improve the implementation of NPP-2;
b. To promote research and development in spatial planning; and
c. To develop appropriate planning models for adoption and applications.
Four (4) NPP-2 Specific Actions are identified and summarized in Table 6.5.
Table 6.5: NPP-2 Specific Actions
Specific Actions Objectives
Establishing the National Physical Planning Advisory Panel Improve implementation of the NPP
Assessment of Existing NPP Indicators Improve implementation of the NPP
Strengthening Land Use Planning Intelligent System (iPLAN) and
Publishing Land Use Data
Promote R&D in spatial planning and
monitor land use change
Establishing a Spatial Planning and Development Research Institute
(SPDRI)
Develop appropriate planning models for
adoption and applications
a. Establishing the National Physical Planning Advisory Panel (NPPAP)
The National Physical Plan Advisory Panel (NPPAP) is urgently required to facilitate
the planning process, especially in terms of giving attention to national strategic and
contemporary spatial issues. Such issues could undermine national competitiveness
if left unattended. It could also facilitate the review of the national physical plan
enabling the review process to quickly pick up such issues for study and evaluation
and determine the implications on the NPP-2 policies (see Section 6.1.5.(iii)).
b. Assessment of Existing NPP Indicators
The NPP-2 provides for the establishment of a monitoring process through the
development of key policy indicators. These indicators shall provide the enabling tool
for continuous monitoring, with a proviso for flexibility such that the indicators can be
modified, removed or added. The main thrust of the monitoring process is to gather
data and information needed for the indicators on a regular basis from selected data
providers. At the same time, these indicators have to be assessed and evaluated on
their timely relevance.
Plan monitoring has been identified as one of the issues in NPP. There is a need to
assess existing KPIs and identify those with inadequate data coverage, those which
are unsuitable for measurement, and those which entail duplications in data
collection. Of specific concern is the use of quantifiable indicators for the NPP
policies. Quantifiable indicators require a relatively strong data base which not all
NPP KPIs have. The other option is to use qualitative indicators which would entail
reviewing some KPIs in greater depths to determine whether qualitative indicators are

6-28
better than quantitative indicators, and evolving a mixed KPI index, using both
qualitative and quantitative aspects. Spatial data for the KPIs have to be updated
continuously.
To reduce time and costs, it may be necessary to use existing data base and to rely
on existing sources of information. For example, the data base could be devised to
systematically include statistical information from the Department of Statistics (DOS).
The indicators from the Act 172 MURNInet could also be adapted into the NPP-2 in
order to reduce time and to streamline data collection and compilation across
agencies and local authorities.
Although the NPP-2 has revisited the KPIs; it is not a thorough assessment of the
KPIs and their relevance. It is recommended that a separate assessment be
undertaken to check and evaluate the robustness and relevance of the present NPP
KPIs.
c. Strengthening NPP Land Use Planning Intelligent System (iPLAN) and
Publishing Land Use Data
The NPP recommends the establishment of the NPP Land Use Planning Intelligent
System (iPLAN). The iPLANs objective is to enable effective data and information
sharing among the three levels of organizations involved in spatial planning. The
iPLAN will be linked to the state level system, that is the State Planning Information
System (SPIS), and district level system or the District Planning Information System
(DPIS). Against this vertical integration of spatial data across different tiers of
government, the iPLAN also advocates the sharing of information horizontally across
federal agencies to further enhance the spatial information flows. The vertical and
horizontal information flows are expected to be strengthened through the Malaysian
Geospatial Data Infrastructure (MyGDI). Once in place, the sharing of digital land use
data among government agencies and departments will be carried out efficiently.
Conceptually, the iPLAN will strengthen spatial planning at all levels of government
and horizontally across agencies of similar level. In practice, data sharing on land use
has yet to occur as envisaged under iPLAN. Presently, there are neither published
data on land use nor national land use data for urban centres /strategic zones or
conurbations throughout the country. In this respect, NPP-2 advocates that Act 172
take specific actions to strengthen and intensify iPLANs horizontal and vertical
networks so that the necessary infrastructure is operational and accessible to
everyone engaged in spatial planning.
As the national authority on land use, Act 172 should, on a regular basis published
land use data that could be distributed at a reasonable price to the general public.

6-29
d. Establishing a National Spatial Planning and Development Research Institute
(SPDRI)
NPP-2 proposes that a research institute for spatial planning and development be
established to spearhead research in spatial planning. The models put forward could
be similar to that of the Institute of Strategic and International Studies (ISIS) in
Malaysia, the Korea Research Institute for Human Settlements (KRIHS), International
Centre for Sustainable Cities (ICSC) in Vancouver, Habitat in Nairobi, and the
International Institute for Urban Environment in the Netherlands. NPP-2 believes that
the creation of a national Spatial Planning and Development Research Institute
(SPDRI) is still relevant and important for enhancing the national spatial framework
for the country, and thus, advocates that its creation should be given immediate
attention by Act 172 .
One possibility in the initial step is to corporatize it as a non-profit company operating
on an initial government grant under Act 172 directive and guidance. It is important
for SPDRI to have an independent board of directors comprising public and private
representations from professional bodies like the Malaysian Institute of Planners,
NGOs, REHDA and the universities. Both the Ministry of Housing and Local
Government (MHLG) and Federal Department of Town and Country planning (Act
172 ) are represented in its board of directors.
In the medium to long term, the proposed SPDRI could be a blend of KRIHS or IIUE.
It can initiate demonstration projects that would spearhead research and
development on spatial topics that are both contemporary and significant at national
and global levels. It can provide research and consultancy services, conduct
seminars and workshops, and publish research findings in peer-reviewed journals. It
should be given the means to raise funds independently to support its activities as
much as possible, with an eventual goal of being self-supporting.
ii. NPP-2 Spatial Initiatives
Spatial initiatives are proposed in accordance with the various NPP-2 policies. The
initiatives are directly or indirectly linked to NPP-2 policies although some may fall within
the wider umbrella of the NPP-2 themes. The initiatives have to be in line with the
principles mentioned earlier. They are spatial in nature, and are expected to have spatial
implications at national or regional level. Some initiatives could cross state or local
authority administrative boundaries or even national boundaries, especially with
Peninsular Malaysias immediate and adjoining neighbours, that is, Thailand and
Singapore.
The spatial initiatives are mainly national level studies where the findings are expected to
contribute significantly towards national spatial planning that are strategic for overall
development. They either value-add to existing knowledge and information on national
spatial issues or they lead to a more effective use of national natural assets and
resources, thus contributing to an overall improvement of the environment.

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Table 6.6 links the spatial initiatives to the NPP-2 themes, and shows the objectives of
each spatial initiative. Altogether, 24 spatial initiatives are identified. Most of the spatial
initiatives are to be initiated by Act 172 but there are some which are to be undertaken by
other federal and other agencies. The non-Act 172 initiatives are included because of
their close linkages to the NPP-2 policies, and thus, are deemed important for overall
national physical planning. An attachment detailing the proposed spatial initiatives is
appended for reference. The details will include the justification and scoping for the
proposed initiatives. The objective is to provide a further understanding of the importance
of the NPP spatial initiatives for national spatial planning.
Table 6.6: NPP-2 Spatial Initiatives
NPP Themes Spatial Initiatives Objectives
Enhancing
National Economic
Competitiveness
1. A Master Plan on Border Towns in Northern
Peninsular Malaysia
To provide a rational spatial form for land
use development in the border region.
2. A Spatial Evaluation Study of Industrial Areas in
Peninsular Malaysia
To determine the investment priority for
targeted industrial areas using the IMP3
strategy.
To identify potential for private sector
industrial investments.
To develop a strategy for underperforming
industrial areas.
Conserving
Agricultural
Resources and
Rural
Development
3. A Master Plan Study of Prime Agricultural Areas
(PAA) in Peninsular Malaysia (with special
emphasis on Food Production Areas)
To preserve highly productive agricultural
areas, especially food production areas, to
sustain long-term agricultural production in
the country
4. A Study on Loss of Development Rights under
the NPP and the Formulation of a
Compensation Payment for Such Losses in
Affected States
To study the impact of NPP-2 on the
revenue losses incurred by states.
To outline compensation payment scheme
to enable affected states to make fiscal
adjustments for the loss of current and
potential revenue.
5. Feasibility studies for the Improvements of
Paddy Areas Outside the Granary Areas
To convert paddy areas outside the granary
areas into granary areas to increase
productivity and yield.
6. An Integrated Rural Development Policy and
Master Plan in Peninsular Malaysia
To develop a development policy and
strategy for rural settlements.
To conduct an integrated analysis of Rural
Growth Centres and clusters.
To identify economic opportunities and to
enhance socio-economic and socio-cultural
environment in these centres.
7. A Master Plan of Orang Asli Settlements in
Peninsular Malaysia (with Special Emphasis on
the Integration of Spatial, Economic and Socio-
Cultural Aspects)
To develop a master plan for development
and improvements of Orang Asli
settlements.
To identify economic opportunities that
would improve their livelihood.
To enhance their socio-cultural
environment.
Sustainable
Tourism
Development
8. A Master Plan on Sustainable Tourism
Development in Peninsular Malaysia
To identify appropriate strategies for
sustainable tourism development.
To establish guidelines and policies to
support sustainable tourism development.

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NPP Themes Spatial Initiatives Objectives
9. A Study on the Identification, Conservation and
Use of Natural, Historical and Cultural Sites and
Resources in Peninsular Malaysia (with Special
Emphasis on Tourism Development)
To identify natural, historical and cultural
sites and resources and map these areas.
To determine strategies to conserve,
enhance, and improve these sites as
tourism attractions.
10. A Master Plan Study of the Development and
Integration of National and State Parks in
Peninsular Malaysia and their Contribution to
Tourism Development
To map national and state parks and
develop a green network plan
To evaluate the resources and potential of
existing parks.
To formulate strategies to conserve and
protect these parks.
To formulate strategies to integrate the
development of the parks into tourism
attractions.
Managing
Changing Human
Settlements
11. Kuala Lumpur Conurbation Plan To map and delineate the boundary of the
conurbation.
To profile the conurbation.
To prepare the regional plan.
To formulate a regional integrated
development strategy.
12. George Town Conurbation Plan To map and delineate the boundary of the
conurbation.
To profile the conurbation.
To prepare the regional plan.
To formulate a regional integrated
development strategy.
13. Kuantan Conurbation Plan To map and delineate the boundary of the
conurbation.
To profile the conurbation.
To prepare the regional plan.
To formulate a regional integrated
development strategy.
14. An Evaluation Study of Major and Minor
Settlement Centres in Peninsular Malaysia and
their Potential Spatial Expansion
To define intermediate and small towns in
the urban hierarchy.
To determine the functional roles of these
towns.
To formulate development strategies for the
growth of these towns.
Conserving
Natural
Resources,
Biodiversity and
the Environment
15. A Study on Sustainable Use and Conservation
of Limestone Hills in Peninsular Malaysia
To improve knowledge and understanding
of the contributions of limestone hills to land
use development.
To identify the areas that should be
conserved and those where quarries are
permitted.
To formulate a strategic plan for the
sustainable use and conservation of such
areas.
Integrating the
National and
Urban
Transportation
Network
16. A Master Plan Study of the High-Speed Rail
System in Peninsular Malaysia
To determine potential routes.
To undertake feasibility studies.
17. A Master Plan Study of Seaports in Peninsular
Malaysia
To study the existing sea ports and their
functional roles.
To develop a hierarchy of sea ports.
To prepare a master plan for their
development.

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NPP Themes Spatial Initiatives Objectives
18. A Study on the Development of Freight towns in
Peninsular Malaysia
To identify and map towns currently serving
as logistics centres.
To identify and map towns with potential for
developing in to logistic centres and hubs.
To formulate strategies for developing such
towns.
19. Public Transportation Master Plan for Kuala
Lumpur Conurbation (These studies could be
integrated with the Conurbation Studies)
To undertake a study on public
transportation for the conurbation.
To identify issues and constraints.
To prepare a master plan for its
development.
20. Public Transportation Master Plan for the
Georgetown Conurbation (These studies could
be integrated with the Conurbation Studies)
To undertake a study on public
transportation for the conurbation.
To identify issues and constraints.
To prepare a master plan for its
development.
21. Public Transportation Master Plan for the
Kuantan Conurbation (These studies could be
integrated with the Conurbation Studies)
To undertake a study on public
transportation for the conurbation.
To identify issues and constraints.
To prepare a master plan for its
development.
Providing
Appropriate
Infrastructure
22. A Review of the National Water Resources
Master Plan
To ensure sustainable development of
water resources including surface and
ground water.
To develop a National Water Resources
Policy.
To develop water supply management
strategies.
23. A National Sewerage Master Plan Study To provide for the development of
sustainable sewerage services.
To improve sewerage services throughout
the country.
24. A Study on the Adoption of Energy-Efficient/
Low Energy/ Green Buildings in Urban
Conurbations (including a Feasibility Study on
the Provision of Incentives)
To study the implications and impacts of the
adoption of energy efficient technologies in
the urban areas.
To determine appropriate energy efficient
technologies for urban conurbations in
Peninsular Malaysia.
iii. NPP-2 Demonstration Projects
The third component of the Action Programme is the NPP-2 Demonstration Projects. Like
the spatial initiatives, the NPP-2 Demonstration Projects are linked to the NPP-2 themes
and policies. The difference is the NPP-2 Demonstration Projects are directed at specific
areas in Peninsular Malaysia for the purpose of implementation and serve as
demonstration projects. They are spatial in nature, and would likely take the form of
Special Area Plans (SAPs) to facilitate implementation. To kick-start the NPP-2 Action
Programme, thirteen (13) demonstration projects are identified and summarized in Table
6.7.

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Table 6.7: NPP-2 Demonstration Projects
NPP Themes NPP Policies Demonstration Projects
Special Area Plans (SAPs) / Feasibility Studies
Enhancing National
Economic
Competitiveness
NPP4
Cooperation in physical planning and economic
development between Malaysia and its ASEAN
neighbours shall be strengthened.
Special Area Plans for:
1. Bukit Kayu Hitam, Kedah
2. Pengkalan Kubor, Kelantan
Conserving Natural
Resources, Biodiversity
and the Environment
NPP22
Environmentally Sensitive Areas (ESA) shall be
integrated into the planning and management of
land use and natural resources.
Special Area Plan for Conservation District in:
1. Grik, Perak
2. Gua Musang, Kelantan
NPP 23
A Central Forest Spine (CFS) shall be
established to form the backbone of the
Environmentally Sensitive Area network.
Special Area Plans for:
1. Sg. Yu Ecological Corridor, Pahang
2. Labis Timur Ecological Corridor, Johor
3. Temerloh/ Bera Forest District, Pahang,
Primary Linkage of additional Bera Chini
Forest Reserve
4. Ketiar River, Hulu Terengganu, National
Park Primary Linkage Tembat Forest
Reserve
5. Gerik, Perak that includes Belum Forest
Reserve, Royal Belum Forest Reserve and
Temenggor Forest Reserve
NPP 25
Land development in the highlands shall be
strictly controlled to safeguard human safety and
maintain environmental quality and biodiversity.
Special Area Plans for:
1. Cameron-Kinta-Lojing Highlands (SMA)
2. Penang Hill
3. Bukit Larut
4. Gunung Jerai
5. Frasers Hills
Implementation Projects
Providing Appropriate
Infrastructure
NPP 37
All settlements shall be serviced by an integrated
network of solid waste disposal and/ or recovery
facilities.
Research and Development Project on:
1. Sustainable Solid Waste Management
Practices and adoption of Green
Technology in Putrajaya
Managing Changing
Human Settlements
NPP 16
High priority shall be given to achieve energy
efficient compact cities.
Brownfield Project on:
1. Integrated mixed-urban regeneration ,
project involving housing, commercial,
public amenities, recreational and lorry
parking terminal (14.5 ha) in Port Klang,
Selangor Darul Ehsan (Port Klang Special
Area Plan)
The proposed demonstration projects may be categorised into six (6) groups as follows:
a. Special Area Plans for Border Towns
Initially, two border towns that is Bukit Kayu Hitam, Kedah and Pengkalan Kubor,
Kelantan are identified as demonstration projects. The study has finally identified 7
border towns along the northern Peninsula border with Thailand, which are, Kota
Putra, Kedah; Padang Besar, Perlis; Pengkalan Hulu, Perak; Rantau Panjang,
Kelantan; Bukit Bunga, Kelantan, Bukit Kayu Hitam, Kedah; and Pengkalan Kubor,
Kelantan.

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The demonstration projects on the two towns entail working with authorities across
the Malaysian border and with the Centre of IMT-GT Sub-regional Cooperation to
draw up development plans, involving joint-implementation.
b. Special Area Plans for Conservation Districts
The NPP-2 identifies conservation districts, as districts which have high percentages
of their lands under ESA. These districts are located mostly in the CFS. Here, land
use planning and resource extractions have to consider the implications on
biodiversity and environment in the districts, as well as their potential for tourism
activities, especially eco-tourism.
It is suggested that two model projects be undertaken within the focal initiative
umbrella. The two conservation districts identified are Grik in Perak and Gua
Musang in Kelantan.
c. Special Area Plans for Ecological Corridors
The third category involves the preparation of special area plans for ecological
corridors identified from the CFS study. The need for special area plans would be
looked into, especially in extremely sensitive areas. As a start, the study proposes
two areas to focus which are the Sungai Yu Ecological Corridor in Pahang, and the
Labis Timur Ecological Corridor in Johor. Other ecological corridors are the Temerloh/
Bera Forest District in Pahang, Ketiar River in Hulu Terengganu and Grik in Perak
which include Belum Forest Reserve Royal Belum Forest Reserve and Temenggor
Forest Reserve.
d. Special Area Plans for Highlands Settlements
Human settlements in the highlands and their economic activities impact upon the
environment and the biodiversity in the areas. The fact that these settlements exist
long before awareness and concerns over the environment are realized, poses a
problem over the management and conservation of the highlands. Removing human
settlements and their activities may not be the solution, politically and socially. The
tasks then are to strive for a delicate balance between human needs and
conservation needs in the highlands. The proposal to prepare special area plans to
treat these settlements and their activities as special management areas would help
to sustain highlands while allowing human activities to continue with certain control.
The areas proposed are Cameron Highlands-Kinta-Lojing SMA, Penang Hills, Bukit
Larut, Gunung Jerai and Frasers Hills.

6-35
e. R&D Demonstration Projects in Sustainable Management of Infrastructure
Services and Adoption of Green Technology
This category is focused on the applications of green technology and sustainable
methods in management of services, in particular solid waste management in a given
local planning area. The category would likely cover a wide range of R&D
applications that are pertinent to urban land use planning, especially in improving the
quality of life in urban centres throughout the country.
f. Integrated mixed-Urban Regeneration Project Involving Housing, Commercial,
Public Amenities, Recreational and Lorry Parking Terminal (14.5 ha) in Port
Klang, Selangor Darul Ehsan.
The NPP-2 direction on urban development is to refocus towards brownfield
development and compact city development as opposed to greenfield site
development. The project is part of the urban regeneration initiatives identified in the
Special Area Plan prepared for the harbour town of Port Klang according to section
16B of Act 172. The project involves the redevelopment of a 14.5ha site near the
South Point Area close to the historic town of Port Klang into a vibrant mixed
development involving housing, commercial shot lots, public amenities and a lorry
parking terminal. This demonstration project will be implemented by the Klang
Municipal Council and the State Act 172 using provisions of the Act 172, in particular
Part VIII (Development Areas). The project will provide key insights on the role of the
local authorities in undertaking urban regeneration projects, stakeholder participation
involving landowners, local community and the transport hauliers, public-private
sector participation, revitalization of local urban economies and the application of
urban design principles in enhancing the urban image and identity of the place.
In the medium to long term the demonstration projects should cover a wider range of
strategic topics on land use planning and management in the country. They can also
be linked to other global initiatives such as Local Agenda 21
1
and the World Banks
local economic development programme,
2
all of which contain spatial development
strategies.
6.3.3 Implementation Model
i. Key Custodian
The key custodian and implementing agency to the NPP-2 Action Programme is the Act
172 to ensure that the specific actions are in place before the next review.
The NPP Spatial Initiatives will also be undertaken by Act 172 while the other non-
planning initiatives would be implemented by the appropriate agencies and authorities.

1
The Local Agenda 21 i s a comprehensi ve strategy ai med at protecti ng the envi ronment, whi l e promoti ng economi c growth and
communi ty wel l-bei ng. It i s usuall y government-led program that encourages communi ty participati on.
2
See urban devel opment program under Worl d Bank for more i nformati on. Refer to www.worldbank.

6-36
As they are NPP initiated, support from the relevant agencies and authorities is greatly
encouraged.
The Demonstration Projects are designed to facilitate implementation. As a norm, Act 172
is not an implementing agency. However, the NPP-2 has recommended enabling
initiatives and area specific initiatives which could be realized if some of these can be
turned into demonstration projects.
The preparation of the each demonstration projects involves a two-part exercise. The first
is the conduct of an implementation study for the focal area which is designated as a
special area. The tasks involve detailing strategies, and the preparation of a physical plan
outlining specific projects to be carried out and the resultant desired land use changes.
The second exercise is the actual implementation of the projects. The demonstration
projects are specifically generated from the NPP-2 and thus, can be differentiated from
the existing system of special area plans. However, they should be integrated into the
existing system of special area plans according to section 16(B) of the Act 172.
ii. Demonstration Projects as Special Area Plans (SAPs)
Section 16B of Act 172 provides for an area to be designated as a special area for special
and detailed treatment by development, redevelopment, improvement, conservation or
management practice. The approach may be flexible and the nature of the treatment can
be varied. The SAP can be initiated by a State Director or a Local Planning Authority
(LPA) or directed by the SPC. In the case of the demonstration projects, the Director
General of Act 172 will initiate the demonstration projects.
To facilitate implementation, it is suggested that the relevant local planning authority
adopts the NPP-2 Demonstration Projects as the SAP and declares the area or parts of it,
as a Development Area. This is useful as the demonstration projects are specific area-
based and would come under a LPA for implementation. Matters related to land could
also be resolved through Section 38 and Section 39 of the Act 172, provided there are
adequate financial resources to undertake this task. The Act 172 allows for compensation
and the mode in which compensation can be given. By allowing the local planning
authority to acquire or purchase land in the designated development area, it creates an
enabling environment to expedite implementation.
There are other provisions which are also important to provide the enabling environment
for implementing demonstration projects. For example, Section 41 of the Act 172 allows a
LPA to enter into a business arrangement with any person, company or body subject to
various conditions and restrictions. It also provides for the Local Planning Authority (LPA),
with approval of the Chief Minister or Menteri Besar to establish a corporation to carry out
and manage any project in the designated Development Area. Section 42 of the Act 172
provides for borrowing by the LPA with the approval of the Chief Minister or Menteri
Besar to finance the development of a designated Development Area.

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6.3.4 Implementing Agencies
i. Key Implementing Agencies for NPP Spatial Initiatives
The Act 172 is identified as the key implementing agency for most of the spatial and
demonstration projects (Table 6.8). The demonstration projects are to be led by the
MHLG; the Act 172 will assist the Ministry in the implementation of this component of the
Action Programme. A development programme should be drawn up for the demonstration
projects by the MHLG.
Federal ministries identified in the NPP spatial initiatives are the Ministry of Finance
(MOF), Ministry of Tourism (MOTOUR), Ministry of Transport (MOT), Ministry of Rural
and Regional Development (KKLW), and the Ministry of Energy, Green Technology and
Water (KeTTHA).
Other agencies that are expected to be involved, either as lead or key supporting
agencies, include the Centre of IMT-GT Sub-regional Cooperation (CIMT), Department of
Aboriginal Affair (JHEOA), Northern Corridor Implementation Authority (NCIA), East
Coast Economic Region Development Council (ECERDC), Indah Water Konsortium Sdn.
Bhd. (IWK), Forestry Department, Wildlife Department, Department of Irrigation and
Drainage (DID), and Local Planning Authorities.
Table 6.8: The NPP-2 Spatial Initiatives, Key Implementing Agencies
NPP Policy Spatial Initiative
Key Implementing
Agencies
NPP 4
Cooperation in physical planning and
economic development between Malaysia
and its ASEAN neighbours shall be
strengthened.
1. A Master Plan on Border Towns in
Northern Peninsular Malaysia
Act 172 / Centre of IMT-GT
Sub-regional Cooperation
(CIMT)
NPP 5
The planning for industrial development shall
adopt the holistic development strategy of the
IMP3 of achieving global competitiveness via
transformation and innovation of the
manufacturing and services sector.
2. A Spatial Evaluation Study of Industrial
Areas in Peninsular Malaysia
Act 172
NPP 6
Prime Agricultural Areas (PAA) shall be
conserved only for agriculture purposes and
urban development shall be restricted.
3. A Master Plan Study of Prime
Agricultural Areas (PAA) in Peninsular
Malaysia (with special emphasis on
Food Production Areas)
Act 172 / DOA
NPP 7
The eight (8) strategic granary areas
comprising Muda (MADA), Kemubu (KADA),
IADA Kerian-Sungai Manik, IADA Barat Laut
Selangor, IADA Pulau Pinang, IADA Seberang
Perak, IADA Terengganu Utara (KETARA),
and IADA Kemasin- Semerak shall be
conserved for paddy cultivation.
4. A Study on Loss of Development Rights
under the NPP and the Formulation of a
Compensation Payment for Such
Losses in Affected States
Act 172 / MOF
NPP 8
Existing potential paddy land outside granary
areas shall be provided with the proper
infrastructure to increase productivity and
yields.
5. Feasibility Studies for the Improvements
of All Paddy Areas outside the Granary
Areas
Act 172 / DID/ DOA

6-38
NPP Policy Spatial Initiative
Key Implementing
Agencies
NPP 9
Rural areas and Rural Growth Centres (RGC)
shall be developed to ensure higher income
and better quality of life for the population.
6. An Integrated Master Plan of Rural
Growth Centres in Peninsular Malaysia
Act 172
NPP 10
The Orang Asli communities shall be spatially
and economically integrated into the
mainstream of development initiatives.
7. A Master Plan of Orang Asli Settlements
in Peninsular Malaysia (with Special
Emphasis on the Integration of Spatial,
Economic and Socio-Cultural Aspects)
Act 172 / JHEOA
NPP 11
Natural tourism resource, the authentic multi-
cultural and historical heritage of the country
shall be conserved.
8. A Master Plan on Sustainable Tourism
Development in Peninsular Malaysia
MOTOUR
NPP12
Tourism development zones in each state
shall focus on specialised regional niche
products based on their locational advantages
and availability of resources.
9. A Study on the Identification,
Conservation and Use of Natural,
Historical and Cultural Sites and
Resources in Peninsular Malaysia, (with
Special Emphasis on Tourism
Development)
Act 172 / MICC
10. A Master Plan Study of the
Development and Integration of National
and State Parks in Peninsular Malaysia
and their Contribution to Tourism
Development
Act 172 / MOTOUR/ DOF/
Wildlife Dept.
NPP15
The growth of the four main conurbations of
Kuala Lumpur, George Town, Johor Bahru
and Kuantan shall be supported to enhance
their global competitiveness.
11. Regional Plan Study for Kuala Lumpur
Conurbation
Act 172 / Min Federal
Territories
12. Regional Plan Study for Georgetown
Conurbation
Act 172 / NCIA
13. Regional Plan Study for Kuantan
Conurbation
ECERDC/ ACT 172
NPP16
High priority shall be given to achieve energy
efficient compact cities.
14. Demonstration project 2: Integrated
mixed- urban regeneration project
involving housing, commercial, public
amenities, recreational and lorry parking
terminal (14.5 ha.) in Port Klang,
Selangor Darul Ehsan (Port Klang
Special Area Plan)
Act 172 / Klang Municipal
Council
NPP 18
Small and intermediate towns shall be
sustained and developed in accordance with
their local economic potentials.
15. An Evaluation Study of Intermediate and
Small towns in Peninsular Malaysia and
their Potential Spatial Expansion
Act 172
NPP22
Environmentally Sensitive Areas shall be
integrated in the planning and management of
land use and natural resources.
16. A Study on the Sustainable Use and
Conservation of Limestone Hills in
Peninsular Malaysia
Act 172 / DMG
NPP29
A national integrated high-speed rail system
shall be established to complement the
existing rail network.
17. A Master Plan Study of the High-Speed
Rail System in Peninsular Malaysia
MOT
NPP 31
Major airports and seaports shall be
developed according to their complementary
functions to enhance the nations economic
competitiveness and facilitate tourist arrivals.
18. A Master Plan Study of Sea Ports in
Peninsular Malaysia
MOT
19. A Study on the Development of Freight
towns in Peninsular Malaysia
Act 172
NPP 33
An integrated public transportation system
shall be established in all major urban centres.
20. Public Transportation Master Plan for
the Kuala Lumpur Conurbation
SPAD/ MOT/ Act 172
21. Public Transportation Master Plan for
the Georgetown Conurbation
SPAD/ NCIA/Act 172
22. Public Transportation Master Plan for
the Kuantan Conurbation
SPAD/ECERDC/Act 172

6-39
NPP Policy Spatial Initiative
Key Implementing
Agencies
NPP35
Appropriate water supply infrastructure
including source works, treatment plants and
transmission and distribution networks shall be
provided to all settlements.
23. A Review of the National Water
Resources Master Plan
MEGTW
NPP 36
Appropriate sewerage facilities shall be
provided for all areas, with adequate
collection, treatment and disposal of sewage
and sludge.
24. A National Sewerage Master Plan
Study
MEGTW/ IWK
NPP 37
All settlements shall be serviced by an
integrated network of solid waste disposal and/
or recovery facilities.
25. Demonstration project 1: Sustainable
Solid Waste Management Practices
and application of Green Technology
in Putrajaya
Act 172 / MHLG/ KeTTHA
NPP 39
As strategic assets, electricity generation
plants, transmission and distribution mains
shall be located to provide a reliable and
efficient supply of energy to consumers.
26. A Study on the Adoption of Energy-
Efficient/Low Energy/Green Buildings
in Urban Conurbations (including a
Feasibility Study on the Provision of
Incentives)
KeTTHA
6.3.5 Implementation Approach
i. Horizontal and Vertical Partnerships
Implementation of NPP-2 initiatives rest upon the development of successful partnerships
developed horizontally and vertically. Horizontal partnerships are forged with federal
ministries and agencies, and vertical partnerships are developed with local planning
authorities and state agencies.
The success of the NPP-2 initiatives depends on the successful partnerships developed
horizontally and vertically between the federal ministries and agencies, and with local
planning authorities and state agencies.
Implementation entails both horizontal and vertical integration of shared goals and visions
to make the national physical environment conducive for economic growth and achieving
Vision 2020. In some instances, Act 172 initiates and coordinates; in others, it will extend
assistance and cooperation. At the vertical integration stage, Act 172 plays an important
role in bringing the demonstration projects down to the local planning authority level. At
this lowest level of planning, technical and financial assistance is crucial because many
local planning authorities have difficulty in gaining direct access to federal funds for
implementation.

6-40
Figure 6.3: Implementation Model for NPP-2 Initiatives
ii. Creating a Development Programme for NPP-2 Demonstration Projects
It is proposed that a development programme for implementing Special Area Plans
(SAPs) be established under the Ministry of Housing and Local Government (MHLG). The
NPP Demonstration Projects shall fall under this development programme. The
programme shall be eligible for funds from the federal development budgets. The Act 172
shall assist the Minister in the coordination and implementation of the proposed projects
under the development programme.
It is proposed that the development programme for SAPs have a time frame of 10 to 15
years. This means it would cover three 5-year development plan periods. The rationale
for this is to ensure continuity and to allow Demonstration Projects to reach its
completion, and be reviewed. All Demonstration Projects should be reviewed to
determine their strengths and weaknesses in order to derive good practices and lessons
for subsequent projects.
6.3.6 Funding Model
The funding model for the Action Programme is composed of two (2) stages. The first
stage is to use the federal allocations for Act 172 to finance the NPP-2 specific actions
and the studies to be conducted under the NPP spatial initiatives. The second stage is to
establish a proposed Development Programme for Special Area Plan (SAP) under the
Ministry of Housing and Local Government (MHLG) to receive allocations from federal
development budgets. However, in order to receive federal funds, the Development
Programme for Special Area Plan, it is suggested that a trust account be set up for this
purpose under the MHLG.
Feder al M i ni st ri es
Pr i vat e Sect or / NGOs
Feder al Agenci es
Hor i zont al Int egrat i on
M i ni st r y of Housi ng &
Local Gover nment
Act 172
Local Pl anni ng Aut hor i t i es
St at e Agenci es
Pr i vat e Sect or/ NGOs
Hor izont al Par t ner ship

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i. Using Federal Funds for NPP-2 Specific Actions and Spatial Initiatives
Federal funds will be used to undertaking the NPP-2 specific actions which have already
been approved by the NPPC. The rationale for undertaking the proposed NPP-2 spatial
initiatives are to tackle strategic planning challenges that are important for overall national
land use planning and will contribute towards a more rational and sustainable use of land
as a national asset.
ii. Creating a Trust Account for Financing the proposed Development Programme for
Special Area Plans
It is proposed that a trust account be established to receive funds for the proposed
development programme. The funds are more likely to be federal funds although the trust
account should also be able to receive donations and grants from other organizations
including multilateral and bilateral assistance to support the programme on SAPs. One
possibility is to work with jointly with European Union on its urban programmes.
3
iii. Establishing a Revolving Fund
Funds channelled into the trust account for the development programme are to be held in
a Revolving Fund. There are two major reasons for establishing a Revolving Fund and
they are (i) to ensure that flow of funds is maintained as far as possible, and (ii) to operate
on a principle that monies received have to be used efficiently and transparently and must
be paid back to allow the fund to operate (iii) the funds are used mainly to finance the
feasibility studies and infrastructure components of the project.
A Revolving Fund implies a cap to the amount set aside in the fund. In this case, the
recommended sum is RM10 billion. Enlarging the amount allocated to the fund shall be at
the discretion of the federal government. If there are no regular injections into the fund,
there would be insufficient monies to continue with financing projects under SPA.
In the absence of any enlargement, the fund managers have to work with available
monies and adopt a payment mode that encourages replenishments from users. To
enable replenishment, the allocations of monies from the revolving fund would have to be
in the form of loans rather than grants and allocations. However, taking into consideration
that many local planning authorities, tend to be hard pressed financially, it is suggested
that the revolving fund be subdivided into two sub-components that is, grant and loan
segments.

3
The EU has an acti ve urban programme designed to improve urban developments wi thi n the EU. It has al so set up a regi onal
programme cal led EU-Asi a Urbs Programme to work wi th l ocal government i n Asi a on i mprovi ng urban envi ronment. It al so has
another regi onal programme known as Asi a Pro Eco II that ai ms to co-fi nance proj ects in the fi eld of urban envi ronment. Both
programmes are i n the second phase. Under Asi a Pro Eco II, i t i s known that there are 3 proj ects i n eco-touri sm Mal aysi a
i nvol vi ng NGOs that are under thi s programme. (Mal aysi a European Communi ty Strategy Paper for the Peri od 2007-
2013. Refer to ec.europa.en/external -rel ati ons/Mal aysi a/csp/07-13.e.pdf)

6-42
Grants
Grants are given to smaller local planning authorities to finance part of the projects
under Special Area Plans (SAP) and in particular conservation and social
infrastructure projects. To be eligible for grants from the revolving fund under the
development programme, the applicants would have to meet certain criteria to be
spelt out by the fund managers.
Loans
The Revolving Fund can extend loans to Local Planning Authorities to enable them to
implement projects recommended under the SAP. Borrowings are allowed under the
Act 172. The conditions and terms of the loans are to be spelt out by the fund
managers. Local Planning Authorities under loan schemes (as well as grant scheme)
are encouraged to look for ways (i) to raise monies to supplement the grants and
loans, and (ii) to repay the loans in accordance with the terms and conditions set out.
The mix of grants and loans should favour loans more than grants. Under the
circumstances, it is suggested the mix should be 20% for grants and 80% for loans.
Having a grant element would mean that regular topping up by the federal
government is required in order to maintain the size of the grants in the revolving
fund. The loan segment requires borrowers to repay the monies according to a
payment schedule determined in the loan agreements. One condition may be for the
borrowers to set up a sinking fund within their respective accounts to repay the loans
(see Figure 6.5).

6-43
Figure 6.4: Development Programme for Special Area Plans and Funding Model
Development
Premiums
Re-Valuation of
Property Tax
Development Key
Infrastructure
Acquire Land
Activity 2
e.g. Riverfront
Development
Activity 3
e.g. Multilevel Car
Park Scheme
Activity 1
e.g. Food Court &
Stall
Activity 4
e.g. Hotels/
Homestay Facilities
Trust Account
Revolving Fund
Grants Loans
Department Programme
for Special Area Plan
FGTCP
Ministry of Housing &
Local Government
Sinking Fund
Area Development
Licensing Scheme
Set Up Corporations
JV or Partnership
Special Area Plan proposed
as NPP Demonstration
Projects
Special Area Plans (Prepared
Under Section 16b. Act 172)
Local Planning
Authority

6-44
Access to the Revolving Fund
The system of SAP should be able to access the proposed Revolving Fund. This
means that whilst it is the NPP-2 focal initiatives that are the driving force being the
development programme for special area funds, the funds allocated should not be
restricted only to them. The other SAPs that are identified under the Structure Plans
and Local Plans as per Section 16B of the Act 172 are also eligible. However, given
that there is a cap on the monies in the revolving fund, the allocation of monies would
have to depend on availability, eligibility, and feasibility of projects. The fund cannot
provide for all projects recommended under each SAP. Priorities would be accorded
and eligibility would vary with findings from feasibility studies to be undertaken and
the capacity of the borrowers to repay.
iv. Repayment of Loans
To dispel concerns over repayment by borrowing bodies, the following proposals are
recommended:
Setting up Sinking Fund
Local Planning Authorities who borrow under the Development Programme for SAPs
to fund some their projects are encouraged to establish sinking funds within their
accounts. The objective of the sinking funds is for borrowers to set aside annually a
sum dedicated towards repayment of the loan. The sinking funds are to be set up
immediately when the loans are released even if there is a grace period given before
repayment commences. The sinking funds have a lifespan equivalent to the loan
period. Monies to be set aside in the sinking fund could be a certain percentage of
annual revenue. The commitment to repay is critical for sustaining the revolving fund,
and enables it to assist more Local Planning Authorities.
Engaging in Public-Private Partnership Schemes
To carry out the projects under the SAPs, it is suggested that Local Planning
Authorities set up corporations to go into joint ventures and / or to manage the
improvement areas through public-private partnership schemes. The rationale is to
enable local planning authorities to raise more monies to finance implementation.
Private sector involvement is encouraged. Partnerships are encouraged to help
devolve the need to rely completely on the revolving fund for financial support. Local
planning authorities are encouraged to seek to recoup the enhancement to their
areas as a result of the SAP.
There are ways for the local planning authorities to raise monies from proposed
developments under the SAP, where possibilities exist. Examples include (i) raising
development premiums; (ii) readjusting the local tax base to reflect the change of use
of land; (iii) introducing area development licensing scheme. An area development
licence scheme allows a private investor to participate directly in implementing parts
of the SAPs under a licence from a Local Planning Authority (LPA). The private
investors are encouraged to invest because (i) part or most of the major infrastructure

6-45
will be put in place by the LPA, (ii) the local planning authority will acquire lands, if
necessary in compliance with the SAP proposals; (iii) the plans are in place and
approvals are expedited; (iv) a private investor who agrees to participate in the area
development licence scheme is allowed to develop, redevelop and reassign the
development rights of the area to another investor subject to approval from the local
planning authority. The options available to the LPA in setting up the area
development licence scheme to raise monies are; (i) to sell or auction the
development licence; (ii) to create an annual licence fee, (iii) to go into partnership;
and (iv) to use a combination of the three options.
The proposal to establish a revolving fund at the Federal Level for urban development
initiatives is particularly important to implement the SAPs prepared under the Act 172.
A similar concept is applied in Japan where a central government fund is established
to implement City Planning Roads (Major roads identified in the Local Plans) and the
Land Readjustment Projects that are implemented through the statutory planning
system. It is imperative that urban planning in the country migrates towards
implementing innovative demonstration projects to enhance the quality of the living
environment as is the trend in many developed countries. While the Act 172 has the
relevant statutory provisions to embark onto this important area of work, not much
emphasis was given to this in the past as the priority then was to prepare statutory
Development Plans (Structure Plans and Local Plans) for guiding and managing land
use development. As the trend in urban planning initiatives moves towards inner city
development and urban regeneration, it is imperative that the government paves the
way to provide the framework for this to happen through the Special Area Plan
system.
6.4 Plan Monitoring
Plan monitoring provides the framework for continuous evaluation which would become
the basis for the review of the NPP. Key development indicators would be examined and
the continuing validity of all assumptions, forecasts and objectives checked. The following
section discusses the methodology to monitor the performance of the NPP-2 and the
implementation of NPP-2 policies.
6.4.1 Scope of Monitoring
The scope of monitoring involves determining the various aspects of the NPP-2 which
would need to be monitored. There are two major objectives in monitoring, namely:
i. To monitor the application of the NPP-2 policies through the use of relevant
indicators.
ii. To determine the extent of conformity in land use planning between the National
Physical Plan and the Structure Plans. The main aspects of land use planning to be
monitored would include land use changes pertaining to the following:

6-46
a. Sustainable urban land use patterns with special emphasis on the physical
growth of urban land and conurbations as proposed in the NPP-2.
b. The preservation and conservation of environmentally sensitive areas and green
belts including the status of forest areas as proposed in the NPP-2.
6.4.2 Monitoring Agencies
The Act 172 as the custodian of the NPP-2 and the State Act 172 as the custodian of
Structure Plans are the lead agencies to conduct the monitoring process. The role of each
agency is defined below:
i. The Act 172 is the lead agency responsible for monitoring national land use planning
information and policy indicators for future reviews of the NPP.
ii. The respective State Act 172 will take the lead in maintaining its own land use
planning information and monitoring land use changes at state level.
6.4.3 The Monitoring Process
Monitoring land use changes can be processed through the use of indicators and the
setting up of an appropriate information system which would allow for continuous
evaluation and support informed decision making.
i. Application of Key Policy Indicators
The key instrument that will be used to monitor the progress and application of land
use policies are the NPP-2 policy indicators. The indicators can be modified, removed
or added to the list with each Review. The NPP policy indicators are for Peninsular
Malaysia and will be collected on an annual basis by the National Physical Planning
Division of Act 172 from identified data providers. The data providers will be required
to collect information in a prescribed format and forward them to Act 172 on a regular
basis. Indicators are prepared in the form of numeric and statistical measures based
on quantifiable dimensions such as area, proportion, ratio, and indices. The
usefulness of the indicators is based on their relevancy, ease of getting data and
reliability. Table 6.9 outlines the NPP policies, the key indicators and data providers.

6-47
Table 6.9: NPP-2 Policy Indicators
Policies & Measures Expected Outcomes Performance Indicators Data Providers
NPP 1
The NPP shall serve as the
national spatial planning
framework in order to achieve
an integrated and sustainable
land use planning, coordinated
with other sectoral policies.
Consistent planning framework
between NPP, Development
Plans, national sectoral plans
and policies.

Variation between targeted
population in SP and NPP-2
by state.
Act172
Number of SP that comply
with the NPP classification on
ESA, PAA, urban hierarchy
and land use.
Act 172
Proportions of population in
strategic conurbations.
DOS
NPP 2
Future urban growth centres
shall be concentrated in
strategic conurbations.
Greater concentration of
economic activities in the
strategic conurbation centres.
Proportions of population in
strategic conurbation centres.
DOS
Proportions of employment in
strategic conurbation centres.
DOS
Number of (availability) of
strategic facilities (e.g.
universities, hospitals, etc)
within conurbation centres.
Act 172
Mean household income by
state.
EPU (Distribution
Section)
NPP 3
The corridor development
approach shall be adopted in
planning the less developed
regions to foster greater
economic growth and
development in order to reduce
regional imbalances.
Fewer imbalances in economic
growth between regions.
Regional GDP (RM million)
compared with 2020 target.
EPU
(Macroeconomics
Section)
Regional GDP growth rate (%)
compared with 2020 target.
EPU
(Macroeconomics
Section)
Mean household income by
regions.
EPU (Distribution
Section)
NPP 4
Cooperation in physical
planning and economic
development between Malaysia
and its ASEAN neighbours shall
be strengthened.
Cross border plans being
developed, via studies, plans
submitted, development
projects launched.
Total trade of Malaysia with
ASEAN Countries.
DOS
Number of Special Economic
Zones established.
EPU
Total investment by Malaysian
companies abroad and FDI
into Malaysia.
DOS, Bank Negara
No. of cross border plans
submitted/being developed.
MIDA
NPP 5
The planning for industrial
development shall adopt the
holistic development strategy of
the IMP3 of achieving global
competitiveness via
transformation and innovation of
the manufacturing and services
sector.
A more globally competitive
industrial economy.
Malaysias rank in Global
Competitiveness Index.
World Bank
GDP sectoral shares (%)
against 2020 target by state.
EPU
(Macroeconomics
Section)
NPP 6
Prime Agricultural Areas (PAA)
shall be conserved only for
agriculture purposes and urban
development shall be restricted.
Conservation of PAA for
agriculture activities.
Number of SP to identify PAA
areas.
Act 172
PAA area (ha) lost for non-
agricultural development.
DOA
Area (ha) designated and
zoned for agriculture in
development plan.
Act 172

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NPP 7
The eight (8) strategic granary
areas comprising Muda
(MADA), Kemubu (KADA),
IADA Kerian-Sungai Manik,
IADA Barat Laut Selangor,
IADA Pulau Pinang, IADA
Seberang Perak, IADA
Terengganu Utara (KETARA),
and IADA Kemasin- Semerak
shall be conserved for the
paddy cultivation.
Conservation of strategic
granary area for paddy
production.
Total land area (ha)
designated as strategic
granary area in development
plan.
Act 172 , KADA,
MADA, KETARA,
IADAs
Area (ha) of granary area
gazetted under Irrigation
Areas Act.
Act 172 , KADA,
MADA, KETARA,
IADAs
Area loss /gain (ha) of
strategic granary area to other
uses.
Act 172 , KADA,
MADA, KETARA,
IADAs
Increase of total paddy
production and productivity.
DOA
Percentage of contribution
from granary areas onto
paddy production.
DOA
NPP 8
Existing potential paddy land
outside granary areas shall be
provided with the proper
infrastructure to increase
productivity and yields.
Increased in productivity of
paddy.
Area loss (ha) of paddy land
outside granary to other uses.
DOA, DID
Area (ha) of paddy land
gazetted as strategic granary
area in development plan.
DOA, DID, Act 172
Increase of total paddy
production and productivity.
DOA
NPP9
Rural areas and Rural Growth
Centres (RGC) shall be
developed to ensure higher
income and better quality of life
for the population.
Improve the income and better
quality of life in rural area.
Mean household income of
rural population.
Min. of Rural &
Regional Dev.,
EPU
Living Condition (availability of
basic amenities).
Min. of Rural &
Regional Dev.,
Min. Education,
Min. Health
Number of SP which identifies
Rural Growth Centre (RGC).
Act 172
NPP 10
The Orang Asli communities
shall be spatially and
economically integrated into the
mainstream of development
initiatives.
Improve of living condition and
environment of Orang Asli.
Number of Orang Asli
settlements served with basic
utilities and amenities.
JHEOA
Mean household income of
Orang Asli community.
JHEOA
Number and percentage of
Orang Asli children going to
school.
JHEOA
PP 11
Natural tourism resource, the
authentic multi-cultural and
historical heritage of the
country shall be conserved.
Conserve and safeguard the
natural, cultural & historical
tourism resources.
Number of SP and tourism
plans (by other agencies)
identify/ designate natural,
cultural & historical tourism
resources.
JPBD State,
MOTOUR, NRE
Number of natural and
historical tourism resources
that has been gazetted.
FDPM, Marine
Park Dept.,
Fisheries Dept.,
MICC
Number of tourism resources
getting international
recognition e.g. as World
Heritage Tourism.
UPEN, MICC
NPP 12
Tourism development zones in
each state shall focus on
specialised regional niche
products based on their
locational advantages and
availability of resources.
Sustainable increase of tourist
arrivals (domestic &
internationals) with the
improvement of its locational
advantages.
Number of tourist arrivals in
Malaysia.
MOTOUR
Accommodation occupancy
rate (%) by state.
MOTOUR
Percentage of contribution
from tourism industry to GDP
by state.
EPU, JPM

6-49
NPP 13
High quality tourism
infrastructure and facilities shall
be provided to enhance tourists
comfort and safety without
compromising the quality of the
environment.
.
High quality standard of tourism
support facilities
(accommodation, transport
facilities, access and linkages ,
tourists information centre, etc)
World recognition to
checkpoints (airports) facilities
MOT
Number of tourism
accommodation by stats.
MOTOUR
(Tourism Services
Division)
Number of major tourism
information centres by states.
MOTOUR
Total budget of state to
maintain tourism areas.
EPU
Number and Frequency of
international airline landing
MOT
Identification of area prone to
natural disaster e.g. tsunami,
flood etc.
NSC, SP
NPP 14
The concentration of urban
growth shall be accommodated
in the conurbations which shall
be planned and developed in an
integrated manner in line with
the National Urbanisation
Policy.
Concentrated development in
the conurbations
Number and total value of
investment
EPU, MIDA
Urbanization rate by state. DOS
NPP 15
The growth of the four main
conurbations of Kuala Lumpur,
George Town, Johor Bahru and
Kuantan shall be supported to
enhance their global
competitiveness
Support the main conurbations
with high level of facilities
Integrated planning for the
conurbations
Total population increase by
conurbations.
DOS
Number of major strategic
facilities in main conurbations
(e.g., LRT, Cyber Centre,
MICE, university, etc)
Act 172
NPP 16
High priority shall be given to
achieve energy efficient
compact cities.
Enhance the character and
uniqueness of individual cities
within the conurbations
Number of Development
Plans with designated urban
limit.
Act 172
Total urban development (ha)
developed outside of the
designated urban limit of the
conurbations.
State Act 172 , LA
NPP 17
Towns with special features
shall be identified and the
development projects to
enhance their special features
shall be supported with
appropriate infrastructure.
Optimize the potential of special
features towns.
Number of special features
towns supported with the
appropriate infrastructure.
State Act 172 , LA
NPP 18
Small and intermediate towns
shall be sustained and
developed in accordance with
their local economic potentials.
Optimize the potential of small
and intermediate towns.
Number of economic project
implemented in accordance to
the economic potential which
has been identified as to local
plan.
State Act 172 , LA
NPP 19
Sufficient affordable housing
with adequate community
facilities, including security
facilities and services, shall be
provided in major urban centres
to meet the requirements of the
population.
Sufficient affordable housing
supply with high quality of life.
Number of affordable new
housing units by major centre
MHLG, Valuation &
Property Services
Dept., DOS, LA
Median of housing price over
household income.
MHLG, Valuation &
Property Services
Dept., DOS, LA
Average number of household
per dwelling unit.
MHLG, Valuation &
Property Services
Dept., DOS, LA
Squatter houses over housing
stock by state.
MHLG, Valuation &
Property Services
Dept., DOS, LA
Crime (per 1,000 population). Police

6-50
NPP 20
Planning standards and urban
development policy guidelines
shall be designed to meet the
requirements of a developed
nation.
Achieve high standards of living Number of Federal planning
standards and guidelines
adopted by state.
Act 172
Malaysian Quality of Life
Index.
EPU
NPP 21
A designated central authority
shall be responsible for
publishing on a regular basis,
information pertaining to land
use development.
Continuous data gathering and
monitoring on land use change
Number of verified land use
plan.
State Act 172
Total land area (ha) with latest
land use data.
State Act 172
NPP 22
Environmentally Sensitive
Areas shall be integrated in the
planning and management of
land use and natural resources.
Protect and proper
management of the ESA
Area (ha) gazetted as
protected area.
DOF, DWNP,
FDPM, Marine
Park Dept.
Area (ha) of forest reserve
under natural forest cover.
DOF, Act 172 ,
DWNP, NRE,
FDPM
NPP 23
A Central Forest Spine shall be
established to form the
backbone of the
Environmentally Sensitive Area
network.
Conserve 45% of land as forest
cover and integrated ecological
linkages to all forest complexes.
Number of ecological linkages
established.
NRE, DOF, DWNP
Number of linkages with
enriched habitat (ha)
NRE, FDPM,
DWNP
NPP 24
Sensitive coastal and marine
ecosystems shall be protected
and managed in a sustainable
manner.
Protect and proper
management of the sensitive
coastal areas
Area (ha) of coastal
reclamation area.
DID, Act 172
Number of Biodiversity
components protected.
MIMA, Marine Park
Dept., DWNP
Coverage of mangrove and
coastal forest (ha).
DOF
NPP 25
Land development in the
highlands shall be strictly
controlled to safeguard human
safety and maintain
environmental quality and
biodiversity.
Protect the highlands and
proper management of the
SMAs
Percentage of habitat loss in
the highlands (areas above
300m) and outside of the
Special Management Areas
(SMAs).
Act 172 ,DMG,
State EPU
NPP 26
All surface and ground water
resources shall be safeguarded
and managed sustainably.
Protect and proper manage the
water resources for water
supply to all location
Area (ha) of dam catchments
gazetted.
DMG, DID, FDPM,
State Water
Authorities
Demarcation of groundwater
aquifer and recharge areas.
DMG, DID, FDPM,
State Water
Authorities
Water quality index (WQI) for
rivers.
DOE
Water catchment areas (ha)
gazette within Permanent
Forest Reserves
FDPM
NPP 27
The spatial planning framework
shall incorporate mitigation and
adaptation measures against
the impacts of climate change.
Minimize the economic loss
caused by climate change
Areas mapped for
vulnerability.
Prime Ministers
Dept. (National
Security Div.),
NRE, NSC

6-51
NPP 28
An integrated national
transportation network shall be
established in recognition of the
inter-relationship between land
use and transport.
Integrated system for all
transportation modes
Development of 20 year
National Public Transport
Master Plan.
SPAD
Development of 10 years
Regional Public Transport
Master plan.
SPAD
No. of integrated transport
terminals (ITT) for passengers
built and under construction in
country.
SPAD
No. of multimodal or
intermodal terminals (MMT)
for freight developed in
country.
SPAD
NPP 29
A national integrated high-
speed rail system shall be
established to complement the
existing rail network.
High-speed rail connecting to all
main conurbations. HSR is
defined as rail system on
standard gauge with average
operating speed of 140kph and
above
F/S for High Speed Rail
Corridor completed:-
KL-Penang HSR Corridor
KL-Kuantan HRS Corridor
Kuantan-KT-KB HSR
Corridor
Kuantan-JB HSR Corridor
SPAD
NPP 30
The national road network shall
be further extended for regional
travel and for local access.
High level of road accessibility Road service level (total road
lane length per 1,000
persons).
HPU
Road density (length of roads
/ land area).
HPU
Road Development Index
(RDI) for federal road only.
HPU
NPP 31
Major airports and seaports
shall be developed according to
their complementary functions
to enhance the nations
economic competitiveness and
facilitate tourist arrivals.
Adequate airport and seaport
for national economy
development
Number of passengers over
the designed airport capacity.
MOT
Tonnage of freight over the
designed capacity of airport.
MOT
Tonnage of freight over the
designed capacity of seaport.
MOT
NPP 32
The Transit Oriented
Development (TOD) concept
shall be promoted as the basis
of urban land use planning to
ensure viability of public
transport.
TOD development in all
conurbations.
Number of local plans and
special area plans that have
incorporated the TOD
concepts
Act 172
NPP 33
An integrated public
transportation system shall be
established in all major urban
centres.
Model split (private to public
transport) of 25:75 in Klang
Valley by 2012, 30:70 for all
major urban centres in 2020
and 50:50 in future.
Modal split ratio (number of
private vehicle passengers/
number of public transport
passengers).
SPAD
No. of integrated
transportation terminal
constructed in major urban
centres.
SPAD
NPP 34
The NPP-2 shall provide the
spatial framework for the
delivery of integrated
infrastructure services at the
national and regional level and
to the main conurbations.
Integrated infrastructure
services in all human
settlements
Number of National
Infrastructure Master Plan
prepared at national/ regional
level.
All service
provides

6-52
NPP 35
Appropriate water supply
infrastructure including source
works, treatment plants and
transmission and distribution
networks shall be provided to all
settlements.
Full coverage of water supply to
all human settlements
Percentage of population
served.
SPAN
Daily water consumption rate
per capita.
SPAN
Non revenue water rate SPAN
NPP 36
Appropriate sewerage facilities
shall be provided for all areas,
with adequate collection,
treatment and disposal of
sewage and sludge.
Full coverage of sewerage
treatment plans in all human
settlements
Percentage population
connected to sewerage
treatment plants.
SPAN, DID
NPP 37
All settlements shall be serviced
by an integrated network of
solid waste disposal and/ or
recovery facilities.
Proper solid waste disposal for
all human settlements
Percentage population
connected to regional plants.
SPAN, DID
Household waste generation
capita/day.
JPSPN
Percentage of solid waste
been recycled.
JPSPN
NPP 38
Drainage infrastructure shall be
provided in all settlements to
eliminate the incidence of major
floods, minor floods and
pollution.
All main river reserves
gazetted.
Reduced economic losses
due to floods
Number of state that has
gazetted (under Section 62,
NLC) its river reserves.
DID
Number of flood incidence
according to state/ year.
DID
Number of flood prone areas
protected (victim/ area).
DID
NPP 39
As strategic assets, electricity
generation plants, transmission
and distribution mains shall be
located to provide a reliable and
efficient supply of energy to
consumers.
Minimum electric interruption
incidence
Increased use of renewable
energy
Number of electric interruption
incidence (SAIFI and SAIDI
Index).
TNB
Percentage produced
renewable energy.
TNB
NPP 40
Natural gas processing plants,
transmission and distribution
pipe networks shall be located
to provide a reliable and
efficient supply of natural gas to
consumers.
Promote industrial
development
Number of customers by
sectors.
Energy
Commission
Length of natural gas pipeline.
(high and medium pressure)
Energy
Commission
`NPP 41
Communications network
facilities and infrastructure shall
be provided to all settlements.
Transform the nation into a
knowledge society with full
coverage of ICT services
Fixed line penetration rate. MCMC
Number of cyber cities &
cyber centres developed by
states.
MCMC
Cellular mobile penetration
rate.
MCMC
Fixed line Internet penetration
rate.
MCMC
High speed broadband
penetration rate.
MCMC
Personal computer ownership
per 100 households.
MCMC

6-53
ii. Establishment of the NPP-2 Land Use Planning Intelligent System (iPLAN) to be
maintained by Act 172 :-
a. The iPLAN is set up as the info-structure framework to support the whole process of
implementation, monitoring and review stages of the NPP-2. It will contain support
modules which can track land use changes and monitor the application of selected
land use policies. To date the department has set up:
Statistical data in tabular format on socio economic profiles at state, district and
town levels;
Spatial data on land use in GIS format; and
Textual data on guidelines, classification of land use, standards and indicators.
b. To ensure conformity amongst the different tiers of land use planning, iPLAN will be
developed within a framework of an integrated land use planning information system
which will comprise three components i.e. iPLAN, State Planning Information System
(SPIS) and District Planning Information System (DPIS).
This integrated framework will allow effective data and information sharing among the
three levels of organisations responsible for physical planning.
c. There are two major sets of information flow in the iPLAN:
There shall be a vertical flow of information between the SPIS and the iPLAN.
State Act 172 will supply updated land use data and other information collected
from the State Structure Plan and various Local Plans to Federal Act 172 which
will in turn analyse the land use changes and monitor the continued relevance of
selected land use policies. The vertical flow of information shall be made
obligatory between the State Act 172 and Act 172 (Figure 6.6).
There shall be a horizontal flow of information from the line agencies and major
data providers to iPLAN. The horizontal flow of information will involve relevant
government departments and agencies that will supply necessary information to
iPLAN. The horizontal flow of information may be achieved through a process of
negotiations in the form of MOUs between Act 172 and the various government
agencies and departments (Figure 6.7).

6-54
Figure 6.5: Vertical Information Flows
Figure 6.6: Major Data Providers in iPLAN (Horizontal Information Flows)
LOCAL
AUTHORITIES
DTCP
(STATES)
DEMOGRAPHIC
-SOCIAL
Population &
Households
Urban
settlements
Rural
Settlements
Community
Facilities
DTCP
(FEDERAL)
NPP LAND USE PLANNING INTELLIGENT SYSTEM (iPLAN)
INFRASTRUCTURE
Roads
Rail
Ports
Airports
Utilities
LAND USE
Land Cover
Built-Up-Area
Existing
Residential
Commercial
Industrial
Recreation Area
Others
Committed Projects
Proposed Projects
Approved Projects
NPP MAIN
FINDINGS
STRATEGIES &
COMPOSITE
MAPS
SPIS
STATE LAND USE
& ZONING PLANS
COMMITTED
DEVELOPMENT
Remotely Sensed
data
PHYSICAL
ENVIRONMENT
Elevation
Slope
Rivers
Lakes, Ponds
River Basins
Water Catchment Zones
Forest Reserves
Mining
Soils
Agro-climatic
ECONOMIC
Global Trade
Macro
Economic
Primary
Secondary
Tertiary
Parcel lot level
Information
Local
Area Data
Development
Project
DPIS
Socio
economic
tables &
projections
GOVT. AGENCIES
Related to
Housing
Education
Health
Trade &
Industries
Social Facilities
Transport
MOU
GOVT. AGENCIES
Related to
Tourism
Forestry
Mineral &
GeoSciences
Drainage &
Irrigation
Environment
Utilities
MOU
iPLAN
MOU
EPU DEPT OF
STATISTICS
DEPT OF AGRICULTURE
MACRES
JUPEM (CAMS)
MOU
MOU

6-55
d. One of the main objectives of iPLAN is to ensure that accurate, timely and up to date
information will be available for subsequent NPP Reviews which are scheduled at five
year intervals. Consequently, data maintenance and updating of iPLAN information
system will be on an annual basis in order to analyse land use changes in a timely
manner. There are two distinctive tasks involved in data maintenance and updating of
the iPLAN, namely:
Updating the statistical information base: The statistical database is made up of
selected profiles of activities covering sectors such as economics (primary,
secondary and tertiary sectors); population, housing and settlements;
infrastructure, utilities and services, land-use and the environment. Appropriate
tables specifying the types of data required will be sent to each data provider on
an annual basis. The older sets of statistical data will be archived but can be
retrieved for analysis purposes when required. The updated version will form the
basis for the next set of data for the Review.
Monitoring land use changes: This will be done from the bottom up, that is,
information on land use changes would be tracked at state level and generalised
to meet the needs of the iPLAN information system.
iii. Establishment of Information System in State
Act 172 shall be the hub for the information system at the state level. In order to achieve
this, each state would have to establish land use information system which will include
the State Land Use Information System and the Planning Approval Information System.
a. To achieve consistency, the land use base maps for each state are prepared and
standardised in both scale and format to facilitate comparison of land use patterns
both at the state and federal levels. The principal source of land use maps at state
level will be the DOA Mapping Division and JUPEM. There is a need for Act 172 to
enter into an MOU with DOA and JUPEM, so that each state can have access to a
standardised base map. These maps will be updated with urban land use information
from the Local authorities.
b. For the purposes of tracking land use changes in the iPLAN, information need to be
compiled on approved development projects of 20 hectares and above for smaller
states such as in Pulau Pinang, Perlis, Melaka and Negeri Sembilan while, 50
hectares and above for the other states. Information such as the status of approved
projects and the types of land use will also be monitored.
c. The schedule for updating approved development projects from the State Act 172
will be on an annual basis.

6-56
d. The transfer of land use information from the State to iPLAN will be in digital format to
minimize errors. The iPLAN will establish guidelines for the conversion of data to the
required format.
iv. Data Sharing Measures
a. Data sharing between Federal and State is an important element to facilitate the
monitoring process. In this context, the NPP-2 also calls for the establishment of a
TWG to oversee the process of vertical integration and information sharing
procedures within town and country planning departments. The TWG will also be
responsible for negotiating MOUs at an inter-organisational level to foster horizontal
linkages with external data providers.
b. Achieving a consistent flow of information through vertical and horizontal integration
by utilising the Malaysian Geospatial Data Infrastructure (MyGDI). The MyGDI
programme is currently being developed to enable land related digital data to be
exchanged seamlessly between various government departments and agencies in
the country as shown in Figure 6.8.
Figure 6.7: Vertical and Horizontal Linkages Land Use Planning Information System,2020
Source: NPP : Package I: Implementation of NPP Information System Technical Report, 2001
iPLAN
SPIS
DPIS
M yGdi
Govt. Agencies
Federal Level
Govt. Agencies
District/ Local
Level
Govt. Agencies
State Level
Govt. Agencies
Federal Level
Govt. Agencies
State Level
Govt. Agencies
District/ Local
Level

6-57
v. National Physical Plan Monitoring System (NPPMS)
The Act 172 is currently embarking on a NPP-2 Monitoring system using GIS
applications. The overall concept is shown in Figure 6.9. The sub components of the
system comprise:
The Input (Back End).
The Core (comprising processing and analysis sub modules).
The Output (Front End) comprising derived tables.
Additional modules and applications that can be added on in the future will include land
suitability analysis, population growth projections and decision support systems. This
conceptual framework of the National Physical Plan Monitoring System (NPPMS) could
serve as a prototype for monitoring land use changes at all three levels of planning.
Figure 6.8: The Conceptual Framework of NPPMS
6.5 Review of the NPP
There is a duty on the part of the various planning authorities to keep the NPP, Structure
and Local Plans in review. The concept of a hierarchy of Plans implies that the lower
subsidiary Plans should conform to the higher levels of Plans. When a Local Plan is
prepared there is a duty to take cognizance of current development policies, whether
national policies or state policies. This would suggest that development plans would
Proposed Future
direction/ application
Statistical & Graphic Database
BACK END
Enhanced DSS to
Stakeholders
M2
Built-Up-Areas 2-5
Years Trends
(Image Analysis)
Selection
Land-use layer
extracted from
iPLAN
CORE
Remotely
Sensed Data On
Land use cover
M4
Analysis and Modeling
of Landuse Changes
ArcGIS 9 Model Builder
Benchmarking
Target Setting
M3
NPPMS Graphic
Database ArcGIS
9 Format
M1
Landuse Database
Module
(in EXEL FORMAT)
iPLAN Spatial
Database
(ARCVIEW 3
FORMAT)
M5
Output Table of
Indicators in HTML
format
Land suitability
Analysis (AHP)
site Selection
Potential Sub-modules
Population Growth Modeling
Industrial Growth Centre
Modeling Geo-Demographic
Analysis Regional
Analysis SIA
iPLAN
Statistical
Database

6-58
influence and affect one another. Hence it is important that there is a coordinated
programme for the preparation of the various plans. Most of these plans also require a
lead time of between 18-24 months for preparation (Figure 6.10).
Figure 6.9: Economic and Land Use Planning Cycle
The NPP-2 shall be reviewed every five years in tandem with the Review of the FYMP. To
achieve this, data required for such reviews must be made available beforehand for the
exercise to be undertaken on time. Collection of data for the Review should commence at
least two years before. As the custodian of the iPLAN, it will be necessary for Act 172 to
ensure that the requisite data and information, particularly the indicators, are kept in
review and made available when needed.
6.5.1 Evaluating the effectiveness of the Policies
There is also a need for continuous evaluation of the NPP policies to ascertain its
effectiveness in achieving national development objectives. The Act 172 , the Spatial
Planning and Development Research Institute (SPDRI) and Universities should undertake
research initiatives and impact studies from time to time to ascertain the effectiveness of
the NPP-2 policies. The findings of this research will provide useful information for the
subsequent Plan Review.
11M
Leadtime
2 years
T
MT
T+5
MT
T+10
MT
8MP 9MP 10M
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
SP
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
DLP
Leadtime
18 years
DLP
Leadtime
18 years
DLP
Revi Revi Revi
NPP NPP NPP
Economi
Spatial Planning

6-59
6.6 Proposals
The institutional responsibilities for the preparation, implementation, monitoring and
review of the NPP-2 are shown in Table 6.10. The Director General of Act 172 is
responsible for preparing the NPP, monitoring its implementation and keeping it in review
every 5 years. At the same, he will be assisted by the various committees that have been
proposed in the NPP-2 such as, the NPPC, NPPC Working Committee, NPPAP, IAPG
and TWG.
The Implementation of the NPP-2 however will require the support of the various Federal
and State agencies that have a legal obligation to adhere to the policies of the NPP-2. In
this respect it is important that the proposals are translated into plans of action and
included in the subsequent FYMP through the offices of the EPU, Treasury and the
NDPC. In order to enhance the effectiveness of the NDPC, the Director General of Act
172 shall be made a permanent member.
Adherence to the recommendations of the NPP-2 will also be manifested in the respective
Structure Plans. One of the key instruments for monitoring the NPP-2 and keeping it in
review is the establishment of the iPLAN to ensure effective exchange of both spatial and
attribute data that is necessary to prepare the NPP-2 and its review.
The policies of the NPP-2 will remain applicable unless reviewed or replaced. In carrying
out the review, the Director General will rely on the advice of the NPPAP, the NPPC
Working Committee, directions of the NPPC and the application of indicators and
research findings to assess their effectiveness. Critical success factors will depend on the
establishment of a clear Terms of Reference of matters that need to be reviewed.
Appropriate IAPG and TWG will also be established to provide adequate and up-to-date
inputs for the Review.
Table 6.10: Institutional Responsibility for Plan Preparation,
Implementation, Monitoring and Review of NPP-2
Activity Responsibility Enabling Law Enabling Instruments/ Institutions
Plan preparation Director General Act 172
NPPC, iPLAN, IAPG , TWG, NPPAP,
NPPC Working Committee
Plan Implementation
All Federal and
State Agencies
Act 172 NDPC, EPU, Treasury, Act 172
Monitoring
Land Use changes
Application of the policies
Director General Act 172 NPPIS, NDPC, Indicators
Plan Review Director General Act 172
NPPC, NPPC Working Committee,
NPPAP, iPLAN, IAPG, TWG
Ab b re via tion
NATIONAL PHYSICAL PLAN
ABBREVIATION
8MP - 8
th
Malaysia Plan
9MP - 9
th
Malaysia Plan
10MP - 10
th
Malaysia Plan
AAGR - Average Annual Growth Rate
AFTA - ASEAN Free Trade Agreement
ASEAN - Association of South-East Asian Nations
BIMP-EAGA - Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area
CCC - Certificates of Compliance and Completion
CFS - Central Forest Spine
CIMT - Centre of IMT-GT Sub-regional Cooperation
CLMV - Cambodia, Lao Peoples Democratic Republic, Myanmar and Vietnam
CPPCs - Collection, Processing and Packaging Centers
CPTED - Crime Prevention Through Environmental Design
DG - Director General
DID - Department of Irrigation and Drainage
DMG - Department of Mineral and Geoscience
DOA - Department of Agriculture
DOE - Department of Environment
DOF - Department of Forestry
DOS - Department of Statistics
DOV - Department of Veterinary Services
DPIS - District Planning Information System
DTCP - Department of Town and Country Planning
EBFM - Ecosystem Based Fisheries Management
ECER - East Coast Economic Region
ECERDC - East Coast Economic Region Development Council
EEZ - Exclusive Economic Zone
EIA - Environmental Impact Assessment
EPU - Economic Planning Unit
ERL - Express Rail Link
ESA - Environmentally Sensitive Areas
FDI - Foreign Direct Investment
FELCRA - Federal Land Consolidation and Rehabilitation Authority
FELDA - Federal Land Development Authority
FYMP - Five-Year Malaysia Plan
GDP - Gross Domestic Product
GIS - Geographic Information System
GNI - Gross National Income
HNDP - Highway Network Development Plan
HPU - Highway Planning Unit
HSBB - High Speed Broadband
IADA - Integrated Agricultural Development Area
IAPG - Inter Agency Planning Group
ICT - Information and Communication Technology
ICU - Implementation and Coordination Unit
ICZM - Integrated Coastal Zone Management
IIUE - International Institute for Urban Environment
iPLAN - Land Use Planning Intelligent System
IRDA - Iskandar Region Development Authority
IMP3 - Third Industrial Master Plan
IMS-GT - Indonesia-Malaysia-Singapore Growth Triangle
IMT-GT - Indonesia-Malaysia-Thailand Growth Triangle
IP - Indicative Plan
IPCC - Intergovernmental Panel on Climate Change
IRBM - Integrated River Basin Management
ISMP - Integrated Shoreline Management Plans
ISIS - Institute of Strategic and International Studies
ITS - Intelligent Transport System
IWK - Indah Water Konsortium Sdn Bhd
IWRM - Integrated Water Resource Management
JDS - Joint Development Strategy
JHEOA - Department of Aboriginal Affairs
JPSPN - National Solid Waste Management Department
KADA - Kemubu Agricultural Development Authority
KRAs - Key Result Areas
KEDA - Kedah Regional Development Authority
KEJORA - Southeast Johore Development Authority
KESEDAR - Kelantan Selatan Development Authority
KETARA - IADA Terengganu Utara
KETENGAH - Terengganu Tengah Development Authority
KeTTHA - Ministry of Energy, Green Technology and Water
KKLW - Ministry of Rural and Regional Development
KLIA - Kuala Lumpur International Airport
KPI - Key Performance Indicator
KRIHS - Korea Research Institute for Human Settlements
KSN - Chief Secretary to the Government
KTMB - Keretapi Tanah Melayu Berhad
LA - Local Authority
LA 21 - Local Agenda 21
LCCT - Low Cost Carrier Terminal
LP - Local Plan
LPA - Local Planning Authority
LRT - Light-Rail Transit
MAHB - Malaysia Airports Holdings Berhad
MADA - Muda Agricultural Development Authority
MARA - Majlis Amanah Rakyat
MARDI - Malaysian Agricultural Research and Development Institute
MATRADE - Malaysia External Trade Corporation
MCMC - Malaysian Communications and Multimedia Commission
MDeC - Multimedia Development Corporation
MHLG - Ministry of Housing and Local Government
MICC - Ministry of Information, Communication and Culture
MICE - Meetings, Incentives, Conventions and Exhibitions
MILUnet - Multifunctional Intensive Land Use Network
MIP - Malaysian Institute of Planners
MITI - Ministry of International Trade and Industry
MMD - Malaysian Meteorological Department
MOHE - Ministry of High Education
MOF - Ministry of Finance
MOSTE - Ministry of Science, Technology and Environment
MOT - Ministry of Transport
MOTOUR - Ministry of Tourism
MOU - Memorandum of Understanding
MPOB - Malaysian Palm Oil Board
MPPA - Million Passengers per Annum
MRRD - Ministry of Rural and Regional Development
MRSA - Malaysian Remote Sensing Agency
MRT - Mass Rail Transit
MSC - Multimedia Super Corridor
MSMA - Urban Storm Water Management Manual for Malaysia
MyGDI - Malaysian Geospatial Data Infrastructure
NAHRIM - National Hydraulic Research Institute of Malaysia
NAP - National Agricultural Policy
NAP3 - Third National Agricultural Policy
NATCIT - National Commission on Intermodal Transportation
NCER - Northern Corridor Economic Region
NCIA - Northern Corridor Implementation Authority
NCLG - National Council of Local Government
NDPC - National Development Planning Committee
NEM - New Economic Model
NEP - National Ecotourism Plan
NFC - National Finance Council
NGO - Non Governmental Organization
NGDS - Natural Gas Distribution System
NITA - National Information Technology Agenda
NKRA - National Key Results Area
NLC - National Land Council
NPP - National Physical Plan
NPP2 - Review National Physical Plan (2009)
NPPC - National Physical Planning Council
NPPAP - National Physical Planning Advisory Panel
NPPMS - National Physical Planning Monitoring System
NSC - National Security Council
NRE - Ministry of Natural Resources and Environment
NUP - National Urbanization Policy
NWRC - National Water Resources Council
OIC - Organisation of Islamic Countries
OPP - Outline Perspective Plans
OPP3 - Third Outline Perspective Plan
PAA - Prime Agricultural Areas
PFPP - Permanent Food Production Park
PGU - Peninsular Gas Utilization
POASM - Peninsular Malaysia Orang Asli Association
PPG - Planning Policy Guidelines
PWD - Public Work Department
R&D - Research & Development
RDA - Regional Development Authority
REHDA - Real Estate and Housing Developers' Association
RGC - Rural Growth Centre
RISDA - Rubber Industry Smallholders Development Authority
RPC - Regional Planning Committee
SA - State Authority
SEA - Strategic Environmental Assessments
SEDC - State Economic Development Corporation
SEZ - Special Economic Zone
SJER - South Johor Economic Region
SMA - Special Management Areas
SME - Small and Medium Scale Enterprises
SMIDEC - Small and Medium Industries Development Corporation
SP - Structure Plan
SPAD - Public Land Transport Commission
SPAN - National Water Services Commission
SPC - State Planning Committee
SPDRI - Spatial Planning and Development Research Institute
SPIS - State Planning Information System
SPRI - Spatial Planning Research Institute
STP - Sewerage Treatment Plant
SYABAS - Syarikat Bekalan Air Selangor Sdn Bhd
TNB - Tenaga Nasional Berhad
TOD - Transit Oriented Development
TWG - Technical Working Group
UNCLOS - United Nations Convention on Law of the Sea
UNFCCC - United Nation Framework Convention on Climate Change
W.P. - Wilayah Persekutuan / Federal Territory
WTO - World Trade Organization
G lossa ry
NATIONAL PHYSICAL PLAN

GLOSSARY
Term Definition
Affordable Housing Affordable housing includes low, low medium and medium cost housing with selling
prices between RM42,000 to RM150,000 per unit to cater for low and medium
income groups with a monthly household income between RM1,500 to RM4,000.
Biodiversity The Convention on Biological Diversity (CBD) defines biodiversity as: The variability
among living organisms from all sources including, inter alia, terrestrial, marine and
other aquatic ecosystems and the ecological complexes of which they are part; this
includes diversity within species, between species and of ecosystems.
Buffer Zone A buffer zone is normally in the form of green areas, separating two incompatible
land use activities i.e. residential and industrial areas.
Catchment A catchment is essentially an extent of land where rain water drains downhill into a
body of water, such as a river, reservoir, wetland or sea. Two types of catchments
are distinguished here, i.e. dam catchments and water intake catchments, which
may be located along the river a long way downstream of dams.
Conservation Areas Areas of special architectural or historic interest and character which are desirable
to be preserved or enhanced. Conservation areas are critical environmental areas
where ordinary development practices would likely cause significant environmental
damages. Development surrounding these areas should consider negative impacts
onto the conservation efforts and effective controlling methods need to be provided
in order to reduce these impacts.
Development
Charge
Development charge levied on enhanced land value of a development proposal due
to change of land use and/or an increase in population density and/or an increase in
plot ratio and/or a shortage in provision of car parking bays.
Development Plan Development plan in relation to an area means the local plan for the area or if there
is no local plan for the area, the structure plan for the area, and in relation to any
land or building, means the development plan as so defined for the area in which
the land or building is situated.
Eco-Tourism Environmentally responsible travel to relatively undisturbed natural areas in order to
enjoy and appreciate nature (and any other accompanying cultural features). One
that promotes conservation, one that has low visitor impact and one that provides
for beneficially active socio economic involvement of local populations.
Forests The Food and Agriculture Organisation (FAO) defines forests as: Land with tree
crown cover of more than 10 percent and area of more than 0.5ha.
Plantation forests are defined as: Forest stands established by planting or/and
seeding in the process of afforestation or reforestation. They are either of introduced
species (all planted stands), or intensively managed stands of indigenous species
which meet all the following criteria: one or two species at plantation, even age
class, regular spacing.

Term Definition
Highlands The Study for the Sustainable Development of the Highlands of Peninsular Malaysia
(EPU, 2002) adopted the following classification for highlands:
Lowlands: below 150m
Hill land: 150m300m
Highlands: 300m 1,000m
Mountains: above 1,000m
Hill Station The term Hill station is a term used for a town usually at somewhat higher
elevations. The term was used in colonial Asia (particularly India), where towns
have been founded by European colonial rulers up where temperatures are cooler,
as refuges from the summer heat.
K-Economy The K-economy is about knowledge and the ability to use it to create new value and
wealth. The K-economy includes all human economic activities of previous eras,
such as agriculture and industry, but it introduces new activities that were not
prominent or possible before.
Megadiverse
countries
Megadiverse countries are a group of countries that harbour the majority of the
Earth's species and are therefore considered extremely biodiverse. The World
Conservation Monitoring Centre, an agency of the United Nations Environment
Programme, has identified 17 megadiverse countries, most located in the tropics.
Non-Polluting
Industrial Use
Industrial use which does not involve activities that are detrimental to the occupants
of the building and amenity of the area by reason of noise, waste water discharge,
vibration, smell, fume, smoke, soot, ash, dust or grit.
Protected Area
(PA)
IUCN states that a Protected Area is: An area of land and/or sea especially
dedicated to the protection and maintenance of biological diversity, and of natural
and associated cultural resources, and managed through. The term Protected Area
is used here to refer to terrestrial, freshwater and marine areas.
Recharge Zone A recharge zone/area is a land area into which water can infiltrate into an aquifer
relatively easily. The infiltration replenishes the aquifer.
Strategic
Environmental
Assessments
(SEA)
SEA refers to a range of analytical and participatory approaches that aim to
integrate environmental considerations into policies, plans and programmes and
evaluate the inter-linkages with economic and social considerations.
Special
Management Areas
(SMA)
The Study for the Sustainable Development of the Highlands of Peninsular Malaysia
(EPU, 2002) defined SMAs as locations in the Main Range where agriculture and
urban related activities may be permitted to be developed. These are areas in the
highlands where there are already existing concentration of population and serviced
by basic infrastructure and facilities.
Tourism Product Refers to something that has sense of attraction, which can attract tourist to come
and see. Examples of tourism products are eco-tourism, sports tourism and
education tourism.
Tourism Resources Refer to resources, which will be utilised to develop tourism product such as nature
resources, cultural heritage, historical remains, man-made resources and
events/activities.

Term Definition
Tourists A temporary visitor staying at least one night but not more than one year in a
country visited and whose purpose of visit could be classified as leisure, business,
visiting friends and relatives or attending conferences and meeting, other than
exercise of an activity remunerated from within the country visited.
Transit Oriented
Development
High intensity residential, commercial or mixed-used development at or around a
transit terminal.
Wetlands A wetland is an area of land whose soil is saturated by moisture either permanently
or seasonally. The Ramsar Convention uses a broad definition of the types of
wetlands covered in its mission. These include peatlands, estuaries, near-shore
marine areas, coral reefs, and human-made sites such as fish ponds, rice paddies,
reservoirs, and salt pans. A variety of wetlands ecosystems exist in Malaysia, the
most threatened being freshwater swamp forests, gelam forests, and seagrass
beds.