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NATIONAL PHYSICAL PLAN
MALAYSIA
Federal Department of Town and Country Planning
Ministry of Housing and Local Government
26 April 2005

National Physical Plan
Though its system of Five-Year Plans, Malaysia has successfully
applied economic planning to guide the development of the
country from an economy of agriculture and mining to a
largely industrialised one. Now, with its sights set on attaining
the economic level of a fully developed nation by 2020, the
planning system must be made even more efficient and
focused. It must ensure that every investment made in the
country, whether public or private, yields not only a maximum
return but must directly contribute towards creating the
desirable objective of a strong, modern, internationally
competitive, technologically advanced, post-industrial
economy. The country must focus on securing a credible
share of the lead sectors of the future globalised economy. It
must make itself fit and conducive to these sectors. The
country must also be fully aware of the enormous competition
it faces in a region with rapidly expanding and modernising
economies, all contending for the same pool of potential
international investments.
The National Physical Plan will complement the Five-Year
Economic Development Plans and provide the spatial
dimension to the sectoral distribution of national resources.
Debate and discussion over where public investments should
be directed to will continue but within the forum provided by
the National Physical Plan preparation process at its inception
and at its quinquennial reviews. In between, the nation should
concentrate on carrying out the actions and projects agreed
upon.
Within the national framework state and local initiative is
encouraged. The initiative of State Governments has always
been a major contribution to national development and this
will always be valued.
The proposals of the National Physical Plan will be constantly
monitored and will retain an element of flexibility so that the
country can respond quickly to any unexpected changes in
the world economic situation. There are, however, certain
proposals that should have permanency. This is particularly
true of the areas proposed for conservation. The country
should not only aim at prosperity but also to maintain the
natural beauty of its lands and waters and in ensuring a
healthy environment for its people.
Dato’ Seri Abdullah bin Hj. Ahmad Badawi
Prime Minister of Malaysia
26 April 2005
FOREWARD
Prime Minister of Malaysia

The Ministry of Housing and Local Government welcomes the
National Physical Plan as the consultative process of
preparation and review of the NPP will allow the Ministry to
share the responsibility for national physical planning with the
state governments and with other federal ministries. The NPP
is the resulting consensus from this consultative process.
At this juncture of the country’s development the Ministry is
particularly concerned that rapid urbanisation will inevitably
create pockets of urban poverty. The NPP can be a means to
indicate the areas where dislocations between in-migration
and job creation may occur and provide the Ministry early
warning of where the pockets of urban poverty may emerge
The NPP also indicates areas where there is urgency for
regional and inter-city planning. The Ministry enjoins local
governments in these areas to take joint action for such
regional and inter-city development plans. Attention should
be paid to avoid environmental degradation from over
development and to secure a good quality of life for people.
In short there should be an increased effort to ensure that our
cities are vibrant and attractive. The Department of Town and
Country Planning under the Ministry will provide the necessary
technical assistance for such joint planning.
The NPP provides the framework for the physical planning of
the country, but it will remain only a concept without the
detailing and without project proposals from the state and
local governments and from the federal ministries. The Ministry
urges that, where existing local plans are not in conformity
with the NPP, they should be rectified. It is the hope of the
Ministry that the NPP will become the reference for physical
planning throughout the country so that development in any
one part or city of the country is in support of, and
complementary to, development in other parts and cities of
the country.
Dato’ Seri Ong Ka Ting
Minister of Housing and Local Government, Malaysia
26 April 2005
FOREWARD
Minister of Housing and Local
Government, Malaysia

The National Physical Plan (NPP) is a long time coming, and its
approval by the National Physical Planning Council has been
an important milestone for the Department. Yet this approval
only marked the beginning of more challenging roles for the
Department and all the agencies involved in physical
planning, to whom this document belongs.
Peninsular Malaysia of 13.2 million hectares is not a big area.
Unless it is being planned efficiently and systematically, it is not
big enough to fulfil all the visions and dreams of its population,
or to stand strong in the eyes of the world amidst
globalisation. While physical planning on the local and state
levels have been done before, this is the first time Peninsular
Malaysia is being physically planned as one single integrated
unit. Inevitably its implementation requires a lot of
cooperation and ‘win-win’ compromise between the states
and the various agencies involved.
From the NPP perspective, firstly global competitiveness must
be achieved, secondly balance in terms of opportunities must
be secured, thirdly sustainable development target must be
met, and lastly quality of life is the ultimate aim. Land use
planning must provide the enabling physical structures to
achieve all these, with the precept ‘every hectares count’.
While NPP may be able to provide this big picture, it will not
amount to great things without effective implementation,
monitoring, enforcement and review. Therefore, this
Department appreciates contributions from all the agencies
and individuals who have helped in the preparation of the
NPP, and is looking forward to more contributions and
cooperation to help realise the aspirations of NPP. It is indeed
a journey towards the establishment of an efficient, equitable
and sustainable national spatial framework to guide the
overall development of the country towards achieving quality
living environment and developed nation status by 2020.
Dato’ Mohd. Fadzil bin Hj. Mohd. Khir
Director General
Department of Town and Country Planning
Peninsular Malaysia
26 April 2005
FOREWARD
Director General
Department of Town and Country
Planning, Peninsular Malaysia

National Physical Plan Table of Content
i
EXECUTIVE SUMMARY
PREAMBLE
CHAPTER 1
National Development Planning Framework 1-1
1.1 Function 1-3
1.2 Legal Framework 1-3
1.3 Form 1-4
1.4 Consultative Process 1-4
1.5 Plan Area 1-4
1.6 Plan Period 1-4
CHAPTER 2
Goal, Objectives and Principles 2-1
2.1 Goal 2-1
2.2 Objectives 2-1
2.3 Principles 2-4
CHAPTER 3
Plan Context 3-1
3.1 Global Setting 3-2
3.1.1 World Trade 3-2
3.1.2 International Organisations 3-2
3.2 National Setting 3-4
3.2.1 National Population Growth 3-4
3.2.2 Economic Performance 3-8
3.2.3 Land Use Pattern 3-14
CHAPTER 4
Development Strategy 4-1
4.1 Impact of Global Trends 4-1
4.2 Urbanisation 4-3
4.3 Regional Balance 4-6
4.4 Rural Development 4-6
4.5 Optimising the Use of Land 4-8
4.5.1 Land Availability Assessment 4-8
4.5.2 Agriculture Land 4-8
4.5.3 Forest and Environmentally Sensitive Lands 4-10
4.5.4 Urban Land 4-11
4.5.5 Tourism 4-15
4.5.6 ICT Development 4-17
4.5.7 Infrastructure 4-18

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4.5.8 Utilities and Services 4-22
4.5.9 Community Facilities – Higher Education and 4-25
Hospital Facilities
4.6 Conceptual Development Strategy 4-25
4.6.1 Western Coast Area 4-26
4.6.2 Eastern Coast Area 4-26
4.6.3 Central Highlands 4-26
CHAPTER 5
Policies 5-1
5.1 Setting A National Spatial Framework 5-2
5.2 Enhancing National Economic Competitiveness 5-4
5.3 Modernising Agriculture 5-10
5.4 Strengthening Tourism Development 5-14
5.5 Managing Changing Human Settlements 5-17
5.6 Conserving Natural Resources and the Environment 5-32
5.7 Integrating the National Transportation Network 5-44
5.8 Providing Appropriate Infrastructure 5-51
CHAPTER 6
Implementation Mechanism 6-1
6.1 Institutional Mechanism for Implementing the NPP 6-1
6.1.1 Existing Agencies Involved in Spatial Planning 6-1
6.1.2 Integrated National Development Planning System 6-1
6.1.3 National Physical Planning Process 6-3
6.1.4 National Physical Planning Institutional Structure 6-5
6.1.5 Public Participation in the Preparation of the
National Physical Plan 6-8
6.2 Plan Implementation 6-9
6.2.1 Establishing Linkages with Socio-Economic
Planning and Project Planning 6-13
6.2.2 Establishing Linkages with Sector Councils 6-14
6.2.3 Establishing Linkages with Planning Authorities 6-14
6.3 Plan Monitoring 6-15
6.3.1 Scope of Monitoring 6-15
6.3.2 Monitoring Agencies 6-15
6.3.3 The Monitoring Process 6-15
6.4 Review of the NPP 6-24
6.4.1 Evaluating the Effectiveness of the Policies 6-25
6.5 Proposals 6-25

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List of Figures
Figure 1.1 National Development Planning Framework 1-1
Figure 3.1 Regional Economic Cooperation 3-3
Figure 3.2 Gross Domestic Product Growth for Peninsular Malaysia,
1990-2020 3-8
Figure 3.3 Sectoral Gross Domestic Product Contribution and Growth,
1990-2020 3-10
Figure 3.4 State Sectoral Share to GDP, 2000 3-12
Figure 3.5 Land Use, 2001 3-17
Figure 3.6 Conurbation and Special Feature Towns 3-22
Figure 4.1 Urban Hierarchy Linkages 4-4
Figure 4.2 Land Availability Assessment 4-13
IP 1 National Spatial Framework 2020 5-3
IP 2 Selective Concentration Development Strategy 5-8
IP 3 Industrial Centres and Potential Industrial Clusters 5-11
IP 4 Prime Agricultural Areas 5-13
IP 5 Major Tourist Attraction Areas 5-16
IP 6 Hierarchy of Conurbations 5-24
IP 7 Potential Rural Economic Clusters 5-30
IP 8 Environmentally Sensitive Areas 5-35
IP 9 Central Forest Spine 5-38
IP 10 Sensitive Coastal Ecosystems 5-40
IP 11 Highlands and Special Management Areas 5-42
IP 12 Industrial Sites within Water Catchments 5-43
IP 13 Integrated National Transportation Network 5-47
IP 14 Water Resources and Water-Stressed Area 5-54
IP 15 Ground Water Resources 5-55
IP 16 Flood Prone Areas 5-58
IP 17 Power Supply Grid 5-60
Figure 6.1 Integrated National Development Planning System 6-2
Figure 6.2 Proposed National Physical Planning Structure 6-4
Figure 6.3 Vertical Information Flows 6-21
Figure 6.4 Major Data Providers in LaPiS (Horizontal Information Flows) 6-21
Figure 6.5 Vertical and Horizontal Linkages Land Use Planning
Information System, 2020 6-24
Figure 6.6 Economic and Land Use Planning Cycle 6-25

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List of Tables
Table 3.1 Distribution of Population and AAGR (%) by State, 1980, 1991,
2000 and 2020 3-5
Table 3.2 Population in Urban and Rural Areas by Region, 1991 and 2000 3-6
Table 3.3 Urban-Rural Population (‘000), 2000-2020 3-7
Table 3.4 GDP by States, 2001-2020 3-9
Table 3.5 Projected State GDP Sectoral Shares (%), 2001-2020 3-13
Table 3.6 Malaysia: Labour Force, Employment, 1990, 1995 and 2000 3-13
Table 3.7 Malaysia: Employment (‘000) by Occupational Groups,
1990, 1995 and 2000 3-14
Table 3.8 Land Use for Peninsular Malaysia, 2001 (ha) 3-16
Table 3.9 Proposed Hierarchy of Conurbations and Urban
Settlements, 2020 3-21
Table 3.10 Small and Intermediate Towns Population Changes 3-26
Table 3.11 Special Feature Towns 3-29
Table 4.1 Prime Agricultural Areas 4-9
Table 4.2 Urban Land Required Between 2000 and 2020 and Lands
Available for Urban Use 4-12
Table 4.3 Projected Water Demands for Peninsular Malaysia, 2020 4-18
Table 4.4 Installed Capacity, Peak Demand and Reserve Margin,
2000-2020 4-23
Table 5.1 Population Projection of Main Conurbations 5-18
Table 5.2 Forest Cover in Peninsular Malaysia 5-32
Table 6.1 Members of the NPPC 6-6
Table 6.2 Members of the NPP Committee 6-7
Table 6.3 Members of the National Physical Planning Advisory Committee 6-7
Table 6.4 Implementing the Policies 6-10
Table 6.5 NPP Policies Indicators 6-16
Table 6.6 Institutional Responsibility for Plan Preparation,
Implementation, Monitoring and Review 6-26

EXECUTIVE SUMMARY

National Physical Plan Executive Summary
1
EXECUTIVE SUMMARY
1 INTRODUCTION
National economic planning has been practised in Malaysia since independence and has
successfully guided the transformation of the country from an economy dependent on mining and
plantation agriculture to one which is diversified and largely industrialised. Nevertheless, a gap in
national development planning is recognised. Spatial planning has been delegated to the local
level, to be dealt with in state plans and local plans. This has permitted states and local
authorities to be uncoordinated and unguided in their interpretation of their share of the national
objectives. The result is that the sum total of state and local plans far exceeds national targets as
well as national resources to implement them. The National Physical Plan (NPP) is intended to fill
this gap and provide the framework for national physical planning.
2 FUNCTIONS OF THE NPP
In fulfilling the recognised gap in national development planning, the functions of the NPP include:
i. strengthening national planning by providing a spatial dimension to national
economic policies;
ii. coordinating sectoral agencies by providing the spatial expression to sectoral
policies;
iii. providing the framework for regional, state and local planning;
iv. providing physical planning policies.
The core function of the NPP will be to translate the socio-economic objectives of Vision 2020,
OPP 3 and 8 MP, as well as national sectoral objectives, into the spatial dimension to guide the
geographical distribution of these objectives among the states and, through the states, among the
local areas.
3 SALIENT FEATURES
The Town and Country Planning Act 1976 (Amendment) 2001, A1129 provides the legal basis for
the preparation of the NPP and describes its form, which shall:

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i. be a written statement formulating strategic policies for the purpose of
determining the general directions and trends of the physical development of the
nation;
ii. be accompanied by such indicative plans as may be required to clarify the
strategic policies; and
iii. contain such other matters as may be prescribed or as the National Physical
Planning Council ( NPPC) may in any particular case specify.
The NPP shall be prepared through a consultative process between the Federal Government and
the State Governments and shall take into consideration the current national urbanisation policy
and other similar policies. The NPP is currently confined to Peninsular Malaysia and does not
apply to Sabah and Sarawak which are governed by different planning legislations.
The Act stipulates that the Plan be reviewed every five years in tandem with the review of the
National Five Year Development Plans. However, it is unlikely that all aspects of the Plan will be
changed at the Review as certain proposals require permanency. 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. The NPP shall have both a short term perspective in accommodating the socio-
economic objectives of the FYMP and the long term perspective of Vision 2020.
4 GOAL
The goal of the NPP is:
THE ESTABLISHMENT OF AN EFFICIENT, EQUITABLE AND SUSTAINABLE
NATIONAL SPATIAL FRAMEWORK TO GUIDE THE OVERALL DEVELOPMENT OF
THE COUNTRY TOWARDS ACHIEVING DEVELOPED NATION STATUS BY 2020
5 OBJECTIVES
To achieve its goal, four mutually supportive objectives are identified:
i. To rationalise national spatial planning for economic efficiency and global
competitiveness.
ii. To optimise utilisation of land and natural resources for sustainable development.

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iii. To promote balanced regional development for national unity.
iv. To secure spatial and environmental quality and diversity for a high quality of life.
6 PRINCIPLES
In support of the objectives of the NPP, the following plan principles shall be adhered to in the
NPP:
P1 Develop the country as a single integrated unit.
P2 Promote areas of greatest growth potential
P3 Maximise the use of existing and committed infrastructure.
P4 Protect national heritage areas and locations.
P5 Encourage the development of regions based on their potentials.
P6 Favour public transport over private vehicle use for inter-urban and intra-city
movement.
P7 Strive towards compact urban forms with clear identity.
P8 Avoid disrupting ecological stability.
P9 Facilitate the development of the k-economy.
P10 Strengthen urban and rural linkages.
7 PLAN CONTEXT
The NPP recognises the features in the current context within which it must succeed in fulfilling its
role in national development.
7.1 Global Setting
With globalisation picking up pace, there is an increasingly intensive international competitive
climate for investments. Because of Malaysia’s importance as a trading nation and its reliance on
its trading position for future growth, the country is vulnerable to international vicissitudes and the
threat of emergent competitors, Furthermore, to realise the objective of Vision 2020 to become a
developed nation by 2020, the nation must maintain a high growth rate and high investment rate.

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7.2 National Setting
A number of important features in the national setting, including both long-standing conditions and
emergent trends, constrain strategic development options.
These features include:
• Disparity in development levels between regions.
• A continuing process of sectoral restructuring of the economy with decline in the
contribution of agriculture and growth in the urban sectors based on
manufacturing and services.
• A potential for growth in the technology-based, value-added and capital intensive
activities such as ICT and biotechnology as well as in tourism, educational and
health services.
• With economic restructuring, collateral restructuring of employment with a
potential shift to a demand for highly skilled and educated workers.
• Continuing intensification of urbanisation with a trend not only of concentration of
population in the urban areas but in fact in a few urban regions, namely the
conurbations around Kuala Lumpur, George Town and Johor Bahru.
8 DEVELOPMENT STRATEGIES
8.1 Urbanisation
As only the conurbations around Kuala Lumpur, George Town and Johor Bahru are anticipated to
have the capacity to compete successfully against international city regions such as Shanghai,
Hong Kong, Shenzhen, Singapore, Bangkok and so on, a development strategy of Selective
Concentration is recommended by the NPP. The strategy is applied to development location for
the manufacturing and service sectors, in particular the nascent and emergent sectors of ICT,
biotechnology, education and health services and (non-resort) tourism, and the appropriate type
of infrastructure to be put in place to attract investments for these sectors. State capitals outside
of the conurbations that are not anticipated to have a competitive capacity shall, however, be
supported in terms of their need for services and facilities. Small and intermediate towns shall be
developed according to their special features and their local economic niches. Urban-rural
economic linkages are to be promoted to support the structural changes taking place in
agriculture and to harness the benefits of urbanisation to benefit the rural population.

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Development in the rural areas should be concentrated in the Rural Growth Centres and rural
services should be reviewed to be more appropriate to the changing rural population structure.
8.2 Regional Balance
Notwithstanding addressing the issue of global competitiveness, the NPP must also address the
issue of regional imbalance. This should be carried out while avoiding internal competition and at
the same time optimising available resources. The strategies adopted should be realistic and
capable of success. Regional balance is, therefore, interpreted as access to equitable levels of
income and not necessarily as equal opportunity to the same forms of development. Resource-
based industries, forestry-based activities and industries, downstream agriculture-based activities,
resort tourism, including eco-tourism, craft-based industries and other niche activities should be
directed to the less developed regions and appropriate infrastructure in these regions enhanced
to support the activities.
8.3 Optimising the Use of Land
As a physical plan, it is incumbent on the NPP to re-examine the sectoral distribution of land use
to ensure the optimal use of land. Agriculture is not expected to be expanding in acreage but in
productivity. The greatest demand for land will be in urban expansion but the quantum of land
required is relatively small compared to the potential land available for urban development.
However, local planning will be required to adjust to the location of the available land. To assist
local planning land is categorised according to their agricultural importance to the country,
agricultural productivity and environment sensitivity, and ranked. The objective of the ranking
system is to enable the determination of land for immediate conversion to other uses or for long-
term conservation.
8.4 Safeguarding the Environment
With the absence of a need to make large areas of forest land available for agriculture or for
urban use, there is an opportunity to articulate the proposals of the various national councils that
have expressed concern regarding the natural environment, such as the Forestry Council, the
Coastal Zone Council and the Environmental Council. In response, the NPP proposes the
delineation of a forest Central Spine which will be linked to other conservation areas.
Future water supply needs will also be safeguarded by conserving potential river and
underground sources of water.

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8.5 Planning Appropriate Infrastructure
In national transportation the NPP proposes the long-term commitment to a fast-train system and
in local transportation a commitment to favour public transport.
Infrastructure shall be examined as appropriate to the particular areas and their expectations of
development.
9 POLICIES
The NPP is articulated as a set of policies as follows:
NPP 1 The NPP shall serve as the framework to achieve integrated and sustainable
land use planning in the country.
NPP 2 The planning of urban based activities shall adopt the concept of ‘selective
concentration’ for strategic urban centres for all states.
NPP 3 Cooperation in physical planning between Malaysia and its ASEAN
neighbours shall be strengthened.
NPP 4 Land and natural resources of the less developed regions shall be used in a
sustainable manner to increase the productivity in these regions and reduce
regional imbalances.
NPP 5 Planning for industrial land development shall adopt the concept of ‘Industrial
Clusters’.
NPP 6 The support of agriculture shall take cognisance of the threats and
opportunities of urbanisation.
NPP 7 The eight (8) strategic granary areas comprising Muda (MADA), Kemubu
(KADA), IADP Kerian-Sungai Manik, IADP Barat Laut Selangor, IADP Pulau
Pinang, IADP Seberang Perak, IADP Terengganu Utara (KETARA) and IADP
Kemasin- Semerak shall be conserved.

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NPP 8 The different tourism development zones shall concentrate on different
packages of tourist products to maximize their resource and locational
advantages.
NPP 9 The concentration of urban growth in the conurbations shall be anticipated
and accommodated.
NPP 10 The growth of the four main conurbations of Kuala Lumpur, George Town,
Johor Bahru and Kuantan shall be supported.
NPP 11 The conurbations shall be planned and developed as integrated regions.
NPP 12 The individuality and physical separation of the cities, towns and villages
within the conurbation shall be maintained.
NPP 13 Towns with special features shall be identified and the development of
projects exploiting their special features shall be supported with the
appropriate infrastructure.
NPP 14 Small and intermediate towns shall be developed in accordance with their
localised economic potentials.
NPP 15 The development of Rural Growth Centres (RGCs) shall be reinforced to
rationalise the servicing of the rural population.
NPP 16 Planning Standards shall be designed to meet the requirements of a
developed country.
NPP 17 A designated central authority shall be charged with the responsibility to
publish on regular basis information on land use development.
NPP 18 Environmentally Sensitive Areas (ESA) shall be integrated in the planning
and management of land use and natural resources to ensure sustainable
development.
NPP 19 A Central Forest Spine (CFS) shall be established to form the backbone of
the Environmentally Sensitive Area network

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NPP 20 Sensitive coastal ecosystems shall be protected and used in a sustainable
manner
NPP 21 Land development in the highlands shall be strictly controlled to safeguard
human safety and environmental quality.
NPP 22 All surface and ground water resources are strategic assets to be
safeguarded and used optimally.
NPP 23 In recognition of the inter-relationship between land use and transport an
integrated national transportation network shall be established
NPP 24 An integrated high-speed rail system shall be established
NPP 25 The national road network shall be further extended for regional travel and
local access
NPP 26 Major airports and seaports shall be developed according to their
complementary functions to enhance the nation’s economic competitiveness
and facilitates tourist arrivals
NPP 27 The Transit Orientated Development (TOD) concept shall be promoted as the
basis of urban land use planning and ensure viability of public transport
NPP 28 In all major urban centres, an integrated public transportation system shall be
established
NPP 29 The NPP shall provide the spatial framework for the delivery of integrated
infrastructure services at the national and regional level and to the main
conurbations
NPP 30 The supply and projected demand for water by quantity and location should
guide the planning of water resource areas.
NPP 31 Ground water resources and recharge areas shall be identified and protected
from activities that cause pollution and reduce yield

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NPP 32 All urban settlements shall be serviced by a centralised sewerage treatment
system
NPP 33 All urban settlements shall be serviced by an integrated network of solid
waste disposal and/or recovery facilities
NPP 34 Land utilised for main drains, streams and rivers shall be designated as
drainage or river reserves
NPP 35 As strategic assets, electricity generation plants and the distribution mains
shall be located to provide a reliable and efficient supply of power to
consumers
NPP 36 Appropriate ICT technology shall be provided as a priority to all settlements
10 IMPLEMENTATION MECHANISM
The institutional responsibilities for the preparation, implementation, monitoring and review of the
Plan are shown in the following table:
Activity Responsibility
Enabling
Law
Enabling Instruments/Institutions
Plan preparation DG DTCP TCPA
NPPC, LaPiS, IAPG , TWG, NPPAC,
NPP Committee
Plan Implementation
All Federal and State
Agencies
TCPA NDPC, EPU, Treasury, DTCP
Monitoring
• Land use
changes
• Application
of the
policies
DG DTCP TCPA LaPiS, NDPC, Policy indicators
Plan Review DG DTCP TCPA
NPPC, NPP Committee, NPPAC,
LaPiS, IAPG, TWG
The Director General of the Department of Town and Country Planning (DG DTCP) is charged
with the responsibility of preparing the Plan, monitoring its implementation and keeping it in
review every five years. In carrying out this responsibility the Director-General will rely on the
capacity of his department and a number of bodies that have been provided by the Town and
Country Planning Act 1976 (TCPA), proposed in the Plan or administratively employed in the
current planning process, such as the NPPC, the National Physical Planning Committee (NPP
Com.), National Physical Planning Advisory Committee (NPPAC), IAPGs and TWGs.

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The Implementation of the Plan, however, will require the support of the various federal and state
agencies that have a legal duty to adhere to the policies of the NPP. It is important that the
proposals are translated into plans of action and included in the subsequent Five Year Malaysia
Plans (FYMP) through the offices of the EPU, Treasury and the NDPC.
Adherence to the recommendations of the NPP should also be manifested in the respective
Structure Plans. One of the key instruments for monitoring the Plan and keeping it in review is
the establishment of the NPP Land use Planning Intelligent System (LaPiS) to ensure effective
exchange of both spatial and attribute data that is necessary to prepare the plan and its review.
The policies of the NPP will remain applicable unless reviewed or replaced. In carrying out the
review, the DG DTCP will rely on the directions of the NPPC and the advice of the NPP Com. and
NPPAC, as well as the application of indicators and research findings to assess their
effectiveness. Critical success factors will depend on the establishment of clear terms of
reference on matters that need to be reviewed. Appropriate IAPGs and TWGs should also be
established to provide adequate inputs for the Review.
In conclusion the main recommendations made for the implementation of the NPP are as follow:
i Establish the necessary institutional structure for plan preparation and monitoring.
This will include among others, the strengthening of the National Physical
Planning Division in DTCP, the establishment of the NPP Committee, NPPAC,
relevant IAPGs and TWGs, as well as a National Spatial Planning Research
Institute to generate information and thinking about national and regional physical
planning.
ii Once the NPP is approved the various federal and state agencies need to
translate these policies into programmes and projects and include them in the
subsequent FYMP.
iii The DG DTCP should be made a permanent member of the NDPC to ensure that
the aspirations of the NPP are incorporated into the subsequent FYMP.
iv Establishment of the LaPiS at DTCP and the Structure Plan land use Planning
Intelligent System (SLAPiS) at the State Departments of Town and Country
Planning.

National Physical Plan Preamble
PREAMBLE
National economic planning has been practised in Malaysia since independence and has
successfully guided the transformation of the country from an economy dependent on mining and
plantation agriculture to one which is diversified and largely industrialised. National economic
planning has brought to the country a level of prosperity that is the envy of other developing
countries. Nevertheless, a gap in national development planning is recognised. This is planning in
the physical, geographical or spatial dimension. Hitherto spatial planning has been delegated to
the local level, to be dealt with in state plans and local plans. This has permitted states and local
authorities to be uncoordinated and unguided in their interpretation of their share of the national
objectives. The result is that the sum total of state and local plans far exceeds national targets as
well as national resources to implement them.
Land conversion in many states and use provisions in many local authority areas far exceed
demand and over optimistic development approvals have led to property overhangs. Internecine
rivalry between states and between cities for development have led to, on the one hand, the
duplication and wastage of types of infrastructure that are intended to attract development and, on
the other hand, neglect in public investments in types of infrastructure that should be carried out
to support the development already in place. For example, while urban highways and mega
shopping complexes are given much local authority attention, sewerage systems, public
transportation and flood mitigation projects lag behind.
The need for a national physical plan has been felt and debated over many years. Currently,
some attempt at spatial planning to reconcile inter-state and inter-city competition is carried out on
an ad hoc basis by national agencies like the Economic Planning Unit and Treasury through the
project approval process. These agencies will be better able to carry out their functions with the
availability of a standing guideline and framework on the geographical distribution of physical
development. The National Physical Plan (NPP) is intended to provide this framework. The
framework is intended not only for project approval but also for states and local authorities to
formulate their development plans and strategies, and to identify development projects, in a more
realistic, focussed and co-operative manner.
The NPP will complement the existing efforts in national development planning which has tended
to be socio-economic biased. Economic targets of the Five Year Malaysia Plans (FYMP) and the
goals of Vision 2020 will be translated into spatial terms in the NPP. The Plan will also provide
the coordinative platform for the various sectoral plans and policies and establish the much
needed framework for the preparation of Structure and Local Plans. The NPP is also a response
to the impact of globalisation which requires the country to establish a national physical
framework that will enhance the country’s global competitiveness.
The yardsticks for measuring development have also changed over the years from merely
economic growth indicators and outputs to those that measure the quality of life and a
development that is sustainable. The NPP is one of the instruments for achieving quality in the
living environment and sustainable development. It will serve as a long term national physical plan
providing directions and trends on the development, use and conservation of land in the country.

NATIONAL DEVELOPMENT PLANNING
FRAMEWORK
CHAPTER 1

National Physical Plan National Development Planning Framework
1 - 1
CHAPTER 1
NATIONAL DEVELOPMENT PLANNING FRAMEWORK
Development planning is practised at all three tiers of government. At the national level,
development planning will be guided by the FYMP, the NPP and the sector policies that emanate
from Cabinet, the respective Ministries and Sector Councils. Contextually development planning
in the country will operate within the stated goals outlined in Vision 2020 and the Outline
Perspective Plans (OPP3) (Figure 1.1). Similarly at the state level, development will be guided by
the Structure Plans and sector policies that are articulated from time to time. Local level planning
will be carried out in the form of statutory development plans such as the Local Plans and Special
Area Plans for the local authority areas.
Figure 1.1 : National Development Planning Framework
Plans used in the country to guide development consist of the following:
• 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
all the dimensions: economically, politically, socially, spiritually, psychologically
and culturally.” The strategy to achieve this vision is by a high level of economic
VISION 2020
LEVEL 1 : NATIONAL PLANNING
NATIONAL
PHYSICAL PLAN
LEVEL 2 : REGIONAL / STATE PLANNING
LEVEL 3 : LOCAL PLANNING
5 - YEAR
MALAYSIA PLAN
SPECIAL AREA
PLAN
SECTORAL
POLICIES/ PLANS
LOCAL
PLAN
REGIONAL /
STRUCTURE PLAN
STATE
DEVELOPMENT PLAN
SECTORAL POLICIES/
PLANS

1 - 2
growth through accelerated industrial development and an export based
manufacturing sector. Collateral development will involve the accelerated
development of science and technology. It will also involve an accelerated
development of the service sector, with emphasis on ICT. The private sector is
expected to provide the engine of growth to achieve this vision.
• Outline Perspective Plan
The current Outline Perspective Plan is the Third Outline Perspective Plan 2001-
2010 (OPP3). This, essentially, is a ten year outline plan which forms the
framework for the preparation of the FYMP. A central objective of OPP3 is
national unity. Its concentration is at forging a united nation consisting of a
progressive and dynamic “Bangsa Malaysia” that “lives in harmony and engages
in full and fair partnership”. OPP3 will focus on enhancing regional balance
through rapid development of the less developed states. Efforts will be taken to
diversify the economic base of the slower growing states into manufacturing and
services with emphasis to be given to 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 plan is to reduce urban rural disparities and improve and strengthen the
linkages between urban and rural economies.
• Five-Year Malaysia Plan
The current Five-Year Development Plan is the Eighth Malaysia Plan 2001-2005
(8 MP) which identifies the growing sectors of the economy as services and
manufacturing. It confirms further need for the promotion of direct foreign
investments and recognises that industrialisation for the future will be faced with
intensifying competition among countries for investments, production and
markets. The implementation and further elaboration of free trade agreements
among nations will engender the deepening of globalisation and make
competition intense.
• Structure Plans
Structure Plans distribute the expectation of development within each state and
propose major economic and infrastructure projects for the states. The time
perspective for Structure Plans is 20 years, and for the current set of Structure
Plans, commensurate with the time perspective of Vision 2020.
• Regional Plans
With reference to the Town and Country Planning Act 1976 (Amendment) 2001,
A1129, Regional Plans are prepared for areas situated in two or more states
where there are significant issues pertaining to cross border development. Each
plan is prepared by an appointed Regional Planning Committee for the purpose
of guiding and coordinating development within the relevant region. These plans

1 - 3
will serve to assist the State Planning Committees and the local planning
authorities within the region on appropriate development measures for the region
that will optimise the use of infrastructure and social facilities, coordinate
development, avoid duplication of investments and promote the conservation of
natural resources. Regional Plans may also be prepared for the Conurbations
identified in the NPP covering a number of local authority areas.
• Local Plans
Local Plans are designated as the “Development Plans” by the Town and Country
Planning Act 1976 and provide the vehicles for development control. In addition
to setting the direction of development for a local planning authority area, Local
Plans serve, by their consultative process of preparation, as contractual
agreements on the use of all land within the plan areas between the local
planning authorities and the local residents and land owners. Local Plans are,
therefore, besides being guides for development, also a basis of democratic
governance and the protection of citizen rights.
National, state and local plans are intended to operate as a cohesive and collectively
supportive system directed to achieve Vision 2020. National plans are framed within a
time perspective while state and local plans have both a spatial and a time perspective. A
spatial framework at the national level is, however, currently absent. The National
Physical Plan (NPP) fulfils this missing role.
In addition to the various development plans, national sectoral policies such as the
National Forestry Policy, National Agricultural Policy, etc. as well as various sectoral
plans of varying status, require to be expressed spatially.
1.1 Function
The function of the NPP includes:
i. strengthening national planning by providing a spatial dimension to national
economic policies;
ii. coordinating sectoral agencies by providing the spatial expression to sectoral
policies;
iii. providing the framework for regional, state and local planning;
iv. providing physical planning policies;
1.2 Legal Framework
The Town and Country Planning Act 1976 (Amendment) 2001, A1129 provides the legal
basis for the preparation of the NPP.

1 - 4
1.3 Form
The form of the NPP shall [Town and Country Planning Act 1976]:
i. be a written statement formulating strategic policies for the purpose of
determining the general directions and trends of the physical development of the
nation;
ii. be accompanied by such indicative plans as may be required to clarify the
strategic policies; and
iii. contain such other matters as may be prescribed or as the National Physical
Planning Council ( NPPC) may in any particular case specify.
1.4 Consultative Process
The NPP shall be prepared through a consultative process. When preparing the NPP, the
Director General of Town and Country Planning shall take into consideration the current
national urbanisation policy and other similar policies. The Director General shall consult
with every State Authority and such other authorities or bodies as the Council may direct.
This consultative process ensures that state and local aspirations are taken into
consideration in the NPP.
1.5 Plan Area
The NPP is currently confined to Peninsular Malaysia. The Plan does not apply to Sabah
and Sarawak which are governed by different planning legislations.
1.6 Plan Period
Once the Plan is approved the policies of the NPP will take effect unless they are
subsequently altered or replaced. In view of changing socio-economic circumstances of
the country, the Act stipulates that the Plan be reviewed every five years in tandem with
the review of the National Five Year Development Plans, or as and when directed by the
Council.
It is unlikely that all aspects of the Plan will be changed at the Review as certain aspects
of the Plan will require permanency. 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 or require follow-up phases. The NPP shall have both a short term
perspective in accommodating the socio-economic objectives of the FYMP and the long
term perspective of Vision 2020.

GOAL, OBJECTIVES AND
PRINCIPLES
CHAPTER 2

National Physical Plan Goal, Objectives and Principles
2 - 1
CHAPTER 2
GOAL, OBJECTIVES AND PRINCIPLES
The goal, objectives and principles of the NPP reflect the desire of the nation, as interpreted from
the Town and Country Planning Act 1976, to ensure that physical planning creates the spatial
patterns, structures, institutions and guidelines necessary to support socio-economic planning.
The technical findings on the existing situation, trends, potentials and threats assist in refining the
goal, objectives and principles and provide the basis for formulating the strategies and policies
that, in turn, provide tangible sets of action for implementing the NPP.
2.1 Goal
Basic to all national planning is the country’s aspiration of attaining developed country
status as encapsulated in Vision 2020. A particular onus placed on physical planning is
the creation of a quality and efficient physical environment that will be the foundation for
the high quality of life, economic prosperity, political unity and social vibrancy envisioned
in Vision 2020. Subsumed within this overall objective is the integral need to increase
efficiency, regional balance, sustainability and a strong global positioning of the country.
The NPP will provide the translation of the national plans into the physical and spatial
dimension.
The NPP goal is:
THE ESTABLISHMENT OF AN EFFICIENT, EQUITABLE AND SUSTAINABLE
NATIONAL SPATIAL FRAMEWORK TO GUIDE THE OVERALL DEVELOPMENT OF
THE COUNTRY TOWARDS ACHIEVING DEVELOPED NATION STATUS BY 2020
2.2 Objectives
Arising from this goal, four mutually supportive objectives are identified:
competitiveness.
ii. To optimise utilisation of land and natural resources for sustainable development.
iii. To promote balanced regional development for national unity.

2 - 2
Objective I : To rationalise national spatial planning for economic efficiency
and global competitiveness
In order to sustain the high level of investments of around 7.0 % per annum necessary to
achieve developed nation status by 2020 the country must be economically efficient and
globally competitive over the plan period of Vision 2020. Malaysia will, to a large extent,
be dependent on foreign investments and, as envisaged by 8 MP, global competition for
investments, as well as for markets, will become increasingly fierce. From the spatial
planning perspective this strife for efficiency and investment attractiveness would include
the need to focus development activities in selected areas that offer the best growth
potential. From the physical planning perspective it would involve the creation of a quality
living environment with an integrated and efficient infrastructure.
Objective II : To optimise utilisation of land and natural resources for
sustainable development
The many economic sectors, human social activities and environmental protection
concerns vie for land. The NPP must seek not only to allocate land for the various uses to
meet their needs but also, through sensitive calibration of the quantum of land allocated
to each sector, activity or concern, seek to achieve overall efficiency and optimum use of
land. Land wastage in the form of idle land and low productivity land in any of the
economic sectors should be eliminated. Land use allocation will, however, be very largely
constrained by the existing land use pattern and natural topographical conditions.
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 forestry, with
the increasing demand for tropical timber, has the opportunity for expansion in acreage.
Expansion of forestry acreage, however, cannot involve natural forests because of the
time horizon involved but with forest plantations.
The greatest demand for land in the NPP plan period will, however, come from urban
expansion. Of the 8.3 million additional population projected for the period 2000-2020,
8.0 million or 96.0% will be the additional urban population. However, the total amount of
land necessary to house this population is very small – no more than 0.33 million
hectares – while the land that is identified as potentially available for various uses which
could include urban purposes estimated at about 574,053 ha. Total land required for
urban use, including existing built-up areas, will amount to only 5.8% of the land area of
Peninsular Malaysia. In principle, therefore, there is no necessity for urban expansion to
encroach into land that should be protected or conserved for one purpose or another, nor
is there any necessity for carrying out large scale land reclamation works. Local planning
may, however, need to adjust to the location of available land.
An important role of the NPP is to consolidate the categorisation and ranking of land and
apply land categorisation and ranking to land use control, particularly to guiding
conversion of land for urban uses.

2 - 3
Objective III : To promote balanced regional development for national 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 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 east coast
states. However, the imbalance persists. Unequal development is also not just between
the east coast and the west coast but also between sub regions within the west coast,
e.g. the Klang Valley as against south Perak or northern Kedah, both of which areas
generally exhibit socio-economic characteristics similar to the east coast region.
Balance should be perceived as equal opportunity to comparable incomes and not
necessarily as similar forms of development. As such, while the less developed regions
may, because of their isolation, be less competitive for certain forms of development,
their possession of beaches, scenic beauty, cultural richness and abundant agricultural
and forest products could be further exploited to enhance tourism including eco-tourism,
agricultural and forestry downstream activities, resource-based industries 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.
There should, however, be an anticipation that rural-urban migration, which also
manifests itself as inter-regional migration, will continue as part of the larger national
phenomenon of industrialisation and urbanisation. Skills training of potential migrants will
be important to ensure that they integrate into the urban economy.
Objective IV : To secure spatial and environmental quality and diversity for a high
quality of life
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 three areas.
With rapid expansion of the cities and towns the built environment is in danger of
deteriorating into urban sprawls. 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 measures should be introduced to
ensure the separation of cities within conurbations as well as measures to guide and
control the outward expansion of conurbations.
With 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 there should be assurance that the conversion of agricultural land for urban

2 - 4
uses should not be disorderly, indiscriminate and inefficient. 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 enjoyment of the present and future
generations and for the overall enhancement of the national environment.
2.3 Principles
The following are principles that support the above objectives. While some of these
principles are directly relevant to a single objective, most are relevant to more than one
objective.
P1 Develop the country as a single integrated unit
It is paramount for national unity as well as incidentally efficient for global
competitiveness that the country be developed as an integrated unit rather than
for states to compete with one another. All resources - natural, manpower and
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 Promote areas of greatest growth potential
The magnets for investments in East Asia are the city regions such as Shanghai,
Shenzen, Hong Kong, Singapore and Bangkok. Only the areas of greatest
growth potential in Malaysia, that is, the conurbations around Kuala Lumpur,
George Town and Johor Bahru, have the capacity to rival these international city
regions, particularly for investments in the emergent sectors of ICT,
biotechnology, health and educational services. In the context of increasingly
fierce global competition for investments, it is judicious to focus support of these
conurbations.
P3 Maximise the use of existing and committed infrastructure
In order to utilise infrastructural investments efficiently urban expansion should
be directed to where adequate infrastructure and social facilities are in place or
committed to be put in place. The upgrading of existing infrastructure may be
explored. Efforts should also be taken to encourage urban regeneration and infill
development to reduce the speculative opening up of green field sites. A culture
of upgrading and maintenance should be inculcated in urban administration.
P4 Protect national heritage areas and locations
There should be greater resolve from all quarters to conserve the fast depleting
natural resources of the country and manage it in a sustainable manner. In
particular a sense of value and national pride for areas of natural beauty and

2 - 5
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 fauna, rural landscapes, particular sites and locations
as well as individual buildings. Conservation may be in tandem with the
promotion of such areas, locations, sites and buildings as attractions for
international and local tourism.
Pockets of natural and rural landscapes located close to urban areas should also
be conserved for the recreation and enjoyment of the expanding urban
population, particularly the increasing number of urban children, and generally to
enhance the overall living environment.
P5 Encourage the development of regions based on their potentials
Regions should be developed and promoted on the basis of their potentials 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 eco-tourism, forestry-and-agriculture-based activities, etc., for
example, should receive public investments in the type of infrastructure
necessary to support these forms of development while duplication of
infrastructure for forms of development more suitable for the west coast should
be avoided.
P6 Favour public transport over private vehicle use for inter-urban and intra-
city movement
This will require the development of an efficient 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 extent and efficiency of trains, taxis and
buses.
P7 Strive towards compact urban forms with clear identity
In city and suburban centres integrated, multi-functional and high density
projects can increase efficiency, convenience, vibrancy and the image of the
urban areas. Transport hubs combined with office, living and shopping uses are
examples. This will also lead to a compact city form that will help contain urban
sprawl and is amenable to rail-based public transport systems.
In the expansion of the conurbations the integrity and functional cohesion of
existing communities should be maintained and not disrupted.
Unplanned development proposals outside of designated city limits should be
required to submit rigorous justifications and subject to public scrutiny and
objections in line with the statutory requirements for a local plan.

2 - 6
P8 Avoid disrupting ecological stability
Guidelines on development on environmentally sensitive areas should be
incorporated into the NPP. Coastal land reclamation for purposes other than
seaports, jetties, marinas, bridges and the like should be discouraged.
Developments within water catchment areas and other environmentally sensitive
areas should be carefully monitored. Water resource management based on the
concept of Integrated River Basin Management (IRBM) should be exercised.
P9 Facilitate the development of the knowledge-based economy
To create an impetus for national growth and increase competitiveness there
should be an expansion of ICT linkages and connectivity to all parts of the
country. Efforts should be made to promote the development of a first class ICT
infrastructure network throughout the country and steps taken to develop a large
pool of highly skilled ICT workers.
P10 Strengthen urban and rural linkages
Government should institute programmes to support entrepreneurs 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.

PLAN CONTEXT
CHAPTER 3

National Physical Plan Plan Context
3 - 1
CHAPTER 3
PLAN CONTEXT
Vision 2020, OPP3 and 8MP as well as the national sectoral policies have established the general
guidelines for socio-economic management of the country. The basis of the national vision,
objectives and policies, however, rests upon the foundation of the country’s physical setting as
well as its past and present economic and social environments. As each of these environments
are multifaceted, inseparable and intimately linked to one another, a change in one environment
impacts upon the others in foreseeable and unforeseeable, short and long term, positive and
negative ways.
The approach adopted by the NPP has been to recognise the significance of the interrelationships
of these environments and to assess the issues of spatial relationship in a holistic, integrated and
balanced approach. This approach recognises and accepts that the various types of land use
activities have generally arranged themselves in geographic space in relatively distinct patterns.
In the Peninsular Malaysia context, at the broadest scale, this pattern has been formed by the
physical environment of a western coast, a highland spine and eastern coast area. This pattern of
land use is further reinforced by historical and economic factors which have resulted in a heavier
concentration of population and higher productivity economic activities taking place on the
western coastal plain relative to the other areas. The impact of these factors has resulted in
variations in social and economic makeup of the Peninsula which underlie a number of provisions
included in the national development plans. An underlying intent of all of the various national
development programmes is the need to identify the factors which drive the economy so as to
better understand and manage the challenges facing the country’s future.
Of no less importance to the development of the country is the global setting within which
Malaysia, as a developing country, must operate. The emergent situation of increasing
competition within a globalising world requires that the country must select development
strategies that do not jeopardise her ability to compete successfully for international investments.
In resolving internal development issues Malaysia must take cognisance of the limitations that the
world setting may place on her range of possibilities, especially when the possibilities may be
mutually exclusive, and prioritise the issues to be resolved. For example, fast growth may have to
take priority over balanced development if the choice between the two is mutually exclusive. The
NPP will, however, seek to optimise the choice of possibilities.
The NPP constitutes an integral part of the management plans. It seeks to add a spatial or
geographic dimension to the more purely economic and social biased aspects of the development
plans. This spatial element of the NPP is directed at ensuring sustainable and efficient utilisation
of the country’s natural resources, optimum use of its existing capital as well as its human
resources while at the same time, seeking to provide for equitable access to the opportunities
afforded by the development of the country.

3 - 2
3.1 Global Setting
3.1.1 World Trade
Malaysia ranks 18
th
in terms of the value of exports and imports in the year 2000. The
significance of these relatively high rankings brings with it the burden of contagion
whereby changes in economic and or geopolitical circumstances can flow back into the
Malaysian economy. The mid to late 1990’s international monetary crisis and the general
under performance of the major economies of the developed countries such as America,
Japan and Europe led to an overall decline in Malaysia’s average Gross Domestic
Product (GDP) growth rates. This prevailing situation which has been exacerbated by
geopolitical issues is also only part of a much larger and more pervasive process of
change which is often referred to as ‘globalisation’, a process whereby macro and indeed
micro economic activities around the world are increasingly being integrated, interrelated
and interlinked.
In a similar vein, the economic emergence of China and India has resulted in a changed
competitive platform for trade and investment in the global market. Latin America and
Central European countries are also offering attractive investment opportunities which will
compete for resources from the USA and Europe.
At the regional level, China and India have become attractive investment destinations and
centres for low to medium level technology products at competitive prices. These
changes have offered opportunities for Malaysian investors to internationalise and yet, at
the same time have challenged a variety of traditionally secure Malaysian industries and
enterprises.
Malaysia, in recognising its abilities and weaknesses and in particular its relatively small
market size, has adopted a number of strategies aimed at minimising the risks of
volatility, bolstering economic resilience, enhancing competition, stimulating increased
private investment, venturing into new sources of growth, accelerating transformation to a
high technology and knowledge based economy, increasing the supply of quality human
capital as well as promoting a more equitable and exemplary value-based society.
3.1.2 International Organisations
At the international level implementation of these measures include participation in the
United Nation (UN), World Trade Organization (WTO), Organisation of Islamic Countries
(OIC) and other global reach organisations as well as regional and sub regional
groupings aimed at mutually enhanced economic activity. In particular these latter
agreements include ASEAN, ASEAN Free Trade Agreement (AFTA), and the Indonesia-
Malaysia-Singapore Growth Triangle, the Indonesia-Malaysia-Thailand Growth Triangle
and the Brunei Darussalam-Malaysia-Philippines East ASEAN growth area (Figure 3.1).

3 - 4
Malaysia, on the whole has benefited from the globalisation process through foreign
direct investments of the early 1990s. Even so, two emerging trends of the globalisation
process must be addressed if the country is to at least maintain its present status. The
first of these is to accept the changing circumstances associated with greater competition
for foreign direct investments and secondly to engage with the more developed countries
in the use of ICT and technology to enhance productivity and quality as well as niche
market products and processes.
The preparation of the NPP forms part of the government’s response to the challenges of
globalisation. Among the responses adopted has been for an increased emphasis to be
placed upon the private sector to be the core of the national engine of growth. The
government sectors role will be more of facilitator through institutional support and as a
provider of infrastructure.
3.2 National Setting
To facilitate comparisons with other countries of the region as well as the world at large,
broad based population and economic criteria have been adopted to describe Malaysia’s
past and projected performance.
3.2.1 National Population Growth
Peninsular Malaysia’s population increased from 11.4 million in 1980 and 14.8 million in
1991 to 18.5 million in 2000. This represents an average annual growth rate of 2.38% per
annum (1980-1991) and 2.53% per annum (1991-2000). For the year 2000, the
Peninsular Malaysia’s population accounted for 79.6% of the country’s total of 23.3 million
(Table 3.1).
The NPP has projected Peninsular Malaysia population to increase from 18.5 million in
year 2000 to 26.8 million in 2020 at 1.9% per annum growth between 2000-2020 (Table
3.1). This is the population that could be supported by projected economic and
employment growth. The 2020 population, based on natural increase is about 26.0
million, implying the economic based projection allows the immigration of about 800,000
non-citizens.
By region, the highest growth was recorded for the Central Region at 3.01% per annum
between 1980-1991 and at 4.17% per annum between 1991-2000. Among the states,
Selangor grew fastest at 4.32% and 6.32% per annum respectively during the two
periods. The slowest growth rates were recorded for Perak at 0.82% and 0.42% per
annum for the two periods respectively.
i. Regional Population Pattern
While overall growth has been significant, an even more notable impact with respect to
population has been the movement of people from one state to another over the past 20

3 - 5
years. The northern and eastern regions for example have suffered relative declines
(35.0% to 27.1% and 19.5% to 17.3% respectively) in their shares of Peninsula
population while the central region has been a major recipient of people with its share
rising from 33.1% to 40.5%. Johor by comparison has basically managed to sustain its
population share.
This pattern of migration reflects the development of the country and in particular the rise
of the manufacturing and services sectors.
Table 3.1: Distribution of Population and AAGR (%) by State, 1980, 1991, 2000 and 2020
Population Size Percentage Distribution (%) AAGR (%)
State/ Region
1980 1991 2000
2020
(‘000)
1980 1991 2000 2020
1980-
1991
1991-
2000
2000-
2020
Perlis 148,276 190,182 204,450 250.0 1.3 1.3 1.1 0.9 2.29 0.81 1.01
Kedah 1,116,140 1,364,504 1,649,756 2,363.9 9.8 9.2 8.9 8.8 1.84 2.13 1.81
Pulau Pinang 954,638 1,116,801 1,313,449 1,940.3 8.4 7.5 7.1 7.2 1.44 1.82 1.97
Perak 1,805,198 1,974,893 2,051,236 2,720.2 15.8 13.3 11.1 10.1 0.82 0.42 1.42
Northern Region 4,024,252 4,646,380 5,218,891 7,274.4 35.2 31.4 28.2 27.1 1.32 1.30 1.67
Selangor 1,515,537 2,413,567 4,188,876 6,981.5 13.3 16.3 22.6 26.0 4.32 6.32 2.59
WP Kuala Lumpur 977,102 1,226,708 1,379,310 1,868.6 8.6 8.3 7.4 7.0 2.09 1.31 1.53
Negeri Sembilan 573,578 722,017 859,924 1,110.4 5.0 4.9 4.6 4.1 2.11 1.96 1.29
Melaka 464,754 529,199 635,791 904.3 4.1 3.6 3.4 3.4 1.19 2.06 1.78
Central Region 3,530,971 4,891,491 7,063,901 10,864.8 30.9 33.1 38.1 40.5 3.01 4.17 2.18
Johor 1,638,229 2,162,357 2,740,625 4,042.2 14.3 14.6 14.8 15.1 2.56 2.67 1.96
Southern Region 1,638,229 2,162,357 2,740,625 4,042.2 14.3 14.6 14.8 15.1 2.56 2.67 1.96
Pahang 798,782 1,081,148 1,288,376 1,731.3 7.0 7.3 7.0 6.5 2.79 1.97 1.49
Terengganu 540,626 808,556 898,825 1,147.7 4.7 5.5 4.9 4.3 3.73 1.18 1.23
Kelantan 893,753 1,207,684 1,313,014 1,749.3 7.8 8.2 7.1 6.5 2.77 0.93 1.44
Eastern Region 2,233,161 3,097,388 3,500,215 4,628.3 19.5 20.9 18.9 17.3 3.02 1.37 1.41
Peninsular Malaysia 11,426,613 14,797,616 18,523,632 26,809.7 100.0 100.0 100.0 100.0 2.38 2.53 1.87
% of Penisular 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 23,274,690 100.0 100.0 100.0 2.68 2.66
Source: General Report of the Population Census, Volume 1 and 2, Census 1991, DOS
Population Distribution and Basic Demographic Characteristics, Census 2000, DOS
Note : AAGR – Average Annual Growth Rate
ii. Urban-Rural Population
The criteria adopted in the population census allows for the differentiation of urban and
rural communities. The pattern of change evident in the Table 3.2 highlights the changing
character of Malaysia’s economy associated with the emergence of the manufacturing
and lately, the services sectors.

3 - 6
Using the percentage of population residing in urban areas as a measure of development,
Malaysia’s transformation from rural-based to urban-based economy is reflected in this
change. The 1970, Malaysia’s urban population accounted for 28.4% of total population.
By 1980 this had risen to 34.2% and to 50.7% in 1991. For the Peninsular, this figure was
54.3% or 7.7 million people in 1991.
Table 3.2: Population in Urban and Rural Areas by Region, 1991, 2000 and 2020
1991 2000 2020
Region Urban % Rural % Urban % Rural % Urban % Rural %
Northern
Region 2,277,177 51.4 2,150,525 48.6 2,974,000 57.0 2,244,891 43.0 5,130.90 70.5 2,143.50 29.5
Central
Region 3,358,736 72.4 1,282,983 27.6 5,933,309 84.0 1,130,592 16.0 9,818.00 90.4 1,046.80 9.6
Southern
Region 989,910 47.8 1,079,830 52.2 1,787,533 65.2 953,092 34.8 2,868.00 71.0 1,174.20 29.0
Eastern
Region 1,053,324 35.2 1,939,238 64.8 1,427,248 40.8 2,072,967 59.2 2,302.70 49.8 2,325.60 50.2
Peninsular
Malaysia 7,679,147 54.3 6,452,576 45.7 12,122,090 65.4 6,401,542 34.6 20,119.6 75.0 6,690.1 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
The pattern in 2000 for the country as a whole showed 62.0% residing in urban areas
while for the Peninsular this has risen to 65.4% or 12.1 million people.
On a regional basis, the Central Region which registered with the highest percentage of
urban residents in 1991 at 72.4% also recorded the highest percentage in 2000 at 84.0%.
While the Eastern Region recorded the lowest levels of urbanisation (which covers the
highlands and eastern coastal plain lands) the pattern of increasing urbanisation was also
noted where the urban residents rose from 35.2% in 1991 to 40.8% in 2000.
This pattern of increasing urbanisation of the population is expected to continue up to
2020 when it is anticipated at least 75.0% of the Peninsula population will reside in urban
areas. Table 3.3 shows the urban-rural population by 5 year interval 2000-2020.
On the other hand, Malaysia’s rural population has declined from 6.45 million or 45.7% in
1991 to 6.40 million or 34.6% in 2000. While still managing a small absolute growth in
numbers to 6.69 million persons, its relative share is expected to fall to around 25.0% by
2020.
The implications arising from this change in the rural areas will be rising incomes and
rising productivity as rural enterprises adjust to the reduced availability of local and
indeed, foreign labour. For the small holders, in particular, shifts to planting of less labour
intensive crops is also expected with agro forestry offering attractive sustainable yields as
a medium-long term alternative to oil palm, rubber and other high maintenance crops.

Table 3.3 : Urban – Rural Population (‘000), 2000 - 2020
2000 2005 2010 2015 2020
State / Region Urban Rural Total Urban Rural Total Urban Rural Total Urban Rural Total Urban Rural Total
Perlis 70.1 134.4 204.5 82.9 130.3 213.2 89.4 136.0 225.4 96.4 137.7 234.1 104.0 146.0 250.0
Kedah 648.0 1,001.8 1,649.8 775.7 1,015.7 1,791.4 924.8 1,114.0 2,038.8 1,034.2 1,147.7 2,181.9 1,170.0 1,193.9 2,363.9
Pulau Pinang 1,052.1 261.4 1,313.4 1,209.7 242.5 1,452.2 1,391.0 235.5 1,626.5 1,614.0 225.8 1,839.8 1,746.0 194.3 1,940.3
Perak 1,203.9 847.4 2,051.2 1,424.8 757.2 2,182.0 1,624.3 724.1 2,348.4 1,851.7 675.7 2,527.4 2,110.9 609.3 2,720.2
Northern Region 2,974.0 2,244.9 5,218.9 3,493.1 2,145.7 5,638.8 4,029.6 2,209.5 6,239.1 4,596.3 2,186.9 6,783.2 5,130.9 2,143.5 7,274.4
Selangor 3,667.5 521.4 4,188.9 4,699.0 370.0 5,069.0 5,252.4 387.4 5,639.8 5,871.1 403.8 6,274.9 6,562.6 418.9 6,981.5
W.P. Kuala Lumpur 1,379.3 - 1,379.3 1,581.0 - 1,581.0 1,671.6 - 1,671.6 1,767.4 - 1,767.4 1,868.6 - 1,868.6
Negeri Sembilan 459.3 400.7 859.9 528.3 379.4 907.7 578.9 391.9 970.8 634.3 403.9 1,038.2 695.0 415.4 1,110.4
Melaka 427.3 208.5 635.8 512.8 168.2 681.0 566.6 181.9 748.5 626.1 196.6 822.7 691.8 212.5 904.3
Central Region 5,933.3 1,130.6 7,063.9 7,321.1 917.6 8,238.7 8,069.5 961.2 9,030.7 8,898.8 1,004.4 9,903.2 9,818.0 1,046.8 10,864.8
Johor 1,787.5 953.1 2,740.6 2,086.8 933.2 3,020.0 2,320.2 1,008.0 3,328.2 2,579.6 1,088.3 3,667.9 2,868.0 1,174.2 4,042.2
Southern Region 1,787.5 953.1 2,740.6 2,086.8 933.2 3,020.0 2,320.2 1,008.0 3,328.2 2,579.6 1,088.3 3,667.9 2,868.0 1,174.2 4,042.2
Pahang 540.9 747.5 1,288.4 600.6 764.5 1,365.1 716.1 761.5 1,477.6 853.8 745.6 1,599.4 1,018.0 713.3 1,731.3
Terengganu 437.5 461.3 898.8 507.5 505.5 1,013.0 542.5 513.5 1,056.0 580.0 520.9 1,100.9 620.0 527.7 1,147.7
Kelantan 448.9 864.1 1,313.0 494.7 853.3 1,348.0 545.9 924.4 1,470.3 602.4 1,001.4 1,603.8 664.7 1,084.6 1,749.3
Eastern Region 1,427.2 2,073.0 3,500.2 1,602.8 2,123.3 3,726.1 1,804.6 2,199.3 4,003.9 2,036.2 2,267.9 4,304.1 2,302.7 2,325.6 4,628.3
Peninsular Malaysia 12,122.1 6,401.5 18,523.6 14,503.8 6,119.8 20,623.6 16,223.8 6,378.1 22,601.9 18,110.9 6,547.5 24,658.4 20,119.6 6,690.1 26,809.7
Source : NPP Population, Housing & Social Amenities Technical Report, 2001
National
Physical
Plan
Plan
Context
3
-
7

3 - 8
3.2.2 Economic Performance
i. National Gross Domestic Product (GDP)
The positive and negative impacts of globalisation upon Malaysia’s economy are clearly
reflected in the country’s GDP for the years 1990 to 2000. As Figure 3.2 illustrates the
country has enjoyed an average annual growth rate of 7.0%, with a high of 9.5% for the
period 1990-1995 dropping to 4.7% for 1996-2000 due, in part, to the international
monetary crisis.
For the period 2000 to 2020, at a national level the government projects an average
annual growth rate of 7.0% per annum. The basis of this growth (subject to a continued
relatively stable world economy) relies upon the private sector’s adoption of knowledge as
a key factor in production and the continuing integration and blurring of the economic
sectors as new info technologies and knowledge workers evolve from the old “production
type” economy, particularly, in the services and manufacturing sectors.
Figure 3.2: GDP Growth for Peninsular Malaysia, 1990-2020
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
1990 1995 2000 2005 2010 2015 2020
Malaysian GDP (RM bil) 106.0 166.6 218.6 313.4 452.7 617.3 845.3
Peninsular
MalaysiaGDP (RM bil)
88.4 138.1 174.6 251.8 364.9 500.0 685.0
AARG (%) 4.8% 7.5% 6.1% 7.7% 6.5% 6.5%
Share of Peninsular Malaysia
GDP to total GDP (%)
83.4 82.9 79.9 80.4 80.6 81.0 81.0
Pen. Malaysia Population (million) 18.5 20.6 22.6 24.7 26.8
Per capita GDP for Peninsular
Malaysia (RM in 1987 prices)
9,438 12,223 16,005 20,243 25,560
Note: (1) Malaysia GDP 1990 & 1995 extracted from Malaysia Economic Statistics – Time Series 2000
(2) Malaysia GDP 2000 extracted from 8MP, Table 2-6, p 35
(3) Population 2000 extracted from Population Distribution and Basic Demographic Characteristics, Census 2000
Source: (1) 8MP
(2) Malaysia Economic Statistics – Time Series 2000
(3) Population Distribution and Basic Demographic Characteristics, Census 2000
RM
Billion
(1987
prices)
AAGR

3 - 9
ii. Regional Patterns of GDP Contribution
The contributions to GDP by regions and states illustrated in Figure 3.3 and Table 3.4
show significant differences that can substantially be attributed to the economic history of
the country and its topographical character.
Table 3.4: GDP by States, 2001–2020
State GDP RM million in 1987 Prices Average Annual Growth (%)
State / Region
2000 2005 2010 2015 2020
2001-
2005
2001-
2010
2001-
2020
Perlis 1,362 1,940 2,648 3,600 4,900 7.3 6.9 6.6
Kedah 9,087 13,041 18,944 26,900 38,200 7.5 7.6 7.4
Pulau Pinang 17,314 24,904 36,446 49,500 66,300 7.5 7.7 6.9
Perak 17,153 24,371 34,235 47,000 64,600 7.3 7.2 6.8
Northern Region 44,916 64,256 92,273 127,000 174,000 7.4 7.5 7.0
Selangor 44,708 64,743 93,878 127,400 172,900 7.7 7.7 7.0
WP Kuala Lumpur 25,968 37,272 53,101 72,300 97,700 7.5 7.4 6.8
Negeri Sembilan 6,776 9,562 13,720 18,900 25,800 7.1 7.3 6.9
Melaka 6,148 8,743 12,536 16,900 22,900 7.3 7.4 6.8
Central Region 83,600 120,320 173,235 235,500 319,300 7.5 7.6 6.9
Johor 23,425 33,950 49,162 67,500 91,800 7.7 7.7 7.1
Southern Region 23,425 33,950 49,162 67,500 91,800 7.7 7.7 7.1
Pahang 8,250 11,917 17,034 23,300 32,700 7.6 7.5 7.1
Terengganu 12,746 17,937 25,149 34,100 48,900 7.1 7.0 6.9
Kelantan 5,061 6,987 9,615 13,200 18,800 6.7 6.6 6.8
Eastern Region 26,057 36,841 51,798 70,600 100,400 7.2 7.1 7.0
Pen. Malaysia 177,998 255,367 366,468 500,600 685,500 7.5 7.5 7.0
Note: GDP at 1987 prices for 2000, 2005 and 2010 are extracted from 8MP and OPP3. Beyond 2010, GDP estimates are
based on national growth targets and assumed distribution among states.
Source: (1) 8MP, Table 5-3, p 139
(2) OPP3, Table 4-9, p 110
(3) NPP Global Framework and Macro Economy Technical Report, 2001
The economic significance of the Central Region which contributed 47.0% to GDP in
2000 cannot be under estimated. This needs to be compared to Northern Region, which
contributed 25.4% and the Southern Region, which added a further 13.4% for the same
year.
State contributions to GDP for both existing and projected figures exhibits even further
variations with Selangor and Wilayah Persekutuan Kuala Lumpur the most significant
contributors at almost 40.0%. The relative contribution from the far northern and east
coast states by comparison is generally below 5.0% except for Terengganu at 7.0%
which has oil production as a resource.
While this relative disparity in contribution to GDP is of concern to policy planners at a
macro level, the economy operates as a unit. Measures to enhance the performance of
the east coast states thus needs to focus on their comparative advantages which are

3 - 10
land, culture and environments rather than reactive programmes for relocation and
dispersal of enterprises which would seriously affect the image of the country and the
viability of affected economic enterprises.
iii. Sectoral Contributions and Projections
Over the period 1990-2000 and as projected through the 2020, while changes in the
relative contribution of the three sectors are expected, broad based economic growth is to
continue (Figure 3.3).
Figure 3.3: Sectoral GDP Contribution and Growth, 1990-2020
0
10
20
30
40
50
60
70
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Primary sector (%) 25.6 18.2 14.7 11.9 8 6.3 4.9
Secondary sector (%) 27.9 31.2 35.2 37.3 37.2 37.2 37.1
Tertiary sector (%) 46.5 50.6 50.2 50.8 54.8 56.5 58
Primary sector AAGR (%) 2.4 0.8 3.1 -0.7 1.4 1.4
Secondary sector AAGR (%) 12.0 7.9 8.7 7.6 6.4 6.4
Tertiary sector AAGR (%) 11.5 5.2 7.7 9.3 7.0 7.0
1990 1995 2000 2005 2010 2015 2020
Note: Estimated from unpublished data, EPU 2000
Source: (1) 8MP
(2) Unpublished data, EPU 2000
The agriculture sector is experiencing the most significant changes in that its trend in
contribution to GDP is expected to continue to fall from its 1990 level of 25.6% to its 2000
level of 14.7% and to fall further to 4.9% by 2020. This structural change needs to be
managed through a variety of programmes such as consolidation of small holder lots into
RM
Billion
(1987
prices)
AAGR

3 - 11
more viable larger production units, agricultural extension services and social and
employment readjustment courses.
The manufacturing sector is expected to also undergo structural changes but these are
expected to be substantially limited to the firms themselves as they adjust to the
introduction of higher levels of new technology and use of information technologies.
These changes are likely to result in a shift in the character of employment categories
with an increasing demand for skilled and professional workers. Meeting the needs of this
shortfall will involve the universities and colleges as well as the creation of special skills
training institutes.
Other programmes to facilitate the enhancement of the manufacturing sector will involve
promotion of Research and Development (R&D), creation of support services, utilization
of ICT, strengthening of the industrial clusters and support of small medium enterprises
(SME).
The tertiary sector is expected to take up the shortfall from the agricultural sector by
increasing its share from a year 2000 share of 50.2% to 58.0% by 2020. The main
contributors to growth of this sector are expected to come from tourists attracted by
leisure and business opportunities offered in shopping, meetings, conventions,
exhibitions, culture, nature and eco-tourism as well as healthcare and higher education.
Other sub sectors expected to contribute to the enhancement of the sector are finance
and transport.
A wide range of programmes have already been established as reflected in sectoral
master plans such as tourism, finance and improvements to ports and shipping. Full
realization of the benefits of these programmes will require closer coordination and
integration of programmes, particularly in the tourism sector.
At the state level, considerable variations exist between relative contributions to both
state and national level of GDP. This is illustrated in Figure 3.4, state sectoral share to
GDP 2000 where the advanced states of Selangor and Wilayah Persekutuan’s economy
contrasts with the three east coast states.
Projected state sectoral shares through to 2020 further reflect the structural changes and
challenges for the future, particularly for Terengganu and Kelantan, where the need for
agricultural readjustment, development of products, niche market and down stream agro
product development are necessary. The tertiary sector offers these two states
considerable potential in the form of culture, beach island and nature tourism.
Development of skills centres to support these industries will be essential for the full
potential to be realized (Table 3.5).

3 - 13
Table 3.5: Projected State GDP Sectoral Shares (%), 2001-2020
Primary (%) Secondary (%) Tertiary (%)
Year
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
WP 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 2001–2010. 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.
Source: (1) Table 1, unpublished data, EPU 2001-2010
(2) 2015-2020: NPP estimates, NPP Global Framework and Macro Economy Technical Report, 2001
iv. Malaysian Employment
The national labour force grew by 3.1% per annum from 7.042 million in 1990 to 9.572
million in 2000. Total employment during the corresponding periods was 6.686 million and
9.271 million respectively, an increase of 3.3% per annum. This growth in labour force
was accompanied by a small increase in the employment population ratio and a more
significant increase to 1.9 in the worker-household ratio.
As the growth pattern suggests, job creation (employment against labour force), resulted
in a reduction of the unemployment rate from 5.1% in 1990 to 3.1% in 2000 or from
356,000 to 301,300 (Table 3.6).
Table 3.6: Malaysia : Labour Force and Employment, 1990, 1995 and 2000
AAGR (%)
1990 1995 2000
1991-1995 1996-2000 1991-2000
Labour Force (‘000) 7,042.0 8,254.0 9,572.5 3.23 3.00 3.12
Total Employment (‘000) 6,686.0 7,999.2 9,271.2 3.65 3.00 3.32
Employment-Population Ratio 0.37 0.39 0.40 - - -
Workers-household Ratio 1.43 1.78 1.89 - - -
Unemployment (‘000)
Unemployment Rate (%)
356.0
5.1
254.8
3.1
301.3
3.1
- - -
Source: 7MP and 8MP

3 - 14
In terms of employment by occupational group there was an increase in the demand for
workers who are highly skilled and educated, due to the strategic shift towards higher
value-added activities with capital intensity and the use of new technology (Table 3.7). The
fastest growing occupations were in the professional and technical, and the administrative
and managerial categories during the 1991-2000 period.
Table 3.7: Malaysia : Employment (‘000) by Occupational Groups,
1990, 1995 and 2000
1990 2000 2010 2020
Occupational
Group (‘000) % (‘000) % (‘000) % (‘000) %
Professional & Technical
Workers 586 8.8 1,020 11.0 1,405 11.8 2,007 13.5
Administrative &
Managerial Workers 164 2.4 389 4.2 429 3.6 639 4.3
Clerical & Related
Workers 653 9.8 1,029 11.1 1,191 10.0 1,502 10.1
Sales Workers 769 11.5 1,020 11.0 1,727 14.5 2,260 15.2
Service Workers 778 11.6 1,094 11.8 1,620 13.6 2,171 14.6
Agricultural Workers 1,846 27.6 1,678 18.1 1,846 15.5 1,636 11.0
Production & Related
Workers 1,891 28.3 3,041 32.8 3,692 31.0 4,654 31.3
Total 6,686 100.0 9,271 100.0 11,910 100.0 14,870 100.0
Source: 7MP and 8MP
The basis for the rapid urban growth is reflected in the reduction of agricultural workers
where for the period 1990 to 2000 it experienced a 9.5% decline in category share from
27.6% in 1990; a trend expected to continue to 2020, albeit at a slower rate where only
11.0% will be employed in this sector.
The emerging change to a knowledge economy is also reflected in the absolute and
percentage increases for professional and technical workers where a doubling of workers
per decade is expected with the percentage increase rising from 8.8% in 1990 to 13.5% in
2020. A parallel rise in service and sales workers from around 23.0% in 1990 to 30.0% in
2020 also reflects the changing base of Malaysia’s economy.
3.2.3 Land Use Pattern
i. Land Use Categories
The present land use pattern is a product of the country’s physical, historical and socio-
economic environments.

3 - 15
Peninsular Malaysia Land Use 2001 is categorised into four major land uses:
1
Built-up areas 437,090 ha. 3.3%
Agriculture
2
6,668,730 ha. 50.6%
Forests
3
5,844,890 ha. 44.4%
Water Bodies
4
230,930 ha. 1.7%
Peninsular Malaysia Land Area 13,181,640 ha.
5
100.0%
Notes :
1
Existing Land use distribution is based on the DOA Land Cover Map, 1991 (digital data). Statistical data
discussed in the various NPP Technical Reports (e.g. Global Framework and Macro Economy Technical
Report, 2001 – Chapter 4.0: Primary Sector, Environmental and Natural Resources Technical Report,
2001 are based on latter publications and data from DOA and DOF respectively.
2
Agriculture use includes the category ‘other’ uses such as vacant and grass land as identified in the
Global Framework and Macro Economy Technical Report, 2001
3
Inclusive of wetlands.
4
Water Bodies includes lands identified as ’ex-mining’.
5
Land area estimations are to the nearest 10 ha.
ii. Regional Patterns in Distribution of Land Use
The overall land use pattern, particularly when the percentage of built-up areas and
agricultural areas are considered, vividly illustrates the differences between the states in
the Central Region and the states in the Northern and Eastern Region.
Superficial assessment of development status based on percentages of built-up areas
compared to agriculture land however needs to take account of the relative size of each
state and of the significant forest acreages of the three east coast states (Pahang,
Terengganu and Kelantan). This is underlined by the fact that the highland spine, which is
substantially unsuitable for development, traverses these three states. The impression of
imbalance in the land use pattern between the West Coast and the East Coast is hence a
reflection not so much of different levels of development but of different terrain conditions
(Table 3.8 and Figure 3.5)
a. Built-up Areas
Built-up areas are defined in the NPP as areas under predominantly urban use
but comprising a variety of land uses such as residential, commercial, industrial
and institutional uses together with supporting facilities such as roads, public
utilities, open spaces, parks and vacant lands.
Existing built up areas account for only 437,090 ha. or 3.3% of total Peninsular
Malaysia, and of these, nearly 45.0% (196,249 ha.) are in the Central Region
where Kuala Lumpur, the municipalities of Selangor, Seremban and Melaka are
located.

3 - 16
Table 3.8: Land Use for Peninsular Malaysia, 2001 (ha.)
Land Area (ha.)
State / Region
Built Up % Agriculture % Forest %
Water
Bodies % Total
Perlis
%
8,980
2.1
11.0 61,359
0.9
75.4 10,169
0.2
12.5 921
0.4
1.1 81,429
0.6
Kedah
%
34,008
7.8
3.6 565,929
8.5
59.8 340,655
5.8
36.0 6,160
2.7
0.7 946,752
7.2
Pulau Pinang
%
29,565
6.8
28.3 45,289
0.7
43.4 24,383
0.4
23.4 5,118
2.2
4.9 104,355
0.8
Perak
%
42,954
9.8
2.0 939,797
14.1
44.8 1,004,716
17.2
47.9 109,121
47.3
5.2 2,096,588
15.9
Northern Region
%
115,507
26.4
3.6 1,612,374
24.2
49.9 1,379,923
23.6
42.7 121,320
52.5
3.8 3,229,124
24.5
Selangor
%
131,106
30.0
16.5 390,179
5.9
49.0 257,588
4.4
32.4 16,908
7.3
2.1 795,781
6.0
W.P. Kuala Lumpur
%
18,158
4.2
63.5 9,848
0.1
34.4 219
0.0
0.8 366
0.2
1.3 28,591
0.2
Negeri Sembilan
%
29,724
6.8
4.5 448,757
6.7
67.5 183,461
3.1
27.6 3,372
1.5
0.5 665,314
5.0
Melaka
%
17,261
3.9
10.4 139,194
2.1
84.1 8,596
0.1
5.2 364
0.2
0.2 165,415
1.3
Central Region
%
196,249
44.9
11.9 987,978
14.8
59.7 449,864
7.7
27.2 21,010
9.1
1.3 1,655,101
12.6
Johor
%
65,379
15.0
3.4 1,378,695
20.7
72.3 438,686
7.5
23.0 24,933
10.8
1.3 1,907,693
14.5
Southern Region
%
65,379
15.0
3.4 1,378,695
20.7
72.3 438,686
7.5
23.0 24,933
10.8
1.3 1,907,693
14.5
Pahang
%
27,382
6.3
0.8 1,471,212
22.1
41.0 2,075,952
35.5
57.8 17,758
7.7
0.5 3,592,304
27.3
Terengganu
%
23,669
5.4
1.8 564,121
8.5
43.6 665,895
11.4
51.4 41,132
17.8
3.2 1,294,817
9.8
Kelantan
%
8,906
2.0
0.6 654,346
9.8
43.5 834,567
14.3
55.5 4,782
2.1
0.3 1,502,601
11.4
Eastern Region
%
59,957
13.7
0.9 2,689,679
40.3
42.1 3,576,414
61.2
56.0 63,672
27.6
1.0 6,389,722
48.5
Peninsular
Malaysia
%
437,092
100.0
3.3 6,668,726
100.0
50.6 5,844,887
100.0
44.4 230,935
100.0
1.7 13,181,64
100.0
Source : NPP Physical Planning, Urban Centres and Hierarchy Technical Report, 2001

3 - 18
The most heavily built-up state is Wilayah Persekutuan Kuala Lumpur with 63.5%
of its 28,591 ha in this category. Pulau Pinang is a distant second with 28.3%,
while Kelantan and Perlis, at the other end of the spectrum have only 2.0% and
2.1% respectively classed as built-up.
b. Agriculture
Existing agricultural areas, which include areas under crop as well as cleared
land, grassed land, unused/vacant land, account for some 6.7 million ha.
Department of Agriculture statistics indicate that a total of 4.3 million ha. were
under agricultural cultivation in the year 1999.
Included in the agriculture land use category are the 8 designated strategic
granary areas:
1. Muda Agricultural Development Authority (MADA)
2. Kemubu Agricultural Development Authority (KADA)
3. IADP Kerian - Sungai Manik
4. IADP Barat Laut Selangor
5. IADP Pulau Pinang
6. IADP Seberang Perak
7. IADP Terengganu Utara (KETARA)
8. IADP Kemasin-Semerak
These areas together account for 311,912 ha. of land.
Oil palm plantations, which are heavily concentrated in Johor, Negeri Sembilan,
Selangor, Melaka, Pahang and Terengganu are the largest use in the agriculture
category accounting for at least 2 million ha. Rubber plantations which occupy a
further 1.2 million ha. are generally located in Melaka, Negeri Sembilan and
Perak.
For the smaller states such as Perlis and Melaka while agriculture dominates the
land use at 75.4% and 84.1% respectively, the acreages devoted to this use are
relatively small (Perlis 61,359 ha.) compared to states such as Pahang
(1,471,212 ha.) and Johor (1,378,695 ha.) which account for 22.1% and 20.7%
respectively of the national acreages.
c. Forest
The forest category comprises forests and wetlands and covers approximately
5.9 million ha. or approximately 44.4% of total land area in Peninsular Malaysia.
It is made up of 4.85 million ha. of Permanent Forest Estate (PFE), 0.77 million
ha. Protected Areas (0.1 million ha. within PFE), and 0.39 million ha. state land
forest. The PFE which accounts for 82.0% of the total forest cover is mainly made

3 - 19
up of inland forest (4.5 million ha.), peat swamp forest and mangrove forest
(278,900 ha.) and plantation forest (74,400 ha.).
The relatively large size of the three east coast states is reflected in the acreages
under forest and wetlands. These three states account for 3.5m Ha or 61.0% of
all forest land area alone. On the West Coast only Perak has significant acreages
under forestry with over 1.0 million Ha or 47.9%.
d. Water Bodies
Water bodies, which includes the area occupied by major rivers, reservoirs and
ponds, account for about 1.7% of Peninsular Malaysia. This category includes ex-
mining ponds which are strongly represented in Perak.
The relatively small areas ascribed to ‘water bodies’ for Melaka (0.2%), Negeri
Sembilan (1.5%), Perlis (0.4%) and Kedah (2.7%) reflect the findings of technical
studies that these states are likely to be subject to ‘water stress’.
Selangor and Pulau Pinang have also been identified as falling into this same
category. The areas ascribed to water bodies at 7.3% and 4.3% of the two states’
area respectively, is a minuscule 16,908 ha. and 4,448 ha. compared to the
42,915 ha. for Perak and 38,952 ha. for Terengganu.
iii. Current Settlement Pattern
The current settlement patterns are a product of the country’s past and present economic
regime where the various modes of production determines the geographical spread of
activities and hence of people.
With the passage of time, changes in the political settings, in consumer preferences,
lifestyle and technology result in new and evolving economic circumstances. These
changes lead to changes in the centres of production and hence in settlement patterns.
Such changes take place slowly because of inertia due to social factors, a general
reluctance of people to adjust and of the desire for full recovery of the costs of
infrastructure and other heavy investments.
The emergence of a new economic regime does not necessarily wipe out the settlement
pattern generated by a previous regime but 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 process has and
is likely to continue to impact upon the present settlement pattern in Peninsular Malaysia.
The present pattern for the Peninsula 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 range to the coast. The larger cities and towns are mainly
engaged in manufacturing and the provision of services. The smaller towns provide retail

3 - 20
services and government-sponsored services, generally to the public, with scattered
incidence 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.
There is no clear zone to the east of the main range 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 recently settled swaths of
the erstwhile Regional Development Authorities of southern Kelantan, central
Terengganu, Jengka, south-east Pahang and south-east Johor.
Industrial activities have penetrated the Kuantan and southern Terengganu area as well
as central Pahang. Tourism has become important to the coastal zone and offshore
islands. However, in general the eastern half of the Peninsula is less well developed than
its western half.
An infrastructure of roads, rails, ports and airports support the settlement system.
Generally, however, the communication and transportation network is better developed
on the West Coast than on the East Coast. A highway runs the length of the West Coast
zone while a highway 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 two major ports 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 Peninsula population living in urban areas increasing from
26.7% in 1970 to 65.4% in 2000. Not only has the population shifted towards urban areas
but the urban population itself has also become concentrated into a small number of
conurbations, namely the towns around Kuala Lumpur, George Town and Johor Bahru,
These three conurbations combined account for almost 40.0% of the Peninsular
population and is likely to increase to between half and three-quarters by 2020.
Urbanisation is characterised not only by rural-urban migration but migration directly to
the conurbations. Population in the villages is being depleted. Although most villages
retain their older residents, remoter 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 to the conurbations.
Between the populated areas of the two coasts remains an empty heart of unpopulated or
very sparsely populated jungle, covering the main range and the eastern range. This is an
area that is not only a sanctuary for the rich wildlife of the country but a heritage that
should perhaps be cherished by Malaysians (Figure 3.5).

3 - 21
iv. Urban Growth Conurbations and Centres
To complement the economic assessment of growth, an urban population component
was added which concluded in designation of settlement according to a functional
hierarchy. This hierarchy identified seven levels of urban settlement of which four have
been incorporated into the macro level NPP assessment. The hierarchy by functional
center and population size is detailed in Table 3.9.
Table 3.9: Proposed Hierarchy of Conurbations 2020
Functional
Hierarchy
Conurbation
Population
2000 (‘000)
Population
2020 (‘000)
Additional
Population
(‘000)
% Share of
Total 2020
Urban
Population
National Growth
Conurbation
Kuala Lumpur 4,815.4 8,457.7 3,642.3 51.7
George Town 1,266.8 2,424.5 1,157.7 14.8
Johor Bahru 1,013.0 1,836.6 823.6 11.2
Regional Growth
Conurbations
Kuantan 317.0 637.9 320.9 3.9
Sub-total Main
Conurbations
7,412.2 13,356.7 5,944.5 81.6
Ipoh 608.1 1,085.7 477.6 6.6
Intermediate
(Connective) Growth
Conurbations
Melaka 395.5 667.0 271.5 4.1
Kota Bharu 269.9 418.9 149.0 2.6
Alor Star 252.9 385.3 132.4 2.4
Kuala Terengganu 272.5 368.8 96.3 2.2
Urban Growth
Centres / Future
Conurbations
Kangar 54.4 86.1 31.7 0.5
Sub-total Other Conurbations 1,853.3 3,011.8 1,158.5 18.4
Total Conurbations 9,265.5 16,368.5 7,103.0 100.0
Source: NPP Population, Housing and Social Amenities Technical Report, 2001
a. 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 Zone.
The effective Kuala Lumpur Conurbation encompasses an area of approximately
504,000 ha. 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
8.46 million or 32.0% of the Peninsular Malaysia population by 2020 (Figure 3.6).
A major issue for the Kuala Lumpur conurbation, given the projected population,
is the need for further in-depth studies to address the need for urban land in view
of environmental aspects, implications on the quality of life for the conurbation
residents and providing for infill and redevelopment of areas within the
conurbation. This review should also establish zones of green lungs to provide for
identity of communities as well as regional recreational space.

3 - 23
b. Regional Growth Conurbation
• George Town Conurbation
This is an area based on Pulau Pinang and adjacent areas in southern
Kedah and northern Perak. This conurbation has been referred to as the
George Town Conurbation.
In the case of George Town Conurbation, the proposed conurbation area will
extend into three states: Pulau Pinang, southern Kedah, and northern Perak.
The George Town Conurbation is expected to provide for a support
population of 2.42 million within an area of 150,000 ha. by 2020.
• Johor Bahru Conurbation
The Johor Bahru Conurbation is expected to provide for a population of 1.84
million by 2020 and the area is expected to cover the southern part of the
state stretching from Tanjung Pelepas in the west to Pasir Gudang in the
east.
• Kuantan Conurbation
The strategic location, infrastructure and comparative advantage has
warranted the inclusion of Kuantan in the category Regional Growth
Conurbation although on size alone it functions at a lower level. It is expected
a Kuantan Conurbation extending into southern Terengganu will emerge with
a population of some 0.64 million and that it will function as a focus point for
the East Coast growth.
c. Intermediate (Connective) Growth Conurbations
Ipoh and Melaka represent Intermediate (Connective) Growth Conurbations. Ipoh
is projected to account for a population of 1.09 million while Melaka is projected
to have a population of 0.67 million by year 2020.
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.
d. Urban Growth Centres
The remaining state capitals viz. Kota Bahru, Alor Star, Kuala Terengganu and
Kangar represent the next layer of the hierarchy with administrative functions of
central importance. However many state capitals are not likely to grow
economically in the fierce global competitive climate.

3 - 24
e. Future Conurbations
Within the Peninsula context there exist a number of distinct lower order centres
which are manufacturing and service centres in their own right. These centres
cater not only to the international markets but also to local rural areas. Examples
of these well-established towns are Muar-Batu Pahat-Kluang and the emerging
centres of Temerloh-Mentakab and Sitiawan-Lumut-Manjung.
These areas have the potential to become the nucleus of the future conurbations.
v. Conurbation Delineation
The urban growth process being substantially private sector initiated is typically
undertaken on an ad hoc basis and with non-sequential additions to the existing
developed lands. That is, new development is often scattered over an area adjacent to
existing urban areas but in discrete and relatively separate schemes. In recognition of this
process and the need to rationalize spatial planning, optimise utilization of land for
sustainable development, the NPP has identified conceptual edges to the prime urban
areas which allows for the identification of the larger functioning economic entity. These
areas, referred to as conurbations, include the core urban centre as well as adjoining
urban and rural type land areas within a catchment assessed on travel time criteria and
physical constraints.
The NPP proposes the use of several basic parameters for the purpose of delineating an
edge to a conurbation. The use of designated parameters which have been set at the
macro NPP level will guide and ensure an integrated and consistent approach in terms of
the future delineation of all conurbations within Peninsular Malaysia.
Parameters taken into consideration in the detailing of the delineation of conurbations
have been:
• Committed Development.
• Acceptable travelling time, door to door, for journey to work (Kuala Lumpur
conurbation - 45 minutes, Regional Conurbations and other State Capitals - 30
minutes).
• Physical: buildings based on concentration.
• Exclusion of Prime Agricultural Areas (PAA) as designated by the NPP.
• Exclusion of Priority Environmentally Sensitive Areas (ESA) as designated by the
NPP.
However, it is presumed that the final delineation of the various conurbation boundaries
will be refined to include further parameters which are relevant at the regional, state and
local levels. As an example, the NPP distinguishes PAA which are of prime importance at
macro national level, whereas the various state level studies may identify ‘agricultural
crops’ not located in a PAA which are of utmost importance to the state for conservation
and protection and hence an additional parameter must duly be incorporated in the
detailed delineation of the conurbation areas.

3 - 25
vi. Small and Intermediate Towns
Towns between 10,000 and 80,000 populations are classed as small and intermediate
towns. Except for those located within the sphere of influence of the conurbations and
those exceptional groups like Temerloh-Mentakab, Lumut-Sitiawan-Manjung or the
somewhat bigger towns like Muar-Batu Pahat-Kluang, most of these towns have
languished. This is an impact of the changing structure of the Malaysian economy.
Small and intermediate towns had developed based on trade with and services to their
hinterlands, including administrative services. The hinterland economies, based on
agriculture, have not expanded. Unless such towns can industrialise as 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, because of rising incomes
elsewhere, they 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 (Table 3.10).
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 flow of population to the conurbations.
On the other hand, small and intermediate towns 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 such towns, for example, Nilai, Rawang, Balakong, Senai, Ulu Tiram, etc.
have gone through this experience. As transportation facilities such as highways and fast
train connections from the conurbations extend further out, more small and intermediate
towns will benefit from development expansion from the urban cores.
What the small and intermediate towns face is a historical experience that similar towns in
other countries that had industrialised had faced. 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 small
and intermediate towns become small prosperous places. They are still needed by the
countryside even if the countryside can only sustain a limited trading population.
Entrepreneurs from these towns may provide the 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
young to migrate and integrate into the urban economy would be called for.

3 - 26
Table 3.10: Small and Intermediate Towns Population Changes
Population
Urban Centre
1991 2000
AAGR
Population Change
Category 5
JOHOR
Yong Peng 12,235 20,257 5.76 2
Kulai 29,929 48,149 5.43 2
Senai 18,680 45,483 10.39 1
Ulu Tiram 22,198 49,829 9.40 1
Kota Tinggi 24,327 39,006 5.39 2
Mersing 19,055 20,094 0.59 4
Bukit Bakti 9,666 20,123 8.49 1
Tangkak 17,057 26,763 5.13 2
Pekan Nanas 10,002 17,182 6.20 1
Pontian Kecil 30,181 41,187 3.51 3
Labis 12,861 17,789 3.67 3
Segamat 41,096 56,706 3.64 3
KEDAH
Kuala Kedah 15,582 16,932 0.93 4
Bedong 11,158 29,669 11.48 1
Gurun 10,379 13,191 2.70 3
Jitra 35,881 49,455 3.63 3
Kuah 10,503 20,862 7.92 1
KELANTAN
Kadok 15,315 17,159 1.27 4
Pangkal Kalong 29,386 34,672 1.85 4
Peringat 18,352 20,650 1.32 4
Pasir Mas 15,374 17,092 1.18 4
Tanah Merah 21,825 24,803 1.43 4
Tumpat 11,882 11,646 - 0.22 5
Wakaf Bharu 14,408 16,997 1.85 4
Gua Musang 14,448 16,597 1.55 4
Kuala Krai 19,914 19,531 - 0.22 5
MELAKA
Ayer Keroh 16,984 27,739 5.60 2
Bukit Baru 42,323 47,747 1.35 4
Klabang 22,939 30,536 3.25 3
NEGERI SEMBILAN
Kuala Pilah 17,787 18,040 0.16 4
Port Dickson 47,892 69,175 4.17 3
Tampin 15,271 22,131 4.21 3
Bahau 16,649 24,314 4.30 3

3 - 27
Population
Urban Centre
1991 2000
AAGR
Population Change
Category 5
PAHANG
Bentong 31,243 51,504 5.71 2
Jerantut 15,811 24,737 5.10 2
Kuala Lipis 11,480 13,501 1.82 4
Raub 21,298 31,669 4.51 2
Mentakab 21,575 32,413 4.63 2
Temerloh 13,335 36,508 11.84 1
PERAK
Bidor 18,208 24,247 3.23 3
Tanjong Malim 11,427 14,909 3.00 3
Tapah 13,750 21,295 4.98 2
Ayer Tawar 10,351 15,730 4.76 2
Kampong Koh 17,691 27,213 4.90 2
Lumut 22,234 31,882 4.09 3
Pantai Remis 10,714 13,420 2.53 3
Sitiawan 27,281 44,651 5.63 2
Batu Gajah 19,008 34,038 6.69 1
Kampar 23,281 19,795 - 1.79 5
Lawan Kuda Baharu 15,886 17,536 1.10 4
Bagan Serai 12,395 16,703 3.37 3
Parit Buntar 7,475 23,368 13.50 1
Kuala Kangsar 31,806 34,690 0.97 4
Sungai Siput Utara 33,677 34,486 0.26 4
Teluk Intan 62,329 60,615 - 0.31 5
PERLIS
Kangar 48,838 54,390 1.20 4
PULAU PINANG
Perai 56,401 55,860 - 0.11 5
Pematang Kuching 22,887 24,087 0.57 4
Nibong Tebal 20,856 30,365 4.26 3
Val D’or 18,347 15,683 - 1.73 5
Tanjong Bungah 16,344 15,683 - 0.46 5
Tanjong Tokong 25,450 23,183 - 1.03 5
SELANGOR
Gombak Setia/Taman Perwira 19,822 39,598 7.99 1
Rawang 24,505 65,769 11.59 1
Taman Greenwood/ Taman
Gombak
41,699 79,711 7.46 1
Banting 25,796 48,240 7.20 1
Jenjarom 11,614 18,245 5.15 2

3 - 28
Population
Urban Centre
1991 2000
AAGR
Population Change
Category 5
Kuala Selangor 16,283 33,816 8.46 1
Sungai Besar 14,805 20,663 3.77 3
Semenyih 15,075 45,088 12.95 1
Kuala Kubu Baru 11,972 17,763 4.48 3
TERENGGANU
Dungun 41,282 68,701 5.82 2
Cukai 43,775 62,875 4.11 3
Kerteh 12,954 18,285 3.90 3
Marang 14,522 17,387 2.02 4
West Malaysia Total Urban
Population 7,679,147 12,122,090 5.20
West Malaysia Total Population 14,131,723 17,470,092 2.50
Source: DOS, Population and Housing Census of Malaysia 2000, Preliminary Count Report for Urban and Rural Areas.
5
Population Change Category :
1 Fast Growth
2 Average Growth
3 Slow Growth
4 Stagnant
5 Declining
vii. Special Feature Towns
There are, however, some small and intermediate towns, or even towns which have not
reached the urban centre threshold of 10,000 populations that enjoy a special feature that
could be a basis for economic growth (Table 3.11). However, the limits of development
based on such special features must be recognised to avoid waste of resources.
viii. Rural Growth Centres
At the very lowest level of ‘centres’ would be the Rural Growth Centres (RGC). These are
central villages that could conveniently serve a rural hinterland of several villages.
However, in the process of urbanisation and rural out-migration many of the villages and
hamlets are likely to become depopulated and no longer economic to be serviced
properly. It may become necessary to consolidate the rural population at the RGCs,
which will also make it possible for the services provided to be enhanced. Incidentally
rural services such as in education and health should be re-examined to match them with
the emergent rural population structure.

3 - 29
Table 3.11: Special Feature Towns
Special Feature Centre
Border Town
Bukit Kayu Hitam
Padang Besar
Rantau Panjang
Pengkalan Kubur
Bukit Bunga
Pengkalan Hulu
Tourism Towns
Port Dickson
Mersing
Bandar Cukai
Kuah
Tanah Rata
Fraser’s Hill
Raub
Kuala Lipis
Gua Musang
Jerantut
Maran
Muadzam Shah
Kuala Rompin
Special Role Centre Putrajaya
Special Industry Centre
Kertih
Cyberjaya
Future Communications and Transport Node
Temerloh-Mentakab
Kuala Lipis
Gua Musang
Lumut-Sitiawan-Manjung

DEVELOPMENT STRATEGY
CHAPTER 4

National Physical Plan Development Strategy
4 - 1
CHAPTER 4
DEVELOPMENT STRATEGY
4.1 Impact of Global Trends
The development strategy for the NPP has been formulated to provide a spatial or
geographical expression to Vision 2020, OPP3, and 8 MP, as well as the sectoral master
plans for agriculture, industry, tourism, water management and transport. The spatial
expression of these national plans and national sectoral policies requires the country:
competitiveness.
ii. To promote balanced regional development for national unity.
iii. To optimise utilisation of land and natural resources for sustainable development.
Simultaneously, the formulation of the NPP must take cognisance of the processes
affecting the global economy and the nation’s prospects for economic development. At
the global level two particular processes have been observed that are having a
substantial impact not only on the composition of world trade patterns but also on the
pattern of land use of the ‘knowledge type’ economies.
The first of these processes is globalisation where, at a city level, the factors of
significance are the breaking down of trade barriers and the increasing global reach of
large corporations.
The second process has been referred to as the emergence of the k-economy, a feature
of the post-industrial revolution. This process involves a shift from manufacturing and
goods handling towards employment in and production of services and the generation of
knowledge as an economic product together with the use of knowledge to enhance
economic productivity. Nascent elements of this shift are already evident in the Malaysian
economy. It is hence possible as well as critical for Malaysia to be able to attract
international investments in these emergent sectors to ensure that the country not only
achieves the objectives of Vision 2020 but also maintain a competitive position in the
post-2020 period.
The new global trend creates a new worldwide calculus of lowest cost and highest return
locations. Preferred locations must offer efficient infrastructure and good access to
international communications and transport as well as other support services and
facilities. An integral feature of the k-economy is its dependence on knowledge workers,

4 - 2
either locally produced or attracted to a location by job opportunities and the overall
environment. Knowledge workers are characterised by their mobility as they are
supported by their relative affluence, their level of education and their cosmopolitan
adaptability. The criterion of attractiveness of a location to them, after the availability of
the knowledge-based employment itself, is the quality of life that the location can offer to
them and their families. Planning for the k-economy must, therefore, take cognisance of
not only what attracts investors but also what attracts knowledge workers.
A result of these two processes that have been observed at the international scale is the
emergence of what may be referred to as new urban hierarchies consisting of ‘advanced
cities’ that offer higher order services. Below these cities are ‘developing cities’ within
which manufacturing still represents the economic base.
A common character of the advanced cities is the increase in agglomeration of higher
order services activities not only in a fewer number of centres but also into even more
centralised locations. This process of increasing concentration involves information
handling services activities such as business and finance, command and control
functions, including international corporate headquarters, tourism including both leisure
and business, and creative and cultural industries as well as specialised services which
include advanced healthcare, higher education and research and development. At the
international level, the leading global cities include London, New York and Tokyo. These
are followed by a much larger group servicing specific locations or catchments such as
Sydney for the western Pacific Rim, Milan for fashion and Los Angeles for media. At the
regional level, Malaysia, represented by Kuala Lumpur, is competing against Singapore
and to a lesser extent Bangkok to be the leading ‘advanced city’ for the region.
Some of the qualities essential to attract knowledge workers and that are, therefore,
supportive of the higher level services activities, include quality housing, international
quality education for children, international quality health services for families, high-end
shopping as well as recreational and sports clubs. There is also a need for a generally
cosmopolitan living environment offering safe and vibrant living conditions, variety and
tolerance in cultural activities and expressions, a wide choice in entertainment and
cuisine, and a cosmopolitan life style. All of these qualities are already available in the
three main metropolises of the country and particularly in Kuala Lumpur.
These assets should be utilised more aggressively in attracting international investors to
the country. It would be injudicious to attempt to steer investors to less developed
locations, unless, for reasons of their own, such sites are specifically requested for. Nor
would it be wise to divert financial resources to build up the infrastructure in small isolated
towns and cities and less developed regions, since the facilities in the main metropolises
have yet to be fully exploited and it would take perhaps many years to accumulate the
features in the isolated cities and towns before they become attractive to international
investors and knowledge workers. The NPP, therefore, proposes a basic development
strategy of ‘Selective Concentration’, focussing on the three main conurbations of Kuala
Lumpur, George Town and Johor Bahru as the vehicles for propelling Malaysia towards
the aspirations of Vision 2020 and into the era of k-economy.

4 - 3
4.2 Urbanisation
In the last several decades since independence Malaysia has been experiencing
accelerating urbanisation as a result of the structural economic change from dependence
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. This 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. Indeed, the main
concentration is in the Kuala Lumpur conurbation, with George Town and Johor Bahru
struggling to keep pace. Johor Bahru has the advantage of proximity to Singapore and
can benefit from overspill development from Singapore. George Town has a long tradition
of cosmopolitan urban services to its regional sphere of influence and maintains its
position as the second city of the Peninsula (having lost its first position to Kuala Lumpur
soon after the selection of Kuala Lumpur as the national capital).
The changing world economy superimposes its effects on individual industrialising
countries, and these effects are felt particularly in the pattern of urban centres. While the
accelerated pace of urbanisation may be driven by internal forces, the concentration of
productive investments and population into a small number of city regions is as much a
response to external forces, with the necessity to direct international trade,
communications and exchange of information, movement of people, and so on, into
concentrated channels and points of contact and commerce with the wider world.
It may appear logical to expect that only one large centre would have emerged in a small
country like Peninsular Malaysia while other centres would have declined. However,
Malaysia is fortunate in that a strong urban hierarchy had already been developed over
many years in the colonial and post-colonial eras and this hierarchy, with strong local
groups of entrepreneurs, continues to provide a sustainable geographical base for further
industrialisation and economic modernisation. A pattern of polycentric interdependent
urban centres has emerged with the Kuala Lumpur conurbation being the ‘advanced’ city
supported by the George Town and Johor Bahru conurbations (Figure 4.1).
Nevertheless, there is early indication that the Kuala Lumpur conurbation is growing
faster than either the George Town or the Johor Bahru conurbation and the emergence of
a single overwhelming primate city is not off the cards. Pre-emptive action should be
taken to forestall such further concentration of population and productive capacity into
one single super conurbation. Among the strategies proposed by the NPP is a fast rail
system connecting the main cities. This will provide the quick and easy connection of the
peripheral conurbations to the core conurbation and reduce the centripetal pressure to
locate businesses in the core conurbation.
The NPP recognises these trends are part of the international processes associated with
globalisation and transformation into the k-economy. These processes, in combination
with efficiency assessments, suggest that the present trend for urban development to
concentrate in the larger centres at the expense of rural areas and the smaller urban
settlements will continue. At a macro economic level, given the present stage of economic

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growth enhanced economic performance 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.
For the NPP, 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. The challenge for the national
and lower level planning authorities is to manage this urban growth, both in the fast
growing conurbations as well as in the slow growing or even declining urban areas, to
create urban centres offering residents a high quality of life, access to community support
such as schools, colleges, hospitals and parks as well as services, good quality urban
transport and utilities.
Urban centres outside of the three major conurbations are anticipated to grow more
slowly and, over time, lose their share of the urban population. The capability of state
capitals to service their surrounding populations should, however be supported. A special
case should also be made of Kuantan. Although clearly not in the same league as
George Town and Johor Bahru, it should be selected for infrastructural support on a par
with the other two conurbations. Focusing on Kuantan as an exception is a development
strategy for regional balance by making it possible to create a substantial centre on the
East Coast as a base for an economic spread effect.
Many small and intermediate towns, except for those lying within the sphere of influence
of the conurbations, are likely to decline in population. For lower tier authority planners
this should be seen as a challenge to enhance productivity and efficiency of the small and
intermediate towns and create small prosperous places rather than be unduly
overwhelmed by population loss. There are, however, a number of small and intermediate
towns that have shown indications of becoming the nucleus of future conurbations. These
include Mentakab-Temerloh, Lumut-Sitiawan-Manjung and Muar-Batu Pahat-Kluang.
There is also a number of small centres that possess special features that may provide a
basis for the development of niche activities.
Selective concentration remains the basic strategy for the NPP. Within the conurbations,
presently festering and emergent urban issues will be encountered. 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 imminent threats. The NPP proposes counter
measures to anticipate these threats. Nevertheless, the imagination and diligence of
lower tier planners and city administrators will be fully challenged.

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4.3 Regional Balance
Notwithstanding addressing the issue of the country’s need for global competitiveness,
the NPP must also address the issue of regional imbalance. This should be carried out
while avoiding internal competition as well as be realistic and capable of success.
Regional balance is, therefore, interpreted as equal access to equitable levels of real
income and personal development opportunities and not necessarily as equal opportunity
to the same forms of development. Land and natural resources of the less developed
regions, which still remain not fully utilised, should be further used to increase the
productivity of these regions and, therefore, help to reduce regional imbalances.
Resource-based industries, forestry-based activities and industries, downstream
agriculture-based activities, resort tourism, in particular eco-tourism, craft-based
industries and other niche activities – in other words economic activities that are not
subject to the same degree of global competition as the activities that are being attracted
to the conurbations should be directed to the less developed regions. Appropriate
infrastructure in these regions, especially in ICT and the transportation network in the
areas of potential tourism development should be enhanced to facilitate their
development and expedite their integration into the k-economy activities to promote
regional balance include an early extension of the national highway system to Kelantan.
Regional balance has also be interpreted as setting the stage for future development.
Hence, the inclusion of the Kuantan conurbation as one of the urban regions to be
promoted together with George Town and Johor Bahru, as a reception area for the
emergent and advanced economic sectors.
The modernisation of agriculture and enhancement of agricultural incomes, however,
remains a basic factor in the eventual abolition of regional imbalances. Nevertheless, out-
migration from the less developed regions should be anticipated in the national
development strategy. There is a need to strengthen the provision of educational,
technical training and social development programmes in the less developed states in
anticipation of the need for segments of these populations to integrate more effectively
into the urban economy of the conurbations.
4.4 Rural Development
The Department of Statistics definition of an urban area is a threshold of 10,000
populations, below which settlements are considered to be rural. At present, settlements
generally regarded to be rural based could be broadly categorised as traditional villages
or new villages, Orang Asli settlements and FELDA settlements. The settlements are
presently nested within the category of land identified as ‘agriculture’.
Some 1,189 traditional and new villages are identified likely to remain rural within the plan
period as they do not fall within the sphere of influence of existing urban centres (IP 7). Of
these villages, 771 traditional villages are located within PAA, thus indicating the
continuing importance of agricultural sector activities for the rural population affected. This

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indicates the importance of providing employment opportunities through higher yield
agriculture crops for the rural population residing within these areas. In this respect, one
of the recommendations is to encourage agricultural activities such as cash crops, market
gardening and livestock within strategically located agricultural areas, that is villages
close to designated conurbations. The process of urbanisation itself should be harnessed
to support rural population economically and so produce a beneficial impact on the lives
of the rural population.
To diversify the rural economic base, the development of economic activities based on
resource-based manufacturing, craft-based industries, value-added downstream
agriculture-based activities, eco-tourism and forestry should be encouraged in the Rural
Growth Centres (RGC). Development of non-agricultural activities should, however,
proceed in tandem with the modernisation of agriculture, including the rationalisation of
management units and application of modern technology and methods.
The socio-economic role of the traditional villages should be to enhance their status by
designating functions relying upon inherent advantages of the surrounding areas such as
linkages to special feature towns, nature tourist attraction areas, coastal tourism towns or
agricultural areas, offering downstream development possibilities. In addition to the
promotion of high value agricultural activities within rural areas, it is proposed that the
rural areas and population be closely integrated with future tourism activities to capture
the benefits of this high potential and high growth industry.
A generalised range of possible economic focus areas for rural enterprises have been
identified based on location and the local economic base (IP 7). As has been noted in
many economically (and socially) vital centres, their success is often driven by a positive
approach to the role of culture and of individual enterprise. Rural-urban economic
linkages should be enhanced. Entrepreneurs from rural growth centres, traditional
villages, new villages, Orang Asli settlements or even from the small and intermediate
towns embarking on agricultural projects to supply food and materials to the population of
the urban conurbations or the tourist resorts or to supply intermediate industrial or other
services to the industries of the conurbations should be supported by government
programmes. While suggested economic linkages have been identified, more detailed
studies are however required to establish a viable economic base for each rural growth
centre, new village or small town. In all instances, individual SMI and SME initiatives
resulting in enhanced economic performance should be supported. The implementation
of future infrastructure and rural development programmes should ensure that the
benefits of economic growth of the country can accrue to the rural population and enable
their effective participation in the national economy.
The rural areas will, nevertheless, still face population decline not only because of the pull
factor of urban employment but also because of the push factor of agricultural
modernisation and increase in productivity. It is, therefore, important to rationalise rural
settlements not only to support an expanding urban-based economy but also to service
the remaining rural population efficiently and effectively.

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The maintenance of public services, such as in public health, education, communications
and public transport, utilities, security, recreational facilities and so on in the villages and
the small and intermediate towns, should continue but should be rationalised. The
distribution of the services, as well as the types of services and facilities provided, need to
be monitored and adjusted. The nation is already facing the necessity of closing schools
in rural areas because of the decline in the school-going age population in rural areas.
Public health services, which hitherto have concentrated on maternity and child-care in
the rural areas, may also need to be re-examined. As the population structure changes
and more child-bearing age women become concentrated in the urban areas, the present
birth-related rural health care services may have to move with the population to the urban
areas. At the same time the aging population of rural areas will require that geriatric care,
which is still poorly developed, be quickly and greatly enhanced.
As the rural population decreases some villages, including traditional villages, new
villages, Orang Asli settlements, as well as FELDA settlements, are likely to decline to a
level where the provision of public facilities and services is no longer sustainable. The
rural population should be consolidated at rural growth centres where a high level of
public facilities and services can continue.
4.5 Optimising the Use of Land
4.5.1 Land Availability Assessment
The phenomena of urban growth in the Peninsula, reinforced by the significance of the
contribution to GDP by urban based activities, has resulted in an impression of broad
scale urban sprawl. The Peninsula wide land use analysis however suggests built-up
areas only accounted for 3.3% of Peninsula land in 2000.
An assessment of the need to accommodate future urban growth was thus undertaken to
establish not only the gross area of land required for future urban growth but also to
identify at state level expected directions of growth. The land use assessment
incorporates the findings of the sectoral studies on agriculture, the environment, utilities
and transport.
4.5.2 Agriculture Land
The National Agriculture Policy (NAP3) seeks to enhance the performance of the rural
sector through optimal use of resources and proposes to reduce the cost of food imports.
Among the measures incorporated into the NPP to fulfil these requirements is the
designation of PAA. The intent of the process is to delineate the PAA via a multiplayer
ranking sieve to identify, conserve and protect those agricultural areas of high productivity
value and to direct urban encroachment to areas of lower agricultural productivity value.

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The criteria utilised in the assessment include:
i. Designated granary areas,
ii. Existing agricultural lands under Soil Class 1 and 2, and
iii. An agro-climatic assessment of productivity that provided for delineation of oil
palm Rank 1 and 2 areas.
The distribution of the various types of PAA is illustrated in Table 4.1.
Table 4.1: Prime Agricultural Areas
Prime Agricultural Areas (ha.)
State / Region
Paddy %
Oil Palm
Rank 1 & 2 %
Agriculture
under Soil
Class 1 & 2
% Total
Perlis 28,314 9.1 - - 21,645 1.1 49,959
Kedah 113,231 36.3 5,436 0.5 179,102 9.3 297,769
Pulau Pinang 14,154 4.5 4,584 0.4 10,527 0.5 29,265
Perak 48,359 15.5 63,923 6.1 339,907 17.6 452,189
Northern Region 204,058 65.4 73,943 7.1 551,181 28.5 829,182
Selangor 21,311 6.8 115,815 11.1 115,748 6.0 252,874
WP Kuala Lumpur - - 1,408 0.1 705 0.0 2,113
Negeri Sembilan - - 69,787 6.7 186,269 9.6 256,056
Melaka - - 14,748 1.4 65,988 3.4 80,736
Central Region 21,311 6.8 201,758 19.3 368,710 19.1 591,779
Johor - - 329,894 31.5 461,127 23.9 791,021
Southern Region - - 329,894 31.5 461,127 23.9 791,021
Pahang 1,950 0.6 382,457 36.5 290,920 15.1 675,327
Terengganu 9,552 3.1 58,464 5.6 128,917 6.7 196,933
Kelantan 75,041 24.1 704 0.1 129,862 6.7 205,607
Eastern Region 86,543 27.8 441,625 42.2 549,699 28.5 1,077,867
Peninsular Malaysia 311,912 100.0 1,047,220 100.0 1,930,717 100.0 3,289,849
Source: NPP Physical Planning, Urban Centres and Hierarchy Technical Report, 2001
The agricultural lands represent the largest single use category in the Peninsula with palm
oil and rubber plantations being the most significant activity. Sectoral studies indicate that
at the macro level, no additional lands need be made available for this use. All projected
increases in productivity are to be achieved through enhanced production technologies
and utilisation of the substantial areas of under utilised and vacant rural lands.
At the micro level however significant changes are expected as farmers respond to
opportunities offered by access to the larger and increasing affluent urban population, of
import substitution, particularly of food products and as they engage in the niche market
export of tropical products such as fruits and flowers. Malaysian farmers will also seek to
utilise its comparative advantage as a secure Muslim country to promote ‘Halal’ products
to the Muslim world.

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The output of this analysis based on the approach that PAA should be conserved as part
of the country’s need to be relatively self sufficient in food production and that the
agriculture sector should be an efficient user of land is the generalised location of PAA
(IP 4). Studies at state and local levels should further refine the delineation of these
areas.
4.5.3 Forest and Environmentally Sensitive Lands
A similar multi-layered ranking exercise was undertaken for the other non-agriculture non-
urban (built-up) areas. This process which covered, among other considerations, the
status of forest lands, marine parks, catchment areas, drainage, recharge areas, erosion
risk and elevation identified three classes of Environmentally Sensitive Areas (ESA).
These are:
ESA Rank 1: All protected areas, potential protected areas, wetlands, turtle landing
sites, catchment areas of existing and proposed dams and areas with
contours above 1000 metres above mean sea level (a.m.s.l).
ESA Rank 2: All other forests, wildlife corridors, buffer zones around ESA Rank 1
areas and areas with contours between 300-1000 metres a.m.s.l.
ESA Rank 3: All marine park islands, buffer zones around ESA Rank 2 areas,
catchment areas for water intakes, areas for groundwater extraction (well
fields), areas with erosion risk greater than 150 ton/ha./year, areas
experiencing critical or significant coastal erosion and areas between
150-300 metres a.m.s.l.
The output of the sensitivity analysis is shown in IP 8.
With respect to the land use assessment, forest lands were identified as the second most
significant land use in the Peninsula. Most of these lands are the State Government
controlled forest reserves. Although classified in different categories and in areas of
variable terrain, they represent the most distinctive land use pattern in the Peninsula.
The forest lands form an almost continuous corridor of land from the north to south. This
pattern of use offers the opportunity to create a unique forest spine corridor which would
act as a reservoir for biodiversity and associated opportunities arising from the
biotechnology, provide protection areas for water catchments, create environments
offering opportunities for nature and eco tourism as well as provide regional recreation
facilities for the urban population. These functions would co-exist with programmes for the
sustainable management of selected forests for logging. This latter activity would
complement efforts in agro forestry as Malaysia exploits its comparative advantage in the
production of tropical hard woods.

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At the macro level no requirement exists for lands to be excised from forest category for
alternative uses. As mentioned, agricultural expansion will be based on increased
productivity and crop changes on the existing acreage: urban expansion will utilised the
least productive agriculture lands. Conserving forests lands would be integral to
optimising the use of land in the country. Indeed the multifunctional role of the forest
lands should be enhanced through the recognition of the central forest spine and
programmes to create linkages and corridors to the more isolated reserves (IP 9). These
corridors could include mono culture crops but would exclude housing and similar
activities.
4.5.4 Urban Land
i. Requirements
In assessing the land required for urban purposes two factors were considered, viz. the
demand for land generated by the increase in urban population and secondly an
assessment of lands that could be made available for urban uses without jeopardizing the
integrity of key land uses considered essential as food supply, agricultural production
purposes or which are subject to environmental constraints.
The assessment of demand was based on a number of assumptions, the most significant
among these being that overall the typical pattern of development in Peninsular Malaysia
will not change significantly. However, in line with NPP objectives to achieve higher levels
of land use efficiency, better use of infrastructure, in particular public transport and to
create a higher quality urban environment with more parks and recreation areas, the
present overall gross urban density of approximately 29 persons per hectare will need to
decrease slightly to 25 persons per hectare. This target gross urban density has been
adopted to establish a macro level assessment of the need to provide urban land.
For the individual states, this figure will need to be adjusted to account for the
development characteristics of each area. The present overall gross density of Kuala
Lumpur is for example higher than 25 persons per hectare. At the Kuala Lumpur
conurbation level however, 25 persons per hectare is an applicable average even though
individual components of the conurbation, such as Wilayah Persekutuan Kuala Lumpur
have been developed at higher densities.
For the year 2000, Peninsular Malaysia’s urban population of 12.12 million is
accommodated on built-up lands which have been assessed at 437,090 hectares.
Accounting for the increase in urban population to the year 2020, a further 331,520
hectares of land will be required for urban uses. This results in a total commitment for
urban land in 2020 of some 768,610 hectares; an area equivalent to approximately 5.8%
of Peninsular Malaysia’s land area (Table 4.2 and Figure 4.2).

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Table 4.2: Urban Land Required Between 2000 and 2020 and Land Available
Not Subject to Development Limitations
State/region
Urban Land Required1
(ha)
Lands Not Subject to
Limitations (ha)
Net Position (ha)
Perlis 1,800 840 - 960
Kedah 28,560 18,152 - 10,408
Pulau Pinang 25,080 20,499 - 4,581
Perak 26,760 133,530 + 106,770
Northern Region 82,200 173,021 + 90,821
Selangor 111,720 13,884 - 97,836
WP Kuala Lumpur 19,600 5,123 - 14,477
Negeri Sembilan 10,040 22,989 + 12,949
Melaka 10,760 36,397 + 25,637
Central Region 152,120 78,393 - 73,727
Johor 52,080 135,976 + 83,896
Southern Region 52,080 135,976 + 83,896
Pahang 17,720 113,000 + 95,280
Terengganu 9,960 55,207 + 45,247
Kelantan 17,440 18,456 + 1,016
Eastern Region 45,120 186,663 + 141,543
Peninsular Malaysia 331,520 574,053 + 242,533
Note: Derived from projected urban growth and a gross density of 25 persons per hectare
ii. Supply
A land supply analysis shows that by excluding lands identified as built-up, PAA, ESA,
some 574,053 ha. are available for a variety of uses.
Land classified as built-up, PAA, ESA are referred to as land having pre-existing
limitations. Lands not recognised as being subject to pre-existing limitations are classified
as available for development purposes. The purposes may include urban uses,
agriculture and any other uses.
The analysis suggests that at a macro level the needs of future urban land use can be
accommodated without the need to intrude into lands subject to use limitations such as
PAA or ESA. However, redevelopment of existing built-up areas and the use of brownfield
sites within built-up areas may, indeed should, be conducted.
Applying the same rigorous criteria at state level however shows that five states viz.,
Perlis, Kedah, Pulau Pinang, Selangor and Wilayah Persekutuan Kuala Lumpur will need
to utilise either land designated as PAA or ESA (Table 4.2).

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Given the type and level of constraints applicable to ESA lands, this suggests that apart
from the use of PAA lands, only selected parts of ESA Rank 3 land may potentially be
considered for urban uses. Considerable care in land use planning however will be
required, particularly in the use of water catchments and water recharge areas.
For Perlis, Kedah and Pulau Pinang given the significance of the granary areas and the
enormous investment in the irrigation schemes, use of the lower ranked ESA land may
need to be considered ahead of use of the PAA lands to overcome the apparent short fall
in land required for future urban use.
Analysis of land required for future urban use and lands not subject to limitations, that is
lands not classified as PAA or ESA Rank 1, 2 or 3, for Selangor and Wilayah Persekutuan
Kuala Lumpur shows that even if some of the lowest rank ESA lands were assigned for
urban use, potentially there is still a need to utilise PAA lands for urban uses. Given the
present pattern of urban land use development within these states, in the interests of
efficiency and effective use of national resources, priority should be given to urban land
use consolidation over use of PAA.
Factors which will however militate against the loss of PAA lands and use of ESA Rank 3
lands in these two areas will include adoption of generally higher gross densities in the
main conurbation areas, use of vacant lands within the present built-up areas as well as
rehabilitation and redevelopment of existing buildings sites. Specific development plans
for Kuala Lumpur Conurbation should consider in greater detail which areas should be
consolidated as well as the provision of green corridors as part of the need to conserve
and protect the PAA and ESA.
iii. Housing
An assessment of present and projected needs for housing up to 2020 shows it can be
accommodated within the designated urban centres without the need for conversion of
forest lands to housing nor the use of the most environmentally sensitive lands.
The major challenge in spatial planning terms is to initiate a mind set change from the
present perception that all lands adjacent to urban areas are ripe for development. The
NPP has recognised that considerable waste of resources can (and has) occurred when
land has been prepared either through conversion and layout plan approval but without a
thorough assessment of demand. As the urban areas expand this process of increasing
supply versus maturing of demand will be exacerbated. Management and dissemination
of information on supply and demand for urban purposes, land suitability, incorporation of
PAA and forest lands in conurbations into green belts are to be adopted to avoid property
overhangs and inefficient use of lands adjacent to urban areas.
Identification of routes, recognizing the long lead times and need for operational
efficiencies required by public transport should also be assessed in the managed release
of future urban land particularly in the urban conurbations. The assessment also needs to
consider the capacity and cost of upgrading of existing infrastructure and utilities such as

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water supply and delivery of electricity and road space in the sitting of future urban
growth.
iv. Industry
While the past twenty years saw a substantial change in the type and performance of the
industrial sector, expectations of the future are of consolidation, changes in operational
characteristics, increasing niche marketing and creation of brand names.
The macro level assessment of industrial land showed no additional land is required for
this use. As inter and intra industry adjustments however take place, a demand for sites
with specific locational advantages may need creation of new sites. As most of these
adjustments will be in and around the major urban conurbations provision for these
changes has been accommodated within the overall allocations of ‘urban land’.
Industry in the past has been seen as an impetus for growth in rural areas, particularly as
a means to address regional economic imbalances. This has resulted in large areas being
assigned to the use in the East Coast. Use of the lands will need to be re-evaluated.
The Industrial Master Plan cluster concept of industrial development using broad based
criteria such as source of inputs, markets, cost of transport, access to labour, skills,
capacity and reliability of infrastructure and other support services will be considered in
the selection of industry type and sitting of clusters. Special efforts are however to be
made to promote down stream linkages of rural area production centres to assist
development in those area.
4.5.5 Tourism
In terms of spatial planning of tourism, the whole country is a destination and not just
selected locations or sites of special interest. The appeal for the tourist is the total scene;
the land and how it is used, the people, the culture. The attractions, which draw the
tourists, are only an expression of the total ethos of the country.
Malaysia’s development status, location and multi-cultural composition, allow for
numerous experiences while the mountains, forests, islands and beaches are all
destinations in their own right.
An assessment of Peninsular Malaysia’s tourism assets was undertaken which ranked
sites in terms of potential and importance. The sites selected hence represent an
expression of Malaysia’s history, culture, natural environment, as well as its shopping,
recreation and entertainment potential.
The 8MP forecasts that tourist arrivals to Malaysia will grow at an average annual rate of
9.0 percent per annum. Assuming that this trend is maintained during the plan period, it is
estimated that tourist arrival in Peninsular Malaysia will be approximately 36.0 million by
2020.

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Tourism development in Malaysia should involve a balanced strategy aimed at both
international and domestic markets. This will require the Federal Government, with the
support of the State Governments and the private sector, to encourage the development
of a balanced tourism product with adequate infrastructure, an accommodation mix in line
with visitor preferences, ancillary tourism facilities and activities to cater to the needs of
both international and domestic tourists.
i. Priority Tourism Activities
Priority should also be placed on tourism activities, and the NPP listing is as follows:
a. International shopping for ASEAN region and other international visitors -
the main conurbations of western coast area
b. Health or media tourism for western coast and eastern coast areas.
c. Socio cultural heritage tourism encompassing the past and present
lifestyles of Malaysia’s multi ethnic groups - eastern coast area and the
main conurbations.
d. Destination resort tourism capable of sustaining high yield, international
and domestic tourists - the coastal and island resorts of western and
eastern coast areas
e. Eco-tourism and other special interest tourism with an emphasis on niche
markets particularly, amongst overseas market segments - central
highlands and eastern coast area.
f. Educational tourism offering government certified quality courses through
private institutions to international students - the main conurbations,
western coast area.
g. Cultural tourism with an emphasis on the traditional kampongs, beaches
and islands environment – eastern coast area
h. Promotion of Malaysia as a MICE destination.
i. Development of a World War II Heritage Trail.
ii. Priority Tourism Towns
There are several towns that are strategically located i.e. within close vicinity of tourist
attraction areas. For example Taiping is located close to the Matang Mangrove Forest
Reserve and the Bubu Forest Reserve, which can function as a nature based tourism
town, while Padang Besar, Bukit Kayu Hitam and Rantau Panjang are border towns
which can be further developed as gateway towns. Their potentials as Tourism Towns
should be exploited and their economic activities oriented accordingly. Conflicting
activities e.g. polluting and heavy industries should be discouraged within designated
Tourism Towns.

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iii. Special Tourism Zones
One of the recommendations of the NPP is the designation of Special Tourism Zones for
future tourism planning purposes.
Future development within designated Special Tourism Zones will need to be monitored
to ensure the long term protection of existing and potential tourist attraction areas as
national assets. Of particular importance is the need to restrict the establishment of heavy
and polluting industries within Environmentally Sensitive Areas located within the Special
Tourism Zones to ensure that there is no negative impact on environmental quality. Within
such areas, future urban and industrial developments are to be focused within existing
urban centres and industrial areas.
Among the growth sectors, tourism offers good potential to off set regional economic
imbalances between the West Coast and the central highlands and East Coast. Eco and
nature tourism, the beaches and culture of the East Coast are assets to be developed
and enhanced through close cooperation between the public and private sectors,
enhanced infrastructure information and the delivering of quality services to visitors.
A range of urban based tourism products are to be developed. Among these are health
services particularly catering for ASEAN visitors, education services which utilise the
country’s multi lingual character and proficiency in English as well as offering shopping as
part of the utilisation of facilities available for meetings and exhibitions building upon its
good quality hotels and myriad tourism attractions.
4.5.6 ICT Development
The National Information Technology Agenda (NITA) is a strategic framework for IT
programme development at federal, state and local government levels. 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 in its linkages to Singapore. Contrary
to popular opinion trends in the use of ICT has to encourage further agglomeration of
activities rather than be dispersed. This is primarily due to the need for sophisticated back
up services which would not be available in more remote locations.
Within the context of the NPP, the national and regional growth conurbations of Kuala
Lumpur, George Town, Johor Bahru and Kuantan are to be developed as intelligent cities.

4 - 18
The programme shall then entail all capital cities within the country to form a nationwide
network of intelligent cities linked to the global information highway.
4.5.7 Infrastructure
A characteristic of the all modern developed centres is the quality of the supporting
infrastructure and the quality of life afforded to residents through housing, education,
recreation and health facilities.
To this end, the NPP recognises that for the country to operate as an integrated unit and
to allow for balanced development, the provision of high quality infrastructure and
services is critical.
i. Water
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
Resources Study up to 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
2000 to 13,900 million m
3
/year in 2020, an increase of some 22.0% (Table 4.3).
Table 4.3: Projected Water Demands for Peninsular Malaysia, 2020
Year
Demand Sector Units
2010 2020
million m3/yr 2,987 3,862
Domestic
Mld 8,184 10,582
Industrial
Mld 7,101 9,756
Sub Total
Mld 15,285 20,338
Irrigation
Mld 17,857 17,857
million m3/yr 12,095 13,940
Total
Mld 33,142 38,195
Source: NPP Infrastructure and Utilities Technical Report, 2001
The per capita water availability for Peninsular Malaysia in 2050 is projected to decrease
to approximately 3,000 m
3
/year. It is projected that Negeri Sembilan will face severe
shortage by 2010; Pulau Pinang and Melaka by year 2020. Selangor and Perlis will be in
the same category by 2050. The water-rich states are Perak, Johor, Pahang, Terengganu
and Kelantan.
Consideration has thus been given to the protection of water sources and to the future
water needs of both the urban and rural areas. Water surplus and water stressed areas

4 - 19
have been identified and these have been matched against water source catchments,
dams, and water recharge and aquifer areas (IP 14).
Apart from the water transfer programmes other specific proposals for water management
include the designation of 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. Transportation Network
The development of a comprehensive transportation network is seen as a means of
integrating the various state economies whereby the country can operate as a single
integrated unit with the various states maximising on their comparative advantages for the
benefit of the nation as a whole.
IP 13 indicates the conceptual Integrated National Transportation Network for Peninsular
Malaysia to support the NPP Development Strategy.
Strategies in terms of the transportation network comprise the following aspects:
a. Network Configuration
b. National Gateways and Transportation Nodes
c. Urban Transportation and Intelligent Transport Systems
a. Network Configuration
The road and rail networks are to be appropriately linked to facilitate multimodalism and
to achieve an integrated national transportation system.
• High-Speed Rail System
Based upon efficiency criteria, a 300 kph high-speed rail system is proposed to
consist essentially 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 identified and
incorporated into lower tier plan to be protected as part of the staged
implementation of these programmes.

4 - 20
• Road Network
The expressway system is to be extended to ensure effective linkages between the
various states. A minimum of three expressway crosslinks 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 (IP 13).
b. National Gateways and Transportation Nodes
• Kuala Lumpur International Airport
The most important gateway for overseas arrivals to the country is the Kuala
Lumpur International Airport (KLIA).
With an annual throughput of 14.7 million passengers per annum (mppa), KLIA is
operating currently at about 60.0% of its existing capacity of 25 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 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 plying these routes may accentuate its role and
appeal as a hub.
KLIA must be made into an integrated national transportation hub whereby
travellers bound for external destinations generated locally within its natural
hinterland can be channelled efficiently and multimodally through KLIA (IP 13).
• 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 nation’s 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.
To be a truly effective urban transportation interchange, KL Sentral must be well
served by an efficient feeder bus system and be integrated with a well-designed
network for non-motorised transport modes such as walking and cycling.

4 - 21
c. Airports
Four international airports are proposed to be in operation to support the overall NPP
development strategy (IP 13).
• Kuala Lumpur International Airport (KLIA),
• Pulau Pinang – Bayan Lepas International Airport,
• Johor Bahru (Senai) – Sultan Ismail International Airport, and
• Langkawi - Mat Sirat International Airport.
The development of Sultan Ismail International Airport in Johor Bahru is planned to be
integrated with 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 as below (IP 13)
• National Ports : Port Klang,
Port of Tanjung Pelepas
• Regional Ports : Pulau Pinang Port
Kuantan-Kemaman Port
• Coastal and Feeder Ports : Pasir Gudang Port,
Langkawi Port and Lumut Port
Port Klang and Port of Tanjung Pelepas (PTP) are to be the major national ports, albeit
each with a different focus.
Port Klang, with its central location and proximity to the nation’s domestic hinterland, is to
be established as the national hinterland port with extensive intermodalism and efficient
landbridging 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 services
to all ASEAN countries.
The maritime service by two national ports should further be complemented and
strengthened by Pulau Pinang Port and Kuantan-Kemaman Port. Main shipping lines,
which prefer to load and unload their goods directly at the Northern Region of the
Peninsula could be catered for by Pulau Pinang Port. Similarly, Kuantan-Kemaman Port
could cater for those who wish to ship directly to the Eastern Region of the Peninsula and
for those shipping lines from the Pacific Rim countries that do not navigate en route past
the Straits of Melaka.

4 - 22
The development of an efficient and extensive intermodalism and feeder and hub port
system in freight transportation should be rigorously promoted. The setting up of a
National Commission on Intermodal Transportation (NATCIT) or equivalent to help to
move the intermodal development in the country to a globally competitive level is
therefore needed. This will certainly improve the competitive edge of the two national
ports in their endeavours to become the leading top ports in the South-East Asian region.
• Urban Transportation and Intelligent Transport System
The urban transportation strategy, as advocated in the 8MP is to focus on the
development of an integrated, efficient and reliable urban environment in all the
major urban centres in 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, a modal split ratio of 50:50
between private and public transport shall be adopted as a city mission. Kuala
Lumpur presently has a modal split ratio of 80:20 in favour of private transport.
To achieve this modal split, a fully integrated system and network will require
creation of one single multimodal/multifunction transportation authority to oversee
public transportation which will include rail systems, bus routing and other para
transit modes. Detailed studies at conurbation level will be required to prioritise
provision of infrastructure to achieve the modal split and coordinate siting of fixed
track networks to be in areas of greatest demand. For the lower order urban
centres which are not likely to exceed the 500,000 population mark, this transport
system should rely more upon buses.
The use of Intelligent Transport Systems (ITS) will complement the development of
enhanced 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 be applied to better manage limited road space.
The present level of ITS infrastructure is to be expanded in the three main
conurbations.
4.5.8 Utilities and Services
i. Electricity
The peak demand for electricity supply is expected to increase threefold by 2020 due to
increases in demand by domestic, commercial, industrial users. The projected demand
and supply scenario up to 2020 is shown in the Table 4.4.

4 - 23
Table 4.4: Installed Capacity, Peak Demand and Reserve Margin, 2000 - 2020
Year Accumulated Installed Capacity (MW) Peak Demand (MW) Reserve Margin (%)
2000 12,479 9,712 28.5
2005 20,819 15,380 35.4
2010 25,854 19,887 30.0
2015 32,997 25,382 30.0
2020 42,113 32,395 30.0
Source : NPP Infrastructure and Utilities Technical Report, 2001
To meet this demand additional power plants are proposed to be located at the periphery
of the main conurbations of Kuala Lumpur, Johor Bahru, George Town and Kuantan.
In order to reduce use of fossil fuels, utilisation of Renewable Energy (RE) solution and
Energy Efficiency (EE) will be pursued. The target is to achieve use of RE from the
present 0.5% to 5.0% of generation mix by 2005. As for EE the target is to improve use
by about 10.0%, which will result in a savings of RM1.0 billion by 2005.
The steady growth in demand will require the transmission and distribution of electricity
being strengthened to improve the adequacy and reliability of supply. Among the
committed transmission projects are the 500kv line from Gurun-Air Tawar in the north,
Pasir Gudang-Yong Peng in the south and the connection from Manjung Power Station to
Air Tawar main sub-station. It is proposed that the 500kv line be extended to the Kuantan
Conurbation which is designated as one of four Regional Conurbations for Peninsular
Malaysia.
The link to Thailand will also be upgraded with high voltage direct current transmission for
transfer capability of 300MW upgradable to 600MW. This will pave the way for the
establishment of the ASEAN Power Grid. Besides Singapore, grid connections to
Indonesia should also be pursued.
ii. Telecommunication
Internet and wireless technologies represent two of the fastest developing technologies in
the telecommunications field. A backbone network such as the one covering the MSC’s
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, Labuan,
Melaka and Semantan (Kuching), 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.

4 - 24
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.
iii. Drainage
Under the NPP 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 (MASMA). Flood risk maps for Peninsular Malaysia
are to be prepared to ensure that adequate provision and consideration is given to this
aspect for future physical and land use planning exercises. To this end, contemporary
approaches in flood mitigation based on preventive measures which centre 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 and their flora and fauna as well as provides regional level recreation facilities
for urban residents.
iv. Sewerage
In line with the need to create world class cities, a major commitment to sewerage
treatment will be required. The 13 sewerage projects comprising ten sewerage treatment
plants and three central sludge treatment facilities will increase service totals to 14.4
million people.
For the Peninsula as a whole, target proposals are to have 85.0% of the population of the
49 larger local authorities, provided with centralised sewerage systems, with the
remainder relying on septic tanks.
Of the 95 smaller local authorities, 30.0% of the population are to be provided with
centralised sewerage systems, with the rest using septic tanks.
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. Priority will also be given to the offshore islands and
Environmentally Sensitive Areas such as marine parks and nature reserves.

4 - 25
4.5.9 Community Facilities – Higher Education and Hospital Facilities
• Public Universities
Public universities and hospitals are community facilities considered to be relevant at
national level planning, due to comparatively larger land usage as well as special
characteristics that may help to achieve NPP objectives, especially those relating to
regional balance, area specialization, etc.
Presently there are nine public universities in Peninsular Malaysia. Under the 8MP, four
new public universities have been proposed, one each in Perlis, Negeri Sembilan, Melaka
and Pulau Pinang.
Based on population projections, five additional public universities are required to meet
the 50.0% target
1
enrolment.
At least two of the five proposed additional public universities are proposed to be in the
Eastern Region. One of these universities could focus on environmental studies and
tourism as main academic core in view of the area being designated as a Special Tourism
Zone.
• Public Hospitals
At present there are 85 public hospitals in Peninsular Malaysia. Another 16 are to be
completed under the 8MP. Future locations of new hospitals are proposed to relate to
catchment areas which have to be distance and transport related, provision of ample
space for expansion of hospitals to grow to full health complexes with all medical and
ancillary services and facilities, like nurses training and accommodation, R&D, recreation,
etc.
It is estimated that by 2020, the 26.8 million population targeted for Peninsular Malaysia
would require about 57,000 hospital beds in around 153 hospitals. To meet this target
another 50 hospitals are required.
4.6 Conceptual Development Strategy
The layering of the outcome of the sectoral assessments of future land use patterns and
of long term infrastructure proposals is expressed in the conceptual development strategy
plan. This plan shows the agricultural and forest lands providing a base layer overlaid by
main urban centres and infrastructure proposals (IP 2).
1
OPP3 target that 40% of the population at the age of 17-23 years to receive tertiary education by the end of the plan.
For age cohort 17-23 years, from year 2010 onwards, targets are assumed to rise at constant rate of 5.0% every 5 year.

4 - 26
The spatial expression of the concept over the three distinct geographic spaces of
Western Coast Area, Eastern Coast Area and Central Highlands are as follows:
4.6.1 Western Coast Area
i. To anticipate and respond to the continued urban growth of the three main
conurbations of Kuala Lumpur, Johor Bahru and George Town.
ii. To facilitate development of industrial enterprises within the conurbations and for
non resource based industrial development to locate only at selected non-
metropolitan centres offering conditions for long term viability; be competitive and
for enterprises to utilise existing infrastructure.
iii. To facilitate the emergence of Kuala Lumpur, Johor Bahru and George Town and
major urban centres providing niche market, local, regional and international
tourism services, shopping, healthcare and education.
iv. To ensure the optimal use of existing infrastructure, in particular roads, airports
and sea ports and avoid duplication of these facilities.
4.6.2 Eastern Coast Area
i. To recognise the uniqueness of the East Coast in terms of potential for nature,
cultural beach and island tourism.
ii. To focus on the growth potential of Kuantan for industry and the services sector to
create a significant East Coast growth node.
iii. To facilitate the emergence of Kota Bharu as a growth pole for the modern
economy via a growth triangle involving Pulau Pinang, South Thailand and
Kelantan.
iv. For industrial development to focus on existing urban centres using the existing
resource base as the catalyst for growth and development.
v. To enhance residents potential to participate in the modern economy through
education and social development programmes.
4.6.3 Central Highlands
i. To recognise the significance of the forest spine and topographic constraints to
agricultural and urban development in the Central Highlands.
ii. To promote the integration of the forest reserves in the Central Highlands into a
continuous forest spine.

4 - 27
iii. To create and enhance the economic base of the tourism sector through eco and
agro tourism serviced by enterprises in selected strategically located rural urban
settlements such as Cameron Highlands.
iv. To promote the concept of sustainability in forest management not only of log
production but also with respect to habitat for fauna and wildlife.
v. For future urban development in the Central Highlands to focus on existing urban
centres to enhance the multiplier effects of services of larger urban centres on the
surrounding rural areas.

POLICIES
CHAPTER 5

National Physical Plan Policies
5 - 1
CHAPTER 5
POLICIES
A primary concern of the NPP is to ensure that Malaysia is globally competitive for investments in
manufacturing and services, in particular in the sub-sectors of electronics, knowledge and
communications technology, bio-technology, education and health tourism, and related sub-
sectors. In order to do so it shall support, promote, and enhance the infrastructure and general
development of those regions of the country that have the highest potential in attracting such
investments and are in the best position to provide the competitive edge over similar regions in
neighbouring countries. The NPP shall adopt a development strategy of ‘selective concentration’.
The NPP shall simultaneously promote and support the development of resource-based,
agriculture-based and craft-and-culture-based industries and services, such as forestry and
timber products manufacturing, traditional artisan crafts and manufactures, agricultural
downstream activities, eco-tourism and general tourism, and cross-border trade and cross-border
linked development, in those regions where such resources and opportunities are located. It shall
also promote the development of the rural areas in general through support and enhancement of
high value food production and commercial agriculture.
The NPP shall, therefore, provide a spatial planning strategy for international competitiveness and
a framework for national developmental cohesion and discipline. The spatial framework avoids
internal attrition and waste arising from internecine rivalry and provides a basis for inter-state co-
operation and mutual support. Without prejudice to global competitiveness, the NPP shall
simultaneously promote co-operation among Malaysia’s close neighbours.
The federal government shall implement the NPP through its control of development budgeting.
The policies and measures formulated and enunciated here shall provide the guidelines for the
implementation of the NPP. While the NPP is, inter alia, an exercise in national discipline,
provision for debate, discussion and consensus is ensured in its process of formulation and in the
five-year reviews. Within the agreed framework of the NPP, local initiative is encouraged.
The main users of the NPP are expected to be the Federal and State agencies responsible for
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 on education, public
health and so on. Private sector property developers will also find the firm and agreed projections
of population distribution as well as the transparent disclosure of forward distribution of public
investments in infrastructure reliable guides for their investments. This will avoid speculative
development in the private sector and future mismatch between property development and
demand.

5 - 2
5.1 Setting a National Spatial Framework
IP 1 : National Spatial Framework 2020
The NPP established a spatial framework for the general direction of physical
development for the nation. It shall form the basis on which lower tier Development Plans
such as Structure Plans and Local Plans, as well as sectoral plans such as
Transportation and Rural Development plans, are to be drawn up, and shall ensure that
these plans conform to a cohesive set of national objectives and policies. The spatial
framework will ensure that national resources are optimally used, duplication in
infrastructure investment avoided, and more sustainable development in the states
achieved. This spatial framework also complements the Five-Year Malaysia Plan (FYMP)
which outlines the economic strategies of the nation. 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
country’s system of planning. Aspirations of the states and local authorities shall be
matters to be raised, discussed and rationalised at the time of formulation of the NPP and
at the five-year reviews.
NPP 1
The NPP shall serve as the framework to achieve integrated and sustainable land
use planning in the country.
Measures:
i. Development Plans (Structure Plans and Local Plans) and sectoral plans and
policies shall conform to the provisions of the NPP.
ii. For uniformity of measurement, Development Plans shall apply the standards and
criteria of the NPP, such as in:
a. Land Use Classification
b. Criteria for Land Availability Assessment
iii. Existing Development Plans shall be reviewed to comply with the provisions of
the NPP.
iv. Population targets as provided in the NPP (as shown in the table) shall, within a
stipulated variation range (+/- 5%), be adhered to as the basis for the preparation
of Structure Plans, the planning of public infrastructure and social facilities, as
well as for the approval of private development applications.
v. The NPP shall provide the spatial framework for the formulation of the FYMP.

5 - 4
Population Targets and Distribution by States 2020
States Population
Perlis 250,000
Kedah 2,363,900
Pulau Pinang 1,940,300
Perak 2,720,200
Selangor 6,981,500
Wilayah Persekutuan 1,868,600
Negeri Sembilan 1,110,400
Melaka 904,300
Johor 4,042,200
Pahang 1,731,300
Terengganu 1,147,700
Kelantan 1,749,300
Peninsular Malaysia 26,809,700
5.2 Enhancing National Economic Competitiveness
Economic globalisation and world trade liberalisation offer opportunities in the form of
open markets, increased inflows of investments and job opportunities but they also pose
challenges to a developing country like Malaysia. There is increased competition
especially among ASEAN countries and between ASEAN, China and India, which are
emerging as major economic forces in this part of the world. The key to each nation’s
success in meeting the challenges and maximising the benefits of globalisation and
liberalisation is competitiveness.
In meeting the challenges of an increasingly global competitive environment and in line
with the 8MP, the NPP proposes a land development strategy that focuses on the
promotion of sustainable economic growth and also offers long term social balance. Its
strategic thrust is to enhance those regions of the country which have shown a capacity
in the recent past to compete with international world-class city regions for investments,
so as to sustain their competitiveness and provide the country with the driving force for
further development. This strategic thrust is particularly pertinent to the emergent sectors
of ICT, biotechnology and knowledge-based services, in which Malaysia is still an
emerging participant.
The NPP spatial strategy places a reliance on the urban-based manufacturing and
tertiary services sectors to provide the basis for sustained economic growth and
employment generation. An implication of this strategy is that certain urbanised regions,
in particular the conurbations around Kuala Lumpur, George Town, Johor Bahru and
Kuantan will continue to grow faster than the small and intermediate towns as well as
other urban centres outside of the conurbations. The continuing migration of people from
the rural and smaller urban centres should be facilitated through support programmes
such as the provision of reception housing in the destination cities and sectoral
redeployment through intensified training and education.

5 - 5
The NPP has adopted a concept of selective concentration. By this concept it is expected
the main conurbations of Kuala Lumpur, George Town, Johor Bahru and Kuantan will be
the primary recipient areas for foreign and local investments not only in the established
sectors of manufacturing and services but also in the emergent sectors of ICT, privatised
health, educational services and non-resort tourism.
The concept however recognises that where local or foreign investment is able, or
desires, to locate away from the main conurbations, optimal use of existing physical and
social infrastructure shall be promoted by focusing commitments on selected urban
centres such as state capitals and urban growth areas such as Temerloh-Mentakab,
Lumut-Sitiawan-Manjung, Kluang, Batu Pahat and Muar. To achieve a more balanced
distribution, however, Kuantan is expected to emerge as the prime economic urban
centre in the East Coast.
In summary, a finer interpretation of selective concentration is the expectation that the
main conurbations are to be the prime centres of growth, but where sustainable
development can be located away from those areas, it is to focus on only selected
centres rather than be thinly and ineffectively dispersed over a broad economic
landscape.
Simultaneously rural incomes are expected to rise through improved productivity forced
upon the agricultural sector by the competition for labour. Rising productivity in the rural
areas has to be associated with the restructuring of rural enterprise units and the use of
new and improved technology. Continued urbanisation is seen as a necessary condition
for increasing productivity in the rural areas as it provides the markets for agricultural
products and, more importantly, stimulates specialisation of agricultural activities among
regions in the country. The agricultural sector is expected to be more land-efficient
through the intensive use of suitable agricultural land and the adoption of high-level
technology.
The concentration of high value-added economic activities in urban areas also provides
the basis for specialisation and increased productivity in the tertiary sector and in
manufacturing. The urban centres provide concentrated markets for output and the link
with the global market through which technological know-how is also disseminated and
absorbed. Within the urban centres, the driving force is expected to be the tertiary sector
which is targeted to grow at 8.0% per annum over the next 20 years. Tourism and
related activities including the distributive trade and the financial sectors will be the major
forces of growth in the future. The emergence of knowledge centres within the
conurbations will support and encourage the extensive use of ICT and R&D in all sectors.
While the manufacturing sector has stabilised and matured, its continued growth and
expansion will be through use of new technologies and the strengthening of the
technological base of the industries. This change in structure and operations will be
accompanied by a shift to knowledge-based production with increasing reliance on ICT

5 - 6
and internally generated research and product development. Industries that rely upon
relatively unskilled labour as a key component in operations will be subject to increasing
competition from other emerging developing countries that will result in a rationalisation
of operations and location. Provision of industrial land will need to take into account
linkages, access to ICT and other support services.
The NPP supports and complements the cluster concept put forward by the Industrial
Master Plan by translating the industrial clusters spatially across the country, indicating
locations for key industrial clusters in the West and East Coasts based on their spatial
strengths. The adoption of the cluster concept in industrial development encourages
synergies, specialisation and exploitation of comparative advantages in the use of
physical resources such as infrastructure in the form of access to ports, airports, the rail
network and highways as well as non-physical resources in the form of capital, human
resources and knowledge.
Competitiveness can also be enhanced through international regional cooperation. On
its own, a nation may not have the means to meet the onslaught of global and economic
liberalisation but a grouping of nations may be able to exploit these challenges to benefit
its members. Malaysia is among such nations that have realised the significance of
participating in regional cooperation. Membership in ASEAN has been taken further into
the formation of a regional trade bloc – ASEAN Free Trade Agreement - and into the
creation of regional growth triangles. The growth triangles – the Indonesia-Malaysia-
Singapore Triangle (IMS-GT) and the Indonesia-Malaysia-Thailand Triangle (IMT-GT)
exploit the advantages of interregional cooperation and facilitate the flow of benefits from
regional cooperation to participating states. Johor and the states in northern Peninsular
Malaysia stand to benefit the most from these growth triangles.
Among the many requirements to be economically competitive and resilient is efficiency
in the use of national resources. Land is an important national asset and its efficient use
through careful and effective planning is crucial towards enhancing national
competitiveness in the global arena. Hence, land use planning should be based on an
integrated approach throughout the country. This would not only reduce duplication and
waste of resources but would also provide an avenue to reduce regional inequalities
within the country. Inter-state cooperation in land and resource management is vital for
sustainable socio-economic development.
In Peninsular Malaysia, imbalances in economic growth exist between the West and East
Coasts. Within the West Coast, imbalances also occur between the more developed
states, especially in the northern region where states like Kedah and Perlis are relatively
less developed compared to Pulau Pinang and Perak. Reducing these imbalances is
important towards enabling Malaysia to achieve national integration. Managing and
planning the use of land resources in the less developed states forms an integral part of
the NPP because it would enhance the sustainable development of scarce resources in
these states whilst contributing to the reduction of imbalances in the medium to long
term.

5 - 7
NPP 2
The planning of urban-based economic activities shall adopt the concept of
‘Selective Concentration’ for strategic urban centres for all states.
IP 2 : Selective Concentration Development Strategy
Measures:
i. Concentrate urban-based economic activities in main conurbations of Kuala
Lumpur, George Town, Johor Bahru and Kuantan to promote efficiency in land
use and infrastructure planning.
ii. Where operational efficiencies permit, urban-based economic activities able to
locate away from the main conurbations are to locate at selected urban growth
centres that offer efficiency in the use of existing infrastructure as well as local
human and natural resources.
iii. Facilitate the development of industrial enterprises within the conurbations in the
West Coast to achieve economies of scale.
iv. Encourage the development of privatised educational and training infrastructure
in existing urban centres to facilitate the transition into the k-economy and to act
as a catalyst for economic growth.
v. Locate knowledge-based activities and cyber cities 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. Encourage the optimal use of existing main infrastructure facilities such as
highways, railways, airports, and seaports to avoid wasteful duplication of these
facilities.
NPP 3
Cooperation in physical planning between Malaysia and its ASEAN neighbours
shall be strengthened.
Measures:
i. Exploit the opportunities presented by the Growth Triangles, namely IMT-GT and
IMS-GT, to further generate development in the northern and southern parts of
Peninsular Malaysia.
ii. In the northern region, planning of economic activities shall encourage the
development of a seamless corridor between Northern Malaysia, Northern
Sumatera (Medan) and Southern Thailand (Songkhla/Hat Yai). The planning of

5 - 9
an international transportation network such as an international rail network with
links to sea entries should adopt the seamless corridor concept.
iii. Encourage interstate cooperation to effectively exploit their respective
comparative advantages and optimise the use of their infrastructure, land and
human resources.
iv. Establish Special Economic Zones (SEZ) in participating states to cater for new
areas of regional co-operation such as halal-food processing.
v. Kelantan is encouraged to become a member of the northern economic region in
order to promote synergistic linkages with Southern Thailand and to gain access
to a larger market provided by the George Town conurbation.
vi. Programmes shall be developed to encourage the east coast states to develop
their recognized skills in crafts such as batik, wooden boat building and wood
carving into internationally recognized niche market production centres.
vii. The country will also look at exporting professional services and forge
cooperation in physical planning with ASEAN countries and national planning
institutes of member countries
NPP 4
Land and natural resources of the less developed regions shall be used in a
sustainable manner to increase the productivity of these regions and reduce
regional imbalances.
Measures:
i. Encourage economic diversification through the widening of the economic base
of the less developed states by:
a. Agricultural activities through the strengthening of agricultural downstream
processing of agricultural products to increase rural income levels.
b. Areas with strong nature tourism potential, particularly in the Eastern Coast
Area, shall be conserved and promoted.
ii. Strengthen infrastructure facilities, especially in ICT and transportation network
in agricultural areas and areas of tourism potential to facilitate and expedite their
integration into the modern economy.
iii. Strengthen the provision of educational technical training and social
development programmes in the less developed states in anticipation of the
need for segments of these populations to integrate more effectively into the
urban economy.

5 - 10
NPP 5
Planning for industrial land development shall adopt the concept of ‘Industrial
Cluster’.
IP 3 : Industrial Centres and Potential Industrial Clusters
Measures:
i. Implement the Industrial Cluster concept as follows:
a. Internationally-linked clusters are to be supported in the main conurbations
through the establishment of an integrated network of infrastructure
facilities including social amenities.
b. The location of policy-driven clusters such as transportation, materials and
machinery shall be supported and encouraged in selected conurbations,
depending on their respective comparative advantages.
c. Resource-based clusters and craft-based clusters shall be directed to the
less developed states to serve as a catalyst for growth.
ii. Proposal for new industrial estates outside of the main conurbations and selected
growth centres must be supported by a detailed programme identifying actual
occupants, activities, linkages and viability studies.
iii. Existing underutilised yet developed industrial estates outside of the main
conurbations and selected growth centres are to be evaluated to identify existing
weakness in industrial locational criteria and to identify possible alternative uses.
iv. All new proposals for industrial estates are to demonstrate adoption of
appropriate industrial locational criteria such as linkages between input resources
and product, distribution and market, human resources and the capacity
thresholds of infrastructure, where an emphasis should be given to the capacity
of the water delivery system.
v. New industrial estates catering for heavy or pollution-generating activities shall
not be located in designated nature/eco-tourism towns.
5.3 Modernising Agriculture
Agricultural acreage is expected to decline over time as urban uses compete with
agricultural uses. The high costs of labour and land have also made the country less
competitive in agricultural products compared to neighbouring countries. Despite these
constraints, the agricultural sector remains important and can be enhanced to contribute
still further to the national economy. Agricultural activities also continue to be dominant in
employment in the East Coast and the northern states on the West Coast.

5 - 12
The Third National Agricultural Policy (NAP3) has specifically emphasised the
maximisation of income through optimal use of resources. This entails raising productivity
and sustaining growth. Another goal of the NAP3 is enhancing food security. To achieve
its goals, the NAP3 advocates that the granary areas be designated as permanent paddy
producing areas, that oil palm cultivation be sustained through improved productivity, and
that synergistic links between forestry and wood-based industry be fostered.
In supporting the NAP3, there is a need to develop a rational land use strategy that seeks
a compromise between the need for agricultural land and the increasing demands of a
rapidly urbanising economy that focuses on urban-based activities. Due cognisance must
be taken of the strategic position of the granary areas as the main food producing areas
in the country. Consideration should also be given to the importance and dominance of
oil palm cultivation and the need to rationalise the conversion of large estates to urban
uses. Long-term prospects for rubber cultivation even on a small-scale appear uncertain
and weak, thus demanding a review of land allocated for rubber cultivation in order to
avoid penalising specifically the current rubber smallholders as well as the country as a
whole.
NPP 6
The support of agriculture shall take cognisance of the threats and opportunities
of urbanisation.
IP 4 : Prime Agricultural Areas
Measures:
i. Prioritise agricultural land to conserve Prime Agricultural Areas (PAA).
ii. The 8 granary areas, oil palm areas under Rank 1 and 2 and all other agricultural
areas under Soil Class 1 and 2 are to be designated as PAA. The following
strategy shall apply to PAA:
a. All PAA outside of designated urban areas shall not be permitted for
conversion to urban uses. Only conversion from one crop to another or
from agriculture to agro-tourism and forest plantations may be permitted.
b. All PAA within the designated conurbations that fall within green belts shall
be permanently conserved. Only conversion from one crop to another or to
livestock raising and aquaculture shall be permitted.
c. A national exercise shall be carried out to identify, designate and map the
PAA.
d. All Development Plans shall incorporate the areas of PAA onto their
coverage.

5 - 14
iii. Productivity in the agricultural sector shall be enhanced through the
rationalisation of management units, adoption of new technology and, particularly
within and around the conurbations, conversion to high-value crops.
iv. The development of emerging agricultural sub-sectors such as aquaculture and
livestock shall be promoted.
v. Existing major food production areas such as vegetable farms, tea plantations,
livestock and aquaculture areas shall be conserved to support the national food
programme.
vi. The change of crops in areas that are strategically located close to major urban
centres to food and cash crop cultivation shall be encouraged.
NPP 7
The eight (8) strategic granary areas comprising Muda (MADA), Kemubu (KADA),
IADP Kerian-Sungai Manik, IADP Barat Laut Selangor, IADP Pulau Pinang, IADP
Seberang Perak, IADP Terengganu Utara (KETARA) and IADP Kemasin-Semerak
shall be conserved.
Measures:
i. Permanent development limits for all urban centres within these areas shall be
established.
ii. There shall be no conversion of paddy land in these areas to urban or any other
uses beyond the established urban limits except for paddy related activities.
iii. In the Structure Plans for states with granary areas, urban development shall be
diverted from these areas and alternative locations for urban development shall
be identified.
iv. Water catchments for the granary areas shall be identified and conserved to
ensure adequate and quality water supply for paddy cultivation.
v. Fiscal measures shall be introduced to assist states that are required to conserve
granary areas.
5.4 Strengthening Tourism Development
Of the three national productive sectors, the service sector is targeted to be the main
engine of growth where it is expected to be contributing almost 60% to GDP. The
development of the service sector is strategic in attracting future foreign direct
investments (FDIs) and enhancing Malaysia’s global competitiveness.

5 - 15
Tourism is seen as the main driver of growth within this sector. Tourist arrivals are
targeted to grow at an average rate of 7.5% and the aim is to attract more international
tourists to lengthen their stay in Malaysia. There is a need to diversify tourism products to
capture a larger market as well as to develop good supporting facilities to ensure that
Malaysia stays competitive in this area. Supporting facilities would include the ‘software’
of human resources and an efficient transportation system, which play key roles in
moving tourists from the entry points to other parts of the country to enable them to
maximise their stay.
Four tourism development zones have been identified by the National Tourism Policy as
the primary tourism development zones in Peninsular Malaysia. They include the Kuala
Lumpur-Melaka corridor, the Penang-Langkawi-Northwestern States, South-East Johor
and the Peninsular East Coast. Within these zones, only tourist attraction areas of
international and national importance and interest (gazetted Protected Areas and
potential Protected Areas) are highlighted in the NPP.
NPP 8
The different tourism development zones shall concentrate on different packages
of tourist products to maximise their resource and locational advantages.
IP 5 : Major Tourist Attraction Areas
Measures:
i. International shopping shall be encouraged in designated major urban centres
such as Kuala Lumpur and Johor Bahru in order to maximise tourist and
excursionist gateway capture of economic benefits.
ii. Environmentally sensitive integrated resort tourism suitable for high yield
international and domestic tourists shall be promoted in the Eastern Coast Area
with its outstanding natural beauty.
iii. Educational and health-care tourism shall be further developed as a niche
product in the major urban areas particularly Kuala Lumpur, Melaka, Johor Bahru
and Pulau Pinang. MATRADE shall assist to promote these products vigorously
in target overseas markets.
iv. The value-added contributions from Meetings, Incentives, Conventions and
Exhibitions (MICE) shall be maximised through the active promotion of primary
sites in Kuala Lumpur and secondary sites in Pulau Pinang, Langkawi and
Genting Highlands.
v. Infrastructure and support facilities necessary to strengthen and promote eco-
tourism, socio-cultural and heritage tourism in the Eastern Coast Area to a niche
market shall be developed.

5 - 17
vi. Tourism infrastructure and visitor facilities shall be upgraded to standards
expected by international tourists to enhance competitiveness, without
compromising the effects on the environment.
vii. A strong ground transportation system and integrated tourism packages shall be
planned for, or improved, to support tourism growth and expansion.
viii. Heavy industries and utility plants, such as power generation stations,
incinerators and landfills, shall not be sited at or close to designated tourism
locations.
ix. Resource protection and management measures shall be vigorously and strictly
implemented in the following areas:
a. Nature/Eco-tourism sites (such as Endau-Rompin, Tanjung Piai, Penang
National Park, Taman Negara, Cameron Highlands, Fraser’s Hill, Tasik
Bera, Tasik Chini, Tasik Kenyir, Royal Belum Forest Reserve, Matang
Mangrove Forest Reserve, Pulau Redang and Pulau Perhentian).
b. Prehistoric / archeological / historic sites and buildings (such as Lenggong,
Bujang Valley, Kota Melawati, Stadthuys Building and the Sultan Abdul
Samad Building).
c. Rural-tourism priority districts (such as Kuala Selangor, Lipis, Pontian,
Besut, Alor Gajah and Baling).
x. The identification of areas of outstanding natural beauty and strong tourism
potential and their designation as tourism sites shall continue.
xi. Guidelines on permissible development for individual eco-tourism sites, requiring
involvement of local residents, promotion of local culture and reinvestment in the
local environment shall be formulated.
xii. As a new policy direction, a more attractive financial assistance for the states
that conserve their land for tourism activities, shall be worked out.
5.5 Managing Changing Human Settlements
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 the intensification of urbanisation will be the dominant feature
of Malaysian geography and economics. Urbanisation is also marked by the increasing
primacy of the three main city regions of Kuala Lumpur, George Town and Johor Bahru,
around which conurbations are being formed. The fastest growing towns in the period
1991-2000 have been those that cluster around these cities - 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 three main

5 - 18
conurbations will continue to grow faster than the rest of the country and attract in-
migrants. Population projection of the three main conurbations is as shown in Table 5.1.
Table 5.1: Population Projection of Main Conurbations
Conurbation Year 2000 (in million) Year 2020 (in million)
Kuala Lumpur 4.8 8.5
George Town 1.3 2.4
Johor Bahru 1.0 1.8
Total as % of Peninsular
Population
38.4 % 47.3%
The formation of a nascent fourth conurbation is also taking place around Kuantan. The
selected strategy of selective concentration based on the main conurbations will reinforce
these four conurbations.
Vision 2020 and OPP3 strategies are based on a high level of economic growth through
accelerated industrial development and an export-based manufacturing sector. The 8MP
also confirms the growing sectors of the economy as 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 to meet
them imply a focus and dependence on the urban areas for the country’s future
development. They also imply a general freedom of location for investors in accordance
with the imperatives of their particular businesses, and international investors are likely to
prefer locations that not only have the physical infrastructure to support the needs of their
businesses, and that provide proximity to other businesses and industries, but also the
infrastructure to support the lifestyle of knowledge workers on whom their businesses will
depend. Such lifestyle needs include social, recreational and sports clubs, a variety of
entertainment, outlets for cultural expression, international schools for children, high-end
shops for wives, convenient access to international travel and a generally stimulating
social environment. Only the highly urbanised conurbations can provide these conditions.
The strategy of selective concentration avoids impinging on the capability of our most
dynamic urban centres to compete against other urban centres in the West Pacific region
and sustains 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 trend in urbanisation towards primacy of the main cities may be modified but not
countered, as past policies in rural urbanisation in the example of the Regional
Development Authority (RDA) areas, have shown. Any attempt to direct industrial
development to areas dictated by the government may not only result in ineffective public
investments but also losing the competitiveness of Malaysia in attracting FDIs or even
losing local investments to Malaysia’s competitors, and, therefore, 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 order to encourage a
balance in the geographical development of the country and to strengthen the base for

5 - 19
further industrialisation of these regions. It also includes channelling overspill and excess
development to conurbations located between the main conurbations such as Ipoh,
Melaka, Temerloh-Mentakab and Lumut-Sitiawan-Manjung.
The small and intermediate cities and towns in general, including some state capitals,
have generally not developed as fast as the main conurbations and have experienced a
loss in their share of the urban population in the decade 1991-2000. Public investments
in infrastructure in order to attract development in the sectors facing global competition to
the small and intermediate cities and towns will not be cost-effective. Their
developmental viability should, therefore, depend on sectors that are not subject to global
competition, or at least less intensive global competition, such as resource-based
manufacturing, resource-based services, craft-based industries, downstream agricultural
activities, forestry, as well as the general modernisation of the agricultural sector. There
will be competition among the small and intermediate cities and towns for such forms of
development. Priority should be directed to the state capitals such as Kota Bharu, Kuala
Terengganu and Kangar, or in the case of downstream agricultural activities, to those
centres located in the midst of modernising agriculture such as Tanah Rata, Kluang,
Muar and Batu Pahat. Some of the modernising agricultural areas are of course already
catered for by the conurbations. Many small and intermediate cities and towns will,
therefore, still face stagnation and potential decline.
There are a few exceptions, particularly towns that have a potential in those sectors
related to in-situ resource development, that is, in those niche sectors which are not
subject to intensive international competition. These towns may be referred to as special
feature towns. They include towns located close to sites of outstanding natural beauty or
areas of natural, archaeological or historical attraction that can become tourist resort
towns (example: Tanah Rata and Port Dickson) and new bases for eco-tourism
(example: Raub and Kuala Lipis), as well as towns that cater to or support a particular
mining operation or a particular industry arising from mining (example: Kerteh). They also
include towns that can exploit their locations such as border towns that benefit from
cross-border trade and international developmental co-operation (example: Padang
Besar and Rantau Panjang). They further include towns that have been created for a
special purpose and which will receive exceptional public financial support (example;
Putrajaya and Cyberjaya), but this last group of towns are generally located within the
expanding conurbations and their development will be supported by the growth of the
conurbation concerned. The exceptions also include clusters of towns which, because of
their locational advantage in relation to the transportation system of the country as well
as other factors, have the potential to become the nuclei of future conurbations, namely,
the Lumut-Sitiawan-Manjung area in Perak and the Temerloh-Mentakab area in Pahang.
State Governments may direct infrastructural investments that are appropriate to the type
of development anticipated to these exceptional areas identified.
The rural areas will face population decline not only because of the pull factor of urban
employment but also because of the push factor of agricultural modernisation. It is,
therefore, important to rationalise rural settlements not only to support an expanding
urban-based economy but also to service efficiently the remaining rural population.

5 - 20
The maintenance of public services, such as in public health, education, communications
and public transport, utilities, security, recreational facilities and so on in the small and
intermediate cities and towns, and in the villages, should continue but should be
rationalised. Such public expenditures do not constitute development investment but an
equitable share of the general prosperity of the country. The level of services in the cities,
towns and villages that may be declining should not be permitted to fall below the
national standard, even if it requires that the rich areas must support and subsidise the
poor areas. National integration must presuppose an equitable distribution of national
wealth and this equitable distribution is achieved through public services and facilities.
The distribution of the services, as well as the types of services and facilities provided,
need, however, to be monitored and adjusted. The nation is already facing the necessity
of closing schools in rural areas because of the decline in the school-going age
population in rural areas. At the same time more schools need to be built in the urban
areas. These changes will continue over the plan period of the NPP. Space standards for
schools may also need to be reviewed. The high cost of urban land may make the
present generous space standards no longer affordable. Schools will have to consider
seriously the sharing of playing fields, the time-sharing of municipal games fields, and the
option of promoting less space-consuming games and so on. It is important to bear in
mind that by 2020 three out of four Peninsular Malaysians will be living in urban areas,
and nearly one out of two Peninsular Malaysians will be living in the three main
conurbations, with the proportion of children probably even higher.
Public health services, which hitherto have concentrated on maternity and child-care in
the rural areas, may also need to be re-examined. As the population structure changes
and more child-bearing age women become concentrated in the urban areas, the present
birth-related rural health care services may have to move with the population to the urban
areas. At the same time the aging population of rural areas will require that geriatric care,
which is still poorly developed, be quickly and greatly enhanced.
As the rural population decreases some villages, including traditional villages, new
villages, Orang Asli settlements, as well as FELDA settlements, are likely to decline to a
level where the provision of public facilities and services is no longer sustainable. The
rural population should be consolidated at Rural Growth Centres (RGCs) where a high
level of public facilities and services can continue. To diversify the rural economic base,
the development of economic activities based on resource-based manufacturing, craft-
based industries, value-added downstream agriculture-based activities, eco-tourism and
forestry should be encouraged in these RGCs. Development of non-agricultural activities
should, however, proceed in tandem with the modernisation of agriculture, including the
rationalisation of management units and application of modern technology and methods.
The process of urbanisation should be harnessed to enhance rural productivity and
incomes, so that even when physical development appears to be occurring only in
selected areas, the benefits of urbanisation is felt throughout the country through a
structural change in agriculture.

5 - 21
Within the conurbations, urban sprawl and the consequential deterioration of the urban
environment 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 one another.
The inner cores of the conurbations have also experienced a loss of their share of
population to the suburbs and satellite towns in the decade 1991-2000. The city of Kuala
Lumpur has grown at a slower rate than its conurbation and George Town has actually
lost population. The population of Kuala Lumpur City grew at 1.4% p.a. while its
conurbation grew at 5.6% p.a. – not including Kuala Lumpur City itself, the conurbation in
fact grew at 7.7% p.a. The population of George Town shrank by 2.2% p.a. or 17.8%
over the inter-censual period. This is in spite of the growth of employment in the core
cities at rates that surpass their surrounding suburbs. For the year 2000 the employment
ratio of Kuala Lumpur City was 0.59 against a conurbation ratio of 0.41 and a national
ratio of 0.40 (Draft Kuala Lumpur Structure Plan 2020). This suggests that people
continue to work in the core cities but move out to live in the suburbs. There is, therefore,
increasing commuting.
The main cause of population movement out of the core cities may be attributed to the
increasing cost of city housing, making living in the cities beyond the affordability of
middle and lower income groups. Only subsidised housing in the form of low-cost
housing manages to retain a proportion of the low income groups in the cities. However,
while subsidised housing is extended to the poorest city dwellers it is not extended to the
middle-income and lower middle-income groups. A situation may be developing in which
the core cities are populated by the richest and the poorest and little in between. This is
not a desirable social mix.
As low-cost housing areas are dependent on public maintenance not only of the
infrastructure but also of the buildings themselves, they are vulnerable to dilapidation and
neglect. The contrast between rich areas and poor areas can become very visible, again
not a desirable social condition for the cities.
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 become increasingly an issue over the next two decades. Urban policies need to be
put in place to guide the planning of cities, particularly the older cities in the main
conurbations. Greater effort need 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. In the Malaysian context ‘inner city’ should
not be interpreted strictly as a geographical term implying a central location but should

5 - 22
include old areas and settlements that might have been hastily built or built without
proper planning and have become parts of the cities, such as traditional villages and new
villages.
The aspiration to attain developed country status and to enjoy the quality of urban life of a
developed country involves the onus to adopt 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 international standards.
Malaysia is still experiencing a property overhang, which immobilises capital and
resources, which has come about from speculative development. Future property
overhangs should be prevented from recurring. It is incumbent on approving authorities to
be restrained in the approval of development applications and to be guided by projections
of housing and property demand based on realistic population projections. Development
applications include the application for land conversion and sub-division. Approval of land
conversion should not be at a rate faster than five years ahead of projected demand for
development land. Presently some states have approved conversions sufficient to meet
the demand for development up to twenty years ahead. In addition to the planning control
exercised by state governments and local authorities, it is important that the private
sector also exercises self discipline and responds more sensitively to state planning
projections. A contributing cause of speculative development is the lack of accurate,
regular and transparent information on the housing and property situation available to
developers and property purchasers. Exacerbated by economic recession it engenders a
property overhang.
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 from cities
located in the midst of granary areas like Alor Star. Such diversion could be areas just
outside the paddy growing lands or to other cities and towns in the state. The details of
urban diversion would be matters for state and local planning to address, but 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 initiative where such
initiative does not contradict the national spatial framework. For example, the aspirations
of Kuala Lumpur City as contained in its Structure Plan should be supported. Support
would be translated into federal financial allocations for local programmes.

5 - 23
NPP 9
The concentration of urban growth in the conurbations shall be anticipated and
accommodated.
IP 6 : Hierarchy of Conurbations
Measures:
i. The levels of conurbations proposed for priority development are as follow:
Level Designation Area
1 National Growth Conurbation Kuala Lumpur-Klang Valley-Seremban
2 Regional Growth Conurbation i. George Town-Kulim-Sungai Petani-Northern Perak
ii. Johor Bahru-Pasir Gudang-Tanjung Pelepas
iii. Kuantan-Kemaman
3 Intermediate (Connective) Growth
Conurbation
i. Ipoh
ii. Melaka
4 Urban Growth Centre / Future
Conurbation
i. Alor Setar
ii. Kota Bharu
iii. Kuala Terengganu
iv. Kangar
v. Temerloh-Mentakab
vi. Lumut-Sitiawan-Manjung
vii. Muar-Batu Pahat-Kluang
ii The extent of the conurbations has been demarcated as follow:
a. For the National Growth Conurbation a 45 minutes travel time from the
employment centres of core cities.
b. For all other conurbations a 30 minutes travel time from the employment
centre of the core city.
iii. As a new urban policy direction, use of vacant land within the present built-up
area, rehabilitation and redevelopment of existing building sites shall be
emphasized.
NPP 10
The growth of the four main conurbations of Kuala Lumpur, George Town, Johor
Bahru and Kuantan shall be supported.
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

5 - 25
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.
iii. Where necessary and appropriate, specific areas shall be identified and
developed within the conurbations for the housing of 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 locate in the intermediate (connective) growth conurbations and
future conurbations of:
a. Ipoh
b. Melaka
c. Temerloh-Mentakab
d. Lumut-Sitiawan-Manjung
e. Muar-Batu Pahat-Kluang
NPP 11
The conurbations shall be planned and developed as integrated regions.
Measures:
i. Regional plans for the conurbations shall be prepared.
ii. In the case of a conurbation lying wholly within a single state the regional plan for
the conurbation may be prepared in one or other of the following ways:
a. Local planning authorities within the conurbation area may, together and
under the supervision of the State Planning Committee, prepare a regional
plan for the conurbation;
b. The Structure Plan may incorporate a regional plan for the conurbation.
iii. In the case of a conurbation covering the areas of more than one state, Regional
Planning Committees shall be formed, comprising all local planning authorities
within the conurbation, representatives of the state governments involved and a
representative of the federal government.

5 - 26
iv. Regional plans for the conurbations shall, among other things, address such
matters as new towns and growth centres within the conurbations, transportation,
water supply, sewerage systems, solid waste disposal, green belts, industrial
estates, and flood mitigation.
v. Conurbation boundaries as shown in the NPP are not intended to be ‘hard
boundaries’ but indications of the potential extent of the conurbations based on
acceptable travel time from core cities. There are no conurbation boundaries as
such for the purpose of planning or development control. The local authority
areas within the conurbations provide the basis for planning and development
control. Limits of development of the individual cities and towns within the
conurbations shall, therefore, be agreed upon and delineated in the regional
plans for the conurbation and shall be strictly observed by the individual local
authorities.
vi. Excess 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 conurbations.
vii. The general population targets of the four main conurbations for the NPP plan
period (2020) are as follow:
a. Kuala Lumpur Conurbation : 8.5 million
b. George Town Conurbation : 2.4 million
c. Johor Bahru Conurbation : 1.8 million
d. Kuantan Conurbation : 0.6 million
viii. In delineating city limits, land shall be provided in between individual cities and
towns which shall be set aside from development. Such land shall form a green
belt, and, if deem necessary, legislation may be enacted to provide for the
creation, maintenance and control of green belts.
ix. Isolated forest reserves, PAA and ESA Rank 1 and 2 shall form parts of the green
belts. Agriculture Soil Class 3 land may also be included in the green belts as
local authorities and State Governments deem fit.
x. The development control of lands 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, and the suitable type of recreational
activities should depend on the type and sensitivity of the area.
xi. Land conversion and development applications shall be assessed on the basis of
a sequential test
1
to minimise speculative development.
xii. State land within the urban limits shall be reserved for public use.
1
Sequential test refers to a sequential approach to the release of land and buildings for housing, supported by a system of
regional and sub-regional reconciliation of housing needs and demand.

5 - 27
NPP 12
The individuality and physical separation of the cities, towns and villages within
the conurbations shall be maintained.
Measures:
i. The development limits of individual cities, towns and villages within the
conurbations shall circumscribe the horizontal expanse of the individual cities,
towns and villages.
ii. The integrity of relationships between the core areas of individual cities and their
peripheries shall be maintained.
iii. 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.
iv. Structure Plans and Local Plans shall encourage infilling and the use of
brownfield sites within the urban areas, to better utilise existing and committed
physical and social infrastructure.
v. Local planning shall create scope for urban regeneration in the core cities not
only for the purpose of economic growth but also for the purpose of enhancing
the living environment.
vi. Local planning shall be sensitive to the conservation of historical, cultural and
architecturally outstanding areas to enhance the character and uniqueness of
individual cities.
vii. A hierarchy of infrastructural, social and recreational facilities shall be established
within each conurbation to promote greater efficiency in public investments and
the use of public facilities.

5 - 28
NPP 13
Towns with special features shall be identified and the development of projects
exploiting their special features shall be supported with the appropriate
infrastructure.
Measures:
i. Examples of towns with special features include:
Special Feature Town
Border Town Bukit Kayu Hitam
Padang Besar
Rantau Panjang
Pengkalan Kubor
Bukit Bunga
Pengkalan Hulu
Tourism Town
(including eco-tourism)
Port Dickson
Mersing
Bandar Cukai
Kuah
Tanah Rata
Fraser’s Hill
Raub
Kuala Lipis
Gua Musang
Jerantut
Maran
Muadzam Shah
Kuala Rompin
Special Role Centre Putrajaya
Special Industry Centre Kertih
Cyberjaya
Future Communications and Transport
Node
Temerloh-Mentakab
Lumut-Sitiawan-Manjung
Kuala Lipis
Gua Musang
Other towns may be identified in the Structure Plans. Support infrastructure
includes roads, public transport, utilities and public facilities.
NPP 14
Small and intermediate towns shall be developed in accordance with their
localised economic potentials.
Measures:
i. Public amenities and facilities in all cities, towns and villages shall be maintained
at a level commensurate with the needs of their population.

5 - 29
ii. Private investments in resource-based industries, craft-based industries, value-
added agricultural activities, eco-tourism and similar industries and services in
cities, towns and villages around which the resources or the base activities are
located shall be supported by public investments in infrastructure necessary for
such developments.
iii. Urban development shall be coordinated with national policies relating to land
use, such as the Agricultural Policy to safeguard food producing areas. As an
example, urban development should be diverted from cities and town located
within designated granary areas to locations not reserved for rice production.
Federal assistance, including financial assistance, should be made available for
such urban development diversion.
NPP 15
The development of Rural Growth Centres (RGCs) shall be reinforced to rationalise
the servicing of the rural population.
IP 7 : Potential Rural Economic Clusters
Measures:
i. The existing RGCs shall be reviewed and its implementation programme
expedited.
ii. Social and commercial services and public facilities shall be consolidated at
RGCs.
iii. Public investment in infrastructure shall be concentrated in RGCs to support
resource-based economic activities, craft-based industries, agriculture-based and
forestry-based downstream activities.
iv. Villages of historical, heritage, cultural and architectural value should be selected
as RGCs. Where any such village cannot be selected, a special programme
should be created for its conservation.
v. The residents of villages where the population has become too small, or which
are too isolated, to service or which, for any reason, have become uneconomic to
service, should be encouraged to relocate to RGCs.

5 - 31
NPP 16
Planning standards shall be designed to meet the requirements of a developed
country.
Measures:
i. Existing planning standards shall be benchmarked against international
developed country standards and upgraded where appropriate with the view of
ensuring a quality of life for Malaysians that is commensurate with a developed
country status. Upgrading may be selective to ensure that any higher standards
adopted are practical, appropriate to the local cultural, climatic and other
conditions.
ii. The implementation of enhanced standards may 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 standards.
v. The quality and range of municipal services provided shall also be reviewed to
commensurate with the aspirations of a developed country.
NPP 17
A designated central authority shall be charged with the responsibility to publish
on regular basis information on land use development.
Measures:
i. The central authority shall be identified by the National Physical Planning Council.
ii. Every local planning authority shall be required to supply to the designated
central authority, at regular intervals, information on planning approvals and issue
of Certificates of Compliance and Completion (CCC) it has carried out.
iii. Every district land office shall be required to supply to the designated central
authority, at regular intervals, information on land conversions approved in its
district.
iv. The designated central authority shall determine the frequency of publication in
consultations with stakeholders and the frequency of reporting by the local
planning authorities and land offices.

5 - 32
v. The designated authority shall, in consultations with the stakeholders, determine
the formats for reporting and publication and the type of information to be
included (whether in units, land acreages, quantum of floor space, housing types
and so on). Information may include applications received and applications
rejected.
vi. All Development Plans shall include a programme designating when land is 'ripe
for development' and conversion to urban use. Approval for the conversion of
land from agriculture to urban use shall adhere to such a programme. Where
conversion is well ahead of development there should be a moratorium on
conversion. The rate of conversion should be no more than 5 years ahead of
projected development.
5.6 Conserving Natural Resources and the Environment
The effective management of natural resources and the environment is vital to the quality
of human life and overall wellbeing of the country. It is recognized that land resources,
being used for a variety of purposes of which all interact with both positive and
sometimes negative outcomes, should be planned and managed in a holistic and
integrated manner. This approach is advocated in the United Nations sponsored Agenda
21 programmes. Prudent management of natural resources and the environment is thus
vital for the creation of an efficient, equitable and sustainable national spatial framework
for the NPP.
The management of natural resources and the environment in a sustainable manner is a
challenge to the country. The significant loss of forest cover is a good example -
Peninsular Malaysia has already lost more than half of its original forests to agriculture
and urban development (Table 5.2). While most of these forest clearings were needed to
provide for the growing population, better planning and management of land could have
minimised the loss and avoided fragmentation of the remaining forests. Fragmentation is
one of the major threats to the conservation and maintenance of biodiversity and
ecosystem.
Table 5.2: Forest Cover in Peninsular Malaysia
Year Area (ha.) % of Total Land
Early 19th. Century - (est.) ~ 90
1946 10,144,808 77
1970 8,008,767 61
1999 5,938,068 45
Source: Forestry Department, 2000

5 - 33
At present, the remaining forests play a vital role in safeguarding our water supply,
providing forest produce and recreation and acting as a gene pool. Similarly, wetlands
are among the most threatened ecosystems and their conservation is vital for the well-
being of the country. Wetlands play important roles in flood mitigation and recharging
groundwater storage. Conversion of wetlands to other land uses will aggravate flooding in
many parts of the country. Most of the wetland forests especially on the west coast of
Peninsular Malaysia have been developed and the remaining areas are under threat of
encroachment and over-exploitation.
Currently, the Protected Areas (PA) in Peninsular Malaysia include gazetted National and
State Parks, Wildlife Reserves / Sanctuaries, Marine Parks, Protection Forests (of the
Permanent Forest Estate, or PFE) and other areas designated for statutory protection.
This categorisation is based on the definition by the Convention on Biological Diversity
(UNEP, 1992), to which Malaysia is signatory, which is: A geographically defined area
which is designated or regulated and managed to achieve specific conservation
objectives. Another definition that has been used is one provided by the International
Union for the Conservation of Nature (IUCN), that is: An area of land and/or
freshwater/marine body legally demarcated and dedicated to the protection, preservation
and enhancement of biological diversity and of natural and associated cultural resources
and managed through legal or other effective means (MOSTE, 1997).
Although these PA already comprise various habitats/ecosystems, the distribution of
reserves reveals that some habitats/ecosystems are seriously under-represented, namely
wetlands and lowland dipterocarp forests. Moreover, despite these PA being gazetted,
there are provisions that allow degazettement for short-term economic uses.
Uncontrolled development in the highlands is also a growing problem that requires
unambiguous policy directions. Highland in this document refers to land with elevation
above 300m as adopted in the Study for the Sustainable Development of the Highlands
of Peninsular Malaysia (EPU, 2002). The last decade has seen intensive development in
the highlands, particularly in the established hill stations for commercial agriculture and
tourism. The changes are particularly noticeable at hill stations such as Genting
Highlands, Cameron Highlands and Fraser’s Hill, while development in other highlands is
also fast intensifying. Many disasters such as flash floods and landslides have occurred
that may be attributed to uncontrolled development. The natural topography of highlands
is in itself extremely susceptible to soil erosion and landslides. In addition, disturbance
from land development in such steep terrain will result in siltation of rivers and streams,
thus increasing the incidence of flash floods downstream.
Policies are also needed both to protect and to manage our water resources.
Incompatible developments within water catchments lead to pollution and deteriorating
river water quality and significantly increases cost of water treatment. Besides the
hazards of flash floods and landslides, other issues include over exploitation of water
resources, land subsidence, encroachment onto floodplains and riparian buffer zones
and loss of ecological integrity.

5 - 34
The coastal zones of Peninsular Malaysia have generally been experiencing rapid
development including large-scale reclamation for tourism and urban purposes. Policies
are needed to control and guide these developments so that the potential threats to the
marine and coastal ecosystems such as alteration and loss of habitat, coastal pollution,
over exploitation and coastal erosion and deposition can be minimised and monitored.
NPP 18
Environmentally Sensitive Areas (ESA) shall be integrated in the planning and
management of land use and natural resources to ensure sustainable
development.
IP 8 : Environmentally Sensitive Areas
Measures:
i. The management of ESA shall be guided by the following criteria:
a. ESA Rank 1 – No development, agriculture or logging shall be permitted
except for low-impact nature tourism, research and education.
b. ESA Rank 2 – No development or agriculture. Sustainable logging and low
impact nature tourism may be permitted subject to local constraints.
c. ESA Rank 3 – Controlled development where the type and intensity of the
development shall be strictly controlled depending on the nature of the
constraints.
ii. Areas that will be inundated by proposed dams may be logged, subject to the
timing requirements of dam construction. Areas between proposed inundated
areas and the 1000m contour level within a proposed dam catchment may be
sustainably logged, subject to the conditions applicable to the appropriate ESA
ranking. An existing logging concession in a proposed dam catchment and
potential Protected Area may continue until the expiry of the concession.
iii. There shall be adequate buffer zones between ESA and urban or agriculture
development. A minimum standard of buffer zone shall be established.
Permanent buildings should not be permitted in the buffer zone. The buffer zone
may be utilised for agro-forestry. Within the designated conurbations, ESA buffer
zones may be incorporated into the green belts.
iv. Structure Plans and Local Plans shall refine and delineate the ESA identified in
the NPP to include other ESA that may be of importance at the state or local
levels.

5 - 36
v. The Protected Areas (PA) network shall be enlarged to include a full
representation of the diversity of natural ecosystems, particularly the lowland
dipterocarp forests and wetlands. To achieve this, the following areas are
recommended to be gazetted as PA, and shall be managed as ESA Rank 1:
a. Parts of Southeast Pahang Peat Swamp Forest, Pahang
b. Parts of Kuala Selangor North Peat Swamp Forest, Selangor
c. Kuala Langat North Peat Swamp Forest, Selangor
d. Klang Islands (Pulau Klang, Pulau Che Mat Zain and Pulau Tengah),
Selangor
e. Parts of Matang Mangrove Forest Reserve, Perak
f. Ulu Muda Forest Reserve, Kedah
g. Tasik Chini and its surrounding wetland, Pahang
h. All forests above 1000m elevation except for Special Management Areas.
This PA network, which crosses state boundaries, is best coordinated at the
national level to achieve effective management, comprehensive monitoring and
integration with economic and development policies.
vi. Further detailed studies at the Structure and Local Plan levels shall determine the
locations and sizes of all PA. All PA shall be protected from any form of urban
and agricultural development.
vii. Isolated PFE shall be integrated into urban development to serve as regional
parks and part of the country’s network of recreational areas.
viii. PFE that have been degazetted for development shall be simultaneously
replaced with forests that are of similar quality and size.
ix. All present State Land Forest shall be gazetted as PFE and be subjected to
appropriate silvicultural treatment to further improve the productivity of such
forests.
x. Future functions of the forest land shall be recommended in the context of the
proposed development strategy for each region.
xi. Fiscal measures shall be introduced to assist states that are required to conserve
areas for environmental purposes beyond the needs of their states. This includes
Protected Areas as well as water catchments.

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NPP 19
A Central Forest Spine (CFS) shall be established to form the backbone of the
Environmentally Sensitive Area network.
IP 9 : Central Forest Spine
Measures:
i. The CFS shall be gazetted as a protection forest under the National Forestry Act.
ii. Management plans, guidelines and operational procedures shall be formulated to
regulate the functions and uses of the CFS.
iii. The tourism economic base within the CFS shall be enhanced.
iv. Studies shall be undertaken to determine the possibility of re-establishing the
integrity and connectivity of forests and wetlands through the implementation of
the linkages between the following four major forest complexes:
a. Banjaran Titiwangsa-Banjaran Bintang-Banjaran Nakawan,
b. Taman Negara-Banjaran Timur,
c. South East Pahang, Chini and Bera Wetlands,
e. Endau Rompin Park-Kluang Wildlife Reserves.
v. Rivers shall be used as connecting corridors to maintain the integrity and
connectivity of forest ecosystems. Structure Plans and Local Plans shall
incorporate the concept of using the rivers and forests as the backbone for
developing the country's network of linear recreational areas and for maintaining
ecological balance.

5 - 39
NPP 20
Sensitive coastal ecosystems shall be protected and used in a sustainable manner.
IP 10 : Sensitive Coastal Ecosystems
Measures:
i. Coastal reclamation for future urban expansion shall not be carried out except for
the development of ports, marinas and jetties.
ii. Sensitive coastal ecosystems of national importance shall be gazetted as
Protected Areas and could be utilised for low-impact nature tourism. Amongst
others, these include:
a. Parts of the mangroves in Larut Matang District, which are important for
West Coast fisheries, should be gazetted as protection forests.
b. Klang Islands, especially Pulau Tengah, which should be protected as a
bird sanctuary.
c. Kuala Selangor Nature Park should be enlarged by incorporating parts of
Banjar North and Banjar South Forest Reserves and be protected.
d. Turtle nesting sites such as Pulau Redang, Kuala Setiu Bahru, Geliga and
Paka in Terengganu, Pulau Upeh in Melaka and Chendor in Pahang should
be protected as turtle sanctuaries.
e. Kuala Gula should be protected as a sanctuary for migratory birds.
f. All islands within marine parks should be designated as ESA Rank 3 as
minimum requirement, and development should be controlled accordingly
to help safeguard the marine parks. Subject to further studies, some marine
park islands will be designated ESA Rank 1 or 2.
Other sensitive coastal ecosystems shall continue to be identified in the
Structure Plans.
iii. Adopt policy recommended by National Integrated Coastal Zone Management
for coastal areas.
iv. Coastal area land use plan shall be prepared.

5 - 41
NPP 21
Land development in highlands shall be strictly controlled to safeguard human
safety and environmental quality.
IP 11 : Highlands And Special Management Areas
Measures:
i. Future urban and agriculture development in the highlands shall only be
permitted in three Special Management Areas (SMA) viz.:
a. Cameron Highlands-Kinta-Lojing,
b. Genting Highlands-Bukit Tinggi-Janda Baik
c. Fraser’s Hill.
Within the SMA, future agriculture development shall only be permitted in areas
with slopes of 25
o
or below.
ii. New golf courses and industries shall not be permitted in the highlands.
iii. The synergy between agriculture and tourism shall be strengthened to optimise
the use of resources.
iv. The planning and design of highland developments shall be based on the
recommendations of the Study for the Sustainable Development of the Highlands
of Peninsular Malaysia (EPU, 2002).
NPP 22
All surface and ground water resources are strategic assets to be safeguarded and
used optimally.
IP 12 : Industrial Sites within Water Catchments
Measures:
i. Surface and ground water resource and recharge areas shall be identified and
delineated as areas requiring special land use management and subject to
specific land use control.
ii. All existing and future land use activities within surface and ground water
resource and recharge areas should not jeopardise nor add to the cost of water
treatment for human consumption.
iii. New industrial development and other activities that could be a source of water
borne pollution shall not be permitted in water catchments.

5 - 44
iv. Existing industries within water catchments shall be required to adopt appropriate
environmental management measures to protect public health and the water
quality.
v. Water catchments upstream of dams shall be gazetted as protection forests to
ensure that there will be no further encroachment of incompatible land uses into
such areas.
vi. Water bodies shall be managed to protect the aquatic flora and fauna, with the
objective to sustain living rivers.
5.7 Integrating the National 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. However, 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 time 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 seems 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 NPP 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 and Kuala Terengganu to the West
Coast conurbations, must be given priority consideration. 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 exploited 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

5 - 45
urban centres, a national high-speed rail transport system shall best serve as a
comprehensive unifying system linking all state capitals. A minimum of two east-west
cross-links (north and central) shall be considered in the development of the national
high-speed rail system. 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 narrow (1.0m) gauge to the internationally accepted 1.435m gauge.
Complementing the inter-state high-speed rail, the main urban conurbations should have
their own light and mass rail transit (LRT and MRT) systems for urban transit. Railway
stations will become the focal points of urban life and activity. Railway stations will
become community places in addition to being transportation interchanges.
In relation to sea traffic, Malaysia plays the role of 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 and the Port of Tanjung Pelepas (PTP) should be promoted as the two major
national ports, albeit each with a different focus. Port Klang, with its central location and
proximity to the nation’s domestic hinterland, should ideally build on this comparative
advantage to focus on being the regional hinterland port with extensive intermodalism
and efficient land-bridging services to other ASEAN countries. PTP, given its locational
characteristic on the other hand, should concentrate its development to be a regional and
international transhipment hub for South-East Asia with extensive maritime feeder
services to all ASEAN countries.
For air traffic, strategically KLIA has the potential to be a competitive hub for air travel
between the northern hemisphere and the southern hemisphere. The strength of KLIA
lies in the fact that it has a 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.
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.
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 80:20 in favour
of private transport, reflects an obvious imbalance between private and public vehicle

5 - 46
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. Hence, a modal split of 50:50 is proposed as a national strategy for all major
urban centres.
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, basically laid down some 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 today’s vehicles. The prime focus of this
programme should be all federal roads and main rural-urban roads that are hindering the
growth potential of rural areas capable of servicing the conurbations and rural-urban
commuters.
NPP 23
In recognition of the inter-relationship between land use and transport an
integrated national transportation network shall be established.
IP 13 : Integrated National Transportation Network
Measures:
i. A single agency shall be identified to coordinate integration of the nation’s public
and private transportation systems where an emphasis should be placed on
enhanced use of public transportation services in major urban areas.
ii. 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.
iii. In order to optimise use of resources, the role and function of each road shall
complement rather than duplicate each other.
iv. To facilitate emergence of an integrated transportation network, studies shall be
undertaken to identify movement corridors and for these corridors to be
subsequently incorporated into Structure and Local Plans.
v. Corridors shown in Structure and Local Plans shall be protected from alternative
land uses.
vi. While implementation of a transportation network may be undertaken
incrementally, the overall works programme shall be consistently executed to
achieve completion.

5 - 48
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 in Peninsular Malaysia shall be established.
The high-speed rail shall act as the core system supported by the road network.
NPP 24
A national integrated high-speed rail system shall be established.
Measures:
i. Corridors for the high-speed rail system shall be established and protected in a
phased programme.
ii. All state capitals should be linked via the high-speed rail network with the rail
stations acting as focal points for community and transportation activities.
iii. 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.
iv. Two east-west links should be established as part of the high-speed rail network,
one from Kota Bharu to George Town and the second from Kuantan to Kuala
Lumpur.
v. The present ERL route to KLIA would form part of the high-speed rail network.
vi. KL Sentral shall be the national transportation hub linking the major transportation
nodes with a range of multimodal services.
NPP 25
The national road network shall be further extended for regional travel and for local
access.
Measures:
i. The road network shall form the base layer on which the proposed high-speed rail
system shall be overlaid.
ii. The expressway system shall be extended to cover both the West Coast and the
East Coast regions in which a minimum of three expressway cross-links should
be provided to better integrate the Western Coast Area, Central Highlands and
Eastern Coast Area.

5 - 49
iii. Supporting and complementing the national expressway system shall be an
extensive network of lower hierarchy roads such as the federal and state roads,
essentially for traffic dispersal from the expressway and the rail system, and for
local access.
NPP 26
Major airports and seaports shall be developed according to their complementary
functions to enhance the nation’s economic competitiveness and facilitate tourist
arrivals.
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. Bayan Lepas International Airport as the major hub serving the industrial,
commercial and tourism needs of the northern region.
c. Mat Sirat 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 Tanjong Pelepas.
ii. Sultan Haji Ahmad Shah (Kuantan), Sultan Ismail Petra (Kota Bharu) and Sultan
Mahmud (Kuala Terengganu) airports are to be upgraded to facilitate arrivals of
chartered 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 multimodalism and intermodalism.
• Port of Tanjung Pelepas - international and regional transhipment hub
for Asia-Pacific.

5 - 50
b. Regional Ports:
• Pulau Pinang Port and Kuantan-Kemaman Port. The former focuses on
shipping lines from the west, whilst the latter caters to those from the
east.
c. Coastal and Feeder Ports:
• Pasir Gudang Port, Langkawi Port and Lumut Port.
These ports shall provide for the efficient bulk movement of goods and serve as
intermodal and multimodal hubs.
NPP 27
The Transit Oriented Development (TOD) concept shall be promoted as the basis
of urban land use planning 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.
ii. Park-and-ride facilities shall be provided to promote the railway stations as
transportation hubs of the towns and shall be incorporated into all urban railway
stations.
iii. 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 conurbations of Kuala Lumpur, George Town and Johor Bahru shall
incorporate LRT and MRT routes into the urban fabric.
vii. The present LRT routes in the Kuala Lumpur conurbation shall be better integrated
and extended to service the new outer growth centres.

5 - 51
NPP 28
In all major urban centres, an integrated public transportation system shall be
established.
Measures:
i. Transportation in all major urban centres shall adopt a modal split of 50:50
between public and private transport.
ii. An integrated, regular and frequent public bus service shall be provided in all
urban settlements of population up to 0.5 million.
iii. For urban settlements with populations of more than 0.5 million, an integrated
mass rapid transit system shall be adopted.
iv. Traffic management measures including Intelligent Transport Systems (ITS) shall
be adopted to enhance traffic efficiency.
5.8 Providing Appropriate Infrastructure
A key indicator of development status is reflected in the availability and quality of
infrastructure in the form of roads, water supply, drainage, piped gas supply, waste
management, power, telecommunications and the like. For the Peninsula, the pattern of
availability and quality of the full range of infrastructure services varies considerably, not
only between states but also within particular states. While national development policies
with respect to provision of basic infrastructure services such as roads and water has
been successfully implemented, the quality of services available in parts of the major
urban areas has been generally found wanting.
The rapid rate of urbanisation combined with institutional and financial weaknesses, has
resulted in the need for providers of services to ‘catch up’ with users’ expectations and
demands. This issue is most critically expressed in the main conurbations where a
combination of inadequacy of roads, absence of public transport and poor land use
integration has led to congestion and community cost inefficiencies. Failure to anticipate
the rapid increase in demand generated by urban activities has also resulted in shortfalls
in supply of water, power and telecommunication services.
The importance of the need to protect all water resource areas as well as to manage
efficiently the supply and delivery of water should not be underestimated. For example,
while water appears to be ubiquitous, present and projected rates of consumption
indicate many centres of population will be subject to water stress in the near and mid-
term futures.
Solutions will require adoption of integrated river basin and water resource management
programme, in addition to husbanding the present sources via rehabilitation of the
present infrastructure, recycling of run-off and reuse of waste water.

5 - 52
The present extraction rates of ground water for domestic, industrial and irrigation
purposes, particularly during the dry season in Kelantan and Selangor, warrants adoption
of water management measures to ensure that this resource is maintained at sustainable
levels and the quality of water is not subject to pollution. Currently the issues relating to
ground water resource are ground water pollution arising from uncontrolled development
within and surrounding the recharge areas, over-extraction that leads to land subsidence,
saline water intrusion particularly in coastal areas, and the lowering of ground water
tables within peat swamp areas.
Quality of life issues related to sewerage, solid waste and flood management have
suffered from a late start in the general perception of the need for these services as part
of normal health and safety requirements of citizens.
At present Malaysia is ranked at level 2 in terms of ICT on a 1 to 4 scale where 4 is high
use of ICT. In terms of national development, the provision of good ICT infrastructure is
vital for Malaysia to be a regional hub for ICT development. Emphasis will continue to be
placed on making ICT accessible and affordable to the masses through efficient
technologies. The MSC shall provide the model for the provision of a similar utility
provision and level of service for new cyber cities.
The NPP recognises these deficiencies in ICT and proposes efforts be directed to
improving the quality of services by focussing initially on the main conurbations, by
attending to shortfalls in service availability, and to enhancing and providing a more even
spread in the quality of services. Each of the service providers should establish integrated
national and specific area programme based on the spatial distribution priorities
established in the NPP.
NPP 29
The NPP shall provide the spatial framework for the efficient delivery of integrated
infrastructure services at the national and regional level and to the main
conurbations.
Measures:
i. National agencies encompassing:
a. Water supply and distribution,
b. Sewerage,
c. Waste management,
d. Transportation inclusive of all public transport,
e. Power supply and distribution,
f. Telecommunication and
g. River and coastal management
shall adopt the NPP as the basis for planning and coordinating provision of
infrastructure services.

5 - 53
ii. National infrastructure agencies shall oversee state and local level agencies to
ensure programmes are consistent with the intent of the NPP.
iii. The NPP population projections and distribution proposals shall be utilised as the
basis for infrastructure service supply and distribution programmes.
iv. 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 through the
implementation of requirements for all infrastructure services/providers to
maintain records using Geographic Information Systems (GIS).
NPP 30
The supply and projected demand for water by quantity and location should guide
the planning of water resource areas.
IP 14 : Water Resources And Water-Stressed Areas
Measures:
i. National policies on water shall be formulated to encompass issues such as
water resources conservation, alternative sources for water- stressed areas,
opportunity costs for conservation of water catchments, reduction of water loss,
reuse and recycling of water and water demand management.
ii States with the ability to supply water to water-stressed areas shall be
encouraged to protect water catchments and to develop their export potential of
this resource.
iii. Integrated Water Resource Management (IWRM) and Integrated River Basin
Management (IRBM) are to be adopted as input of land use planning.
NPP 31
Ground water resource and recharge areas shall be identified and protected from
activities that cause pollution and reduce yield.
IP 15 : Ground water Resources
Measures:
i. Structure Plans and Local Plans shall delineate ground water resource areas
(wellheads) and recharge areas as part of the integrated land use management
plans.

5 - 56
ii. Land use controls and buffer requirement shall be imposed to protect ground
water resources including recharge areas and wellheads.
iii 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.
iv Drainage controls shall be imposed in the vicinity of important ground water areas
such as peat swamps and freshwater swamps to maintain the water table
required to sustain these ecosystems.
NPP 32
All urban settlements shall be serviced by a centralised sewerage treatment
system.
Measures:
i. Priority shall continue to be given to rationalisation and centralisation of the sewer
networks and treatment systems for the main conurbations, major urban
settlements and tourist activity towns and islands.
ii. Sewerage treatment 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 established proactively
in accordance with the spatial policies for new growth urban areas.
iii. Appropriate technology solutions to sewerage treatment should be applied in
rural and low density housing areas.
NPP 33
All urban settlements shall be serviced by an integrated network of solid-waste
disposal and/or recovery facilities.
Measures:
i. Solid-waste disposal and/or recovery system of facilities may include waste
processing, transfer, treatment or other necessary facilities and shall be
monitored at all times by the appropriate health and environmental agencies.
ii. The system of facilities shall be shared by as many urban centres as feasible,
taking into consideration the local infrastructure of roads and the location of
facilities.

5 - 57
iii. The location of the facilities shall comply with national guidelines as contained in
the National Solid Waste Master Plan, taking into consideration the prevention of
any health hazard to, and adverse effect on the environment of surrounding
population.
iv. Due to long-term health and environmental factors, disused sanitary landfill and
other contaminated sites shall not be utilised for human habitation.
v. Waste generation management 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 Solid Waste Master Plan.
NPP 34
Land utilised for main drains, streams and rivers shall be designated as drainage
or river reserves.
IP 16 : Flood Prone Areas
Measures:
i. Studies should be undertaken to evaluate the impact of flood frequency of main
drain and river systems on human and economic activities.
ii. Structure Plans and Local Plans shall incorporate adequate reserves for all main
drains and rivers.
iii. The Urban Storm Water Management (USWM) manual proposals shall be
applied in all urban areas.
iv. For rural areas and areas not subject to USWM proposals but subject to flooding,
appropriate flood mitigation measures shall be adopted.
v. To enhance the quality of urban life, the USWM retention system and riverbank
system shall be integrated to create continuous urban parkway networks.
vi. In conjunction with the implementation of the USWM proposals, measures such
as the reuse and recycling of rainwater shall be developed and applied.

5 - 59
NPP 35
As strategic assets, electricity generation plants and distribution mains shall be
suitably located to provide a reliable and efficient supply of power to consumers.
IP 17 : Power Supply Grid
Measures:
i. Positioning of distribution networks should include impact evaluations on land use
and aesthetics, particularly in nature tourism locations.
ii. Renewable energy such as energy from solar, wind, wave and biomass are to be
promoted to complement traditional power generation sources.
NPP 36
Appropriate ICT technology shall be provided as a priority to all settlements.
Measures:
i. The criteria adopted by the MSC should provide a basis for content and quality of
service.
ii. Appropriate technologies should be applied to ensure rural-urban digital divide in
access to ICT is minimized.
iii. Promotion and use of ICT in all levels of government and the private sectors
should be a priority.

IMPLEMENTATION MECHANISM
CHAPTER 6

National Physical Plan Implementation Mechanism
6 - 1
CHAPTER 6
IMPLEMENTATION MECHANISM
Once the NPP is approved there is a general duty on the part of all agencies of the Federal and
State Governments to ensure that its objectives are achieved. While the Director General of Town
and Country Planning (DG DTCP) is responsible for preparing the NPP, its implementation is the
responsibility of all Federal and State agencies. Agencies identified in the plan to administer the
policies are required to translate them into action plans, programmes and projects and to include
such programmes and projects in the subsequent FYMP. The DG DTCP shall monitor the
implementation of the Plan and report periodically to the National Physical Planning Council
(NPPC).
6.1 Institutional Mechanism for Implementing the NPP
6.1.1 Existing Agencies Involved in Spatial Planning
Functionally the main department entrusted with the responsibility for spatial planning is
the Federal Department of Town and Country Planning (DTCP). However, there are
several ministries and agencies involved in spatial planning. The Department will exercise
technical leadership and ensure that spatial planning is coordinated. The NPP is one of
the instruments through which this coordination could be achieved.
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 Works, Ministry of Transport and
the Ministry of Agriculture and Agro-based Industry. It is important that these Ministries
should be represented in the NPPC.
There is also a growing proliferation of national councils related to physical development.
These councils include the National Water Resources Council, the National Council for
Coastal Erosion, the National Housing Council, the Klang Valley Regional Planning
Council, the National Minerals Council and the proposed National Environmental Council.
It is important that linkages are established with these Councils when preparing the Plan.
6.1.2 Integrated National Development Planning System
The main policy council for spatial planning will be the NPPC. Unlike the other councils
the NPPC is established by law under the Town and Country Planning Act 1976.
Essentially there are three parallel streams relating to the different components of national
development planning (Figure 6.1):
i. National socio-economic development planning under the National Economic
(Planning) Council and the NDPC;

6 - 2
National
Development
Council
National
Economic
Council
Ministry
Department
Agencies
State
Secretary
Rulers
Conference
Yang
di-Pertuan
Agong
Menteri
Besar
Conference
State
Secretary
Conference
State
Ruler
Federal
State
Liaison
Committee
Figure
6.1
:
Integrated
National
Development
Planning
System
National
Land
Council
National
Council
for
Local
Government
National
Finance
Council
Constitutional
Council
Federal
Secretary
for
Sabah
and
Sarawak
Prime
Minister’s
Department
Cabinet
National
Physical
Planning
Council
National
Development
Planning
Committee
IAPG
State
Development
Council
State
Economic
Planning
Committee
State
Planning
Committee
IAPG
NPP
Committee
Parliament
Local
Planning
Authority
National
Development
Working
Committee
ICU
EPU
FDTCP
SDO
SEPU
State
DTCP
State
Exco
Project
Implementation
and
Coordination
National
Development
and
Economic
Planning
National
Physical
Planning
National
Development
Council
National
Economic
Council
Ministry
Department
Agencies
State
Secretary
Rulers
Conference
Yang
di-Pertuan
Agong
Menteri
Besar
Conference
State
Secretary
Conference
State
Ruler
Federal
State
Liaison
Committee
Figure
6.1
:
Integrated
National
Development
Planning
System
National
Land
Council
National
Council
for
Local
Government
National
Finance
Council
Constitutional
Council
National
Land
Council
National
Council
for
Local
Government
National
Finance
Council
Constitutional
Council
Federal
Secretary
for
Sabah
and
Sarawak
Prime
Minister’s
Department
Cabinet
National
Physical
Planning
Council
National
Development
Planning
Committee
IAPG
State
Development
Council
State
Economic
Planning
Committee
State
Planning
Committee
IAPG
NPP
Committee
Parliament
Local
Planning
Authority
National
Development
Working
Committee
ICU
EPU
FDTCP
SDO
SEPU
State
DTCP
State
Exco
Project
Implementation
and
Coordination
National
Development
and
Economic
Planning
National
Physical
Planning

6 - 3
ii. National Physical Planning under the NPPC;
iii. 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. What may be important is to forge
horizontal linkages particularly at the Secretariat and Technical Working Committee
levels. At a functional level it is important that DTCP is represented in the NDPC and
similarly the EPU is represented in the NPP Committee.
6.1.3 National Physical Planning Process
The proposed national physical planning system is shown in Figure 6.2. Under this
proposal there will be five inter related bodies related to National Physical Planning:-
i. National Physical Planning Council (NPPC)
ii. NPP Committee
iii. National Physical Planning Advisory Committee (NPPAC)
iv. National Physical Planning Agency
v. Spatial Planning Research Institute
Apart from the NPPC which is provided by law the other bodies are the recommendations
of this Plan. The functions of these bodies are discussed in Section 6.1.4.
The NPP Committee is proposed to be chaired by the Secretary General of the Ministry
responsible for Town Planning and attended by relevant heads of government agencies
and departments. The Secretariat to the NPP Committee will be provided by the Federal
Department of Town Planning. It is also proposed that a National Physical Planning
Advisory Committee be set up to advice the Minister on current concerns and issues
relating to physical planning. This is similar to that practised in Denmark and Holland. The
composition 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 of Federal
and State Ministers. The NPP Committee will comprise mainly of related government
heads of departments while the Advisory Committee will include the NGOs, Professional
Institutes, Business Councils and special interest groups.
The main agency responsible for preparing the NPP will be the Federal Department of
Town and Country Planning. The department 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 Land Use Planning Intelligent
System (LaPiS). 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
issue related and not compartmentalised by sectors. Some of the relevant planning issues
could include coastal areas management, sustainable highland development, role of small
towns in regional development, etc.

6 - 4
Figure 6.2: Proposed National Physical Planning Structure
Sector Policies
Parliament
Cabinet
Constitutional Councils
National
Land
Council
National Council
for Local
Government
National
Finance
Council
¾ Chairman : Minister for
Town Planning
¾ NGO’s Business Council,
Special Interest Groups
¾ Professional Bodies
National Physical Planning
Advisory Committee
Secretariat : FDTCP
NPP Committee
¾ Chairman : Secretary
General for Town Planning
¾ Deputy Chairman : DG of
Town & Country Planning
¾ Heads of Govt. Agencies /
Depts.
Secretariat : FDTCP
IAPG
¾ Federal Town
and Country
Planning
Department
National Physical
Planning Agency
¾ Spatial
Planning and
Development
Institute
Research
Institute
TWG
Federal
Ministries/
Agencies
State/Local
Government
State DTCP
Local Planning Authority
Municipal Planning
Department
• Chairman : Menteri Besar
• Technical Departments
• Secretary : Director state
DTCP
State Planning Committee
National Physical Planning Council
• Chairman : PM
• Federal Ministers
• State MB
• Secretary : DG of Town and
Country Planning
Secretariat : FDTCP
Water Resources
Council
Environmental
Council
National Mineral
Council
Regional Planning
Council
Coastal Engineering
Council
National Housing
Council

6 - 5
In addition to the NPP, the NPPC may also issue planning guidelines similar to the
Planning Policy Guidelines (United Kingdom) to the various states from time to time.
Once the Draft Plan is prepared, it is reviewed by the NPP Committee before it is
submitted to the NPPC for approval. The approved plan is further endorsed by Cabinet
before it is tabled to Parliament for information. Policies and proposals that are within the
jurisdiction of the Constitutional Councils i.e. the NLC, NCLG and the NFC may be further
tabled in the respective councils. The decisions of these constitutional councils are
generally binding on the states.
6.1.4 National Physical Planning Institutional Structure
i. The National Physical Planning Council (NPPC)
The NPPC is established by way of an amendment to the TCPA 1976 (A1129). 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.
c. To approve the Draft National Physical Plan and keep it in review from time to time.
d. To coordinate physical development at a national and regional level to ensure a
sustainable form of development.
e. To formulate a uniform set of rules and guidelines on planning procedures in 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 members of the NPPC are shown in Table 6.1.

6 - 6
Table 6.1: Members of the NPPC
The permanent members under the TCPA 1976 are:
1. Chairman: Prime Minister
2. Deputy Chairman: Deputy Prime Minister
3. Minister (for Town Planning, should this post be separate from the Minister
of Housing and Local Government)
4. Minister of Housing and Local Government
5. Minister of Finance
6. Minister for Land
7. Menteri Besar or Chief Minister of every state
8. Minister for the Federal Territories
9. Not more than 7 other members to be appointed by the Chairman
Other relevant Ministers and members although not mentioned in the Act should
include:
1. Minister of Works
2. Minister for Rural and Regional Development
3. Minister for Natural Resources and Environment
4. Minister of Transport
5. Minister of Agriculture and Agro-based Industry
6. Chief Secretary to the Government (KSN) / Chairman of the NDPC
The Director General of Town and Country Planning is the Secretary of the
Council
ii. NPP Committee
The functions of the Committee are as follows
a. Discuss and review issues related to national physical planning.
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 S.22 (2A) TCPA).
The members of the NPP Committee are mainly heads of technical departments and
could include the following (Table 6.2):

6 - 7
Table 6.2: Members of the NPP Committee
1. Secretary General of the Ministry responsible for Town Planning as the Chairman
2. Director General of Town and Country Planning as the Deputy Chairman
3. Director General of Economic Planning Unit
4. Secretary General of the Ministry of Finance
5. Director General of the Implementation and Coordination Unit.
6. Director General of Land and Mines
7. Director General of Survey and Mapping
8. Director General of Public Works Department
9. Director General of Drainage and Irrigation
10. Director General of the Environmental Quality
11. Director General of Forestry
12. Director General of Agriculture
13. Director General of Wildlife and National Parks
14. Director General of Fisheries
15. Director General of Minerals and Geoscience
16. State Directors of Town and Country Planning
The Secretariat will be provided by the Federal Department of Town and Country
Planning
iii. National Physical Planning Advisory Committee
The functions of this committee 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 at
the meeting. These briefs will serve as inputs to the preparation and review of the
NPP.
c. Highlight the concerns 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 Committee
1. Minister responsible for Town Planning as the Chairman.
2. Director General of Town and Country Planning as Deputy Chairman.
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. Other special interest groups.
The Secretariat will be provided by Federal Department of Town and Country Planning.

6 - 8
iv. National Physical Planning Agency
The National Physical Planning Agency is the Federal Department of Town and Country
Planning. Under the TCPA, the DG of Town and Country Planning is required to prepare
the NPP. This will require the existing National Physical Planning Division be
strengthened 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 Research Institute
It is important that the NPP benefits from the latest R&D in spatial planning. While some
of these inputs could come from the universities, it may be necessary that the government
establishes a research institute for Spatial Planning and Development in order to have a
continuous R&D 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 ISIS with full powers to hire and fire staff. 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), International Institute for Urban Environment (Netherlands).
vi. IAPG and 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.
6.1.5 Public Participation in the Preparation of the National Physical Plan
Public participation in the case of the NPP shall take the form of consultation with the
State Authorities and utility boards as well as dialogues with selected NGO groups. The
TCPA requires the Director General of Town Planning to consult every state authority and
such other bodies as the NPPC may direct [S6B (3)]. Once the Plan is prepared and
approved by the National Physical Planning Council it could be presented to the Cabinet
for endorsement.
Extensive publicity must be given when preparing and reviewing the NPP. The concerns
of the stakeholders have to be taken into account while preparing the Plan. 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;
iv. Exhibitions, seminars and workshops.

6 - 9
Similar to the situation in the Netherlands, it is proposed that a National Physical Planning
Advisory Committee be set up to advice the Minister on public issues concerning Town
and Country Planning in the Country (Table 6.3).
6.2 Plan Implementation
There are 36 policies and proposals identified in the NPP. These policies cover a wide
range of issues that have a bearing on the physical development of the country. The
policies of the NPP 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 6.2.1).
The proposals of the NPP will also be implemented through the respective Structure
Plans which will have to conform generally to the proposals of the NPP. 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 preparing the Structure Plan, the State Director of Town and Country
Planning (the Director) is required to examine the provisions of the NPP and
other national economic, social, physical, environmental and conservation
policies.
ii. The Draft Structure Plan must contain matters prescribed by the SPC and the
NPPC. This would suggest that the NPPC may issue planning guidelines from
time to time and it would be incumbent on the States to conform to these
guidelines in the Structure Plans
iii. In considering whether to approve 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 Director may refer the Draft
Structure Plan to the NPPC for a decision.
iv. In considering planning applications involving the following categories of
development i.e.:
a. new township with a population exceeding 10,000 or covering an area of
more than 100 ha or both;

6 - 10
b. major infrastructure or utility projects such as airports, seaports, railway
lines, highways, erection of dams, main power stations and toxic waste
disposal sites;
c. development affecting hill tops and hill slopes in areas designated as
environmentally sensitive;
The SPC is required to refer the matter to the NPPC for its advice on the
application.
v. The NPPC may make rules with respect to any matter in the Act. The rules made
by the Council will prevail over the rules made by the State Authority.
Table 6.4: Implementing the Policies
Policies Principal Implementing
Agencies
Implementation Initiatives
NPP 1: The NPP shall serve as the
framework to achieve integrated and
sustainable land use planning in the
country
Federal and State
agencies, DTCP
Translate the strategies and
proposals of the NPP into the
Structure Plan (SP) and Local
Plans (LP)
NPP 2: The planning of urban-based
activities shall adopt the concept of
‘selective concentration’ for strategic
urban centres for all states
Federal and State
agencies, SEDC, Min. of
Education, MDC, DTCP
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: Cooperation in physical planning
between Malaysia and its ASEAN
neighbours shall be strengthened
EPU, Min. Foreign Affairs,
State agencies, DTCP,
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 4: Land and natural resources of the
less developed regions shall be used in a
sustainable manner to increase the
productivity of these regions and reduce
regional imbalances
DOA, Min. of Tourism,
MEWC, Min. of
Entrepreneurial and
Cooperative Dev, Min. of
Rural and Regional
Development, DTCP,
DMG
Encourage economic
diversification especially in the
agriculture and tourism sectors as
well as bridging the digital divide
and providing technical training
and social development
programmes
NPP 5: Planning for industrial land
development shall adopt the concept of
industrial clusters
MITI, SEDC, DTCP The locational criteria of industrial
estates include various factors
such as environmental impact,
economics and accessibility and
conformity to the concept of
industrial clusters
NPP 6: The support of agriculture shall
take cognisance of the threats and
opportunities of urbanisation
DOA, DTCP, LPA Conserve PAA and major food
production areas. The PAA have
to be identified in the SP and LP

6 - 11
Agencies
NPP 7: The eight (8) strategic granary
areas comprising Muda (MADA), Kemubu
(KADA), IADP Kerian-Sungai Manik, IADP
Barat Laut Selangor, IADP Pulau Pinang,
IADP Seberang Perak, IADP Terengganu
Utara (KETARA) and IADP Kemasin-
Semerak shall be conserved
DOA, DTCP The granary areas have to be
demarcated in the SP and LP
NPP 8: The different tourism development
zones shall concentrate on different
packages of tourist products to maximize
their resource and locational advantages
Min. of Tourism, DTCP,
LPA
Identify various tourism products
in the country and effective
programme to promote these
products and to provide
necessary supporting
infrastructure
NPP 9: The concentration of urban growth
in the conurbations shall be anticipated
and accommodated
Federal and State
agencies, DTCP
Identify conurbation areas in SP
and prepare appropriate regional
plans for the conurbations
NPP 10: The growth of the four main
conurbations of Kuala Lumpur, George
Town, Johor Bahru and Kuantan shall be
supported
Federal and state
agencies, DTCP
Establish Regional Planning
Committee for the conurbations
and other support initiatives in
ICT, health, education, tourism
and public transport systems
NPP 11: The conurbations shall be
planned and developed as integrated
regions
Federal and state
agencies, DTCP
Prepare regional plans
NPP 12: The individuality and physical
separation of the cities, towns and villages
within the conurbation shall be maintained
Federal and state
agencies, DTCP, LPA
Undertake comprehensive urban
planning including the
establishment of urban limits in
the LP
NPP 13: Towns with special features shall
be identified and the development of
projects exploiting their special features
shall be supported with the appropriate
infrastructure
DTCP , Min. of Tourism Identify Special Feature Towns in
SP and institute appropriate
development programmes
NPP 14: Small and intermediate towns
shall be developed in accordance with
their localized economic potentials
Federal and state
agencies, DTCP
Provide public amenities,
encourage resource based and
craft industries and develop them
as important marketing towns for
agricultural produce.
NPP 15: The development of Rural
Growth Centres (RGCs) shall be
reinforced to rationalise the servicing of
the rural population
Ministry of Rural and
Regional Development,
DTCP, DOA
Review existing RGC and
undertake comprehensive
planning and development
programme on rural settlements
NPP 16: Planning Standards shall be
designed to meet the requirements of a
developed country
Federal and state
agencies, DTCP
A comprehensive review of
existing planning standards
should be carried out
NPP 17: A designated central authority
shall be charged with the responsibility to
publish on regular basis information on
land use development
DTCP, LPA Prepare and publish land use
information

6 - 12
Agencies
NPP 18: Environmentally Sensitive Areas
(ESA) shall be integrated in the planning
and management of land use and natural
resources to ensure sustainable
development
DOF, DOE, DTCP Demarcate ESA and buffer zones
in SP and LP
NPP 19: A central forest spine (CFS)
shall be established to form the backbone
of the Environmentally Sensitive Area
network
DOF, DOE, Wildlife Dept.,
DTCP
Identify Forest Spine in the
Development Plans and draw up
appropriate management plans
for the CFS
NPP 20: Sensitive Coastal ecosystems
shall be protected and used in a
sustainable manner
DID, DTCP, Wildlife Dept,
Fisheries Dept.
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
NPP21: Land development in the
highlands shall be strictly controlled to
safeguard human safety and
environmental quality
EPU, Dept of Land and
Mines, LPA, DTCP
Apply existing guidelines and
recommendations of the Study for
Sustainable Dev. Of the
Highlands of Peninsular Malaysia,
EPU 2002
NPP 22: All surface and ground water
resources are strategic assets to be
safeguarded and used optimally
DMG, DID, Water
Authorities, DOF, DOE,
DTCP, State Authorities
Demarcate surface and ground
water resource and recharge
areas and establish appropriate
management plans
NPP 23: In recognition of the inter
relationship between land use and
transport an integrated national
transportation network shall be
established
EPU, MOT, Min. of
Works, PWD, DTCP
Prepare an Integrated
Transportation Network Plan and
identify a coordinating agency
NPP 24: A national integrated high- speed
rail system shall be established
MOT, DTCP Prepare a feasibility study on the
proposal. Identify corridor in SP
and LP and develop state capitals
as rail-based transportation hubs
NPP 25: The national road network shall
be further extended for regional travel and
local access
HPU, PWD, DTCP Develop expressway cross links
to better integrate the east and
west coast areas
NPP 26: Major airports and seaports shall
be developed according to their
complementary functions to enhance the
nation’s economic competitiveness and
facilitate tourist arrivals
EPU, MOT Enhance support infrastructure
and facilities at major airports and
seaports
NPP 27: The Transit Orientated
Development (TOD) concept shall be
promoted as the basis of urban land use
planning and ensure viability of public
transport
MOT, LPA, DTCP Identify TOD in regional plans for
conurbation, SP and LP.
Introduce compact city
development and integrated
public transportation system
NPP 28: In all major urban centres, an
integrated public transportation system
shall be established
EPU, MOT, DTCP, LPA Encourage the use of public
transport facilities including bus
and rail in all major urban centres

6 - 13
Agencies
NPP 29: The NPP shall provide the spatial
framework for the efficient delivery of
integrated infrastructure services at the
national and regional level and to the main
conurbations
MEWC, MHLG,
Infrastructure agencies
and utility service
providers
Utility and infrastructure agencies
should use the NPP as a basis for
planning and coordinating
provision of infrastructure
services
NPP 30: The supply and projected
demand for water by quantity and location
should guide the planning of water
resource areas
NWRC, Water Supply
authorities, DID, PWD,
DTCP
National Water Policy under the
National Water Resources
Council should complement the
proposals of the NPP
NPP 31: Ground water resource and
recharge areas shall be identified and
protected from activities that cause
pollution and reduce yield
DMG, State Water
Resource Authorities,
DTCP
Identify ground water recharge
and extraction zones and institute
appropriate land use controls to
protect the resource
NPP 32: All urban settlements shall be
serviced by a centralised sewerage
treatment system
Sewerage Services Dept,
DTCP, LPA
Incorporate Centralised
Sewerage System Master Plans
into the LP
serviced by an integrated network of solid
waste disposal and/or recovery facilities
MHLG, LPA, DTCP Promote waste generation
management and identify waste
treatment plants in major urban
areas
NPP 34: Land utilized for main drains,
streams and rivers shall be designated as
drainage or river reserves
DID, LPA, DTCP Identify and gazette river reserves
in the SP and LP
NPP 35: As strategic assets, electricity
generation plants and the distribution
mains shall be located to provide a reliable
and efficient supply of power to
consumers
MEWC, TNB, DTCP Locate power plants and
distribution mains compatible to
the surrounding land use
NPP 36: Appropriate ICT technology shall
be provided as a priority to all settlements
EPU, MDC, MEWC, Min
of Rural and Regional
Dev.
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 Establishing Linkages with Socio-Economic Planning and Project Planning
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 on the other hand will provide the spatial component to
National Development Planning. The NPP however is a new planning activity and it is
necessary that both horizontal and vertical linkages are established with the
corresponding committees to ensure the successful implementation of the Plan.
In translating the proposals of the NPP 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.

6 - 14
ii. The NDPC and EPU should give weight to projects that are in line with the
recommendations of the NPP.
iii. The DG of TCP should be a permanent member of the NDPC to ensure that the
aspirations of the NPP are incorporated in the subsequent National Development
Plans.
iv. DTCP should be included in the project budgeting and programming process.
Currently the central agencies involved in this process are the EPU and Treasury.
v. The IAPG for the FYMP relating to physical planning should be chaired by the DG
of TCP.
6.2.2 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 e.g. the National Water
Resources Council. In preparing the NPP, the DG 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 plan.
ii. The NPP 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.
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.
6.2.3 Establishing Linkages with Planning Authorities
There is a need to establish strong linkages with planning authorities at the state and local
levels. The Structure Plans have to conform to the NPP and similarly the LP with the SP.
All draft Structure Plans will have to be referred to the NPPC for advice before it can be
approved by the SPC. The NPPC may issue letters of non conformity for Structure Plans
that are contradictory in essence to the objectives and policies of the NPP. The DG of
TCP 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 DTCP. This will be realised through the establishment of the LaPiS at
the DTCP with linkages to the State Structure Plan Information System (SLaPiS) (Section
6.3.3).

6 - 15
6.3 Plan Monitoring
Plan monitoring provides the framework for the 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 and the implementation of NPP policies.
6.3.1 Scope of Monitoring
The scope of monitoring involves determining the various aspects of the NPP which
would need to be monitored. There are two major objectives in monitoring, namely:
i. To monitor the application of the NPP policies through the use of relevant
indicators.
ii. To determine the extent of conformity in land use planning between the NPP and
SP. The main aspects of land use planning to be monitored would include land
use changes pertaining to the following:-
a. Sustainable urban land use patterns with special emphasis on the physical
growth of urban land and conurbations as proposed in the NPP.
b. The preservation and conservation of environmentally sensitive areas and
green belts including the status of forest areas as proposed in the NPP.
6.3.2 Monitoring Agencies
The DTCP as the custodian of the NPP and the State DTCP 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 NPP Division of DTCP 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 DTCP will take the lead in maintaining its own land use
planning information and monitoring land use changes at state level.
6.3.3 The Monitoring Process
Monitoring land use changes can be processed through the establishment of appropriate
instruments such as the use of indicators and the setting up of an appropriate information
system which would allow for continuous evaluation and support informed decision
making.

6 - 16
i. Application of key policy indicators
a. The key instrument that will be used to monitor the progress and
application of land use policies are the NPP 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 NPP Division DTCP from selected data
providers. The data providers will be required to collect the requisite
information in a prescribed format and forward them to DTCP 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,
timeliness, ease of understanding and reliability. Table 6.5 outlines the
NPP policies, the key indicators and data providers.
Table 6.5: NPP Policies Indicators
Policies Policy Indicators Data Providers
NPP 1: The NPP shall serve as the
framework to achieve integrated and
sustainable land use planning in the
country
Key land use and population indicators
of the NPP will be monitored in the SP
and LP
1. ESA
2. PAA
3. Area under CFS
4. State population targets in SP
EPU, DTCP, LPA,
DOF, DOE,DOA,
DOS
NPP 2: The planning of urban-based
economic activities shall adopt the
concept of ‘Selective Concentration’ for
strategic urban centres for all states
1. Area approved for planned
industrial estates
2. Number of and enrolment at
private educational and training
institutions
3. Designated area of cyber cities in
the main conurbations
MDC, MIDA, MITI,
Min. of Higher
Learning, Min. of
Human Resource,
DTCP
NPP 3: Co-operation in physical
planning between Malaysia and its
ASEAN neighbours shall be
strengthened
1. Number of joint venture projects
implemented in the Regional
Growth Triangles
2. Number and area of Special
Economic Zones established
3. Number and type of cross border
projects (with more than RM1
million capital investment)
implemented
EPU, MOF, SEDC
NPP 4: Land and natural resources of
the less developed regions shall be
used in a sustainable manner to
increase the productivity of these
regions and reduce regional imbalances
1. Number and area of agro-based
projects implemented in rural
areas by state
2. Number and area of eco and agro-
tourism projects implemented in
rural areas by state
3. Internet access and penetration in
rural areas
DOA, DOF, Min of
Tourism, Min. of Rural
and Regional Dev.,
MEWC, DTCP

6 - 17
NPP 5: Planning for industrial land
development shall adopt the concept of
industrial clusters
1. Total number, type and location of
industries by state
2. Area of industrial land in
designated industrial growth
centres
MIDA, MITI, DTCP
SEDC
NPP 6: The support of agriculture shall
take cognisance of the threats and
opportunities of urbanisation
1. Area of approved urban
development in PAA
2. Rate of change (%) per annum of
loss of PAA to urban development
DOA, DTCP, state
agencies
NPP 7: The eight (8) strategic granary
areas comprising Muda (MADA),
Kemubu (KADA), IADP Kerian-Sungai
Manik, IADP Barat Laut Selangor, IADP
Pulau Pinang, IADP Seberang Perak,
IADP Terengganu Utara (KETARA) and
IADP Kemasin-Semerak shall be
conserved
1. Area approved for urban
development in strategic granary
areas
2. Rate of change (%) per annum of
loss of strategic granary areas to
urban development
DOA, DTCP
NPP 8: The different tourism
development zones shall concentrate
on different packages of tourist
products to maximise their resource
and locational advantages
1. Number and area of tourism
development zones by type and
by state
Min. of Tourism, Min.
of Culture, Arts and
Heritage, state
agencies
NPP 9: The concentration of urban
growth in the conurbations shall be
anticipated and accommodated
1. Proportion (%) of total urban
population in conurbations
DOS, DTCP
NPP 10: The growth of the four main
conurbations of Kuala Lumpur, George
Town, Johor Bahru and Kuantan shall
be supported
1. Area approved for urban
development
2. Length of road network (km) in the
conurbations
2. Length of rail network (LRT and
Commuter Rail) in the
conurbations
3. Growth of internet subscribers in
the conurbations
4. Number of private hospitals in the
conurbations
LPA, PWD, MOT,
MEWC, Min. of Health
NPP 11: The conurbations shall be
planned and developed as integrated
regions
1. Number of conurbations with
regional plans by year
DTCP
NPP 12: The individuality and physical
separation of the cities, towns and
villages within the conurbations shall be
maintained
1. Area designated for green belts
within the conurbations
DTCP, LPA
NPP 13: Towns with special features
shall be identified and the development
of projects exploiting their special
features shall be supported with the
appropriate infrastructure
1. Number of towns with special
features identified in the NPP and
SP
DTCP, LPA

6 - 18
NPP 14: Small and intermediate towns
shall be developed in accordance with
their localised economic potentials
1. Number of SMEs registered with
MIDA and SMIDEC in small and
intermediate towns
2. Number of towns designated as
agricultural market towns in SP
and LP
MIDA, SMIDEC,
DTCP
NPP 15: The development of Rural
Growth Centres (RGCs) shall be
reinforced to rationalise the servicing of
the rural population
1. Number of RGCs identified in SP
and LP
Min. of Rural and
Regional Dev, DTCP
NPP 16: Planning standards shall be
reviewed to meet the requirements of a
developed country
1. Number of Federal planning
standards and guidelines reviewed
and adopted by the States
DTCP
NPP 17: A designated central authority
shall be charged with the responsibility
to publish on regular basis information
on land use development
1. Number of publications on land
use development produced per
year
DTCP
NPP 18: Environmentally Sensitive
Areas (ESA) shall be integrated in the
planning and management of land use
and natural resources to ensure
sustainable development
1. Area designated/ gazetted as ESA
2. Area designated/ gazetted as
buffer zones around ESA
DOF, DOE, DTCP,
LPA
NPP 19: A Central Forest Spine (CFS)
shall be established to form the
backbone of the Environmentally
Sensitive Area network
1. Percentage of total area of Forest
Spine gazetted as protected forest
by state
DOE, DOF, Wildlife
Dept., DTCP
NPP 20: Sensitive coastal ecosystems
shall be protected and used in a
sustainable manner
1. Number and area of coastal
reclamation by state
2. Area of coastal ecosystem
designated/ gazetted as ESA by
state
DOF, DID, Fisheries
Dept. DTCP
NPP 21: Land development in
highlands shall be strictly controlled to
safeguard human safety and
environmental quality
1. Area of new urban and agricultural
development approved in the
highlands by state
EPU, DOA, DTCP,
LPA
NPP 22: All surface and ground water
resources are strategic assets to be
safeguarded and used optimally
1. Number of industrial sites located
in water catchments and ground
water recharge and resource areas
DOE, DMG, MIDA,
DTCP, SEDC
NPP 23: In recognition of the inter-
relationship between land use and
transport an integrated national
transportation network shall be
established
1. Number of integrated multi-modal
and intermodal transportation
centres by state
2. Establishment of single authority in
coordinating transportation system
MOT, HPU, PWD,
DTCP
NPP 24: A national integrated high-
speed rail system shall be established
1. Corridor of high-speed rail
ƒ Approved (km)
ƒ Budgeted (RM)
ƒ Built (km)
EPU, MOT, DTCP,
state agencies
NPP 25: The national road network
shall be further extended for regional
travel and for local access
1. Length of expressway
(km /1000 population) by state
HPU, PWD, DTCP

6 - 19
NPP 26: Major airports and seaports
shall be developed according to their
complementary functions to enhance
the nation’s economic competitiveness
and facilitate tourist arrivals
1. Airports and seaports
upgraded/developed
ƒ Approved (Number)
ƒ Amount Budgeted (RM)
ƒ Built (Number)
EPU, MOT
NPP 27: The Transit Oriented
Development (TOD) concept shall be
promoted as the basis of urban land
use planning to ensure viability of public
transport
1. Number of TOD established in the
conurbations and urban centres
MOT, DTCP, LPA
NPP 28: In all major urban centres, an
integrated public transportation system
shall be established
1. Modal split ratio (calculated from
O-D surveys in major urban
centres)
HPU, DTCP, LPA
NPP 29: The NPP shall provide the
spatial framework for the efficient
delivery of integrated infrastructure
services at the national and regional
level and to the main conurbations
1. Public transport ridership per
1,000 population
2. Number of Public telephones per
1,000 population
3. Area for residential commercial
and industrial use in flood prone
areas (based on 50 year return
periods)
MOT, MEWC, DID,
DTCP, LPA
NPP 30: The supply and projected
demand for water by quantity and
location should guide the planning of
water resource areas
1. Per capita water availability by
state (m3/person)
State Water Authority
NPP 31: Ground water resource and
recharge area shall be identified and
protected from activities that cause
pollution and reduce yield
1. Number of polluting industries
located in ground water recharge
areas
DOE, DMG, MIDA,
DTCP
serviced by a centralised sewerage
treatment system
1. Number of urban settlements and
population serviced by centralised
sewerage treatment system
Sewerage Services
Dep., DTCP
serviced by an integrated network of
solid waste disposal and/or recovery
facilities
1. Number of centralised solid waste
treatment plants in conurbations
MHLG, DTCP, LPA
NPP 34: Land utilised for main drains,
streams and rivers shall be designated
as drainage or river reserves
1. Area of streams and rivers
designated as reserves by state
DID, DTCP, LPA
NPP 35: As strategic assets, electricity
generation plants and distribution mains
shall be located to provide a reliable
and efficient supply of power to
consumers
1. Number of breakdowns per
annum in conurbations
TNB
NPP 36: Appropriate ICT technology
shall be provided as a priority to all
settlements
1. Number of fixed line telephones
per 100 households
2. Number of PC ownership per 100
households
3. Number of internet subscribers per
100 households by urban and rural
areas for each state
DOS, MEWC, MDC

6 - 20
ii. Establishment of the NPP Land Use Planning Intelligent System (LaPiS) to be
maintained by the NPP Division, DTCP:
a. LaPiS is set up as the info-structure framework to support the whole
process of implementation, monitoring and review stages of the NPP. It will
contain support modules which can track land use changes and monitor the
application of selected land use policies.
b. To ensure conformity among the different tiers of land use planning, LaPiS
will be developed within a framework of an integrated land use planning
information system which will comprise three components i.e. LaPiS, State
Land Use Intelligent System (SLaPiS) and District Land Use Intelligent
System (DLaPiS). This integrated framework will allow for 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 LaPiS
• There shall be a vertical flow of information between the SLaPiS and
the LaPiS. DTCP State will supply updated land use data and other
information collected from the State Structure Plan and various Local
Plans to Federal DTCP 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 State and
Federal DTCP (Figure 6.3).
• There shall be a horizontal flow of information from the line agencies
and major data providers to LaPiS. The horizontal flow of information
will involve relevant government departments and agencies that will
supply necessary information to the LaPiS. The horizontal flow of
information may be achieved through a process of negotiations in the
form of MOUs between DTCP and the various government agencies
and departments (Figure 6.4).

6 - 21
Figure 6.3 : Vertical Information Flows
Figure 6.4 : Major Data Providers in LaPiS (Horizontal Information Flows)
EPU
DEPT OF
STATISTICS
GOVT. AGENCIES
related to
LaPiS
JUPEM
(CAMS)
GOVT. AGENCIES
related to
DEPT. OF
AGRICULTURE
MACRES
Tourism
Forestry
Minerals &
GeoScience
Drainage & Irrigation
Environment
Utilities
MOU MOU
Housing
Education
Health
Trade & Industries
Social Facilities
Transport
NPP LAND USE PLANNING INTELLIGENT SYSTEM (LaPiS)
ECONOMIC
Global Trade
Macro Economy
Primary
Secondary
Tertiary
DEMOGRAPHIC-
SOCIAL
Population &
Households
Urban Settlements
Rural Settlements
Community
Facilities
LAND USE
Land Cover
Built-up Area
Existing
Residential
Commercial
Industrial
Recreation Areas
Others
Committed projects
Proposed projects
Approved projects
PHYSICAL ENVIRONMENT
Elevation
Slope
Rivers
Lakes, Ponds
River Basins
Water Catchment Zones
Forest Reserves
Mining
Soils
Agro-climatic
NPP MAIN
FINDINGS
STRATEGIES
& COMPOSITE
MAPS
Socio-economic
tables &
projections
DTCP
(STATES)
DTCP
(FEDERAL)
DLaPiS
Parcel lot level
information
Development
Projects
Local Area
Data
LOCAL
AUTHORITIES
INFRASTRUCTURE
Roads
Rail
Ports
Airports
Utilities
Remotely sensed
data
MOU
MOU
MOU
SLaPiS
STATE LAND USE &
ZONING PLANS
COMMITTED DEVELOPMENT

6 - 22
d. Updating the Information in LaPiS. One of the main objectives of LaPiS 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 LaPiS 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 LaPiS, 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 LaPiS information system.
iii. Establishment of Information System in State DTCP
State DTCP should be the hub for the information system at the state level. In
order to achieve this, each state DTCP would have to establish land use
information system which will include the State Structure Plan Land use Planning
Intelligent 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 level. The principal
source of land use maps at state level will be the DOA Mapping Division.
There is a need for DTCP to enter into an MOU with DOA, 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 LaPiS, information
need to be compiled on approved development projects of 20 hectares and
above for smaller states such as Pulau Pinang, Perlis, Melaka and Negeri
Sembilan and 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
DTCP will be on an annual basis.

6 - 23
d. The transfer of land use information from the State DTCP to LaPiS will be
in digital format to minimize errors. The LaPiS will establish guidelines for
the conversion of data to the required format.
iv. Data Sharing Measures
Data sharing between Federal and State DTCP is an important element to
facilitate the monitoring process. Data sharing measures and the necessary steps
to be taken can be implemented in two broad phases, namely Phase 1 covering
the period of 2005 and Phase 2, covering the period from 2006-2008. These are
summarised as follows:
a. Phase 1: 2005
• Establishment of a TWG to oversee the process of vertical integration
and information sharing procedures within DTCP. The TWG will also
be responsible for negotiating MOUs at an inter-organisational level to
foster horizontal linkages with external data providers.
• The development of three IT applications which would support vertical
linkages such as:
- LaPiS Planning Support System (for internal stakeholders);
- LaPiS Homepage (for external stakeholders)
- Development of State Planning Monitoring System to track and
update land use changes
• DTCP has to strengthen and upgrade the GIS Units at both the Federal
and State levels in meeting staff requirements, training facilities and the
necessary software and hardware to facilitate the vertical flow of
information between the State and the Federal DTCP.
• Federal DTCP will prepare the necessary guidelines and manuals on
the development of the integrated three-tier information system
framework
• An Executive Information System (EIS) in the form of a user friendly
interface will be provided in the LaPiS especially for senior
management and executives. Up-to-date land use information can be
accessed, viewed and retrieved to assist in decision making.
Eventually the EIS will be used as a decision support system and made
available in a web environment.
• Development of an enhanced land use planning support system that
would incorporate all the three tiers of land use planning that will allow
for monitoring land use changes and the policy indicators.

6 - 24
b. Phase 2: 2006-2010
• Expanding the vertical linkages to the third tier, i.e. the local planning
authorities which are the custodians of the respective District Local
Plan Information Systems. This will be achieved through the
development of data sharing mechanisms and procedures between
local planning authorities and DTCP
• Achieving a consistent flow of information through vertical and
horizontal integration by utilising the Malaysian Geospatial Data
Infrastructure (MyGDI formerly known as NALIS). 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 6.5.
Figure 6.5: Vertical and Horizontal Linkages Land Use Planning
Information System, 2020
Source: NPP:Package I: Implementation of NPP Information System Technical Report, 2001
6.4 Review of the NPP
There is a duty on the part of the various planning authorities to keep the different plans in
review i.e. NPP, Structure Plans and the Local Plans. The concept of a hierarchy of plans
implies that the lower tier plans should conform to the higher tier. When a Local Plan is
prepared there is a duty to take cognizance of current development policies, be they
national policies or state policies. This would suggest that development plans would
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 their preparation (Figure 6.6).
Govt. Agencies
State Level
Govt. Agencies
District /Local
Level
Govt. Agencies
Federal Level
LaPiS
SLaPiS
DLaPiS
Govt. Agencies
State Level
Govt. Agencies
District /Local
Level
Govt. Agencies
Federal Level
MyGdi

6 - 25
Figure 6.6: Economic and Land Use Planning Cycle
The NPP should 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 in a timely manner. Collection of data for the preparation of a
Review should commence at least two years before the Review. As the custodian of the
LaPiS, it will be incumbent upon DTCP to ensure that the requisite data and information,
particularly the indicators, are kept in review and made available.
6.4.1 Evaluating the effectiveness of the Policies
There is a need for continuous evaluation of the NPP policies to ascertain its
effectiveness in achieving national development objectives. It would be incumbent on
DTCP, the Spatial Planning Research Institute and Universities to undertake research
initiatives from time to time to ascertain the effectiveness of the NPP policies. The findings
of this research will provide useful information for the subsequent Plan Review.
6.5 Proposals
The institutional responsibilities for the preparation, implementation, monitoring and
review of the Plan are shown in Table 6.6. The DG of DTCP is charged with the
responsibility of preparing the Plan, monitoring its implementation and keeping it in review
every 5 years. In carrying out this responsibility he will rely on the capacity of his
Leadtime Leadtime Leadtime
11MP
Leadtime Leadtime Leadtime
Leadtime Leadtime Leadtime Leadtime
Leadtime
Leadtime Leadtime
Leadtime 10MP
8MP 9MP
SP
Review
MTR MTR
MTR
Review Review
NPP NPP 2 NPP 3
DLP
DLP
DLP
Leadtime
2 years 11MP
Leadtime
10MP
8MP 9MP
SP
Review
SP
MTR MTR
MTR
NPP
NPP 2
Review
DLP
T + 10
T
Leadtime
18 months
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
T + 5
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
Leadtime
2 years
Review
SP
Review
SP
Leadtime
18 months
Leadtime
18 months
DLP
DLP
NPP 3
Review

6 - 26
department and a number of committees that have been proposed in the Plan such as the
NPPC, NPP Committee, NPPAC, IAPG and TWG.
The Implementation of the plan however will require the support of the various Federal
and State agencies that have a legal duty to adhere to the policies of the NPP. 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 DG of DTCP shall be made a permanent
member.
Adherence to the recommendations of the NPP will also be manifested in the respective
Structure Plans. One of the key instruments for monitoring the Plan and keeping it in
review is the establishment of the LaPiS to ensure effective exchange of both spatial and
attribute data that is necessary to prepare the plan and its review.
The policies of the NPP will remain applicable unless reviewed or replaced. In carrying
out the review, the DG will rely on the advice of the NPPAC, the NPP 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 inputs for the Review.
Table 6.6: Institutional Responsibility for Plan Preparation, Implementation,
Monitoring and Review
Activity Responsibility Enabling Law Enabling Instruments/
Institutions
Plan preparation DG DTCP TCPA NPPC, LaPiS, IAPG , TWG,
NPPAC, NPP Committee
Plan Implementation All Federal and
State Agencies
TCPA NDPC, EPU, Treasury, DTCP
Monitoring
• Land Use changes
• Application of the policies
DG DTCP TCPA NPPIS, NDPC, Indicators
Plan Review DG DTCP TCPA NPPC, NPP Committee, NPPAC,
LaPiS, IAPG, TWG
The main proposals for the implementation of the NPP are as follows:
i. Establish the necessary institutional structure for plan preparation and monitoring.
This will include among others, the strengthening of the National Physical
Planning Division in FDTCP, the establishment of NPP Committee, NPP Advisory
Committee, National Spatial Planning Research Institute, IAPG and relevant
TWG.

6 - 27
ii. Once the NPP is approved, the various Federal and State agencies need to
translate these policies into programmes and projects and include them in the
subsequent FYMP.
iii. The DG of DTCP should be made a permanent member of the NDPC to ensure
that the aspirations of the NPP are incorporated into the subsequent FYMP
iv. Establishment of the NPP LaPiS at FDTCP and the State Structure Plan Land
Use Information System (SLaPiS) at DTCP State.

National Physical Plan List of Abbreviations
ABBREVIATIONS
7MP - 7
th
Malaysia Plan
8MP - 8
th
Malaysia Plan
AAGR - Average Annual Growth Rate
AFTA - ASEAN Free Trade Agreement
ASEAN - Association of South-East Asian Nations
DG - Director General
DID - Department of Irrigation and Drainage
DLaPiS - District Land Use Planning Intelligent System
DMG - Department of Mineral and Geoscience
DOA - Department of Agriculture
DOE - Department of Environment
DOF - Department of Forestry
DOS - Department of Statistics
DTCP - Department of Town and Country Planning
EPU - Economic Planning Unit
ERL - Express Rail Link
ESA - Environmentally Sensitive Areas
FDI - Foreign Direct Investment
FYMP - Five Year Malaysia Plans
GDP - Gross Domestic Product
GIS - Geographic Information System
IADP - Integrated Agricultural Development Project
IAPG - Inter Agency Planning Group
ICT - Information and Communication Technology
ICU - Implementation and Coordination Unit
IMS-GT - Indonesia-Malaysia-Singapore Growth Triangle
IMT – GT - Indonesia-Malaysia-Thailand Growth Triangle
IP - Indicative Plan
KADA - Kemubu Agricultural Development Authority
KLIA - Kuala Lumpur International Airport
KSN - Chief Secretary to the Government
LaPiS - Land Use Planning Intelligent System
LA 21 - Local Agenda 21
LP - Local Plan
LPA - Local Planning Authority
LRT - Light-Rail Transit
MADA - Muda Agricultural Development Authority
MASMA - Urban Storm Water Management Manual for Malaysia
MDC - Multimedia Development Corporation
MEWC - Ministry of Energy, Water and Communication
MHLG - Ministry of Housing and Local Government
MICE - Meetings, Incentives, Conventions and Exhibitions
MITI - Ministry of International Trade and Industry
MOSTE - Ministry of Science, Technology and Environment
MOT - Ministry of Transport
MOU - Memorandum of Understanding

National Physical Plan List of Abbreviations
MRT - Mass Rail Transit
MSC - Multimedia Super Corridor
MyGDI - Malaysian Geospatial Data Infrastructure
NAP3 - Third National Agricultural Policy
NCLG - National Council of Local Government
NDPC - National Development Planning Council
NFC - National Finance Council
NGO - Non Governmental Organization
NITA - National Information Technology Agenda
NLC - National Land Council
NPP - National Physical Plan
NPPC - National Physical Planning Council
NPP Com - National Physical Planning Committee
NPPAC - National Physical Planning Advisory Committee
NWRC - National Water Resources Council
OIC - Organisation of Islamic Countries
OPP - Outline Perspective Plans
OPP3 - Third Outline Perspective Plan
PAA - Prime Agriculture Areas
PFE - Permanent Forest Estate
PPG - Planning Policy Guidelines
PTP - Port of Tanjong Pelepas
R&D - Research & Development
RDA - Regional Development Authority
REHDA - Real Estate and Housing Developers' Association
RGC - Rural Growth Centre
RPC - Regional Planning Committee
SA - State Authority
SDO - State Development Officer
SEDC - State Economic Development Corporation
SEPU - State Economic Planning Unit
SLaPiS - State Land Use Planning Intelligent System
SMA - Special Management Areas
SME - Small and Medium Scale Enterprises
SMIDEC - Small and Medium Industries Development Corporation
SP - Structure Plan
SPC - State Planning Committee
TWG - Technical Working Group
UN - United Nation
UNEP - United Nation Environment Program
UNDP - United Nations Development Program
USWM - Urban Strom Water Management
WTO - World Trade Organization

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