The Airport and the Territory: Transnational Flows in the Singapore-Johor-Riau Cross-Border Region

Full text

IV
Formal and Informal
Economies
Reproduced from The SIJORI Cross-Border Region: Transnational Politics, Economics, and Culture, edited by Francis E.
Hutchinson and Terence Chong (Singapore: ISEAS–Yusof Ishak Institute, 2016). This version was obtained electronically direct
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permission of the ISEAS–Yusof Ishak Institute. Individual chapters are available at <http://bookshop.iseas.edu.sg>.

MNC Distribution
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lintang
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Pinggir PinBaloi
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from Linggui
Tuas
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13
THE AIRPORT AND THE TERRITORY
Transnational Flows in the Singapore-
Johor-Riau Cross-Border Region
Anna Gasco
INTRODUCTION
Singapore’s air-traffic has grown at an astounding rate: the number of passengers has
quintupled since Changi Airport opened in 1981 and tonnes of airfreight movements
have risen by a factor of ten. In great part, the increase of flows articulated by Changi
has been central not only for the development of Singapore but also — as this chapter
argues — to the growth of its related larger territory: the Singapore-Johor-Riau (SIJORI)
Cross-Border Region (CBR). Through fieldwork conducted in Singapore, the State
of Johor in Malaysia and the island of Batam in Indonesia, this chapter outlines an
ongoing investigation into the impact and potential that “aeromobilities”1 have on
processes of urbanization and regional integration within this wider region.
Specifically, the chapter explores the air-cargo networks articulated by Changi
throughout this larger territory. It analyses the spatial manifestations and implications
for cross-border regulatory regimes shown in two case studies: (1) the trade of tax-
free “perishable” goods, such as fresh cut flowers and ornamental fish organized by
local small and medium enterprises (SMEs) across SIJORI’s rural hinterlands; and
(2) the offshore production of “high-value” electronics by multinational corporations
(MNCs) and their transhipment between Changi and the industrial free-trade zones
of the SIJORI region. In doing so the research uncovers how, in playing both active
and reactionary roles in urban development beyond Singapore’s national borders,
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342 Anna Gasco
Changi Airport has enabled companies to expand their commercial activities across
the SIJORI Cross-Border Region.
Finally the chapter investigates the development of “low-cost” hybrid trans-border
air-and-bus and air-and-ferries combinations put in place by SIJORI’s secondary
airports — namely Hang Nadim in Batam and Senai in Johor. While Changi remains
the international hub, overshadowing by its capacity and connections the smaller
airports on the fringe, these are starting to develop inventive solutions to compete
with Changi. In doing so, the chapter argues that coming changes in Singapore’s
airspace control, coupled with the rapid development of aviation in the region, calls
for Changi’s hub to expand its catchment area even further across national borders
by collaborating with these smaller regional airports.
In conclusion, the paper posits that Changi Airport, along with its related transport
links, is a critical lens for re-examining and broadening Singapore’s cross-border
perspective and questioning how this larger territory is being redesigned to facilitate
the production as well as global circulation of goods and passengers. Ultimately
it discusses how a planned and integrated airport system might be regarded as
a stepping-stone for the future of this region. Using Changi’s impact on regional
growth and its relation to the smaller airports in the region, this research represents
a modest attempt to draw attention on the need for a common strategic regional
urban vision for the future of the SIJORI agglomeration.
BROADENING SINGAPORE’S CROSS-BORDER
PERSPECTIVES
According to Saskia Sassen, the city-state of Singapore is a “global city” standing as
one of the “command and control centres of world capitalist economy” (Sassen 1991).
But unlike other global financial centres, Singapore is not part of a larger political
entity, such as New York, London or Tokyo. In this case, its immediate regional
hinterland spans interstate boundaries that make this World City distinctive from
others, like Hong Kong before its restoration to Chinese sovereignty in 1997. As
Lindquist points out, Singapore is limited in size — just over 700 square kilometres
after land reclamation works — and is a global city that is also a nation-state.
Therefore the distance to offshore locations is much closer, “compressing the space
between centre and periphery” (Lindquist 2010).
Since the 1970s, in order to address rising land and labour cost, the economic
development strategy of Singapore promoted the relocation of land- and labour-
intense activities across the national border. However as Chia explains, in order
to avoid the rapid industrial hollowing-out that was occurring in Hong Kong as
industries relocated in droves to the Pearl River Delta, policymakers in Singapore
formalized the government’s outward investment drives in the region in the early
1990s through bilateral agreements, growth triangle schemes, and territorial policies
(Chia 2005, p. 10). While Singapore relocated intensive agriculture, manufacturing,
and leisure activities outside national borders, it kept them as close and as secure
as possible within its peripheral region. Eased by a past joint history and territorial
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The Airport and the Territory 343
proximity, two neighbours became the main inheritors of this capital spillover: the
Malaysian state of Johor, just north of Singapore; and the Riau Islands Province in
Indonesia, south of the island. It is in this context that the SIJORI Growth Triangle
partnership was signed in 1989. As more Malaysian and Indonesian states joined
the partnership, the title “Indonesia-Malaysia-Singapore Growth Triangle” (IMS-GT)
was adopted in 1994 to formalize the new grouping. The IMS-GT optimized the
complementarity between the three countries and enabled Singapore to control the
“hinterlandization” (Sparke et al. 2004) of its economy outside its borders.
Offshore industrial enclaves included Batamindo Industrial Park (BIP) and
Bintan Industrial Estate (BIE). These were set up through the joint venture named
“Gallant Venture”,2 a joint enterprise between Singapore’s government-linked
corporations (GLCs) and Indonesia’s largest business conglomerate at that time, the
Salim Group. As Yeoh, Koh and Cai (2004) explain, Salim’s close ties to Indonesian
politicians provided some guarantee with respect to regulatory issues and government
permissions, while Singapore’s GLCs — namely JTC and SembCorp Industries
— led the design, development, and management of the estates.3 From the early
1990s, the Government of Singapore pursued a similar strategy for its tourism
sector, developing destinations that transcended its national borders. Developed
and managed by Bintan Resorts — the “leisure” subsidiary of Gallant Venture —
Bintan Beach International Resort (BBIR) is an 18,000-hectare tourist enclave built
following Tourism 21, Singapore Tourism Board’s (STB) regional-scale “collective
attractiveness” strategy (Chang 2004).
Throughout the years, many scholars4 have questioned the idea of com-
plementarity and problematized how the relations within this “Triangle” are
by no means “equilateral” given the supremacy of Singapore and limited links
between the Riau Archipelago and Johor (Macleod and McGee 1996). The severe
economic gradient between Singapore and its neighbours has resulted in significant
disparities and uneven development. These objections to the territorial extension of
Singapore are important not only because they unpack the mechanisms and political
context that have coined the IMS-GT, but also because they untangle the negative
impacts of Singapore foreign investment on its hinterland. These scholars illustrate
how implementation of the IMS-GT often contradicted the supposedly “neat”
complementarities of capital, land and labour (Sparke et al. 2004).
Nonetheless, as Sparke et al. (2004) recognize, this “Triangle” was more than
just a politically influential promotional story, and there is no doubt of the economic
forces of such complementarities. If the IMS-GT gave a legal frame for Singapore to
spill over and control its catchment area across the border, it in turn promoted the
development of the “weaker” components of this Cross-Border Region. Following
the establishment of a “special economic zone” with free trade agreements,
the island of Batam in the Riau Islands developed at a rapid pace. The island
attracted the labour-intensive factories of many foreign MNCs headquartered in
Singapore. Nowadays Batam boasts some of Indonesia’s highest economic growth
(BIFZA 2014) and houses the majority of the Riau Province’s population (1,153,860
people at the Civil Registry Survey, conducted in April 2012).5 Its residents are
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344 Anna Gasco
mostly Indonesian migrant workers coming from all over the country to work in
the various industrial parks.
Comparatively, to capitalize on synergies with Singapore, the State of Johor
envisioned the special economic zone of Iskandar Malaysia as “the first choice to
Invest, Work, Live and Play” (IRDA 2014). Part of a larger strategy to foster Malaysia’s
economic growth by attracting foreign capital (mainly from Singapore), Malaysia’s
primary, southern development corridor aims to develop jobs, high-standard
education and healthcare facilities, and provide top-level accommodations. As
Lazman Halim Lajman from Iskandar Investment Group explained “The prosperity
of the southern gateway of Peninsular Malaysia is mainly made possible by and
thanks to Singapore”.6
Throughout the years, the interactions between the three components of the SIJORI
region have multiplied and grown deeper. Nowadays, private firms headquartered
in Singapore are linked through production chains across these neighbouring
territories, while Singapore dollars fuel tourism and residential development in
Iskandar and Bintan. In addition, this flow of capital is supplemented by the daily
flows of commuters crossing the border into Singapore as service providers and
consumers. Each day such transnational mobilities are facilitated, restricted or
blocked in various ways. The borders that divide, yet bind together, this fragmented
region are characterized by regimes that are “persisting” with — as this chapter will
uncover — fairly permeable conditions when it comes to goods trade, but rather
complex restrictions for migration or protectionist reasons. These practices shape and
form the territory. Changi Airport plays a crucial role in these transnational flows.
Mobilities enable transnational business strategies to be implemented and deepen
the interactions between the three territories. However, the flows generated by
Changi Airport across Singapore’s national frontiers have been so far under-studied
by scholars and remain unrelated with cross-border integration. With that in mind,
this chapter uncovers the role of Changi Airport in processes of urbanization and
regional integration within this cross-border territory. As such, it posits that the
airport, along with its related transport links, is a critical lens for re-examining and
broadening Singapore’s cross-border perspective. The research also reveals how
SIJORI’s secondary airports contribute to the transnational circulation of goods and
passengers and in so doing facilitate the interactions between the three territories.
Ultimately, by probing how far into the region Changi’s urban impact extends, the
chapter adds empirical ground and expands the geographic and spatial typological
limit of current airport studies. The last two decades have witnessed a growing interest
— in both praxis and academia — of what may be called “airport-related urban
development”. The devised normative concepts — such as the “airport city” (Güller
and Güller 2003) or the “Aerotropolis” (Kasarda and Lindsay 2011) — describe the
urban impact of airports in a facetious manner. They mainly focus on the clustering
of economic activities around the core of the terminal and disregard the urbanization
impact that airports have on larger regions and territories. Few scholars in the
field of “Regional Sciences”7 study how airports’ urbanization effects do not only
appear around the core of the terminal, but also follow a more complex landscape
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The Airport and the Territory 345
shaped by regional accessibility and political specificities. However, as noted by
Conventz and Thierstein (2012), research on airport-linked spatial development
has not attracted much attention within “space-related” disciplines such as urban
planning. Furthermore, the sheer imbalance of existing scholarship tempts academics
and practitioners to rely on normative concepts that appear universal but are in fact
built on Western experience.
LEARNING FROM OTHER CROSS-BORDER REGIONS
Unlike its European cross-border region equivalents, the border regime within SIJORI
is still present and strengthened on different occasions. Contrasting with these
“persisting” borders, the Basel tri-national region, which spans three countries —
Germany, France and Switzerland — offers an interesting case. As Driscoll, Vigier and
Leith (2010) explain, given that Switzerland is not a member of the EU, cross-border
cooperation faces different financial and legal obstacles than say between Germany
and France. However the Basel tri-national region exemplifies strong cross-border
functional linkages and a history of developing joint projects and co-ordination
mechanisms both in public and private sectors. For example, prior to Switzerland
joining the “borderless” Schengen zone in December 2008,8 a special road corridor
was implemented between Basel and the French airport of Mulhouse, just across
the border. Running parallel to the highway, this “green channel” facilitated cross-
border road travels for airborne passengers: passport checks were conducted only
once — at the airport — with no additional clearance needed at the border between
the two countries. The case of Basel illustrates that the presence of an external EU
border did not constitute a limiting factor in the scope of cooperation strategies.
Another example more similar to the SIJORI CBR is the cross-border region along
the U.S.-Mexico border. In both cases, given the considerable economic disparities
among the territorial components, the governments concerned are seeking to
strengthen and regulate their border regime, rather than eliminating them, such as
in the EU. However, in the case of the U.S.-Mexico border, a promising cross-border
pedestrian bridge aimed at connecting Tijuana International Airport in Mexico to San
Diego in the U.S. was granted approval by authorities on both sides of the border.
According to Tijuana airport’s operators, more than half of Tijuana’s passengers
come from California attracted by lower airfares and a wide range of Mexican
connections. Developed by a U.S. private venture, the expectation is to turn the
Mexican airport into a low-cost alternative to San Diego’s airport and avoid lengthy
waits for passengers at the San Ysidro and Otay Mesa ports of entry. As the CEO of
the South County Economic Development Council in San Diego explains, the new
port of entry will be unique on the U.S.-Mexico border and “is a reflection that we
truly are a bi-national region” (Dibble 2014).
Within these bi- or tri-national regions examples, the type and level of cross-border
cooperation that has evolved is based on clearly identifiable functional relationships
and projects that respond directly to a demand. These experiences testify to the
ability of the actors to overcome the inherent territorial complexity of cross-border
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346 Anna Gasco
cooperation, which brings together various countries (Sohn, Reitel and Walther
2009). As ETH Assistant Professor Milica Topalovic explains, the growing intensity
and complexity of interactions within the SIJORI CBR foresees this territory as
becoming more than a contact of three national borderlands, but a de facto emerging
metropolitan region instead (Topalovic 2014) — a region centred on the economic
and service needs of Singapore, “the metropolis”.
The internal disparities in wealth present in SIJORI drive many aspects of
proximate cross-border economic collaboration. Singapore’s specific geographical
conditions — an island nation-state with a strong economic gradient and border
vis-à-vis its developing peripheral neighbours — coupled with tailored “extra-
territorial” planning legislations greatly contribute to Changi’s particular impact on
the built environment. This research argues that as much as Singapore’s development
and capital spilled out from the island’s frontier into nearby Johor and the Riau
Islands, Changi Airport has significant urbanization effects and economic roles on
Singapore’s hinterland development. Changi is one of the key forces that draw back
together the three components’ territories, portraying an enhanced reciprocity of the
airport with its larger region.
RESEARCH QUESTIONS
Singapore’s lack of natural resources and secure hinterland that led to the development
of the SIJORI transborder urban region, in turn, also drove former Prime Minister
Lee Kuan Yew “to recast the city-state as a ‘global city’ ” (Rimmer and Dick 2009).
The modernization or tabula rasa (Koolhaas and Mau 1995) of Singapore’s restricted
space was accompanied by the government’s upgrading of international transport
infrastructures and services to attract movements of people, information and capital.
As the economy prospered, the national carrier — Singapore Airlines — and the
airport were modernized to be more globally competitive. Changi International
Airport was built on land reclaimed from the sea and opened in 1981. Less than forty
years later, Changi is considered among the top leading transport infrastructures
in the world (CAG 2015). The stellar reputation of Singapore Airlines also adds up
to the core of the strategy. They ensure the extension of Singapore’s external reach
within Southeast Asia and around the world.
Unlike in North America or Europe, the world of aviation in Asia is still very
much regulated by national governments that own airlines, and often airports, but are
also directly involved in regulating traffic rights and air traffic control. To an outsider
an airport may appear as “one entity” — in this case, called “Changi Airport” —
but in practice, it is a “combination of multiple organizations” (Kloppenburg 2013,
p. 187). For example, Changi Airport Group (CAG), the operator, is a corporate
structure wholly owned by the Ministry of Finance in Singapore. CAG focuses
on the management and revenue-collecting departments of the airport, as well
as undertaking airport operations at both Changi and Seletar airports. CAG was
officially launched in July 2009 so that the Civil Aviation Authority of Singapore
(CAAS), which previously acted as the operator, could then focus on overseeing the
regulatory aspects of airports and aviation in Singapore. CAAS regulates air traffic
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The Airport and the Territory 347
within the airspace jurisdiction of the city-state under its Ministry of Transport.
Both CAG and CAAS closely calibrate Changi’s interests to serve the nation-state.
As CAG posits in its last annual report, “Consistently delivering this [exceptional]
experience defined by the Changi Service DNA — personalized, stress-free and
positively surprising — remains a focus for Changi Airport Group (CAG). World-
class airport facilities, efficient operations and excellent service will continue to be
the cornerstones of Changi’s success” (CAG 2012–13).
Changi Airport plays a crucial role for Singapore by extending the island’s global
reach. As Prime Minister Lee Hsien Loong emphasized during his 2013 National
Day Rally Speech,
what is Changi Airport? To travellers — an icon of Singapore. To Singaporeans —
a welcome landmark telling us that we have arrived home. To me it is a part of
the Singapore identity — a symbol of renewal and change. but Changi Airport is
more than an emotional symbol. It is how the world comes to Singapore and how
Singaporeans connect with the world. It is why we thrive as an international hub
for business, for trade, for tourism. it is 163,000 jobs in Singapore, 6 per cent of the
GDP and it is all levels of society. (Lee 2013)
The airport’s global reach and “success story” is well accounted by CAG’s annual
reports. In 2013, Changi served more than one hundred airlines and 6,500 weekly
flights that globally connected Singapore to over 250 cities in about 60 countries (CAG
2012–13). The year 2013 was also when Changi crossed the 50 million passenger
mark, ranking it the seventh busiest international airport in the world, before
Suvarnabhumi Airport in Bangkok, one of the world’s top tourist destinations. In
addition Changi Airport’s International (CAI), a wholly owned subsidiary of CAG,
also makes yearly progress in overseas markets with worldwide consultancy and
investment projects in China, Brazil, Russia, Italy, India, the Emirates, Uganda and
the Philippines (CAG 2012–13).9 In 2013 CAG consolidated revenues of S$1,911,070
billion, an increase of almost S$135,000 million compared to 2012.
But competition is heating up among airports as air traffic in the Asia Pacific
is estimated to triple by 2030 (CAAS 2014). Changi has to step up efforts to entice
carriers to add more connections and flights, and for doing so the airport has to keep
up with its development, too. Changi is currently redeveloping its former “Budget
Terminal” into Terminal 4 — dubbed “A Terminal For The Future” (Kaur 2014). The
project codenamed “Jewel” — a new retail hub designed by “Starchitect” Moshe
Safdie — will replace the open-air car park across Terminal 1 by 2018 to “enhance
Changi’s attractiveness amid competition from regional rivals” (Kaur 2013). The
airport will be further expanded with the new Mega-Terminal 5 and third runway
by the end of the next decade.
Changi embodies Singapore’s close bonds with the rest of the world. However,
this chapter takes a different look at Changi by grounding the international hub
in its related larger territorial context. Changi is a well-known successful global
hub, but how does Changi’s proximity to Malaysia and Indonesia facilitate growth
beyond Singapore’s borders? And what is the potential for the SIJORI Cross-Border
Region? As this chapter argues, Changi’s international hub’s catchment area extends
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348 Anna Gasco
much further than the island’s borders, into the cross-border region. In addition,
the economic gradient has started to generate a trade in cross-border traffic for
passengers in this CBR. Budget travellers take advantage of cheaper regional fares
at the smaller airports of Batam’s Hang Nadim and Senai in Johor, located on the
fringe of Singapore’s borders. What is the potential for the development of a multiple-
airport region in the SIJORI CBR and how are the persistent borders responding?
AIRFREIGHT CASE STUDIES
In 2011, Airports Council International (ACI) ranked Changi as the world’s eighth
busiest cargo airport by international freight and in 2012 the World Bank ranked it
the first in “logistic performances” (CAG 2012b). Changi Airfreight Centre (CAC)
handles an estimated 1.9 million tonnes annually. With a full handling capacity of
three million tonnes per annum, it is one of the largest airfreight operations in the
world (ibid.). In comparison, the airports of Hang Nadim and Senai are largely
overshadowed by CAC’s facilities and worldwide connections. With a maximum
yearly freight handling capacity of 16,230 tonnes for Hang Nadim (Ringkas 2011,
p. 243) and 100,000 tonnes for Senai (Senai Airport 2006), the centrifugal position
of Changi Airport generates transnational airfreight networks in the cross-border
region.
Airfreight is of course expensive compared to other modes of shipping — up to
ten times more than ground transport (CETMO 2011, p. 6) — and therefore caters
for more time-sensitive and expensive categories of goods such as cut flowers, fresh
food, pharmaceutical, medical equipment, valuable spare parts, computers, works of
art, etc. In fact, if only 3 per cent of total world tonnage is transported by air, these
cover over a third of the value of worldwide trade (Sales 2013, p. xvii). These goods
defined as “high-value”,10 “perishable”11 and “process-critical”12 have become key
for airport operators as well as airlines.
For instance, these high-revenue goods have resulted in an above-average
connectivity for Singapore Airlines’ (SQ) passenger network. The SQ airfreight
business model combines belly freight and passenger services together in “belly
cargo” aircrafts, which carry cargo in the holds of passenger jets as an additional
revenue stream. Having the “right” type of goods — meaning “high-value”,
“perishable” and “process-critical” — produces not only high cargo revenues, but
more importantly, continuous returns on routes in the network, which otherwise
would not pay off (for example because of relatively small passenger markets
or seasonal effects). This airfreight concept therefore also creates and supports
a relatively big and diverse network, which results in an expanded network
of connections for Changi passengers. Reciprocally, it results in new business
opportunities for Singapore.
It is therefore not surprising to see perishables as part of the airport’s top
ten commodities handled by Changi Airfreight Centre (CAC). Perishable goods
account for 15 per cent of Changi’s cargo throughput (CAG 2012a). Aiming to play
a central role in the perishable business development, Singapore opened Coolport
— a dedicated “Perishables Terminal Par Excellence” in June 2010. Since then, the
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The Airport and the Territory 349
volume of perishable cargo moving through Changi Airport has increased by a
factor of ten — from 12,000 tonnes in the first month to 200,000 tons in 2012 (CAG
2011–12) — and further expansion plans are on their way.13
Singapore is a global distribution hub and, at 42 per cent of the overall
throughput, “trans-shipment”14 constitutes the greatest bulk of goods handled
in Changi Airfreight Centre (CAG 2012a). If Coolport allows airlines to fly
perishables in bulk to Changi for subsequent redistribution across Asia, it also
enables SMEs of perishable goods located in Singapore’s hinterlands to truck their
goods to the airport for export all over the world. Statistical data on perishable
traffic originated in the SIJORI Cross-Border Region are not made available by
the airport authority. However, if air-to-air trans-shipment accounts for close to
40 per cent, the volume of total trans-shipment cargo handled increases to over
50 per cent, when other inter-modal trans-shipment modes, such as sea-air or
land-air, are included (CAG 2011–12). Then again “quality” and therefore “value”
should prevail over “quantity” measures when it comes to airfreight, since the
10 per cent and upward volume of cross-border cargo originated in SIJORI caters
for “high-value” goods.
As logistics firm OHL’s Operations Manager explained,
Perishables make up one-third of our throughput nowadays. We export as much as we
import, except for perishables where our exports are six times bigger. We specialize in
export of ornamental fish and flowers, mainly orchids to the United States to Japan,
Amsterdam …. It’s convenient, there is no storage costs involved. We pick up the
goods from farms in Singapore and “around” and deliver them straight to Coolport.15
From its independence through the mid-1980s, high pressure on land resources
led Singapore to shift its agricultural production outside the nation’s border. As
Ufkes explains, the government initiated a comprehensive, fast-paced programme
to restructure its domestic agricultural sector. New agricultural policies promoted
that “high-value, aesthetically pleasing and environmentally acceptable agricultural
system will remain in Singapore; other foods will be sourced via agreements with
various neighbouring countries” (Ufkes 1995, p. 196). Traditional farming systems
were phased out by state mandate, and productions were restricted to state-sponsored
high-tech agrotechnology parks. Johor has become the main relocation ground for
Singaporean farms and is today considered the rural hinterland of the SIJORI Cross-
Border Region. For instance, it currently hosts over a hundred Singaporean orchid and
ornamental fish farms. Johor also accounts for 83 per cent of Malaysia’s ornamental
fish farms, a rapidly growing business in the country. Total ornamental fish exports
from Malaysia tripled in the last decade; the major importer was Singapore (Badariah
Mohd 2008). The Singaporean family-run companies relocated their productive
fields in Johor’s rural hinterlands, while maintaining their “parent-farm” in one of
Singapore’s agrotechnology parks.
Nowadays the agriculture land remaining in Singapore hardly produces a meagre
2 per cent of the nation’s food supply. Farms are organized in one of Singapore’s six
agrotechnology parks,16 located well outside residential areas, on the northern fringe
of the island. These “high-tech” agriculture estates occupy a total land area of 1,465
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350 Anna Gasco
hectares, of which less than half — 704 hectares — have been allocated to 227 farms.
From these 704 hectares, 283 are assigned to the production of ornamental flowers
(69 farms) and 174 (75 farms) to the rearing of aquarium fish (AVA 2015). Singapore’s
agrarian productions therefore focus on ornamental goods rather than food. As the
Agri-Food & Veterinary Authority of Singapore (AVA) puts it “The modern farms in
the Agrotechnology Parks develop, adapt and showcase advanced technologies and
techniques for intensive farming systems, and for export of high-value and quality
products and services to other tropical countries in the region”.
The larger orchid and fish farms in Johor are up to fifty times bigger than their
bases in Singapore. They also consolidate and redistribute the goods of other Johor-
based subsidiaries and independent growers. Every day, local logistics firms truck
these so-called “made-in Singapore” goods across the border to Changi Airport, where
they are stored in Coolport before being flown “tax-free” to wholesale distributors
around the world. The overwhelming majority — 95 per cent — of these farms’ yield
is sold abroad. Singapore’s quality orchids are reputed worldwide and, as the biggest
ornamental fish exporter in the world, and the second main importer in Asia, the
city-state is considered “the ornamental fish capital of the world”.17
Flying Orchids
Hock Wee Nurseries is a Singaporean family-run “business-farm” in Kota Tinggi,
a town located 42 kilometres northeast of Johor Bahru in the State of Johor (see
Map 5.1). The plantation is managed by two Singaporean Chinese brothers along
with their sister and wives. The family has been growing and selling orchids for over
thirty years. Their father founded the parent company, Zion Orchids, in Singapore in
1979. During its rationalization of agriculture lands, the Singapore Land Authority
(SLA) pushed Zion Orchids to relocate to a 2-hectare plot of land in Lim Chu Kang
Agrotechnology Park. The two sons decided to relocate to Malaysia, where they
opened Hock Wee Nurseries in Kota Tinggi in 1988. Their move was supported by
the Malaysian government, which granted their company permanent residence and
tax-free operation for the first five years.
Hock Wee Nurseries has since expanded to four farms in the state of Johor. In
addition to the 100-hectare main farm in Tai Hong, Sungai Tiram was added in 2005,
shortly followed by Nam Heng, and later by Bandar Tenggara, which opened in
2007. Altogether, Hock Wee Nurseries “owned” a total of 205 hectares of farmland
in Malaysia, while they lease their 2-hectare Lim Chu Kang farm in Singapore on
a strict two-year contract basis to the Singapore Authorities.18 Hock Wee Nurseries
employs 625 people, out of which nearly 90 per cent are migrant workers from
Bangladesh, China and Indonesia, who work the more labour-intensive part of the
plantation. Each farm provides on-site dormitories for them.
The main farm of Hock Wee borders the eastern side of Jalan Tai Hong narrow
road, where one-storey green net structures stretch all across the plain of Kota
Tinggi. At first glance, Tai Hong appears as a completely man-made landscape yet
reminiscent of very natural-looking undulating fields that blend with the surrounding
countryside. Inside the well-fenced compound, 70 per cent of the land is devoted to
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The Airport and the Territory 351
orchid plantations. Surrounded by this landscape are the administrative areas, several
warehouses for the treatment and packing of flowers, six one-storey dormitories
and the workers canteen.
As Mr Lee Chee Hock, founder and manager of Hock Wee Nurseries, explains,
“Without Changi our business would be very different! We depend on that airport
to sell our flowers. 95 per cent of our production is sold abroad”.19 The flowers
grown in the secondary farms are trucked every day to the main farm in Tai Hong.
Hock Wee Nurseries also buys flowers from around seventy independent growers
located all around the state of Johor who deliver them daily to Tai Hong. These
additional suppliers account for up to 30 per cent of the overall production. In Tai
Hong, the flowers are checked and prepared following a strict, well-planned and
labour-intensive routine to prepare the stems for air-transport. Depending on the
variety, orchids perish within one to four weeks of being cut, so the business needs
quick and reliable air-transport to export their flowers. A daily schedule is pinned
to one wall of the packing room. About twenty clients are listed for each day; next
to each name is a detailed timing for flower preparation, loading of the truck and
departure of the airline. The trucks must leave the farm eight hours before the listed
air departure in order to reach Changi Airport in time.
Every day, with their own system of trucks and drivers, Hock Wee Nurseries
send three to four lorries loaded with flowers to Changi Airport. “Sometimes even
more! Before Valentine’s or Mother’s Day it can go up to six trucks ….” says Tan
Mei Ling, Mr Lee’s wife. “Our biggest markets are Japan, Australia and Holland.
But we literally sell flowers everywhere — Amsterdam, Manchester, London, Zurich,
the United States …. Only 5 per cent of our production is sold in Singapore, our
customers are located all over the world”. Every day Hock Wee Nurseries export
around 1,500 to 2,000 parcels — approximately half a million flowers — “tax-free”
around the globe via Changi Airport. When crossing the border, the flowers are
trans-shipped through Singapore — in other words, not considered to “enter” the
country — and therefore are not subjected to Goods and Services Tax (GST) or
Customs duties normally imposed on such imports.
The ornamental fish and “high-value” electronic chips discussed in this chapter’s
later case studies receive the same tax exemptions. The “tax-free” status of these
time-sensitive goods is testament to the regulatory frameworks governing the cross-
border movement of cargo. Singapore required this to extend its economy outward,
and in response, the regional mobility networks adapted with widespread, locally
operated transport systems. The “persistent” borders that bind together this CBR
have become porous based on clearly identifiable functional relationships — such
as the goods trade described here — between the wealthier core and the adjacent
low-skilled yet vast periphery. These accounts demonstrate the ability of private
actors to overcome the inherent territorial complexity of cross-border cooperation,
which brings the three countries together.
Hock Wee Nurseries chose Changi over the closer Senai Airport in Johor because
Senai is a small, mainly domestic airport. Changi is only 70 kilometres away from
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352 Anna Gasco
Tai Hong. In one day, they deliver at least four truckloads to and from the airport.
As Mei Ling points out,
If something happens with the truck we can quickly intervene and send another
one to save the flowers and still get them to Changi in time. If we were to transport
the flowers to KL [Kuala Lumpur] by road, it would mean covering 400 kilometres
by truck, which is dangerous and expensive. It just doesn’t make sense …. But you
know, competition is high in aviation. It’s been over a year that Malaysian Airlines
are offering us to ship our flowers for free from Senai Airport to KL. Claiming that
from KLIA [Kuala Lumpur International Airport] we would then reach worldwide
destinations. But it is too risky for us. The aircrafts operated from Senai are too
small. In Changi we can load four tonnes of flowers per plane in one go. No airline
in Senai can offer us that. We would then need several aircrafts per day directed to
KL. And we have no clear guarantee of what would happen with the flowers once
in KLIA. You know orchids are very delicate. Their rank in the cut-flower world is
the same as the one of diamonds in the jewellery business. We can’t take the risk.20
Depending on which side of the border needs to be crossed, the journey from Tai
Hong to Changi Airport is nevertheless more uneven than Mr Lee and his wife
may suggest. The smooth drive to the Malaysian CIQ (Immigration and Quarantine
Centre) only takes thirty minutes. One traffic lane going through immigration is
dedicated to lorries, leading to a separate area for goods customs; the three other
lanes direct motorcycles, cars and buses to another zone. After vehicle screening —
as an example of the multiple bonds between Johor and Singapore — the lorries are
channelled to the appropriate custom checkpoint: two handle perishable goods, four
lanes are dedicated to rock, two for timber, one for oil tankers, and one for sand.
On arrival, I give my passport to Ibrahim — the driver assistant — and get off the
truck. The Malay custom officers chat in a little group and give me nothing more
than a funny smile. The Cargo Clearance Permit papers are checked and approved
within ten minutes. We then board the truck again and set off to cross the Causeway
into Singapore.
The traffic is very dense and the truck hardly moves; it takes us two hours to cross
the 1.1-kilometre bridge. When we reach the Woodlands checkpoint (Singaporean
immigration and customs), the atmosphere changes. Ibrahim urges me, “No photo
now okay? Put your camera in the bag and stay close to me”. We get off the truck
and I follow Ibrahim to the immigration office. The officers are clearly upset by my
presence. Ibrahim calmly explains that I am one of the orchid farm’s clients and
that I wanted to check the flowers transport. But my Singaporean Employment
Pass clearly indicates that I am a “Researcher”, and this does not help. Turning their
attention from me to the shipment, the Singaporean custom officers cautiously go
through every permit, identify the only one that is not for “trans-shipment goods”
and request the payment of the related GST duties. Outside, they screen every angle
of our truck with flashlights. After nearly two hours of questioning, we are allowed
to enter the city-state.
Following a frantic fifteen-minute drive along the expressway, the truck pulls up
to the gate of Changi Airfreight Centre inside the airport’s Free Trade Zone. After
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The Airport and the Territory 353
the goods are given yet another check at the customs entrance, the driver parks at
the loading bay of the Coolport. With assistance from the SATS agents, Ibrahim
and the driver hurriedly unload the truck. The parcels are weighed before going to
security approval. They are finally transferred to the “pre-plane” cold room, where
they wait to be transferred to the aircraft. “We made it!” says Ibrahim. “Now I have
to wait for another truck to arrive and help unload the vehicle”. The driver takes
me back to the Police Pass Office where I retrieve my passport.
Like the global orchid trade, Singaporean ornamental fish farms, along with
their subsidiaries located in the state of Johor, have organized their distribution
model around proximity to Changi Airport. The successful family-run economies
of ornamental horticulture and aquaculture are part of a long-lasting agriculture
history in Southeast Asia, where trading dates back to early 1900 (Vanam 2005). Their
productive yield may be regarded as low compared to the prolific one of palm oil
in this region. However their production quality and contextual bond substantially
increase their trade value. Largely overlooked in the airport’s success story, 95 per
cent of production from these SMEs depends on the cross-border perishable trade
in SIJORI and global reach via Changi Airport.
Being the biggest fish exporter in the world and the second main importer in
Asia, Singapore occupies a pivotal position in the perishable world trade of aquarium
fish. According to the chairman of Singapore Aquarium Fish Exporters’ Association,
Mr Fong Ching Loon, business really took off in the early 1980s with the opening
of Changi International Airport (Lim 2010).
Flying Fish
Qian Hu Corporation Limited is one of Singapore’s leading exporters of ornamental fish
contributing to more than 10 per cent of the nation’s total exports (Qian Hu Corporation
Limited 2014). Qian Hu is a family-run business founded by Mr Kenny Yap Kim Lee.
In 1994, the government relocated the farm to Sungei Tengah Agrotechnology Park,
and assigned them 4.2 hectares of land. They managed to lease an extra 2 hectares
in 2010. On this land sit several external ponds and about twenty large warehouses.
On the southern part of the farm, are the cafe and the tropical fish retail store for
local customers. In the northern part of the site are the quarantine, office, farming
area and packing room. As with the orchids, fish farming is labour intensive. The
animals require constant care seven days a week. The 120 migrant workers who are
employed for this work are provided with offsite dormitories and daily transport.
While waiting for my interviewee to arrive, I walk through rows of aquariums
filled with exotic and colourful fish. Several long partitions covered with published
news articles are clearly visible from the entrance: “The one that didn’t get away”
reads the headline in the Straits Times; “Dragon stud fish that costs as much as a
car” reports Singapore Press Holdings; “Swimming ahead” in SME Today. The press
demonstrates the challenge and competition of owning a “farm-based” business
in Singapore. After a few minutes, a bus full of primary school children arrives.
The children gather near the concrete ponds, where a representative waits to guide
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354 Anna Gasco
them around the farm. Qian Hu’s general manager joins me and invites me to sit
near the aquariums. “As you can see we are well established within the Singapore
society. The farm is open and everybody is invited to walk in, take pictures or even
ask questions. Singapore is considered ‘The ornamental fish capital of the world’.
The government supports our industry and we try to play an informative role as
much as we can”.21
As he explains how the Chinese believe the dragon fish is a symbol of luck,
wealth and prosperity and believed to protect against evil spirits, a truck from the
international logistical company Air Cargo arrives. The driver manoeuvres it to stop
in front of the “Shipment Pick-Up Area” bay. He checks the papers given to him by
a farm representative and proceeds with his assistant to stick the airlines-bill labels
on the boxes wrapped in “Qian Hu Live Tropical Fish — Handle with Care” livery.
The boxes are then wrapped together in cellophane paper and loaded inside the
truck. Before the end of my interview, the truck departs. “These fish are headed to
Changi Airport now”, he explains, “to Europe with SQ and to the Middle East with
Emirates. Europe remains a big market for us, although of course Asia is picking up.
We really can’t complain. We have two to three deliveries to Changi almost every
day. Sometimes more. Especially around Christmas”.
Qian Hu Corporation exports fish from four Asian countries. Including their
headquarters in Singapore, they have ten subsidiaries across Malaysia, Thailand,
and China. They have six distribution centres in Singapore, Kuala Lumpur, Bangkok,
Beijing, Shanghai, and Guangzhou.22 “How important is Changi Airport for us?” he
frowns. He continues in a lively tone,
Well it’s almost like water … You wouldn’t think of it, “fish flying” am I right? But
once packed the fish doesn’t survive more than thirty-five hours. How do you want
me to get them to our customers in the U.S. without an airplane? And it’s not only
about our export! 50 per cent of the fish we breed is imported and we import most
of our fish by air! We fly fish from all over the world — from Latin America, from
Africa, Czech Republic, France, Germany … There is a large trade organized around
ornamental fish. Local fishermen, for example, use smaller domestic airports in order
to reach hub airports and have their fish shipped to Singapore.23
The fish are then transported by truck to Qian Hu Singapore, unpacked, quarantined
and bred in aquariums or fishponds. In addition to its international fish imports,
Qian Hu also buys fish from local breeders. Some of these are located in another
agrotechnology park in Singapore, but most are located across the border in the
neighbouring state of Johor (in the areas of Kota Tinggi, Ulu Tiram, Simpang Renggam
and Batu Pahat). Qian Hu’s subsidiary farms in Batu Pahat is considered the biggest
dragon fish breeder of Malaysia.
“We are able to breed around 500 species. Once the fish are ready, we prepare them
for export.” Once packed into plastic bags with infused oxygen and carefully stored
inside insulated boxes, an independent forwarder picks them up on a daily basis for
delivery to the airport. The fish leave Qian Hu fish farm four or five hours prior to
the planes’ departure. Not before, and not after. “For delivery, we work backwards”
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The Airport and the Territory 355
explains the manager, “That means from Saturday to Wednesday included, but
not on Thursday or Friday because the fish can’t reach their final destination on
weekends. They have to be taken care of straightaway upon arrival”. The trucks
deliver them to the Coolport in Changi from where every week, thousands of bags
of ornamental fish branded “from Singapore” are shipped, “tax-free” to over sixty
countries around the globe.
Like these perishable goods industries, the “high-value” electronics business is
another trade that relies on airfreight and plays a major role in the development of
SIJORI. Following Singapore “offshoring” of labour-intensive operations, the MNCs
headquartered in the city-state operate their assembling factories in the industrial
“tax-free” trade zones of the cross-border region. The manufacturing sector remains
the highest contributor to Singapore’s GDP, at 21 per cent compared to 15 per cent
from business services and 12 per cent in financial services (Singapore Economic
Development Board 2012). Singapore primarily manufactures “high-value” added
products such as bio-medicals, electronics and aerospace engineering.24 Because of
their manufacturing process, these goods are “airfreight dependent”. In the electronics
sector, for example, the production is generally divided in two stages: a high-tech
manufacturing process, followed by a more labour-intensive assembly. These can be
carried out in different parts of the globe depending on labour costs and workforce
skill levels. The distances between are quickly overcome with aviation, given the
relatively small size and cost per unit.
Both the State of Johor and the Riau Island Province boast a vibrant “high-
value” electronic production (Hutchinson 2012) as opposed to the “perishable”
trade, which is mainly found in Johor. This case study focuses on the Riau island
of Batam, which serves as a well-known base for MNC factories. The “hassle-free”
policies and “all-inclusive” packages are designed to attract private investors to the
industrial estates. MNCs headquartered in Singapore leverage these advantages,
along with Batam’s strategic location, combining reliable management and know-
how with cheap labour and affordable land resources, at the doorstep of global
infrastructure. The manufacturing industry is the leading sector in Batam, with
electronics ranked as the highest exported commodity per value (Ringkas 2011).
After the high-tech components are produced abroad, they are shipped to Batam for
assembly. The circulation of these goods centres on Changi is supplemented by two
smaller secondary airports: Hang Nadim in Batam, and Seletar, a smaller airfield in
northern Singapore. Using turboprop planes, local operators tranship these “high-
value” goods on a daily basis back and forth to Singapore, where they are tested,
finalized or bundled, before global exportation from Changi Airport.
Flying Chips
Batam Island is a Free Trade Zone located 16 kilometres off Singapore’s southern coast
just across the Singapore Strait. Batamindo Industrial Park is Batam’s pioneer and
flagship industrial estate, nested on an area of 320 hectares. Batamindo exemplifies
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356 Anna Gasco
Singapore’s cross-border labour and production shift. Managed by Gallant Venture,
Batamindo’s success story largely contributed to transforming the island’s economy
and, more than any other projects in Batam, became the success story of the IMS-
GT (Lindquist 2010). Today it contains over seventy MNC manufacturers such as
Philips, Siemens, Sanyo, Schneider Electric, Infineon, and more. These companies,
which are mainly headquartered in Europe, Japan, the United States and Singapore
created employment for 60,000 workers.25
The industrial park’s success can be attributed to its “One-Stop Service” in a
“dedicated manufacturing environment” put in place to attract private investors.
As Mr Hauw, Batamindo’s Senior Manager, advertises in a presentation,26 “The
Park is located fifteen minutes away from Batu Ampar cargo port and Hang Nadim
Airport”. It is also efficiently connected by excellent road infrastructures. In addition,
the management provides “total customer support” including, among other things,
licence applications, immigration clearance, security and maintenance, logistics and
transportation, and manpower recruitment. To further facilitate a foreign company’s
establishment of a subsidiary, the park provides five types of “ready-made” factory
facilities, from detached to semi-detached to terraced, in one-, two-, or three-storey
structures in sizes ranging from 972 to 9,217 square metres. Because of this full-
service strategy, foreign customers can start production “in the quickest possible
time frame” (PT Batamindo Investment Cakrawala 2012). As Lindquist notes, new
laws that followed the IMS-GT allow 100 per cent foreign ownership of companies
on Batam, conditional on a 5 per cent divestment to an Indonesian partner within
five years. This divestiture is rather low in comparison to other parts of Indonesia,
where domestic ownership is required to reach 51 per cent within fifteen years
(Lindquist 2010, p. 158).
The park is master-planned as a “Self-Sufficient Infrastructure”. It is located
in the heart of the island, among tropical greenery and surrounded by a well-
guarded fence. Among its five gates, only two are opened to the public and only
until midnight; logistics companies and workers have 24-hour access through the
others. Inside the park is a landscape of rows of factories and 2,800 dormitories for
migrant workers. Between them are neat tree-lined paved roads with a mini-bus
system, the park’s own power and water treatment plant, a telecommunications
tower, and a small commercial town centre with shops, a food centre, places of
worship, and banking facilities.
Several trucks from a local logistics firm with the phrase “We are Flying Direct
to Changi” printed across them are parked in front of the DHL Batamindo office.
These are not the only visible reminders of the numerous bounds with the city-
state. In its “Singapore-like” self-organized system, Batamindo functions fairly
independently from the rest of the island of Batam.27 Batamindo Executive Village,
located a fifteen-minute-drive away in the Southlinks Country Club, offers the Park’s
international managers with “Chalets and Condominium” housing “with full country
club facilities” (PT Batamindo Investment Cakrawala 2012).
The largest tenant of Batamindo Industrial Park is the German company Infineon
Technologies, a leader in semiconductor manufacturing and part of the top three
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The Airport and the Territory 357
semiconductor companies in the world. Infineon employs over 26,000 people
worldwide, over half of whom are based in Malaysia, Indonesia and Singapore.
Infineon microchips are a good example of regional “high-tech/low-tech”
production split and “airfreight-dependent” global distribution. The process is divided
in two: the high-tech silicon wafers28 are fabricated in the “front-end” factories in:
Kulim, Malaysia; Villach, Austria; or Dresden and Regensburg, Germany. Once ready,
daily shipments of wafers are flown to Singapore, then to Hang Nadim Airport on
Batam where they undergo the “back-end” manufacturing process in Infineon’s
four-block, two-storey assembling factory29 in Batamindo. Following Singapore’s
regionalization, this labour-intensive facility was moved from Singapore to Batam
in 1996. Infineon’s headquarters, final test centre and Distribution Centre for Asia
(DCA) remain located in Singapore.
Although microchips are high-value goods, the freight is too small to be directly
flown to Hang Nadim Airport from Changi. In this case, local logistic company Batam
Logistics takes over transport of the goods, trucking them to Seletar Airport where
they are loaded in a turboprop plane to Hang Nadim. As Batam Logistics’ general
manager explains, “We have four flights every day from Seletar to Hang Nadim and
back. Two in the morning and two in the late afternoon. Mostly depending on the
cargo arrival and departure in Changi”.30 According to Batam Logistics’ cargo load
data for 2012 over 95 per cent of goods were transported by air (Batam Logistics
Pte Ltd 2013).
As with the orchid case study, this secondary transportation step appears very
low-tech relative to the high value of the goods. Once the parcels reach Seletar
Airport, they are simply unloaded and left outdoors near the airfield fence while
waiting for an available turboprop plane to take them to Hang Nadim. At their
arrival in Batam, the Terminal Cargo encapsulates most of the excitement and chaos
often visible in secondary airfields in Southeast Asia. The Cargo Terminal of Hang
Nadim is a simple warehouse shed with two direct access points: the airfield on
the south and the loading bay on the north, where logistics agents load and unload
goods. The western side of the warehouse is dedicated to domestic cargo where a
wide range of vegetables, fruits or seafood is handled. Nearby, on the eastern side
of the shed, is “the International Cargo Terminal”. “High-value” chips parcels are
handled alongside heads of lettuces and customs officers playing chess, before being
transported to the well-organized enclave of Batamindo Industrial Estate.
“Most of our customers are located in Batamindo”, explains Batam Logistics’
manager, “and 90 per cent of the goods we deliver in Singapore are transhipment
goods for worldwide destinations. If our goods pass through customs several times
— either in Changi, in Seletar or in Hang Nadim — our customers never pay taxes”.
Batam Logistics has operational bases at both Hang Nadim and Seletar airports.
Initially located in Changi Airport, it was moved to Seletar by the Civil Aviation
Authority of Singapore (CAAS) following their strategic shift away from operating
smaller-body aircraft in Changi. The operation costs at Seletar are much cheaper
than at Changi, and flight schedules are more flexible. But as with the orchids case
study, Batam Logistics’ manager notes, “The airport of Senai in Johor has offered
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358 Anna Gasco
us a very competitive price to move our Singapore operations there. But it is not
convenient for us since we need a direct access to Changi Airport several times a
day. So we refused. So far ….” she smiles.
Throughout SIJORI, secondary airports, local logistic firms and small-scale
transport systems support the cross-border circulation of “time sensitive” goods
in order to integrate them with the global infrastructure of Changi. Changi Cargo
Airfreight Centre (CAC) is publicized as a “state-of-the-art infrastructure” with
“automated stacker systems”, “elevating transfer vehicles” having “replaced manual
labour so that cargo can be handled more efficiently” (CAG 2012–13). The presence
of “perishable” and “high-value” trades testifies to how critical Changi’s terrestrial
links are to the SIJORI CBR. Changi Airport does not exist in a vacuum but connects
a wide range of small-scale, spread-out transport systems, “middle-men” and local
entrepreneurs who move goods between the production sites and the Hub Airport.
Together these systems generate an urban impact at multiple scales. The “high-tech”
facilities such as the Coolport and the airfreight dependent “high-end” industries
headquartered in Singapore have to be understood in conjunction with a larger
productive territory as well as their more flexible, informal and spread-out mobility
network. Together they deepen the interactions between the three territories and
support the economic integration and urbanization processes of the SIJORI cross-
border region. Changi is the hub that draws the three component territories back
together.
CASE STUDIES OF PASSENGERS
While the SIJORI CBR is greatly interdependent, as illustrated by the airfreight case
studies, it remains administratively fragmented and characterized by uneven stages
of development. Even though it falls in the catchment area of a globally linked hub
airport, persistent border restrictions and protectionist attitudes still limit the free
movement of people.
The Flight Information Region (FIR) of Changi Airport shows a controlled
airspace area remarkably big compared to the size of Singapore. Changi Airport FIR
encompasses all of the Riau Archipelago, parts of the island of Sumatra and a great
portion of the South China Sea. There is no standard size for FIRs — it is a matter
for administrative convenience of the country concerned. Every airplane entering
Changi’s FIR or every airport located within the boundary is under Changi Control
To we r. Th i s i s e nl ig h te ni n g b e ca us e i t o f fe rs a n un us u al i ll u st ra t io n of t he w el l -k no w n
powers and dependencies prevailing in the SIJORI territory. While Singapore’s FIR
shows one clear boundary in the sky, the region is administratively fragmented
and characterized by differenting stages of development. This “disconnect” creates
tension on the ground but opportunities as well. The smaller airports of Batam’s
Hang Nadim and Senai in Johor — which respectively handled fewer than 6 million
and 2 million passengers compared to Changi’s more than 50 million in 2014 — are
hardly vibrant hubs. However, their close proximity to the international borders as
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The Airport and the Territory 359
well as abundant land resources offer great potential for development, especially
low-cost carriers. Emerging passenger trans-border infrastructure is popping up in
Senai and Batam. SIJORI’s secondary airports have, through partnership with local
transport operators, managed inventive “air and bus” or “air and ferry” solutions
to offer passengers cheaper means of travelling to and from Singapore.
The Malaysian budget carrier AirAsia has launched a free SkyShuttle bus from
Senai Airport to Singapore. The service has seen encouraging response from AirAsia
passengers, with almost 2,000 passengers crossing the borders every month for
cheaper fares.31 Similarly after opening the first Maintenance, Repair, and Operations
(MRO) facility of Hang Nadim Airport in 2014, the Indonesian budget airline Lion
Air is considering to establish one of its domestic and international hubs in Batam’s
Airport. Plans for a combined “flight-bus-ferry ticket” from the island to the city-
state of Singapore are under way. This may entice Singapore-bound travellers from
Indonesia — Southeast Asia biggest travel market — to choose Batam over Changi
Airport. Batam’s Hang Nadim airport has indeed recently become the new gateway
for Indonesian tourist “en route” to the city-state. Three “Hotel & Ferry” counters
located inside Hang Nadim’s arrivals hall already enable around forty tourists per
day32 to directly check-in before making their way to Singapore using Batam’s broad
network of ferries.33
By partnering with local transport operators, airlines have inventively bypassed
the need of requesting further approval to Singapore, which has so far refused any
kind of cross-border “airports-links” or cooperation. And by developing an ad hoc
mobility system that navigates across the inconsistencies of “persistent” border
regimes, SIJORI’s secondary airports informally contribute to the integration of the
three territories.
Hybrid Combinations
AirAsia launched its SkyShuttle bus in 2012, almost a decade after its first attempt at
doing so was rejected by the LTA in December 2003. The low-cost carrier partnered
with the Malaysian firm Handal Indah — also known as Causeway Link in Singapore
— which has been licensed for over ten years to run cross-border bus services.
On the Singapore side, Causeway Link buses depart every five minutes at peak
hours from three different locations: Newton, Queen Street and Kranji MRT stations.
As with every bus commuter crossing the Causeway, the passengers alight at the
Woodlands checkpoint for immigration before hopping onto the exclusive AirAsia
SkyShuttle bus, which takes them to Senai airport. The service is free for AirAsia
customers, and the smooth journey to Senai takes about one and a half hours all
included.
This service conveys students, retirees, budget travellers or regular commuters
such as Singaporean Mr Jeffrey Lim, who — for a Singapore-bound trip — flew
to Senai from Sarawak. Around three years ago Mr Lim emigrated to Malaysia
where he founded his automotive spare-parts company. He regularly commutes to
Singapore to visit his daughter and to purchase equipment for his business “I used
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360 Anna Gasco
to fly from Miri to Changi and that would cost me around S$400. A return ticket
from Senai is only S$100. Now I come a lot more than I used to! Plus Senai Airport
is very beautiful. I will never go back to Changi!”, he says.34
According to CAPA, Senai Airport — located about 50 kilometres from Changi
Airport — was the fastest growing airport in Malaysia in 2013, and one of the
fastest growing in Asia, with 44 per cent growth in passengers. This rapid growth
is mainly driven by AirAsia, which currently accounts for about two-thirds of
total capacity in Senai (CAPA 2014). AirAsia’s attempt to tap the Singapore market
from Johor Airport is not new. The low-cost carrier first opened a base in Johor
Airport at the end of 2003, which drove a 66 per cent growth in passenger traffic
in 2004. The initial motive was to divert flow from Changi without operating in
Singapore. The Singaporean authorities were less than cooperative and, to protect
Changi Airport from competition, rejected AirAsia’s application to implement a
direct shuttle service from Singapore to Senai Airport. As a consequence, Senai
Airport’s traffic dropped by 13 per cent and experienced essentially flat traffic
over an eight-year period until 2012 (ibid.). The conclusion of an “Open Skies”
agreement between Malaysia and Singapore in 2008, which opened up the market
to budget carriers, also drove the expansion of AirAsia in Singapore and the further
decline of Senai Airport.
The recent revival of AirAsia’s ambitions to develop a hub at Senai and offer
an alternative gateway to Singapore was mainly driven by the changing dynamics
of the local Johor market. The State of Johor embraces the special economic zone
of Iskandar Malaysia, established to capitalize on synergies with Singapore (IRDA
2014), in both capital and location. The rapid growth in Iskandar is driving demand
for more services at Senai Airport, as more international tourists are flying in to
enjoy Johor’s recent themed parks and leisure developments35 while having access
to Singapore on a daily basis”.36 As CAPA notes, AirAsia has carried a greater than
anticipated amount of traffic on its Johor-Indonesia flights. In addition to the arrival
of tourists from Indonesia, Senai Airport also enables the influx of migrant workers
flown in to support the booming construction activity of Iskandar (CAPA 2014).
Within less than two years, AirAsia launched seven new international routes from
Johor Bahru to Indonesia, while applications for additional routes from Changi
Airport were delayed by Singaporean authorities as an attempt to secure more slots
for Singaporean carriers (ibid.). In the past, traffic from Johor was naturally drawn
into Changi Airport, given that Senai was mainly covering domestic routes. However
as this secondary airport attracts more international services, at very competitive
prices, it could be seen as an opportunity to bring travellers, especially those from
Indonesia, via Senai to Singapore.
Recent news reports published the plan from Iskandar Malaysia to propose a
“Twin-airport concept” to Singapore (Musa 2013). As Mr Izhar Hifnei Ismail adds,
Changi will one day reach its maximum expansion. Senai Airport could cater for
the regional and medium-haul services segment. However we do not want to be
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The Airport and the Territory 361
dependent on Changi to say yes or no anymore. We will get Senai ready. We want
to grow together.
Similarly at the launch of Treasure Bay — one of the next mega projects within
BBIR’s tourist enclave located in the northern stretch of the Riau Island of Bintan —
Indonesia’s former president, Susilo Bambang Yudhoyono, questioned Singapore’s
promotion “Visit Singapore Then Bintan”. “Bintan can become well-known and
promote itself like ‘Visit Bintan Then Singapore’ … We do not wish to see only
Singapore becomes developed, we want to grow together …” (Malaysian Insider 2011).
The ground-breaking ceremony of Bintan Resorts International Airport took place
just a year later, in May 2012, in a move to further boost BBIR appeal to international
and domestic travellers. Currently built next to Bintan Industrial Estate (BIE) — also
owned and managed by Gallant Venture — the new airport will be located at a
short twenty-five minute car ride from BBIR. Over 65 per cent of the resorts’ clients
are international tourists — mainly from Korea, China and India — who fly into
Singapore via Changi Airport to combine the world city’s urban experience with a
couple of days in Bintan’s tropical paradise.
CONCLUSION
Grounding Changi International Airport in its related larger territorial context by
analysing its transnational networks help us to broaden the cross-border perspective
of Singapore. In fact, these different case studies spatialize Singapore’s notable
geographic extension and at the same time illustrate the clear political fragmentation
and inconsistent development throughout this larger territory.
Changi’s regional cargo limbs have highlighted the role of the airport in
supporting the development of this larger territory by enabling transnational business
strategies to be implemented. At the same time, although goods flow fairly smoothly
across borders, the emerging passenger transborder infrastructure highlight the
disconnect between intense “on-the-ground” private firms collaboration on one
hand, and lack of governmental discussion and integration on the other. Due to
clear competing economic interests the CAAS still limits the collaboration with the
secondary airports on the fringe.
Each time I tried to discuss these incipient travels with my contacts and
interviewee at the CAAS, they frowned, arguing that the flat traffic figures didn’t
justify any future airport system coordination. “Changi could never benefit from
formalizing cross-border passenger traffic, nor be threatened by these smaller
airports”.37 Yet these emerging cross-border travels are currently being complemented
by the implementation of competitive and specialized mobility hubs such as Bintan
International Airport.
While the borders joining the three territories have become more permeable
over time, persisting border regimes towards the cross-border movement of people
still hinder the integration between the three components of the Singapore-Johor-
Riau Cross-Border Region. The Indonesia-Malaysia-Singapore Growth Triangle was
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362 Anna Gasco
based on the idea of complementarity and economic gap. However as the growth
trends move rapidly, and differently, the three parts are gradually drawn closer to
each other. The demographic trends are in favour of Riau and of Johor for instance,
with a likely increase of “working-age” population by 2030 against a rise of retirees
in Singapore. Batam also boosts one of the highest rates of economic growth of
Indonesia, while more and more Singaporeans establish their leisure and retiring
base in Johor’s Iskandar Malaysia development corridor. As ETH Centre Assistant
Professor Milica Topalovic argues, if the concept of complimentary may still remain
in the future, the one of economic disparity may not prevail (Topalovic and Yabuka
2014, p. 14). As this transnational region evolves, the resulting cross-border territory
will look very different twenty to thirty years from now.
Changi’s regional cargo limbs have highlighted the role of the airport in
supporting the development of this larger territory. The emerging passenger
transborder networks may anticipate the need for Changi’s hub to further expand its
catchment area across national borders by collaborating with airports on the fringe.
This is not only to sustain the forecast of air-travel growth — estimated to triple by
2030 in the Asia Pacific — but also to develop an airport system that may be regarded
as a stepping-stone to the future SIJORI tri-national “metropolis”. There will always
be a limit to the number of flights Changi can handle. Lingering protectionism has
so far hindered the collaboration with the airports of Johor and Batam.
Successful examples can be found in Hong Kong Airport — which runs cross-
border buses and ferries across the border to Shenzhen — or in the promising cross-
border pedestrian bridge, which will connect Tijuana International Airport in Mexico,
to San Diego in the U.S. with the expectation of turning it into a low-cost alternative
to San Diego’s airport. The project for a high-speed rail between Kuala Lumpur
and Singapore already paves the way and could make transfers more convenient
if the trains stop at Senai and Changi.38 A common strategic regional urban vision
developing integrated cross-border infrastructures could foster regional cooperation
and economic prosperity for all components of the SIJORI region.
Notes
1. “Aeromobilities” (Cwerner 2009) are “mobilities” driven by aviation as a fundamental and
influential mobility networks of our time. The “mobilities turn” (Sheller and Urry 2006,
Cresswell 2006) is a contemporary paradigm in the field of social sciences that explores
the movement of people, ideas and goods, and studies the broader implications of those
movements. The term encompasses the forces that drive, constrain and are produced
by those movements. The “new mobilities paradigm” emerged in reaction to challenges
posed by increased levels of mobility and in response to the importance that movements
have on individuals and society. Since movements are increasingly crossing nation-state
borders, Urry argues that scholars need to draw up a new agenda based on the study of
“mobilities” (Urry 2000). He uses “mobilities” in the plural since the aim is to understand
not only how people, but also how objects, images, or information are “on the move”
and how these structure and organize social life. “How ‘moves’ make social and material
realities” (Büscher and Urry 2009, p. 99).
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The Airport and the Territory 363
2. Gallant Venture Ltd is an investment holding company headquartered in Singapore and
with a focus on regional growth. It is the main commercial developer and management
group in the Riau Archipelago, as well as an integrated master planner for industrial parks
and resorts in Batam and Bintan. Gallant Venture is a joint venture between Indonesian and
Singaporean partners. Their principal shareholders include the Salim Group (Indonesia),
the Parallax Group (Singapore), SembCorp Industries Ltd (Singapore) and the Ascendas
Group (Singapore). Since the early 1990s, they have operated in four key areas: utilities,
industrial parks, resort operations and property developments. In 2004, their operating
revenues totalled approximately S$202 million while their total assets were valued at
approximately S$1.5 billion. Location is their key asset; they take advantage of Singapore
and the free trade zone agreements between the Indonesian and Singapore governments.
They leverage on Singapore’s reputation for management, global infrastructure and proven
legal system on one hand and on the Riau cheap labour and vast land resources on the
other (Gallant Venture Ltd 2013).
3. Other Singapore outward investments lead to the International Tech Park in Bangalore,
Vietnam Singapore Training Centre and Vietnam Singapore Industrial Park.
4. See Grundy-Warr, Peachey and Perry (1999), Bunnell, Muzaini and Sidaway (2006),
Lindquist (2010), Sparke et al. (2004).
5. If this information has been published in several governmental websites and documents,
the author has not been able to locate the original source.
6. Lazman Halim Lajman, VP from Iskandar Investement Group, interview with the author,
November 2011, Johor.
7. Regional science was founded in the late 1940s by Walter Isard to promote the “objective”
and “scientific” analysis of settlement, industrial location, and urban development. Topics
in regional science include location theory or spatial economics, location modelling,
transportation, migration analysis, land use and urban development, environmental and
ecological analysis, resource management, urban and regional policy analysis, geographical
information systems, and spatial data analysis. In the broadest sense, any social science
analysis that has a spatial dimension is embraced by regional scientists.
8. December 2008 marked the date in history when Switzerland joined the passport-free
zone of the Schengen countries. The Schengen zone relaxes controls on passport checks
in line with road and rail border crossing. Until the end of 2008, non-EU residents of
Switzerland had to apply for a visa in order to cross the Swiss borders.
9. An example of CAG’s international activities is the fact that since 2012, Changi Airport
Planners and Engineers (CAPE) have been engaged to carry out the master plan and
conceptual layout for the Brasilia Airport City project. In June 2012, CAI also completed
the acquisition of a 30 per cent stake in Airports of the South (AOS), comprising a group
of four airports in the South of Russia.
10. “High-value” — and generally low weight — are goods where the shipping costs, although
high, are marginal in proportion to the total costs of the cargo. Examples include works of
art, high-end electrical equipment or pharmaceuticals. For these goods, the proportional
share of transport costs is very similar for both air and sea freight, at around 5 per cent
of the total value of the goods shipped (UK Department for Transport 2009, p. 6).
11. “Perishables” are goods with a limited life cycle, and minimizing travel and transit time
is essential to minimize spoilage and cost. They need to reach the consumer as quickly as
possible and in the best possible condition. In terms of volume, fresh produce heads the
list of perishables transported worldwide. Eighty per cent of the total trade of perishables
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364 Anna Gasco
are classical perishables like flowers, ornamental fish, fruits, seafood, fish, meat, et cetera
(Bridger 2008).
12. “Process-critical” are goods that may have limited intrinsic value but are essential for the
good functioning of other business processes such as spare machinery parts in aeronautics
or automobiles (UK Department for Transport 2009, p. 6).
13. Interview with CAG’s Senior Manager of Cargo & Logistic Development. Spurred on by
increasing globalization the perishables business has gained importance worldwide. Once
considered a seasonal, low rate fill-up commodity by most airlines, today approximately
15 per cent of total worldwide air cargo is perishable (ibid.) and these are part of the top
three fastest growing shipper industries segment (von Heereman 2009). The perishable
flows have proven to be resilient during economic crisis and their contraction was far
lower than general cargo (CAG 2011–12). Consumers are willing to pay for the privilege of
having flowers, fresh fruits and vegetables of their choice throughout the year, unrestricted
by seasonal changes.
14. Trans-shipment is when freight is consolidated from trucks, boats or short-haul flights
arriving from a range of origins and is transferred onto long-haul flights for onward
shipment.
15. Operation manager of OHL’s operation centre within CAC Cargo Agent building C,
interview with the author, November 2012.
16. The six agrotechnology parks are situated in Lim Chu Kang, Murai, Sungei Tengah,
Nee Soon, Mandai and Loyang. These “high-tech” agriculture estates combine “modern
technology and life sciences to create intensive farming systems” (AVA 2015). Over 50
per cent of their farmland — 357 out of 704 hectares — is dedicated to the production of
ornamental goods.
17. According to the FAO, Asia is by far the largest exporting area of ornamental fish,
accounting for a significant 55 per cent of the shares, while Europe, North America, and
recently China, are the main importers (Ploeg 2004). Strategically located at the centre of
Southeast Asia, Singapore is surrounded by a rich fish fauna. With its excellent network
of air connections, high temperature and rainfall all year round, the climate in Singapore
is ideal for farming tropical fish (Ling and Lim 2005). Singapore, in fact, occupies a
dominant position in this world trade and acts as a platform. It is the biggest exporter
in the world, accounting for 38 per cent of the turnover, and the second largest importer
in Asia as well (Ploeg 2004).
18. The leases of most of the farms located in the Lim Chu Kang Agrotechnology Park are
expiring in 2014 and the contracts are unlikely to be extended by the government. The
land will probably be put back onto the market for public bid. The idea is to develop the
area with high-tech farming and the government is therefore looking for tenants with
capital and knowledge to do so. The farmers have requested help to the SLA to develop
such infrastructure and a guarantee of a longer term lease in order to secure return on
investment.
19. Interview with the author, Kota Tinggi, Johor, Malaysia, October 2012.
20. Tan Mei Ling, Hock Wee Nurseries, interview with the author, Zion Orchid Farm,
Singapore, October 2012.
21. Qian Hu’s general manager, interview with the author, Qian Hu Farm, Sungei Tengah
Agrotechnology Park, Singapore, November 2012.
22. The distribution centres of Shanghai and Guangzhou focus on accessories only, such as
aquariums, plastic bags and pet accessories.
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The Airport and the Territory 365
23. Qian Hu’s general manager, interview with the author, Qian Hu Farm, Sungei Tengah
Agrotechnology Park, Singapore, November 2012.
24. Manufacturing breakdown in Singapore: Biomedical 25.5 per cent — Electronics 25 per
cent — Transport Engineering (aerospace) 15.7 per cent — Precision Engineering 14.6
per cent — General Manufacturing 11.3 per cent — Chemicals 7.9 per cent (Singapore
Economic Development Board 2012).
25. The manufacture and assembly of electronic components demand fine motor skills and
high levels of concentration for which young — 18 to 24 years old — female workers are
preferred. They are enrolled on a two-year (1+1) contract. After which the MNC must
employ them on a permanent contract. This rarely happens and workers tend to rotate
between firms as well as industrial estates in order to prolong their stay — and revenues
earning — on the island.
26. Andy Hauw, Batamindo’s senior manager, interview with the author, Batamindo Industrial
Park, Batam, October 2012.
27. Illegal housing and informal settlements have appeared around Batamindo throughout
the years. These compensate missing social infrastructure and cheaper housing for the
park’s workers. Johan Lindquist has described how the numbers of informal housing
settlements on the island of Batam have proportionally increased with the growth in
number of factories inside Batamindo (Lindquist 2010).
28. In electronics, a wafer is a thin slice of semiconductor material, such as a silicon crystal,
used in the fabrication of integrated circuits and other micro devices. The wafer serves
as the substrate for microelectronic devices built in and over the wafer. In a complete
sterile environment the silicon is melted, manually stretched and undergoes many micro-
fabrications such as doping, ion implantation, etching, deposition of various materials, and
photolithographic patterning (Interview with the author, Infineon Technologies Batam,
Indonesia November 2012).
29. Once the wafer is ready, it is flown to a labour-intensive “back-end” factory where it is
sliced with a diamond blade. The smaller semiconductors are then glued onto a metal
base, engraved with gold or copper conductive wires and encapsulated to finally form
a microchip (ibid.).
30. Batam Logistics’ general manager, interview with the author, Seletar Airport, March
2013.
31. Data made available by Air Asia through Handal Indah Bus operator Data, 2013.
32. Data gathered from the three ferry companies located in Hang Nadim, author fieldwork,
July 2014.
33. Dendi Gustinandar, Commercial Director, Batam Hang Nadim Airport, interview with
the author, Batam, March 2013.
34. Jeffrey Lim, interview with the author, SkyShuttle bus pick-up, Johor customs, Malaysia,
April 2013.
35. New tourism developments in Johor include resorts along the eastern coast of Desaru
and theme parks like Legoland near Senai, Pinewood Studios or the Hello Kitty Town
(Tan 2014). Between 2011 and 2012, the State of Johor experienced the highest increase
(7.6 per cent) of hotel occupancy rate in Malaysia (Ministry of Tourism Malaysia 2013).
36. Mr Izhar Hifnei Ismail — senior vice-president of Iskandar Regional Development
Authority (IRDA), interview with the author, FCL Singapore, July 2013.
37. CAAS officer — anonymous — interview with the author, August 2013, Singapore Aviation
Academy, Singapore.
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366 Anna Gasco
38. Addendum: Singapore Prime Minister Lee Hsien Loong and his Malaysian counterpart
Najib Razak announced on 7 April 2014 at a press conference that the three options for the
Singapore terminal of the proposed high-speed rail linking Singapore and KL were Tuas
West, Jurong East and the city centre. Although these are proposals to be finalized within
the next years, Singapore’s authorities seem determined to focus future developments on
the western part of the island. This could be a missed-opportunity not only for Changi
Airport, but also for future regional cooperation (Chan 2014).
References
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Badariah, Mohd Ali. “The Status of Ornamental Fish Industry in Malaysia”. Putrajaya, Malaysia:
Department of Fisheries in Malaysia, Ministry of Agriculture & Agro-Based Industry,
2008.
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