By Danial Dzulkifly
SHAH ALAM, July 3 – Selangor is seeking to attract more data centres to be set up in the state as part of a strategic initiative to create a comprehensive hi-tech ecosystem.
State executive councillor for Islam and innovation Dr Fahmi Ngah said this is to complement Selangor’s ongoing efforts to increase investment in semiconductors and other advanced technology industries, as well as encourage artificial intelligence adoption in government services.
Addressing the common misconception that data centres offer minimal economic benefits due to their high electricity consumption and low staffing requirements, Fahmi said their true value is in driving innovation via access to cloud services.
“There are economic benefits to data centre investments, including job opportunities and revenue for the state,” he said in an interview with Selangor Journal.
“More importantly, to establish Selangor as a hub for digital innovation and a knowledge-based economy, access to cloud services is essential. Local data centres can significantly reduce the cost of adopting cloud technology.
“In my view, we should encourage more data centres (in Selangor),” he added.
Fahmi revealed the state has 17 major upcoming high-value data centre projects, valued at RM52 billion, and stressed the need to approach the matter proactively.
“There are 17 projects in the pipeline valued at RM52 billion. Are we going to reject the 18th? Absolutely not.
“Many of these data centres are also looking to expand their capacity by at least 50 per cent. Should we turn them down? Obviously not. We need to be smart about this.”
While acknowledging the private sector’s role in driving growth in Selangor’s data centre industry, Fahmi said the state government is also looking at a couple of areas where it needs to step up.
“First, in terms of application and approval processes for data centres, players are requesting streamlined policies. Conditions should be consistent across all 12 local councils. Currently, they differ.
“Secondly, consider the revenue implications for the state government. If land designated for agriculture is converted to housing, the land premium changes, becoming more expensive. Converting housing into industrial estates further increases the premium.
“Now, take for example a factory producing instant noodles versus a data centre — why should their (land premium) values be the same when their economic contributions differ?
“An instant noodle factory may last five to 10 years, while data centres have a minimum investment of 15 years. Shouldn’t we revise old policies and charge them differently?”
