Data Centres: Johor Won’t Sacrifice People’s Welfare For Investment - MB

By Nur Fadhliana Shaari

JOHOR BAHRU, March 10 (Bernama) -- The Johor state government will never approve any project, including data centre developments, if it brings hardship to the people, said Menteri Besar Datuk Onn Hafiz Ghazi.

He said as a responsible government, it will not gamble with the people’s welfare merely to attract major investments, and various factors will be taken into account before approving any development project.

“We will never allow the people to suffer by making irresponsible decisions,” he said in an interview with a Bernama team led by editor-in-chief Arul Rajoo Durar Raj at Saujana, the Menteri Besar’s official residence, here recently.

Onn Hafiz said he is aware that the adequacy of water and electricity supply has often become a point of debate in the state after Johor became a focal point for foreign companies looking to develop data centres, which has raised questions over the surge in utility consumption required to operate such facilities.

However, he said the state and federal governments have comprehensively reviewed Johor’s water supply planning, covering short-, medium- and long-term projects as a strategic step to ensure the state’s water supply remains stable.

Onn Hafiz, who is also the Machap state assemblyman, said 38 projects worth RM15.3 billion will be implemented to strengthen efforts to ensure water supply security in Johor while supporting the needs of the people and the rapid growth of the state’s industrial and investment sectors.

Regarding the construction of data centres, he said the state government, through the Johor State Data Centre Development Coordinating Committee (JPPPDNJ), will assess applications for such developments and examine the water and electricity requirements of the companies involved.

He reiterated that the committee will only approve Tier 3 and Tier 4 data centre developments that use air-cooling technology, which does not require large amounts of water.

“If a data centre demands a high intake of water, we will not approve it,” he said.

Onn Hafiz said the issue of water supply and data centres arose after some parties alleged that recent water supply disruptions in Simpang Renggam and Benut were linked to data centre developments, even though no data centres are operating in those areas.

“I appeal to the Bangsa Johor community to be cautious when hearing irresponsible news and incitement. Information must be vetted before making any decisions,” he said.

He said he felt compelled to clarify the matter as he was concerned the issue could make investors uneasy.

“Matters like this will have an impact on investors coming into the state. If they believe what is being spread, they will pull the handbrake and not invest in Johor.

“That is why I chose to speak out, to give confidence not only to the Bangsa Johor community but also to investors who want to invest in Johor. We must continue to create that confidence — that is the most important thing,” he said.

Johor has emerged as the country’s leading destination for data centre investments, with 42 projects worth RM164.45 billion approved as of the second quarter of 2025.

The development has contributed about 7.8 per cent to Malaysia’s operational information technology (IT) capacity and created around 6,000 high-skilled jobs. By 2030, about 60 per cent of the country’s data centre capacity is targeted to be concentrated in Johor.

Last year, the state government was reported to have halted new approvals for Tier 1 and Tier 2 data centre developments.

-- BERNAMA