As part of its efforts to maximise its economic benefits and conserve resources, Johor has rejected almost 30% of data centre applications over the last five months.
Beginning in June 2024, the southern state established a committee to review applications.
This action was taken in response to worries that the quickly expanding industry might put a strain on the area’s water and electricity supplies, according to the local reports.
According to Lee Ting Han, Johor State EXCO Member for Investment, Trade, Consumer Affairs & Human Resources and vice-chairman of Johor’s Data Centre Development Coordination Committee, since the committee’s founding, four of the fourteen applications from foreign operators have been denied.
“The rejections were primarily due to operators failing to demonstrate sustainable practices to reduce water and energy consumption,” he said.
Detailed sustainability plans, suggested site locations, and job creation metrics, such as salaries, are now mandatory for applications.
“Some proposals were turned down because they selected areas lacking adequate utility infrastructure, risking resource shortages for local communities,” he added.
Until June, data centre operators only needed a development order from local authorities to begin construction. They must now seek approval from the state’s committee.
This additional layer of scrutiny assesses proposals based on three key criteria: sustainability practices, the creation of skilled, well-paying jobs, and the likelihood of attracting clients once operational.
Lee stated that the committee ensures companies commit to competitive wages, noting that fresh engineering and design graduates could earn starting salaries of RM4,000, which is higher than the industry average of RM2,800. Experienced professionals may receive salaries exceeding RM10,000.
