Is Tasik Kenyir the Next Big Data Centre Hub? Zafrul Calls for Detailed Cost-Benefit Analysis
Kuala Lumpur, Malaysia – The potential of Tasik Kenyir in Terengganu to become a major hub for data centres and artificial intelligence (AI) is generating significant buzz. However, Minister of Finance Tengku Datuk Seri Zafrul Abdul Aziz has cautioned that a thorough cost-benefit analysis (CBA) is crucial before any significant investment is made. This strategic assessment will determine the viability of establishing such a hub in the area and ensure optimal resource allocation.
The proposal to leverage Tasik Kenyir stems from its unique geographical advantages. The lake, one of the largest man-made lakes in Southeast Asia, offers a readily available source of cool water – a critical factor for data centre operations, which require substantial cooling systems to prevent overheating. Furthermore, the area boasts relatively stable geological conditions, minimizing the risk of natural disasters that could disrupt operations. The Malaysian government is actively seeking ways to attract foreign investment and position the country as a regional leader in the digital economy, and data centres are a key component of this strategy.
“We need to carefully evaluate the costs and benefits before moving forward with this project,” Zafrul stated. “A comprehensive CBA will help us understand the potential returns on investment, taking into account factors such as infrastructure development, power supply, connectivity, and ongoing operational expenses.” He emphasized the importance of ensuring that the project is economically sustainable and provides long-term value to the nation.
The rising global demand for data storage and processing power has fueled the growth of the data centre industry. Companies are increasingly relying on cloud computing and AI, driving the need for more data centres to support these technologies. Malaysia, with its strategic location and growing digital infrastructure, is well-positioned to capitalize on this trend. However, competition is fierce, with countries like Singapore and Thailand also vying for a share of the market.
Beyond the economic benefits, establishing a data centre hub in Tasik Kenyir could also create significant employment opportunities for local communities. The project would require skilled workers in areas such as data centre management, IT support, and cybersecurity. Furthermore, it could stimulate the growth of related industries, such as renewable energy and telecommunications.
The government is exploring various options for funding the project, including public-private partnerships (PPPs) and attracting foreign direct investment (FDI). A successful CBA will be instrumental in securing these funding sources and demonstrating the project's potential to investors.
The decision to conduct a CBA reflects the government's commitment to making informed investment decisions and ensuring that any development project aligns with Malaysia's long-term economic goals. The outcome of the analysis will be closely watched by industry stakeholders and investors alike, as it could significantly shape the future of Malaysia's data centre landscape.
Ultimately, the potential of Tasik Kenyir as a data centre hub hinges on a careful balancing act between its advantages and the challenges associated with developing and operating a large-scale data centre facility. The CBA will provide the necessary insights to determine whether this vision can be realized and contribute to Malaysia's digital transformation.