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Pre-feasibility study on industry-specific activities between North Kalimantan and Sabah in medical tourism, higher education and TVET, tourism, rubber, wood products, palm oil, and fisheries. The report presents the findings of a pre-feasibility study on the development of Sabah’s potential areas of cross-border trade collaboration with North Kalimantan. It follows standard international practices for the steps needed to carry out such an analysis: First, it conceptualizes the interrelationship between different cross-border components that are needed to make the program successful in reaching well-defined objectives specified by the governments of Malaysia and Indonesia. Second, it determines the key project parameters in terms of location, financial requirements, technical support needed, gains to major beneficiaries, preliminary cost estimates, financial and economic feasibility, and implementation. As such, it largely focuses on methods to optimize each program component in conjunction with an in-depth analysis of subprojects that are needed to make the overall integrated program successful.

The economic internal rate of return (EIRR) is computed at 19.5% for the overall project. For the subprojects, the returns are nearly 22% for medical tourism; 20.5% for private TVET and higher education; 25% for palm oil and timber products together; land 20% for fisheries. Palm oil and timber products both depend on the same road and ICQS infrastructure costs, so they are should be jointly evaluated. Nearly 75% of the benefits accrue to palm oil and the remaining 25% accrue to timber products.