Having an F1 race in both Singapore and Malaysia will not only help add buzz to the region, but also make both countries more attractive to investors, said Foreign Minister George Yeo.

The reason for Singapore going big on sports events such as the F1 is to make it a more attractive city, said Mr Yeo, after attending his first F1 race in Sepang on Sunday. He was invited by Sepang International Circuit chairman Mokhzani Mahathir to the race

"It is part of the modern world, part of the attraction of talent and making Singapore an interesting, lively city, attracting capital and talent. So providing additional buzz like F1 will help," the minister was quoted by The Straits Times today.

He said that if Singapore and Malaysia were to cooperate, the races in the two countries would be complementary, as Singapore's would be a city circuit. Said Mr Yeo: "If we combine our strengths in certain sectors, I believe we can be a strong combination. And the political climate is right for that now.

"I believe because we are spaced apart, the two races should be able to energise each other and help develop the F1 market in South-east Asia."

Asked by reporters to confirm if Singapore was going ahead to host an F1 race here, the Minister said: "I think the Government has given approval for the project to go ahead based on certain conditions."

A consortium led by hotelier Ong Beng Seng is in negotiations with F1 supremo Bernie Ecclestone to take the race to Singapore.

Mr Yeo said Mr Ong is "very keen on working collaboratively with Sepang", and mentioned this to Mr Mokhzani.

"Whether or not there would be a deal, we do not know. I suppose we will know shortly," added the Minister.

On the trade-offs that may occur if the race came to Singapore, Mr Yeo said: "I think there will be very bad traffic jams. The noise would be quite horrifying, and there will be inconveniences to members of the public. So, it is a trade-off.'

Mr Yeo said another possible area of partnership for the two countries is the Iskandar Development Region (IDR), a 2,217 sq km special economic zone planned for southern Johor - the first zone in the country to have a large chunk of its economy open to foreigners without restrictions.

He said Prime Minister Lee Hsien Loong would be going to Malaysia for a retreat with Prime Minister Abdullah Badawi in the middle of May.

Said Mr Yeo: "I am quite sure one area in which they will discuss is how we can work together cooperatively on developing the IDR... If the IDR takes off, Singapore will benefit, and if Singapore prospers, many of the spin-offs and spillovers will go to the IDR. I see a lot of prospects here for mutual benefits in closer collaboration".