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Public-private partnership (PPP) is nothing new. In layman’s terms, PPP is joint ventures between the private and public sectors to achieve specific national development objectives.

Governments around the world have initiated such partnerships, which, through PPPs, a government aims to secure investment and greater efficiency in the delivery of necessary public services such as infrastructure, healthcare, and education by getting the private sector to take them on.

As an incentive, the government may choose to offer concessions, tax breaks, or grants to the relevant private sector players to create a viable business case.

The biggest, and most ambitious, PPP in Malaysia so far is the Economic Transformation Programme (ETP).

Part of the 10th Malaysia Plan, the ETP with 131 entry point projects (EPP) and 60 business opportunities that could potentially create 3.3 million jobs and propel Malaysia into high-income nation status, defined by the World Bank as having a gross national income (GNI) per capita of US$15,000.

Projects valued at RM30 billion under the Public Private Partnership (PPP) are expected to be implemented this year.

A total of 513 projects have been implemented, wherein 113,487 jobs have moved from the government to the private sector.

This is equivalent to savings of RM163.8 billion on capital expenditure (CAPEX) and RM8.9 billion on operating expenditure (OPEX).

PPP is indeed an important option that can be utilised, particularly in today’s challenging economic times, when we need to find increasingly innovative ways to improve the nation’s infrastructure and services to meet the requirements of the people.

The prime minister, Dato’ Seri Mohd. Najib Tun Abdul Razak said that to enhance private sector involvement in economic activities, the government would further intensify the PPP initiative and implement in 2011 several PPP projects identified under the 10th Malaysia Plan through private investment of RM12.5 billion. The government would allocate RM1 billion from the Facilitation Fund.

Among the PPP projects are the Ampang-Cheras-Pandan Elevated Highway, Guthrie-Damansara Expressway, Damansara-Petaling Jaya Highway, West Coast-Banting-Taiping Highway, Sungai Dua-Juru Highway and Paroi-Senawang-KLIA Highway.

A 300-megawatt Combined-Cycle Gas Power Plant in Kimanis, Sabah, to increase electricity generation capacity to meet rising demand.

The International Islamic University Malaysia Teaching Hospital in Kuantan, the Women and Children’s Hospital as well as the Integrated Health Research Institute Complex in Kuala Lumpur;

The Academic Medical Centre, a joint venture between Academic Medical Centre Sdn Bhd and Johns Hopkins Medicine International as well as Royal College of Surgeons Ireland which involves private investment of RM2 billion.

Dato’ Seri Mohd. Najib also said that the government would encourage the private sector to resume an active role in the economy through several high-impact strategic projects.

These projects included the Kuala Lumpur International Financial District (KLIFD) valued at RM26 billion, which would be implemented from 2011 by 1Malaysia Development Berhad (1MDB) in collaboration with Mubadala Development Company, an investment arm of the Government of Abu Dhabi.

Also, under the High-Impact Strategic Development, Dato’ Seri Mohd. Najib announced the development of another landmark in Kuala Lumpur, Wisma Merdeka, a 100-storey tower.

The integrated development project costing RM5 billion will retain the Merdeka and Negara stadiums as national heritage. The tower will be completed by 2015 and the whole project by 2020.

Dato’ Seri Mohd. Najib also said that the Mass Rapid Transit (MRT) in Greater Kuala Lumpur (Klang Valley), with an estimated private investment of RM40 billion, would be implemented in 2011 and was expected to be completed by 2020.

A C751B train at Eunos MRT Station on the Mass...

A C751B train at Eunos MRT Station on the Mass Rapid Transit (MRT) system, one of three heavy rail passenger transport lines in Singapore (Photo credit: Wikipedia)

Also to be implemented beginning next year is the development of the Malaysian Rubber Board land in Sungai Buloh covering an area of 2,680 acres by the Employees Provident Fund (EPF). It would be a mixed development comprising affordable houses as well as commercial, industrial and infrastructure facilities.

The entire development is estimated at RM10 billion and is expected to be completed by 2025.

As part of the effort to reinvigorate private investment, Dato’ Seri Mohd. Najib also said that the Bumiputera Property Trust Foundation (BPTF) would provide opportunities for bumiputera ownership of prime commercial properties in major towns.

The BPTF will establish a fund to enable ownership of prime commercial properties in the Klang Valley, through a group ownership scheme.

For this, he said, the BPTF would launch a syariah-compliant Bumiputera Property Trust Scheme this year with a size of RM1 billion.

All approvals related to the public-private partnership projects, privatisation and funds conducted by the Public-Private Cooperation Unit (UKAS) would be expedited.

This is in line with the government’s approach under the New Economic Model that focuses on the private investment as a key national economic driver.

UKAS managed to get a commitment for an investment of RM40 billion last year.

That achievement had exceeded the target of RM30 billion set for the public-private partnership projects, privatisation and funds.


(this article written for 1BINA.my)