The construction, agriculture and mining sectors are expected to achieve positive growth during the 10th Malaysia Plan (2011-2015) period.
The construction sector is expected to grow by 4.4% per annum, benefitting primarily from the construction-related activities under the two fiscal stimulus packages. This growth was largely supported by the expansion in civil engineering, residential and non-residential, as well as the special trade works subsectors.
Under the 10th Plan, statistics relevant to construction include:
- GDP in 2015 is expected to be RM 740,250 million (2009 = RM 521,095 million).
- Construction GDP in 2015 is expected to be RM 21,818 million (2009 = RM 17,321 million).
- GDP is expected to grow at 6.0% per annum and construction GDP at 3.7% per annum.
Construction’s share to GDP is at 2.9%.
Malaysia’s population is estimated to grow at 1.1% (2011 – 2015) reaching to 29.8 million persons in 2015 (2010 = 28.3 million persons).
In terms of employment, construction in 2015 is expected to employ 776.5 thousand persons or 5.9% of total employment (2009 = 762.4 or 6.6%).
In addition to the RM 230 billion allocated for development that would either directly or indirectly benefit the construction sector, the 10th Plan also include a host of initiatives and incentives that are expected to generate more robust activities in the construction sector.
These include economic reforms in terms of private sector led economy, innovation led growth, rationalization of the government’s role in business by increasing privatization and PPP, and developing the SMEs.
In relation to privatization and PPP, Malaysia has, since 1983, been very active. Since 1983, 510 projects related to transportation, roads, communications, health, and energy sectors have been privatized or procured via the PPP approach.
Under the 9th Plan, 22 projects worth RM12 billion were privatized via the PPP approach. Under the 10th Plan, 52 projects worth RM62.7 billion are to be privatized via the PPP approach.
To assist the private sector in meeting the initial costs/investment in privatized/PPP projects a sum of RM 20 billion has been allocated under a scheme known as Facilitation Fund. Projects with minimum cost of RM 100 million are eligible for assistance.
Further assistance to the construction industry include government support for firms to export professional services overseas especially within ASEAN, India, China and the OIC countries, establishing a consolidated presence and brand of Malaysian construction professional services overseas via the CIDB and PSDC, creating and promoting demand in green technology, etc.
Some of the more prominent infrastructural facilities earmarked for development under the 10th Plan are;
- RM 2.7 billion for roads and rail networks leading to key ports and airports.
- Completion of the double-track rail project between Johor Bharu and Padang Besar (RM 16.5 billion).
- MRT to cover a 20km radius from the Kuala Lumpur city centre that is expected to carry 2 million passenger-trips per day when completed.
- RM 1 billion for capital dredging of port channels to cater for bigger vessels for Westport Port Klang and PTP Johor, and RM 6 billion upgrading works to these ports and Penang Port.
- Expansion of airport capacity at a cost of RM 3.3 billion (to cater for 62 million passengers in 2015: 47 million in 2008), a new low cost carrier terminal at KLIA and upgrading of the Penang International Airport.
During the 10th Plan period, the strategies to propel the construction related sector forward include:
- Providing support such as market intelligence, networks and government-to-government relations to enable firms to export professional construction services within ASEAN region, India and China as well as Organisation of Islamic Countries (OIC) countries;
- Establishing a consolidated presence and brand for Malaysian professional construction services overseas. In this regard, the role of the Construction Industry Development Board and Professional Services Development Corporation will also be rationalised; and
- Amending legislation to facilitate commitments made at bilateral, regional and multilateral levels to liberalise the industry and create new business opportunities.
Reference: 10th Malaysia Plan 2011-2015.
(this article written for 1BINA.my)
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