Additional Help For Public-Private Partnerships Projects In 2014

KUALA LUMPUR: The Government is allocating up to RM2.7bil under the facilitation fund for public-private partnerships (PPP) projects in 2014, according to Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar.

He said the funding would provide support and complement PPP initiatives in the pipeline.

“For the coming year, up to RM2.7bil has been earmarked. The idea would be for projects that would need this additional help to make the project viable,” he said.

“Sometimes if a project is implemented by the private sector, the return on investment may not be sufficient but with this facilitation fund that typically involve the provision of infrastructure for example. It may make the project more viable,” he said at the Fourth Annual Public-Private Partnership Conference 2013 – Updates on Global and Regional Trends with Special Focus on Renewable Energy Development.

Wahid said in the past 30 years, 611 projects were implemented through PPP mechanism. “The savings generated through PPP has allowed the Government to save RM182.5bil.”

He added that the trend in recent years had been for governments to work in partnership with the private sector to tap its potential and funding.

In Malaysia, the Government undertakes several forms of PPP via privatisation; private financing initiatives; joint ventures; offtake agreements; and through the RM20bil facilitation fund, established to catalyse private investment in nationally strategic areas.

Asked on the facilitation fund, Wahid said it “had been lined up and allocated on an annual basis.”

Under the facilitation fund, Public-Private Partnership Unit in the Prime Minister’s Department has recorded significant achievement in execution of the Government’s development plans.

Between 2010 and 2013, the unit had approved 137 projects with an approval value of RM9bil, mobilising RM115bil in private sector investments.

Projects to be implemented include construction of the 316km West Coast Expressway from Banting to Taiping as well as double-tracking projects from Ipoh to Padang Besar, and later from Gemas to Johor Baru.

In the first six months of 2013, the Malaysian economy grew 4.2%, and it is expected to expand between 4.5% and 5% for 2013. This will be driven in part by private Investments, increasing 16.2% to RM165bil.

“In 2014, the Malaysian economy is forecast to grow at a higher rate between 5% and 5.5%, underpinned by private investment growth of 12.7%.

“This means private investments will comprise 16.7% of gross domestic product (GDP), up from 12.4% in 2010. In 2014, this is expected to increase further to RM189bil, or 17.9% of GDP,” Wahid said.

Asked if new land area had been identified for land swap exercise, Wahid said it was a continuous process from time to time when it looked at the requirement of the Government.

Malaysia has improved its ranking to number six, surging six spots from 12th position last year, according to the World Bank’s Doing Business Report 2014 released on Tuesday.

Commenting on the improvement, Wahid said: “I think it’s a tremendous achievement for Malaysia to be recognised and our ranking improved to number six. This is a recognition for the continuous efforts by the country to improve our processes especially the work done by Permudah (Special Task Force to Facilitate Business). Certainly, it is a recognition and we hope that it will inspire all of us to do even more.”

Meanwhile, Malaysia will see minimal inflation rate hike following subsidy rationalisation, including the increase in sugar price.

“With the subsidy rationalisation, we do expect the inflation rate to actually increase but within the context of the current inflation rate, which is actually low. So, the rate will be quite acceptable in the sense,” Wahid said, adding that the Government expected up to 1.8% increase in consumer price index in the first year of the implementation of goods and services tax but it would be a one-off increase.

Source: Business News, The Star Online

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