KUALA LUMPUR: The recent launch of Public-Private Partnership Master Plan 2030 (PIKAS 2030) is seen as timely and necessary, given significant changes in both global and domestic economic conditions since the late 2010s, UOB Global Economics & Markets Research said.
Launched on Sept 9, PIKAS 2030 is a continuation and enhancement of existing policies and guidelines to provide a more inclusive and clearer direction for PPP policies in the country.
The government aims to increase private investment to RM78 billion by 2030, and for PPP projects to contribute RM82 billion to gross domestic product, and create 900,000 jobs by 2030.
"The right PPP model will ensure the private sector's expertise and resources are aligned with the government's objectives to foster innovation, efficiency, accountability and sustainable development, and will help to ease the government's fiscal constraints," the firm said.
According to UOB, the expansion of PPP models will also help to stimulate economic growth, generate employment opportunities, enhance the overall quality of life for citizens and position the nation towards a progressive future.
The firm said it is estimated that from 2009 to 2023, PPP projects contributed RM50.5 billion to GDP and created 696,061 jobs in Malaysia.
Presently, a total of 37 PPP projects are identified as key outputs of the expanding PPP models in the newly launched PIKAS 2030, while 41 projects are listed as potential PPP projects that can be implemented in the future.
In sum, UOB said PIKAS 2030 is essential to expand and diversify investments as well as pave the way for high-impact projects to drive the country's development and transformation.
The firm said a key challenge for development projects, particularly large-scale ones, has been the issue of financing and cost given the country's fiscal constraints, as well as strengthening governance and transparency.
"The revised PPP model will help to overcome these constraints by effectively prioritizing infrastructure projects, addressing viability gaps, accelerate project execution, and optimise costs."
"With the right model, efficient execution, proper monitoring framework, and broader level of industry engagement, will help stimulate more development initiatives and investment activity for the medium term," it added.
UOB said the Malaysian government is also in the midst of drafting its national budget for 2025 and the 13th Malaysian Plan, whereby public-private partnership (PPP) projects will be included in these plans to transform the economy.
Key changes made to PIKAS 2030 include the definition of PPP, its classification, threshold criteria, life cycle, scope and mechanisms.
Under PIKAS 2030, PPP does not only comprise of public infrastructure but also public assets or services, or both, depending on the nature of PPP projects. This new PPP definition also aims to be more inclusive so that privatisation and alternative modes are also captured within the definition.
Under a reclassification of PPP models, the government will focus on introducing user-pays elements into existing government-pays models to establish hybrid-pay mechanisms and subsequently reduce the government's fiscal burden.
PIKAS 2030 also sets the minimum project cost for PPP projects higher to RM50 million (from RM25 million previously) but keeping the minimum concession period of seven years, after taking into account inflation effects.
Among five key changes identified to ensure enhanced evaluation and transparent bidding, PIKAS 2030 will cut direct negotiations (DN) and Request for Proposals (RFP) processes that used to span over 68 and 73 weeks are reduced to 27 and 52 weeks respectively.
DN for PPP projects will be minimised but exceptions can be made on a case-by-case basis, subject to Cabinet approval.
Ends