Government’s mini-budget of RM2 billion for PFI Projects

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    malaysian
    Published on 15-05-2010 01:52 AM
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    Government’s decision on mini-budget of RM2 billion for private initiative projects (PFI) causes the industry players to be wary.According to an unnamed chief executive of a listed company, “It is still unclear at this point in time how the government wants to do this, but the notable effort could help spur more partnerships.”


    While Lim Chee Sing, RHB Research head said that the obstacle is to convince bank groups of PFI Projects.
    According to Prime Minister and Finance Minister Datuk Seri Najib Razak during the second stimulus package in Parliament yesterday, he said that private companies can tender for the funds. Najib has added few characteristics for PFI Projects that is, planned projects have to be in strategic sectors that will help to create more job opportunities besides boosting country’s competitiveness in projects related to education and tourism.
    He said that the funds only comprises small proportion of the project investment cost as it is a tipping point to turn marginally non-viable project to viable.


    Furthermore, the project's revenue must come only from the private sector. Private sector employ, invest and assume project risks. Currently, a biotechnology cluster in Iskandar Malaysia that is known as Tanjung Agas industrial park under strategic public-private partnership has been approved for improvement of the traffic infrastructure system around KL Sentral that costs over RM3 billion in the next three years. Najib said that government-linked companies will establish 10 not-for-profit private schools as the stepping stone.