Public Private Partnerships of Malaysia

The government first embarked on a path of encouraging private sector growth as far back as the 1980s. In 1981 the Malaysian Government introduced the Malaysia Incorporated Policy, which aimed to encourage co-operation between the public and private sectors. Through this policy both sectors are said to act and operate within a single ‘Malaysian Company’.

To further support the Malaysia Incorporated Policy, the government implemented the Privatisation Policy in 1983. This policy aims to lessen the financial and administrative burden of the government, improve skills and production, accelerate economic growth, reduce the size and involvement of the public sector in the economy, and assist in reaching the country’s economic policy’s goal. In line with the implementation of the policy, a Privatisation Section was formed under the Economic Planning Unit of the Prime Minister’s Department. The Privatisation Section works with the Privatisation Committee in finalising proposals on privatisation for approval by the Ministers’ Council. The Guideline on Privatisation was introduced in 1985, followed by the Master Plan on Privatisation in 1991.

The national Privatisation Policy brought about strategic changes, including provision of infrastructure facilities (such as the development of the Kuala Lumpur International Airport); the creation of local conglomerate companies (including Tenaga Nasional Berhad and Telekom Malaysia Berhad); and the creation of extensive employment opportunities in the private sector.

The success of Malaysia’s privatisation initiatives through the 1980s and 1990s gave way to the introduction of a private finance initiative under the Ninth Malaysia Plan (2006–10). This approach was introduced as an alternative method of financing the development and maintenance of public infrastructures and facilities and saw the introduction of the Privatisation and Private Finance Initiative Unit, later renamed Public Private Partnership Unit.

The most recent government plan, the Tenth Malaysia Plan 2011–15, highlights the government’s intention to continue encouraging the private sector to invest in development projects. The government has set up a facilitation fund to support development projects implemented by the private sector.