THE ‘WILL’ TO DRIVE PPP

Presented by :

Dato’ Dr. Tan Yew Chong

Deputy Director-General (Development II)

Public-Private Partnership Unit,

Prime Minister’s Department of Malaysia

10th March 2015

This paper is not to be published in part or in full without prior written permission from

Public-Private Partnership Unit, Prime Minister’s Department of Malaysia

PRESENTATION OUTLINE

PPP Unit in Malaysia

PPP Structure in Malaysia

Conclusion

2

3

PPP EVOLUTION IN MALAYSIA

1983

Malaysia Incorporated Policy

Privatization Policy

1985

Privatization Guidelines

1991

Privatisation Masterplan

2006

PPP – PFI Introduced

2009

UKAS formed

2009

PPP Guidelines

2010

Facilitation Fund

Introduced

Current

Various PPP Models adopted:

a) Build Operate Transfer

b) Build Operate Own

c) Build Lease Maintain Transfer

d) Build Lease Maintain Operate Transfer

e) Management /Operation outsourcing

d) Leasing

e) Sales of Public Asset/Equity

f) Land Swap

This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia4

GoM FUNCTION IN MOBILIZING PPP

GoM has initiated various approach to mobilize PPP in the country -

This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia5

What

GoM

did?

Institutionalization of PPP as

part of national growth agenda

PPP Decision making at the

highest level

Attract investment into the

country through PPP

How

GoM

did

it?

Establishing of PPP Unit – centralize agency

to plan and negotiate with Private parties

Seeking approval only from Cabinet

Provide assistance and facilitation to Private

sectors

Promoting PPP to all stakeholders thru out

business value chain

IMPLEMENTATION FRAMEWORK

Centralised planning and processing at the Public PrivatePartnership Unit

Approving Authority : CabinetDecentralised implementation and monitoring by the Ministries and State Governments

Negotiation/Standardization of terms and conditions ofconcession agreement by the Privatization/PPP Committee

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PPP UNIT - FUNCTIONS

PPP Committee

Acts as Secretariat to PPP CommitteeNegotiations

Negotiates the terms and conditions of PPParrangements

Facilitation Fund

Manages and Supervises the FacilitationFund Corridor Development

Act as Secretariat for implementing projectsin the 5 Corridors i.e. ECER, IM, SCORE, SDC,NCERMonitoring

Monitors the implementation of projectsunder PPP, Facilitation Fund and CorridorDevelopment.

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ROLE IN PROMOTING PPP

Capacity enhancement of public sector officials to manage partnerships

Ensure that both partners adhere and practice robust governance structures that can withstand independent scrutiny

Facilitate creation of enabling environment

Broaden the understanding of the range of partnership options that exists in the emerging markets.

Policy advice & technical assistance

This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia8

ADMINISTRATIVE MACHINARY

Private Public Partnership

Unit

Ministries Other Agencies

PPP Committee Cabinet

State Governments

Planning & Coordination

Private Sector Initiated

Government-Initiated

Technical Committee

Financial Committee

Implementation

Implementation

This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia9

10

BALANCING ECONOMIC & SOCIAL INFRA PROJECTS

More than 600 projects amounting to more than USD80billionhave been initiated by UKAS since its inception.

For highways alone, 30 toll highways have been in operationamounting to more than 1,800 km in length.

UKAS works side by side with other Ministries to identify theneed of a project to be implemented under DE or PPP.

This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia11

BALANCING ECONOMIC & SOCIAL INFRA PROJECTS

From 1983 – 2012 Saving by GoM from CAPEX wasRM174.6b & OPEX RM9.25b. About RM6.5b been generated asproceeds from sales of GoM’s equity and assets.

Thru out the same period as well, PPP generates RM234b ofmarket capitalization which amoun to 15.97% of total BursaMalaysia capitalization

This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia12

REMOVING STUMBLING BLOCKS

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JKAS A committee comprised of all relevant ministries & agencies thatwill evaluate a PPP project. This committee will save time & resources in

expediting processing time.

JKAS JTAS CABINET

COMBATTING CORRUPTION

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GoM is serius in battling corruption. Thus, few mechanics have been adopted to

materialize the objective within the PPP arrangement -

• CA can be terminated due to company’s or its director

convicted with corruption

• Being part of Condition Precedent in the CAConcession Agreement

• All concessionaires are required to sign an Integrity Pact

• Frequent talks are organized involving concessionaires to

promote integrity in implementation & to fight corruptionIntegrity Pact

Conclusion

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CONCLUSION

o Privatization policy has been formulated by GoM back since 1983 toenhance national growth.

o PPP has been underpinned into other national main policy.

o GoM has initiated lots of PPP projects by balancing the company – socialreturns, and consulting all relevant stakeholders in order to provide asound and beneficial projects for Malaysian.

This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia16

THANK YOU!

visit our website at

www.ukas.gov.my

PUBLIC-PRIVATE PARTNERSHIP UNIT

PRIME MINISTER’S DEPARTMENT