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Foreign Investments: A Boon for Malaysian Infrastructure Sector

Malaysia is open to foreign-investment environment in the infrastructure sector. The country lacks a state-owned dominant construction company. Majority of the many infrastructure projects are government-led, domestic and foreign private firms that opened opportunities to participate. The competitive landscape of Malaysia’s construction and infrastructure industries is the most favourable in Southeast Asia, with numerous open foreign-investment laws along with strong competition between private local and foreign companies. The construction, equipment supply and design/consultant roles are predominantly open to private companies. Infrastructure sectors such as railways remain in the hands of government agencies or project-specific state-owned firms. It was observed that Chinese construction companies in Malaysia occupy a major share in the infrastructure insights market that reflects both the country’s open foreign investment laws and its strategic location along China’s Belt & Road initiative.

According to the report, “Infrastructure Insight: Malaysia”, Malaysia is expected to witness the fastest infrastructure output growth rates in the world in the coming years while a continuation of trends has been seen in the first half of the decade. Malaysia’s large-scale transport projects planned include Klang Valley Mass Rapid Transit System, the Pan Borneo Highway Upgrade and the East Coast Rail Link. An analysis of the administrative, economic and political context for infrastructure in Malaysia is sure to help in the growth of the infrastructure insights market. The current continuing infrastructures in Malaysia are roads, railways, electricity and power, water and sewerage, communications, airports and ports.

Political and financial institutions are involved in the infrastructure market along with the competitive and regulatory environment. The IIC is currently tracking 86 large-scale infrastructure construction projects in Malaysia, at all stages of development from announcement to execution. Malaysia anticipates joining the alliance of developed countries by 2020 by undertaking vast infrastructure and public works projects. Malaysia invested heavily in transforming its public transport, roads, railways, ports, power plants, bridges, schools, hospitals and industrial zones. With the growing population the infrastructure needs are fulfilled by the Malaysian government.

Malaysia’s budget has allocated huge funds for improving public transport through expanding the light rail transit, mass rapid transit and bus rapid transit systems. Other outstanding projects in Malaysia include the Refinery and Petrochemicals Integrated Development (RAPID), Pengerang Integrated Petroleum Complex (PIPC), the Tun Razak Exchange (TRX) and Merdeka PNB118. Old power plants are replaces with new ones to satisfy increasing peak demand for power. The infrastructures insight also involves offices, retail space, conference and exhibition space, hotels, healthcare and wellness facilities.

The massive upgrading of transport and other infrastructures in Malaysia are a boon for the citizens and for investors. Opportunities knock doors for firms in the construction, civil engineering sector combined with industries like steel, copper wire, cement, glass, construction equipment as well as construction workers, civil engineers, architects, urban designers, planners, many other industries and professions are involved. Malaysia government is investing heavily in infrastructure, industrial parks and residential buildings. The government has relaxed policies for public-private partnerships (PPPs) with an aim to develop the country’s infrastructure. Malaysian construction industry is expected to continue to expanding supported by the government to improve the country’s transport network and tourism infrastructure in the coming years.

Low oil prices are expected to impact the Malaysian capability to invest in major infrastructure projects. The infrastructure insights market in Malaysia is expected to benefit from the government’s plan to expand the airport network. The Malaysian government aims to reduce greenhouse gas emission by the year 2020. With increasing infrastructure projects, Malaysia is expected to witness a steady growth in the infrastructure insights in the coming years.

To know more about the research report:

Ken Research
Ankur Gupta, Head Marketing & Communications