Public Private Partnership and Financial Implication to Government: A Case Study from Malaysia
Abstract
The implementation of infrastructure projects through the Public Private Partnership (PPP) that involve investments from the private sector has greatly benefited the country. Apart from being an alternative to conventional public infrastructure projects, PPP is also said to be a more efficient method as the risk of project implementation is transferred to the private partner. Even with these advantages, it cannot escape criticism, especially the implementation of PPP projects which involve financial implications to the government. The main purpose of this study is to investigate the Malaysian government's experience in the implementation of PPP projects especially regarding its financial implication issue and how the Malaysian government addresses the issue. A total of 29 officers from several government agencies were interviewed. The interview transcripts were analyzed using ATLAS. Ti application. Apart from contributing a theory regarding PPP, the results of this study have provided new knowledge on PPP, especially Malaysia's experience in dealing with financial commitment issues arising from the implementation of PPP projects. Although the context of development in other countries may differ, this Malaysian experience can be used as an example for PPP practitioners in planning PPP projects elsewhere.
Downloads
References
Benito, B., Montesinos, V., & Bastida, F. (2008). An example of creative accounting in the public sector is the private financing of infrastructures in Spain. Critical Perspectives on Accounting, 19(7), 963–986. https://doi.org/10.1016/j.cpa.2007.08.002
Cepparulo, A., Eusepi, G., & Giuriato, L. (2024). Public Finance, Fiscal Rules and Public–Private Partnerships: Lessons for Post-COVID-19 Investment Plans. Comparative Economic Studies, 66(1), 191–213. https://doi.org/10.1057/s41294-023-00213-x
Economic Planning Unit. (1991). Privatization Masterplan. https://www.ukas.gov.my/en/guidelines/privatization-masterplan/viewdocument
Engel, E., Fischer, R., & Galetovic, A. (2013). The Basic Public Finance of Public-Private Partnerships. Journal Ofthe European Economic Association, 11(1), 83–111. https://doi.org/10.1111/j.1542-4774.2012.01105.x
Grimsey, D., & Lewis, M. K. (2004). Public Private Partnerships: The Worldwide Revolution in Infrastructure Provision and Project Finance. Edward Elgar.
Hensley, M. L., & White, E. P. (1993). The privatization experience in Malaysia. Integrating build-operate-own and build-operate-transfer techniques within the national privatization strategy. Columbia Journal of World Business, 28(1), 70–82. https://doi.org/10.1016/0022-5428(93)90055-T
Hodge, G. A., & Greve, C. (2013). Public-Private Partnership in Turbulent Times. In C. Greve & G. Hodge (Eds.), Rethinking Public-Private Partnerships: Strategies for turbulent times. Routledge.
Hodge, G., & Greve, C. (2005). The challenge of public-private partnerships: Learning from international experience. In The Challenge of Public-Private Partnerships: Learning from International Experience. Edward Elgar. https://doi.org/10.4337/9781845428082
Ismail, S. & Abdul Razak, S. A. (2023). Public Private Partnership 40 Years Journey in Malaysia. IIUM Press.
Ismail, S. & Yusof, A. M. (2010). Private Finance Initiative in Malaysia. CRIOCM 2010 - International Symposium on Advancement of Construction Management and Real Estate “Towards Sustainable Development of International Metropolis,” 596–605.
Martin, L. L. (2016). Making Sense of Public-Private Partnerships (P3s). Journal of Public Procurement, 16(2), 191–207.
Ministry of Finance. (2020). 2021 Fiscal Outlook and Federal Government Revenue Estimates. http://www1.treasury.gov.my/pdf/revenue/2021/fiscal-outlook-2021.pdf
Mohamad, R., Ismail, S., & Mohd Said, J. (2018). Performance objectives of public-private partnership implementation in Malaysia: perception of key players. Journal of Asia Business Studies, 12(1), 17–30. https://doi.org/10.1108/JABS-09-2015-0167
Musawa, M. S., Ismail, S., & Ahmad, H. (2017). Disclosure of public-private partnership ( PPP ) voluntary information Case of Malaysian PPP projects. Asia-Pacific Journal of Business Administration, 9(2), 146–163. https://doi.org/10.1108/APJBA-10-2016-0095
Public Account Committee. (2015). PAC report on the management control procedure of Pembinaan PFI Sdn Bhd. https://www.parlimen.gov.my/pac/review/docs-86-87.pdf
Reeves, E. (2015). A Review of the PPP Experience in Ireland: Lessons for Comparative Policy Analysis. Journal of Comparative Policy Analysis: Research and Practice, 17(5), 467–480. https://doi.org/10.1080/13876988.2015.1023018
Reinsberg, B., Stubbs, T., Kentikelenis, A., & King, L. (2020). Bad governance: How privatization increases corruption in the developing world. Regulation and Governance, 14(4), 698–717. https://doi.org/10.1111/rego.12265
Saussier, S., & de Brux, J. (2018). The Economics of Public-Private Partnerships. In S. Saussier & J. de Brux (Eds.), The Economics of Public-Private Partnerships: Theoretical and Empirical Developments (pp. 1–18). Springer.
Shukry, A., & Jamrisko, M. (2018). Malaysia’s 1 Trillion Ringgit Government Debt Explained. Bloomberg. https://www.bloombergquint.com/onweb/malaysia-s-1-trillion-ringgit-government-debt-explained
Spackman, M. (2002). Public-private partnerships?: lessons from the British approach. Economic Systems, 26, 283–301. https://doi.org/10.1016/S0939-3625(02)00048-1
Sundaram, J. K. (2023). Privatization Solution is the Problem. Development (Basingstoke), 66(1–2), 23–31. https://doi.org/10.1057/s41301-023-00361-8
Unit Kerjasama Awam Swasta. (n.d.). CONVENTIONAL, PFI & PRIVATISATION DIFFERENCES BACKGROUND. Retrieved August 10, 2021, from https://www.ukas.gov.my/en/mypartnerships/ppp/conventional-pfi-privatisation-differences
Wettenhall, R. (2008). Public-Private Mixes and Partnerships?: A Search for Understanding. Asia Pacific Journal of Public Administration, 30(2), 119–138. https://doi.org/10.1080/23276665.2008.10779347
Yescombe, E. R. (2007). Public Private Partnerships: Principles of Policy and Finance. Elsevier Ltd.
Zahiid, S. J. (2014). Putrajaya didn’t have spare cash to build UiTM campuses, says minister. Malaymail Online. http://www.themalaymailonline.com/print/malaysia/putrajaya-didnt-have-spare-cash-to-build-uitm-campuses-says-minister
Copyright (c) 2024 Amir Faisal Che Abdul, Suhaimi Mhd Sarif, Nik Hziman Nik Mat
This work is licensed under a Creative Commons Attribution 4.0 International License.
Author (s) should affirm that the material has not been published previously. It has not been submitted and it is not under consideration by any other journal. At the same time author (s) need to execute a publication permission agreement to assume the responsibility of the submitted content and any omissions and errors therein. After submission of revised paper in the light of suggestions of the reviewers, the editorial team edits and formats manuscripts to bring uniformity and standardization in published material.
This work will be licensed under Creative Commons Attribution 4.0 International (CC BY 4.0) and under condition of the license, users are free to read, copy, remix, transform, redistribute, download, print, search or link to the full texts of articles and even build upon their work as long as they credit the author for the original work. Moreover, as per journal policy author (s) hold and retain copyrights without any restrictions.
