NEW PRIVATISATION WAVE UNDER 10TH M'SIA PLAN

KUALA LUMPUR, June 10 (Bernama) -- A new wave of privatisation will be
implemented under the 10th Malaysia Plan to increase private investments in the
economy, improve efficiency in services delivery and relieve government's
financial burden.

Privatisation and public-private partnerships (PPP) will be substantially
intensified under the plan period with 52 projects, with an estimated value of
RM62.7 billion (US$19 billion) already under consideration.

The projects include seven toll highways, five Universiti Teknologi MARA
(MARA Technology University) branch campuses, Integrated Transport Terminal,,
privatisation of Penang Port and redevelopment of Angkasapuri Complex as Kuala
Lumpur Media City, says the Economic Planning Unit (EPU) in the Prime Minister's
Department in the 10th Malaysia Plan (2011-2015) Report released Thursday.

Prime Minister Najib Razak tabled the five-year development plan in
parliament Thursday.

To ensure value creation, strategies to strengthen privatisation and PPP
will include monetisation of public sector assets, putting in place rigorous
checks to ensure prospective companies meet a minimum set of criteria,
strengthening the monitoring framework and adopting value for money drivers.

Increasing privatisation and PPPs, establishing a facilitation fund and
achieveing an appropriate balance are three major initiatives undertaken by the
government to rationalise the role of the government and government-linked
companies (GLCs) in business to increase private sector participation in the
economy.

The report says the facilitation fund will be established to facilitate
private sector investment in projects with high strategic value to the nation
and multiplier effects.

"The RM20 billion (US$6 billion) fund will be designed to bridge the
viability gap for private investment in priority areas such as infrastructures,
education, tourism and health projects," it says.

The report says projects with minimum capital cost or investment of RM100
million (US$30.3 million), will be eligible for assistance and the fund will be
provided to finance land cost and basic infrastructures.

It said there is a need to ensure an appropriate balance between government,
GLCs and the private sector to create an appropriate separation between
regulators and operators.

The EPU also outlined the role of GLCs to focus on areas that support the
creation of a vibrant private sector while withdrawing from areas that did not
enhance value creation.

Meanwhile, to rationalise public sector role, privatisation of companies
under the Minister of Finance Incorporated such as Percetakan Nasional Bhd and
Nine Bio Sdn Bhd will be completed during the plan period.

"The government will divest its ownership stakes in such a way to ensure
these assets are broadly held and the divestment and privatisation initiatives
will not affect public interest," says the report.

A clear delineation between regulator and market players will be introduced,
hence the role of government will be reviewed in areas such as public
healthcare, electricity supply and telecommunications.

"This will remove distortions, promote healthy competition between all
players, reduce cost of doing business and create the right demand and factor
conditions," the report adds.
-- BERNAMA


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