Internationalisation of Malaysian Construction Industry

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1 1 Internationalisation of Malaysian Construction Industry 5 TH BUSINESS FORUM ROAD ENGINEERING ASSOCIATION OF ASIA AND AUSTRALASIA Manila, Philippines MEGAT KAMIL AZMI MEGAT RUS KAMARANI Senior General Manager Construction Industry Development Board Malaysia

2 2 Background Presentation Flow Scenario on Infrastructure Projects Awarded Ongoing &Prospects of Infrastructure Projects Conclusion

3 3 Background Presentation Flow Scenario on Infrastructure Projects Awarded Ongoing & Prospects of Infrastructure Projects Conclusion

4 The Transformation of Malaysia 4 Primary Commodities (Year ) Industrial Commodities (Year ) Towards Services Economy (Year 1990 onwards) Peoples Economy 1965 Agro based economy focuses on agriculture, forestry & fisheries Started of new industrial program aided by expansion in infrastructure 3.4% 10.5% 42.7% 21.7% 22.6% GDP Contribution Year % 7.5% 53.6% 8.6% 32.3% GDP Contribution Year % 4.4% 8.9% 8.8% 23.0% GDP Contribution Year 2015 Source: Central Bank of Malaysia Agricultural Manufacturing Services Construction Mining

5 GDP Growth National GDP (%) Construction Sector GDP(%) Note: Constant1987 Prices Constant 2000 Prices Constant 2005 Prices Constant 2010 Prices Source: Central Bank of Malaysia

6 The Importance of Construction & Infrastructure Projects 6 Government Elects Society Standard of living and quality of life Socio Economic Policies Social Infrastructure Economic Infrastructure Environment Environmental friendly - process & materials Construction Industry Housing Hospitals Mosque Schools Public place Other social amenities Highway Dams Airports Ports Technology parks Commercial centers Power generators

7 7 Background Presentation Flow Scenario on Infrastructure Projects Awarded Ongoing & Prospects of Infrastructure Projects Conclusion

8 Projects by Malaysia Plan 83% 10 th Malaysia Plan ,220 projects RM680 billion 17% Government Projects Private Projects 60% 8 th Malaysia Plan ,172 projects RM407 billion Average Growth: 6.0% 40% 8 25,715 projects RM255 billion Average Growth: 1.0% 9 th Malaysia Plan % Average Growth: 10.7% 60% Source: CIDB Malaysia

9 Projects by Category Number of Projects Category Infrastructure 1,751 1,991 1,889 2,028 2,034 2, Social Amenities Non Residential 2,563 2,661 2,884 3,075 3,019 2,660 2,302 Residential 2,131 2,253 2,307 2,365 2,321 2, Total 7,302 7,725 7,998 8,199 8,076 7,478 6,547 RM185 b RM176 b RM91 b 29% (RM27 b ) 10% (RM9 b ) 35% (RM32 b ) 26% (RM23 b) RM102 b 33% (RM34 b) 7% (RM7 b) 37% (RM37b) 24% (RM25 b) RM131 b 35% (RM46 b) 6% (RM7 b ) 33% RM44 b) 26% (RM34 b) RM137 b 24% (RM33 b) 7% (RM10 b) 41% (RM55b) 28% (RM38 b) 24% (RM44 b) 5% (RM8 b) 52% (RM96 b) 20% (RM37 b) RM141 b 21% (RM29 b) 4% (RM6 b) 5% 37% (RM53 b) 50% (RM87 b) (RM8 b) 23% (RM41 b) 38% (RM53 b) 23% (RM401 b) As of March 2017 Source: CIDB Malaysia

10 Scope of Infrastructure Projects by CIDB Malaysia 10 Transport Roads Rails Air & Sea Ports Stations Bridges Tunnels Traffic lights Pedestrian Monitoring systems Drainage & Sewerage Sewerage plant Drainage River Utilities Water filter & supply Piping Communication cables, exchanges & stations Dam Water & oil tank Electric plant & supply Meteorology station Disaster Prevention Flood barrier Slope protection Fire prevention Coastal erosion protection

11 Infrastructure Projects under 10MP ( ) Public Utilities RM68.4 b (3,605 projects) Infrastructure Projects RM175 b (9,683 projects) Other Projects RM505 b (29,537 projects) Source: CIDB Malaysia Drainage & Sewerage RM16.6 b (1,809 projects) Disaster Prevention RM3.5 b (514 projects) Transport RM86.3 b (3,755 projects)

12 Infrastructure Projects by Scope 12 Number of Projects Sub Category Disaster Prevention RM87 b Drainage & Sewerage RM0.6 b RM3 b Transport Utilities Total 1,751 1,991 1,889 2,028 2,034 2,020 1,784 RM27 b RM0.4 b RM1 b RM14 b RM34 b RM0.5 b RM3 b RM13 b RM46 b RM0.5 b RM2 b RM32 b RM33 b RM0.9 b RM4 b RM 12 b RM44 b RM1 b RM5 b RM27 b RM29 b RM0.8 b RM5 b RM16 b RM72 b RM12 b RM17 b RM12 b RM16 b RM11 b RM8 b RM12 b As of March 2017 Source: CIDB Malaysia

13 Government & Private Infrastructure Projects Number of Projects Sector Private Government 941 1,018 1,116 1,069 1,181 1, Total 1,751 1,991 1,889 2,028 2,034 2,020 1,784 RM87 b RM48 b 50.0 RM46 b RM44 b RM27 b RM18 b RM9 b RM34 b RM18 b RM16 b RM33 b RM29 b RM37 b RM30 b RM21 b RM14 b RM39 b RM10 b RM12 b RM14 b RM15 b As of March 2017 Source: CIDB Malaysia

14 Infrastructure Project by State under 10MP ( ) 14 Perak RM16.1b (9%) Sabah RM16.9 b (10%) Kuala Lumpur & Putrajaya RM25.1 b (14%) Selangor RM39.4 b (23%) Johor RM16.7 b (10%) Sarawak RM19.8 b (11%) Note: Data indicates state with share value at 9% and above only Source: CIDB Malaysia

15 West Coast Expressway Banting-Taiping Langat Centralised Sewage Treatment Plant (CSTP) & Sewerage Pipe Network Langat, Selangor EPC Works For The Jimah East 2x1000MW Coal Fired Power Plant Jimah, Negeri Sembilan Upgrading Project for Double Tracking Klang Valley New Deep Water Terminal (Phase 1) for Kuantan Port Kuantan, Pahang Regional Sewerage Treatment Plant & Sewerage Pipe Network Kinta, Perak Underground Works Package: MRT2: Sungai Buluh - Serdang - Putrajaya (SSP), Kuala Lumpur Double Track From Gemas To Johor Bahru, Melaka Top 3 Infrastructure Projects EPCC of a 1800MW TO 2400MW Combined Cycle Gas Turbine Power Plant In Alor Gajah Melaka 15 Source: CIDB Malaysia

16

17 20 CITP Initiatives To Transform The Construction Industry Across 4 Strategic Thrusts 17 Quality, Safety & Professionalism Environmental Sustainability Productivity Internationalisation Q1 Increase emphasis on quality and implement quality assessments E1 Drive innovation in sustainable construction P1 Continue investment in human capital development in construction I1 Internationalise construction practices and standards Q2 Q3 Improve workplace safety and workers' amenities Improve ease of doing business by addressing regulatory constraints E2 E3 Drive compliance to environmental sustainability ratings and requirements Focus on public projects to lead the charge on sustainable practices P2 P3 Enhance control and balance of workforce supply Accelerate adoption of IBS, mechanisation and modern practices I2 I3 Strengthen access to financing for Malaysian champions going abroad Support consortia formation and strengthen overseas market intelligence Q4 Promote and raise awareness of CITP initiatives E4 Facilitate industry adoption of sustainable practices P4 Roll out technology advantage across project life-cycle I4 Intensify contractor s capacity and capability building Q5 Enhance integrity and increase governance E5 Reduce irresponsible waste during construction P5 Enhance availability of strategic information via NCIIC P6 Advance SME Bumiputera capacity and capability-building

18 18 Background Presentation Flow Scenario on Infrastructure Projects Awarded Ongoing & Prospects of Infrastructure Projects Conclusion

19 High Impact Infrastructure Projects Announced 19 East Coast Rail Line (ECRL), Klang Valley Tumpat (600km) Build infrastructure and socio-economic in 5 corridors State road maintenance Agricultural infrastructure Build and upgrade 616 village roads and bridges Broadband coverage and quality up to 20Mbps per second nationwide Improve the provision of clean water supply Regional treatment plant and sewerage pipe networks, Kinta Barat & Papan 2 Dams, Nenggiri & Lembir Double Tracking, Gemas Johor Bahru (197km) Centre Spine Road, Kuala Krai Simpang Pelangai (390km) West Cost Expressway, Banting Taiping (233km) Langat Water Treatment Plant 2 Malaysian Vision Valley (108,000 hectare) High Speed Rail, Kuala Lumpur Jurung East, Singapore (350km)

20 Mass Rapid Transit 2 Sungai Buloh Serdang Putrajaya 20 RM32 b Development Cost Q Operation starts 38.7 km Elevated Q Construction starts 52.2 km Length 13.5 km Underground 37 Stations 2 million Serves catchment population

21 RM9 b 21 Development Cost Q Completion 37 km Length 5 Integrated stations Light Rail Transit 3 Bandar Utama Johan Setia 26 Stations

22 RM29 b Construction cost Pan Borneo Highway Sabah and Sarawak Completion 1,700 km Estimated total length 1,090 km Sarawak section 706 km Sabah section

23 RM5.044b 23 Construction cost Q Completion West Cost Expressway (WCE) Banting - Taiping 233 km Length

24 Damansara Shah Alam Elevated Expressway (DASH) (Klang Valley) 24 RM4.178b Construction cost Q Completion 20.1 km Length 13 Interchange

25 RM1.5b Construction cost Q Completion km Length 5 Interchange ALIGNMENT East Klang Valley Expressway (EKVE) (Klang Valley)

26 26 RM5.272 b Construction cost Q Completion 31.8 km Length 14 Interchange Sungai Besi Ulu Kelang Elevated Expressway (SUKE) (Klang Valley)

27 RM60 b investment by 2020 Year 2035 to be a regional oil & gas hub 6,242 acre site 27 Refinery & Petrochemical Integrated Development (RAPID) Johor

28 Langat Water Treatment Plant 2 Selangor Year 2014 Start 1.89b liters Raw water treated per day Q Completion

29 RM40 b RM45 b Estimate project cost Year 2026 Operation starts 350 km Length 6 Transit location High Speed Rail Kuala Lumpur Jurong East 90 mins. Journey time

30 East Coast Rail Line Klang Valley - Tumpat km Rail line Year 2017 Project start 5 year Project duration RM55 b Construction cost

31 31 Background Presentation Flow Scenario on Infrastructure Projects Awarded Ongoing & Prospects of Infrastructure Projects Conclusion

32 Conclusion 32 Rapid Growth Rapid growth of construction industry presently and in future Liberalisation Challenges posed by the market opening through liberalisation TPPA Bilateral FTAs (i.e: M sia-japan; Malaysia-Australia; Malaysia- New Zealand; etc.) Regional FTAs (ASEAN-China; ASEAN-Japan; ASEAN-India; etc.) Transformation Together we transform the construction industry for the benefit of beloved nation

33 33

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