PUTRAJAYA wil continue being a major buyer to businesses thanks to infrastructure and technology projects and new initiatives under its Shared Prosperity Vision 2030 policy, a business survey said.

The Malaysia Business Sentiment Survey 2019/2020 released today said the government’s role as a buyer had doubled since 2017, from 39%  to 72% this year.

The survey, a joint initiative between Monash University Malaysia and CPA Australia said Putrajaya’s decision to proceed with several mega projects will have significant spillover effects.

Monash Malaysia Research & Development CEO Prof S. Mahendhiran S. Nair said continuing from the trend since 2017, Putrajaya’s role as the biggest buyer of services is similar to most countries.

“I think the government is still going to play a major role because all the major infrastructure projects are driven by the government. So, the spillover effect is going to be enormous even though they might privatise some of it but it is still government-led,” he told The Malaysian Insight.

“It is not only the infrastructure projects, even in technology such as broadband, 4G and 5G, the government is leading it.”

The austerity-driven approach that the Pakatan Harapan administration has taken should also enable it to choose the services of companies that can give them the best value for money, he added.

The PH government has set budget of RM297 billion for 2020. Of this, RM56 billion is earmarked for development and 241 billion is for operating expenses.

While the development expenditure registered a marginal increase from the RM54.7 billion allocated for 2019, government operating spending for 2020 showed an 8.1% decline from the RM262.3 billion in 2019.

Mahendhiran also agreed with the government’s stance of training unfit parties until they qualify for a contract.

This is in line with the government’s role, as well as of government-linked companies,to spur the economy and build capabilities to create the supply network.

“The government’s role is not to give free handouts but to be competitive and to meet the standards,” he said.

Prime Minister Dr Mahathir Mohamad said in September that government contracts, licences and approved permits (APs) will only be awarded to those who are capable of executing projects and concessions.

He also said that parties found to not be fit enough to qualify for contracts, will be trained until they qualify. – December 16, 2019.