KUALA LUMPUR (Feb 17): Deputy Finance Minister Lim Hui Ying said on Monday that the government will consider only public projects with a high impact on the economy, well-being and security of the people under private financing initiatives (PFIs).
This is in line with the government’s efforts to ensure prudent fiscal management, as outlined in the Public Finance and Fiscal Responsibility Act 2023, Lim said.
“In addition, the government is strengthening monitoring and reporting mechanisms to ensure transparency in concession agreements and to avoid unexpected liability risks,” Lim told the Dewan Rakyat during the oral question and answer session.
PFIs are a form of public-private partnership where public projects are financed by private sector concessionaires, who are repaid over the concession period.
Lim acknowledged that heavy reliance on the concession method under the PFI model could have long-term financial implications for the country.
Hence, the government is continuously exploring new ways to encourage private sector and social body involvement in national infrastructure development, Lim said.
These include philanthropic financing through wakaf, sedekah and zakat. The blended financing model, which combines government and private funds for social projects, is a promising approach that should be explored, she added.
“The government will continue to assess the effectiveness of these alternative financing models to ensure the sustainable, inclusive and resilient development of the country,” Lim said.
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