“Such a budget mirrors that of the previous year, where a similar amount was budgeted for rural road, bridges, electricity and water infrastructure development,” Fitch Solutions highlighted. “Less developed states such as Perlis, Kedah, Sabah and Kelantan stand to gain from the government’s renewed push to develop rural infrastructure.”
Meanwhile, some of the suspended projects are expected to be re-implemented if deals can be struck at a lower cost given the potential economic benefits such infrastructure can generate.
The report revealed how some large-scale projects have gone ahead with reduced budgets, such as the construction for the 37km LRT3 project with a 47% reduced budget from $7.68b (MYR31.6b) to $4.04b (MYR16.6b). Similarly, costs for the MRT2 project decreased 22% from $9.56b (MYR39.3b) to $7.42b (MYR30.5b).
Other factors which may trigger a revival of these projects include stronger fiscal health, lower government debt to gross domestic product (GDP) and the adoption of public private partnerships (PPPs) to attract private capital, Fitch Solutions cited.
