The Malaysian Public-Private Partnership (PPP): Financing the Tolled Highway Projects

Abstract

The Public-Private Partnership (PPP) concept was introduced and hailed
as an effective mechanism to increase the efficiency of the public
infrastructure provision as well as to achieve cost-effectiveness. However,
the growing literature on PPP finds that the implementation of the PPP
approach in infrastructure provision is costly and needs a high amount of
state financial support. This study examines the cost of financing of the
Malaysian PPP tolled highways, and the existence of government financial
support to the concession companies. The results of this study show that
private financing in the provision of infrastructure projects is more costly
as opposed to public financing and a substantial amount of financial
support from the government is required in implementing the PPP projects.