The Malaysia Incorporated Policy was introduced in 1981 to encourage cooperation between the public

and private sectors whereby both sectors act and operate within a "Malaysian Company". Through this
policy both parties depend on each other; where the private sector upholds the commercial and
economic activities, while the public sector draws up major policies, identify the direction and provides
the specialised supporting services which are conducive to the success of businesses.
In line with the Governments new approach based on the new economic model in the Tenth Malaysia
Plan, the Government intends to stimulate its effort in encouraging the private sector to invest in
development projects. As such, the Governments allocation for development projects will be reduced
and it can then shift its attention to projects that will be implemented and funded by the private sector
whether through Privatisation and Public Private Partnerships (PPP), or through direct investment of the
private sector in countrys development programme. The Government has also set up a facilitation fund
under the Tenth Malaysia Plan in order to support development projects implemented by the private
sector as the Governments contribution through the cooperation of the public and private sectors.
3PU of the PMD is the core agency that has been given the responsibility to coordinate the Privatisation
and the Public-Private Partnership (PPP) projects which have made an impact to the countrys economy,
and which can be given injection from the facilitation fund.
The Privatisation Policy was launched in 1983 to support the Malaysia Incorporated Policy towards
increasing the private sector's role in the country's economic development. The main objective of this
policy is to lessen the financial and administrative burden of the Government, improve skills and
production, accelerate economic growth, reduce the size and involvement of the public sector in the
economy, and to assist in reaching the country's economic policy's goal.
In line with the implementation of the policy, a Privatisation Section (in the earlier days known as the
Privatisation Special Task Force) was formed by the Government and was put under the Economic
Planning Unit of the Prime Minister's Department (EPU, PMD) which acts as the secretariat to the
Privatisation Committee, which in turn is made up of various agencies working towards finalising and
confirming the proposals on privatization for the Ministers' Council's approval.
In 1985 the Government produced a Guideline On Privatisation which detailed out the objective of the
policy, method of privatization, as well as the implementation mechanism. And in 1991 the Government
produced a Master Plan on Privatisation to explain the policy and strategy for privatization.
Amongst the achievements in the implementation of the national privatization policy are:

Provided infrastructure facilities of world class stature such as the North - South Highway, the
development of the Light Rail Transit (LRT), the Tanjung Pelepas Port and the development of the Kuala
Lumpur International Airport (KLIA) projects;

Created local conglomerate companies which are successful and competitive such as the Tenaga
Nasional Berhad (National Electricity Board) and Telekom Malaysia Berhad;

Provided employment opportunities in the private sector apart from producing a professional work
force, especially amongst the Bumiputra; and

Energised the country's capital market through capital investments of the private sector in privatised
Government projects.

Since the introduction of the privatization programme from 1983 to April 2009, about 500 privatised
projects have been implemented throughout the country. The Government has benefited through
savings in the form of capital expenditure amounting RM161 billion and annual management
expenditure (operations) amounting to RM7.79 billion (or an estimated RM25 billion in a 25 year
period). The burden of the Government's administrative expenditure was successfully reduced following
the privatisation of 58 Government agencies which involved the transfer of 113,440 government
employees to the private sector. This savings has enabled the Government to redistribute its limited
development resource to more needy sectors such as the education, health and poverty eradication
programme.

Under the Ninth Malaysia Plan (9th MP), the Private Finance Initiative (PFI) approach was introduced by
the Government as an alternative procurement method for the public sector in the development and
maintenance of infrastructures and other facilities, which in turn benefits the innovation and efficiency
of the private sector management. Implementation of the PFI projects is also the Government's first
step to ensure a more efficient Government's asset acquisition management based on the value for
money towards the Government's expenditure programme.

On 22nd April 2009, Y.Bhg. Tan Sri Mohd Sidek bin Haji Hassan, the Chief Secretary to the Government,
announced the establishment of a new unit under the Prime Minister's Department known as
Privatisation and Private Finance Initiative Unit - PFI (currently known as Public Private Partnership -
3PU) in line with the economic transformation effort towards being more competitive. Y.Bhg. Dato' Sri
Dr. Ali bin Hamsa was appointed as the first Director General of 3PU.