Construction Industry Outlook

Prospect for Consulting Engineers

Sr Mohd. Zaid Zakaria
General Manager ACEM Talk for
Business & International Division Practicing Engineers 2019
Policy & Corporate Sector KSL Resort
Johor Bahru, Johor
Construction Industry Development Board 12 January 2019
Malaysia

www.cidb.gov.my
 Construction
The Importance of Industry

Construction & Infrastructure Projects

Housing
Social Hospitals
Amenities Mosque
Schools
Government Social Public places
Infrastructure Others
Socio Economic
Elects
Policies Highway
Dams
Airports
Infrastructure
Ports
Economic Power generators
Infrastructure Sewerage
Others
Society

Standard of living Environmental friendly

and quality of life Environment process & materials
2
GDP (%) 2011 2012 2013 2014 2015 2016 2017 2018e 2019f 2020f

Construction Sector 4.6 18.1 10.6 11.7 8.2 7.4 6.7 4.5 4.7 4.3
Construction Sector
Growth
Malaysia 5.3 5.5 4.7 6.0 5.0 4.2 5.9 4.8 4.9 4.5-5.5

18.1%

8.5% 11.4%
10.6%
6.2%
4.4% 4.6% 11.7%
5.6% 6.3%
8.2%
7.4%
6.7%
-0.5% 4.8% 4.5%
7.4% 4.7%
5.3%
5.5% 4.7% 6.0%
2006 -1.5% 5.0%
2007 2008 4.2% 5.9%
2009 2010 4.8% 4.9%
2011 2012 2013 2014
2015
2016
2017
2018e
2019f

Note: 2006-2010 Constant 2005 Prices e: Estimate Source: MOF 3

2011-2019 Constant 2010 Prices f: Forecast
 Number of Projects
2010 2011 2012 2013 2014 2015 2016 2017 Sept. 2018
Projects by
Private 5,424 5,771 5,997 6,228 6,276 5,653 5,987 5,889 3.148
Sector Public 1,878 1,954 2,001 1,971 1,800 1,902 2188 2,328 1,093
Total 7,302 7,725 7,998 8,199 8,076 7,555 8,175 8,217 4,241

RM259.9 b
78%
(RM203.1 b) RM193.6 b
RM185.0 b
68%
87% (RM132.4 b)
RM136.7 b (RM161.4 b) RM142.1 b
RM131.3 b
83%
RM102.4 b 86% 83%
(RM117.4 b)
RM91.0 b (RM112.5 b) (RM113.6 b)
RM82.8 b
77%
79% (RM 79.0 b)
(RM71.5 b) 62%
(RM51.0 b)

21% 23% 14% 17% 13% 17% 22% 32% 38%

(RM19.5 b) (RM23.4 b) (RM18.8 b) (RM23.1 b) (RM23.6 b) (RM24.7 b) (RM56.8 b) (RM61.3 b) (RM31.8 b)

2010 2011 2012 2013 2014 2015 2016 2017 Sept. 2018
4
Source : CIDB Malaysia
 Number of Projects

Projects by Infrastructure
2010
1,751
2011
1,991
2012
1,889
2013
2,028
2014
2,034
2015
2,035
2016
2,228
2017
2,265
Sept 2018
1,061
Category Social Amenities 857 820 918 731 702 727 907 909 457

Non Residential 2,563 2,661 2,884 3,075 3,019 2,697 2,880 2,898 1,558

Residential 2,131 2,253 2,307 2,365 2,321 2,096 2,160 2,145 1,165

Total 7,302 7,725 7,998 8,199 8,076 7,555 8,175 7,308 4,241

RM259.9 b
RM82.8 b
32%
RM185.0 b RM193.6 b
56% (RM26.8 b)
RM142.1 b (RM145.1 b) 9%
24% 31% (RM7.4 b)
RM136.7 b (RM44.1 b) 21%
RM131.3 b (RM61.0 b)
RM102.4 b 5%
(RM29.2 b) 28%
RM91.0 b (RM23.1 b)
33% 24% (RM8.2b) 4% 11%
29% 35% 4% 31%
(RM33.5 b) (RM46.5 b) (RM33.3 b) (RM5.5 b) (RM9.3 b) (RM20.5 b)
(RM26.6 b ) (RM25.5 b)
6% 7% 52%
7% (RM9.9 b) 21% 31%
10% (RM7.4b ) (RM95.9 b) 38% (RM60.4 b)
(RM6.8 b) (RM53.7b) (RM55.6 b)
(RM8.9 b ) 41%
33%
35% 37% (RM55.3b)
(RM43.8 b)
(RM32.3 b ) (RM37.4b) 38% 19% 27%
26% 28% 20% (RM53.8 b)
26% 24% (RM49.9 b) (RM51.7 b)
(RM33.7 b) (RM38.3 b) (RM36.9 b)
(RM23.2 b) (RM24.6 b)
2010 2011 2012 2013 2014 2015 2016 2017 Sep 2018
5
Source : CIDB Malaysia
Scope of Infrastructure Projects
by CIDB Malaysia

Drainage & Disaster

Sewerage Prevention
Sewerage plants Flood barrier
Drainage Slope protection
River Fire prevention
Transport Coastal erosion protection
Utilities
Roads
Water filter & supply
Rails
Piping
Air & Sea Ports
Communication cable,
Stations
exchanges & stations
Bridges
Dams
Tunnels
Water & oil tanks
Traffic lights
Electric plant & supply
Pedestrians
Meteorology station
Monitoring systems
6
 Number of Projects
2010 2011 2012 2013 2014 2015 2016 2017 Sept. 2018
Infrastructure
Transport 775 784 766 762 925 927 1,128 1,051 510 Projects by
Drainage & Sewerage 239 279 370 409 417 413 434 393 187
Utilities 637 828 666 728 571 574 522 659 301
Scope
Disaster Prevention 100 100 87 129 121 121 144 162 63
Total 1,751 1,991 1,889 2,028 2,034 2,035 2,228 2,265 1,061

RM26.6 b RM33.5 b RM46.5 b RM33.3 b RM44.1 b RM29.2 b RM145.1 b RM61.0 b RM26.8 b

89% 58%
69% 61% (RM129 b) 38%
39% 35% 55% (RM35.5 b)
51% (RM32.1 b) (RM26.9 b) (RM10.3 b)
(RM12.9 b) (RM11.8 b) (RM16.0 b) 12%
(RM13.6 b ) 5% 2% (RM7.1 b)
8% (RM2.1 b ) 12% 11% (RM3.5 b) 13%
4% (RM4.1 b) 16%
(RM2.8 b) (RM4.9 b) 26% (RM3.4 b)
(RM1.1 b ) 25% (RM4.7 b)
26% 8% (RM16.1 b)
52% (RM11.8 b) 50%
43% (RM11.3 b) 26% (RM12 b) 47%
(RM16.5 b) 4%
(RM11.5 b) (RM17.3 b) 1% (RM7.7 b) (RM12.5 b)
2% (RM2.3 b)
(RM0.5 b) 3%
2% 1% (RM1.0 b) 3% 0.4% 2%
(RM0.5 b) (RM0.9 b) (RM0.8 b)
(RM0.4 b) (RM0.6 b) (RM0.6 b)

2010 2011 2012 2013 2014 2015 2016 2017 Sep 2018
Source: CIDB Malaysia 7
 Utilities
Infrastructure Projects RM64.6 b
under 10th Malaysia Plan (2011-2015) (3,367 projects)

Infrastructure
Projects 35%
RM186.6 b
(9,977 projects)

27%
Drainage &
Sewerage 10%
RM18.6 b 53%
(1,888 projects)
Other Projects
RM510.9 b
2%
(29,576 projects) Disaster Transport
Prevention RM99.7 b
RM3.7 b (4,164 projects)
Source: CIDB Malaysia (558 projects)
 Infrastructure Projects 2016 – September 2018 Transport
RM174.8 b
(2,689 projects)
Infrastructure
Projects
RM232.9 b
(5,551 projects)

17%
43% Utilities
RM40.6 b
75%
(1,482 projects)

Drainage & 6%
Sewerage
Other Projects
RM14.0 b
RM303.4 b
(1,014 projects) 2%
(14,173projects) Disaster
Prevention
RM3.5 b 9
Source: CIDB Malaysia
(369 projects)
 Top 3 Infrastructure Projects
2017 2016 2015

1440MW CCGT Power Plant in The East Coast Rail Link Project Infrastructure Upgrading Works
Pasir Gudang, Johor. (ECRL). for Double Tracking in Klang
Valley (KVDT) from Rawang to
Tunnels, Stations and Salak Selatan.
Main Civil Works for Baleh
Hydroelectric Project. Associated Structures from
Jalan Ipoh North Escape Shaft Deep Water Terminal at Kuantan
to Desa Waterpark South Portal Port.
Guideway, Stations, Iconic for Mass Rapid Transit Line 2
Bridge, Park and Rides, Ancillary (MRT2) Sungai Buluh - Serdang
Buildings and Other Associated - Putrajaya (SSP). The Effluent Treatment Plant for
Works for Light Rail Transit Line 3 RAPID Project, Johor.
(LRT3) from Bandar Utama To
Electrified Double Track from
Johan Setia.
Gemas to Johor Bahru.
 Mega Infrastructure Projects
Penang Transport Postponed
Master Plan Central Spine Road
Re-evaluate
(2013 – 2030) (2016 – 2020)
RM27 b RM4 b Under construction
Award: RM4.0 b Award: RM1.2 b

MRT 2 KL – Singapore
(2016 – 2022) High Speed Rail (HSR)
RM30.5 b (2020 - 2026)
Award: RM28.1 b RM110 b

LRT 3 East Coast Rail Link

(2016 – 2020) (ECRL)
RM16.6 b RM81 b
Award: RM13.5 b Awarded: RM48 b
Selangor Water
Pipeline Program Klang Valley
(2016 – 2018) Double-Tracking 2
RM324 j RM5.2 b
Award: RM183 j

MRT 3 Johor – Singapore

(2019 - 2025) RTS Link
RM60 b (Complete 2024)
RM4 b
11
Note: Projects awarded until September 2018
 Mega Property Projects
Bandar Malaysia Postponed
KL118 Tower (2019 – 2026)
GDV: RM150 b Re-evaluate
(2016 – 2024)
GDV: RM5 b Under construction
Award: RM1.6 b
KLIA Aeropolis
Bukit Bintang City GDV: RM7 b
Centre
(Complete 2020)
GDV: RM8.7 b Malaysia Vision Valley
Award: RM2.4 b GDV: RM420 b

Tun Razak Exchange

Malacca Gateway
(2013 – 2019)
(2012 – 2025)
GDV: RM40 b
GDV: RM43 b
Award: RM5.7 b
Award: RM4.7 b
Kwasa Damansara
(2015 – 2035) Robotic City
GDV: RM50 b (2019 - 2026)
Award: RM320 j RM31 b

Cyberjaya City Centre Forest City

GDV: RM11 b (2014 - 2034)
Award: RM512 j GDV: RM175 b
Award: RM7.8 b
12
Note: Projects awarded until September 2018
 Mega Projects Pan-Borneo Highway
(2016 – 2022)
RM12.8 b BRT Kota Kinabalu
Award: RM8.1 b RM2 b

Pan-Borneo Highway
(2016 – 2022)
RM16.1 b
Award: RM18.4 b

Coastal Highway
(Start 2019)
RM5 b
Water Supply Grid Program
(2018 – 2020)
Baleh Hydroelectric RM2.8 b
(2017 – 2025)
RM9 b
Award: RM6.6 b Project Walkabout
Postponed
(Start 2019)
RM5.7 b Re-evaluate
Under construction
Roads and Bridges
(Start 2019)
RM1.1 b 13
Note: Projects awarded until September 2018
Federal Budget Allocation
RM314.5 b
RM2.0 b
RM290.4 b
RM2.0 b
RM257.8 b RM265.9 b 29.1%
RM252.2 b RM2.0 b
RM2.0 b RM2.0 b 16.4%
15.8% 17.1%
16.2%

70.9%
84.2% 83.8% 82.9% 83.6%

2015 2016 2017 2018e 2019e

Reserves Development Expenditure Operating Expenditure

14
Note: e - Estimation Source: Federal Budget Speech.
 Estimation of Government’s
Construction Work
Focus 1 2019 RM33.4 b
RM5.2 b

2018 RM59.1 b

2019
Federal Budget 2017 RM89.3 b
Focus 2 Allocation
RM13.6 b

Focus 3 2016 RM61.4 b

RM14.6 b

2015 RM183.3 b

Note: Part of the stated value may not be for construction work. Source: Federal Budget Speech. 15
 2019 Federal Budget Project Highlights

To Implement
Institutional Re-tender of Klang Valley
Reforms Double-Tracking Phase 2 project

Implementation of 24 Public Private

RM5.2 b Partnership (PPP) project for schools,
army camps, police, fire station &
affordable housing projects

Source: Federal Budget Speech. 16

2019 Federal Budget Project Highlights
Upgrade and improve the quality of clinics and hospital’s health services
1
RM10.8 b
To Ensure the
Socio-Economic Construction and completion of affordable homes for Program Perumahan
Rakyat, Perumahan Penjawat Awam Malaysia, PR1MA and Syarikat
Well-Being of Perumahan Nasional Berhad
Malaysians 2
RM1.5 b

Upgrading, repair and maintenance of government housing quarters for police, armed forces and teachers
3
RM400 m

Upgrading schools Islamic affairs program including building

4 mosque
RM652 m 6
RM150 m
Re-construction of dilapidated schools
5
RM100 m Source: Federal Budget Speech.
17
2019 Federal Budget Project Highlights
RM2.5 b RM25 m
80-acre of world class Upgrading and Develop a truck depot at
aerospace industry restoration works for
To Foster an Kota Perdana Special
hub in Subang railway tracks Border Economic Zone
Entrepreneurial
Economy
RM85 m
Convert 380 acre of RM926 m RM1.4 b Upgrading and maintenance
land in Pulau Indah Build and upgrade Electric and water of basic infrastructure such
into a Free Trade roads and bridges in supply to rural and as roads, community halls
Zone rural region remote regions and open spaces for New
Village

RM295 m RM10 m
Upgrade roads, RM9.4 b Completion of Pan Set up 50 childcare
water supply projects Development in Borneo Highway facilities in
and basic Sabah and Sarawak Projects Government buildings
infrastructure work
Source: Federal Budget Speech. 18
for FELDA
 Infrastructure Maintenance Projects
under Federal Budget Allocation

Federal Budget Drainage &

Year Transport Utilities Sewerage Disaster Prevention

2019 RM3.6 b RM1.8 b

2018 RM1.2 b RM0.2 b RM0.5 b RM0.5 b

2017 RM6.0 b RM0.7 b RM0.03 b RM0.5 b

2016 RM1.6 b RM1.7 b RM0.2 b

Note: Part of the stated value may not be for construction work. 19
Source: Federal Budget Speech.
 Kilometre Rail Line per Capita
Rail Line Length Metre Rail Line/
Country Data Year
(km) Capita

23,060 0.7 2008

228,218 0.4 2014

15,108 0.1 2016

5,327 0.08 2016

2,250 0.07 2014

161 0.03 2012

4,684 0.02 2014

12
Source: World Bank and Wikipedia
 Scale of Fees for Basic Professional Services
Cost of Works (RM) Maximum Minimum

< 500,000 10.00% 6.85%

< 5 million 6.80% 5.20%

< 50 million 5.00% 3.80%

< 200 million 4.10% 3.25%

< 500 million 3.40% 2.70%

< 900 million 2.85% 2.33%

> 1 billion 2.54% 2.28%

Source: Registration of Engineers Act 1967, Notification of Scale of Fees, Board of Engineer Malaysia
 Challenges for Engineer to be
Professional and International Recognised

43% Body Corporate

2% Multidisciplinary
9% Partnership
46% Sole Proprietorship

Source: Board of Engineer Malaysia 22

 Continuous Professional and
Update Information
Maintenance Work International Recognition

Continuous infrastructure and social Offered more diverse services. Promotion of services.
amenities project to elevate standard
of living and quality of life. Export oriented. Accurate & timely.

Specific and organised for a purpose.

Decrease uncertainty.
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25
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Thank You

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