Risk Management in Transport PPP Projects
In the Islamic Countries
207
To foster the collaboration of private and public sector through PPPs, in 2009, the Malaysian
government announced the establishment of a new unit under the Prime Minister's Department
known as Privatization and Private Finance Initiative Unit (currently known as Public-
Private Partnership Unit - UKAS) in line with the economic transformation effort towards higher
competitiveness. However, after May 2018 General Election, which resulted a change of
government, UKAS has been transferred to the Ministry of Finance. The unit is in charge of
planning, facilitating and coordinating PPP in Malaysia. Its main functions are presented in the
Figure below.
Figure 8: Main functions of UKAS
Source: UKAS website.
While project planning and coordination are centralized and dealt with by UKAS, project
implementation and contract management are dealt with by the relevant ministries, e.g. the
Transport Ministry in case of transport projects. UKAS takes an active role in monitoring
potential risks arising from contract negotiations until the end of construction works. During
implementation, the unit is involved in the risk monitoring activity forming a Project
Monitoring Committee together with the ministry and the SPV. Then, once the project starts to
operate, the monitoring function is transferred to the Transport Ministry, which shall provide
UKAS with regular reports on the PPP project implementation.
It must be noticed that in the PPP contract framework, UKAS acts as facilitator between SPV and
government ministry. It does not enter the contract.