The adoption of private finance initiative as a procurement strategy for local authorities in Malaysia.

• Main Author: Maryadi, Hasan
• Format: Thesis
• Language: English; English; English
• Published: 2019
• Subjects: HD58.9 Organizational Effectiveness.; HG Finance
• Online Access: https://etd.uum.edu.my/9513/1/s900771_01.pdf; https://etd.uum.edu.my/9513/2/s900771_02.pdf; https://etd.uum.edu.my/9513/3/s900771_references.docx; https://etd.uum.edu.my/9513/

Local Authorities in Malaysia are often reported to have financial constraints which gives effect to Local Authorities especially in implementing their roles and responsibilities, and to ensure their sustainability. Implementation of an effective public procurement system through private sector involvement is a strategy currently applied by the public sector including at the Local Authority level. The Private Finance Initiative (PFI) is a Public-Private Partnership model adopted by many Local Government in many countries as an alternative to traditional procurement. In Malaysia, since its introduction in the Ninth Malaysia Plan (2006-2010), PFI has leveraged mainly on reducing government spending, providing more efficient and effective public amenities, and gain benefits from private sector expertise and innovation. However, PFI model is occasionally considered by Local Authorities in Malaysia. There are also criticisms and debates about its implementation at the national level which raising questions about the practice of this method at the Local Authorities’ level. Therefore, this study aims to describe the use of PFIs among Local Authorities in Malaysia as one of their procurement strategies. For that purpose, the practice of private engagement in the provision of public projects in Local Authorities and the level of experience, knowledge and awareness of Local Authorities in the procurement of PFIs method is examined. In addition, the major influencing factors and the major barriers faced by Local Authorities in applying the PFI method is also identified. A survey has been conducted among 80 Local Authorities in Malaysia. The findings of this survey shows that the most widely used private engagement method in the provision of public infrastructure and service delivery is the Complete Public Sector Delivery, followed by Traditional Contracts and Management Services Contracts. The findings also revealed that there is lack of PFI usage among the Local Authorities in Malaysia. Other than that, majority of the Local Authorities in Malaysia have moderate level of experience, knowledge and awareness about PFI procurement. Therefore, a guideline for integrating PFI in Local Authorities procurement strategy is proposed in this study.