Yang Berbahagia Mr Ng  Kee Leen
President, Master Builders Association Malaysia (MBAM)

Yang Berbahagia Dato’ Patrick Wong,
Immediate Past President, MBAM

Yang Berusaha Mr Matthew Tee,
Vice President, MBAM and
Organising Chairman, 2nd Malaysian Construction Summit 2009

Yang Berusaha Mr Andrew Ong
Alternate Council Member, MBAM and Co-Organising Chairman, 2nd Malaysian Construction Summit 2009

Dato-Dato, Datin-Datin, Ladies and Gentlemen

I would like to thank Master Builders Association Malaysia (MBAM) for inviting me to be part of the 2nd Malaysian Construction Summit (MCS) 2009.

During this defining moment in our Nation’s economic history, it is unfortunate that many sectors of our economy suffered negative growth for the last several quarters.

This is, however, not the case for your industry. The construction sector registered a growth of 1.1% in the first quarter of this year and improved further to 2.8% in the following quarter . For the whole of 2009, the construction industry is expected to register a growth of 3.5% . Indeed, in these times when our exports suffered abroad, in these times of hardship, when there was contraction of growth everywhere, your sector remained the pillar of this Nation’s economy. For this, the Government is grateful. Thank you.

Ladies and gentlemen

The country’s economy has changed much in the last ten years. We are no longer a developing country. Malaysia is now classified as an upper-middle income economy. We have built a significant and impressive network of infrastructure across the nation, from Perlis to Sabah. We have ensured that every Malaysian benefit from our roads, bridges and highways. It has also been the Government’s policy to encourage home-ownership for all Malaysians. In the last twenty five years, these activities have benefited the local construction industry significantly.

However, I am concerned about the future of the construction industry. We have now reached a stage where our economy would need to have new sources of economic growth. This would necessarily bring new challenges to the construction industry.

Nevertheless, the present economic crisis also provides the industry an opportunity to reinvent itself. There will be consolidation in the industry with smaller players merging to compete more effectively. The industry as a whole would need to take stock of their positions in the market and re-assess their financial strength, technical expertise and branding and reputation.

They would also need to restructure themselves and invest in new technologies and systems, such as Industrial Building System (IBS) for example. Construction businesses would have to build their capacities in these critical success areas in order to compete successfully, either locally or abroad.

Ladies and gentlemen

The Government of Malaysia has been an important source of work for the local construction industry. This will continue. However, in line with the Government’s position to increase the private sector’s role in the economy, we are now promoting the Public – Private Partnership initiative.

The definition of PPP is where a stand alone business is established, financed and managed  by the private sector in a package where it involves development, management, facilitation, repair and replacement of a public sector asset including buildings, infrastructure, equipment and other facilities . The PPP approach has been used successfully in more than 120 countries including Australia, European Union, United Kingdom and Singapore, covering multiple sectors such as health, education, management, transport and defence.

The PPP concept differs from the “Build-Lease-Maintain-Transfer” or the “deferred payment” approaches primarily due to greater emphasis placed by the Government’s in getting higher value for its money. It is also in this regard that the Government is also placing greater emphasis on having direct negotiations for projects restricted to security and defence procurement only. 

Competitive bidding will ensure that there is transparency and that the best value is obtained from the open market. This will also minimise the level of leakages of public funds and possible opportunities for unethical practices and corruption.
Therefore, in response, the private sector would also need to re-position itself in the marketplace. The construction industry will have to build strong value propositions to ensure they can survive in a market that is dictated to the forces of supply and demand. In fact, this is the reality of the future. This is the key to future survival.

Ladies and Gentlemen

The theme “Construction Industry-Catalyst for Economic Growth” is indeed timely. Our Prime Minister is transforming this country into a high income economy. Accordingly, the Government will increasingly place greater emphasis on high performance and innovation in all spheres of economic life.

The transformation of the economy will also bring changes in how we shape our physical environment. There will be greater demand for a higher quality environment in which we live, work and play.

Green design and technology will also be very much part and parcel of that environment. Buildings and infrastructure works of the future will have to be sustainable in terms of energy usage, materials used and technology adopted.
We are seeing early shoots of the green movement in this country. A few developments are already adopting green standards in their design and material usage. The demands of climate change will ensure that this green movement will, one day, very much determine how we build and shape our physical environment and landscape. 

All these changes will mean that technology will play a much higher role in the construction industry than it is today. This will require engineers and technicians with higher levels of knowledge and skills. 

I am confident that the Malaysian industry will adapt itself to the changing circumstances. The construction sector has always been a cyclical industry, with times of booms and busts. These extremes have indeed produced a resilient industry that has strong survival skills. 

High perseverance, patience and resourcefulness are the hallmarks of a successful construction towkay. These time-honoured traits will continue, passed down from one generation to another, and with it, the construction industry will transform to an industry that will not merely catalyse economic growth but high economic growth. 

Ladies and gentlemen

Thank you again for giving me the honour to deliver this address this morning. It is with great pleasure that I officially launch the 2nd Malaysian Construction Summit 2009. Thank you.