RM430 Bln Under 13MP To Boost Malaysia’s Construction, Infrastructure Sectors - CIMB
KUALA LUMPUR, July 31 (Bernama) -- Malaysia’s construction and infrastructure sectors are set to benefit significantly from the 13th Malaysia Plan (13MP), which allocates RM430 billion for development expenditure (DE) from 2026 to 2030, according to CIMB Investment Bank Bhd.
In a flash note today, CIMB said the RM430 billion DE represents RM15 billion or a 3.6 per cent increase from the RM415 billion allocated under the 12MP, translating to an expenditure of RM86 billion per annum, the highest under a Malaysia Plan.
“The ramp-up in development spending signals a renewed commitment to strengthen domestic infrastructure and resilience amid external headwinds,” it said.
CIMB also said that the construction sector is expected to gain from increased contract flows beginning in the fourth quarter (4Q) 2025 and accelerating into 2026-2027.
Although no new mega projects were announced, CIMB expects the elevated DE to reinvigorate public infrastructure spending, particularly in East Malaysia, where state elections in Sabah and Sarawak are due by 2025 and 2027, respectively.
The projects include the RM1 billion expansion of Penang International Airport’s main terminal; RM3 billion to RM6 billion Penang Light Rail Transit (LRT) systems package; RM2 billion Port Klang Link for the East Coast Rail Link, and the Johor Bahru-Singapore Rapid Transit System (RTS), which is due for completion by December 2026.
CIMB also noted the potential momentum for the KL-Singapore High-Speed Rail and the Mass Rapid Transit 3 (MRT3), the latter of which was recently endorsed by the government, with implementation expected to begin in 2027.
Investor confidence has been buoyed by a broader investment push, including RM120 billion targeted under Malaysia's Government-linked Enterprises Activation and Reform Programme (GEAR-uP), driven by six government-linked entities.
IJM Corporation Bhd (IJM), for example, recently signed a memorandum of understanding with state agencies to develop an education technology park and food security hub on Carey Island.
Meanwhile, CIMB said the 13MP also supports Malaysia’s energy transition agenda, with plans to roll out the sixth cycle of the Large Scale Solar (LSS) programme, with a combined capacity of 5.2 gigawatt (GW), once LSS 5 projects begin operations in 2026-2027.
CIMB noted that the renewable energy push, including waste-to-energy (WTE), biomass, hydrogen, and hydropower projects, would open up new infrastructure opportunities for local contractors.
WTE momentum is already underway following Malakoff Corporation Bhd’s concession agreement for the Sungai Udang facility, signed in June 2025.
Through the Pelan Induk Kerjasama Awam-Swasta 2030 (PIKAS 2030), more public-private partnership (PPP) projects are expected, aligning with the government’s fiscal consolidation strategy.
The federal fiscal deficit is projected to fall to 3.8 per cent in 2025, from 5.5 per cent in 2022.
CIMB noted that the initial results of PIKAS are already visible, namely the RM1.4 billion New Pantai Expressway (NPE) extension by IJM; RM6.3 billion expressway projects under Ekovest Bhd, including the Laluan Istana Kiara Highway and Kampung Baru Link; and the RM1 billion KL Sentral expansion by Malaysian Resources Corporation Bhd (MRCB).
Putrajaya’s RM4 billion Kota Madani housing project, set to commence by September 2025, would serve as a model for the government’s plan to build one million affordable homes, supported by advanced construction technologies.
On water and infrastructure projects, CIMB said Gamuda Bhd is positioned to secure up to RM4 billion in water infrastructure projects in Sabah and Perak, while IJM is working on road connectivity projects in South Selangor under the Integrated Development Region in South Selangor (IDRISS) corridor.
The West Coast Expressway may also be extended to connect Banting in Selangor to Gelang Patah in Johor.
Meanwhile, CIMB expects strong contract momentum for six to seven data centre projects, each worth RM1 billion to RM2 billion, aided by revived interest in advanced logistics and industrial facilities.
On outlook, CIMB maintained an “overweight” call on the construction sector, with Gamuda, IJM and MRCB as top picks. Malayan Cement is also favoured for building materials exposure.
“The 13MP lays a solid foundation for long-term infrastructure growth, while reinforcing Malaysia’s economic resilience and sustainability goals,” CIMB said.
-- BERNAMA