The 13th Malaysia Plan (13MP) is shaping up to be a cornerstone for Malaysia’s renewed push toward domestic resilience, with development expenditure (DE) hitting a record RM430 billion between 2026 and 2030—a 3.6% increase from the 12MP. The higher allocation signals the government’s commitment to reinvigorating the economy through targeted infrastructure spending, fiscal consolidation, and stronger private sector collaboration.
While the plan introduces no new mega projects, its execution is expected to catalyse a broad wave of construction activity and investment sentiment from late 2025 through 2027, particularly ahead of the 16th General Election expected in 2028.
Public Infrastructure Revival
With an average of RM86 billion earmarked per year, the 13MP sets the stage for a robust pickup in infrastructure projects across the country. Among them include: in Penang: Construction of the main terminal building at Penang International Airport (RM1 billion), the Penang LRT systems package (RM3–6 billion), and the cross-channel link. East Coast: A RM2 billion Port Klang link to the East Coast Rail Link (ECRL). Sabah and Sarawak: A series of basic infrastructure upgrades, supported by the electoral timelines in both states. And in Johor: the Johor Bahru-Singapore Rapid Transit System (56% complete as of June 2025) and renewed attention on the Johor Automated Rapid Transit and the KL-Singapore High Speed Rail.
Adding to investor confidence is the government’s formal endorsement of the long-delayed MRT3 project, which is likely to take shape in 2027.
GLC-Backed Investment Surge
Further development financing will be supported by RM120 billion from six government-linked entities under the GEAR-UP programme. As of June 2025, RM11 billion has already been mobilised. Notably, IJM has signed an MoU with Permodalan Negeri Selangor Bhd and SD Guthrie to co-develop an edu-tech park and food security hub in Carey Island.
Meanwhile, the revival of Bandar Malaysia—now under KLCC Holdings—is being positioned as a multi-decade urban regeneration initiative, with a projected development horizon of up to 50 years.
Renewable Energy and Climate Targets
The 13MP also gives fresh impetus to Malaysia’s green transition. In support of the National Energy Transition Roadmap (NETR), the government is ramping up policy incentives for renewable energy investments:
- Expansion of waste-to-energy (WTE) facilities, led by Malakoff’s Sg. Udang project.
- Launch of the sixth cycle of the Large Scale Solar (LSS) programme in Peninsular Malaysia (total planned capacity: 5.2GW).
- Development of biomass, hydrogen, biofuels, and hydropower initiatives, potentially unlocking new infrastructure opportunities for local contractors.
- PPPs and Fiscal Reform Under PIKAS 2030
In line with the Madani government’s fiscal consolidation goals, the revamped Pelan Induk Kerjasama Awam-Swasta 2030 (PIKAS 2030) will drive more Public-Private Partnership (PPP) projects. Malaysia’s fiscal deficit is projected to narrow to 3.8% in 2025, compared to 5.5% in 2022.
Recent projects under PIKAS 2030 include:
- RM1.4 billion New Pantai Expressway (NPE) extension (IJM).
- Laluan Istana Kiara Highway and Kg. Baru Link Expressway under Ekovest (total cost: RM6.3 billion).
- Kota Madani housing development (RM4 billion) led by Putrajaya Corp, which will adopt advanced building technologies to speed up delivery of 1 million affordable homes.
- Water, Roads, and Digital Infrastructure
Gamuda is well-positioned to secure RM4 billion in water infrastructure contracts, including the Ulu Padas and Northern Perak water supply schemes. Meanwhile, IJM, in collaboration with LSH Capital and PNSB, will spearhead road projects in the Integrated Development Region in South Selangor (IDRISS), aimed at easing congestion on the ELITE Highway.
Further south, the West Coast Expressway extension from Banting to Gelang Patah is also in the pipeline.
In the digital infrastructure space, six to seven major data centre projects—each valued between RM1–2 billion—are expected to progress despite global uncertainties around AI chip exports. This momentum is being bolstered by increased tender activity for advanced logistics and industrial facilities.
Sector Outlook: Overweight Call on Contractors
CIMB Research maintains an “Overweight” stance on Malaysian contractors heading into the 13MP period. Top picks include: Gamuda, IJM and MRCB. For materials exposure, Malayan Cement is highlighted as a key beneficiary.
CIMB Research added that the 13MP underscores the government’s strategic shift towards building resilience through targeted development, green investment, and more efficient fiscal partnerships. With a confluence of public and private capital, and rising clarity around project pipelines, the next five years are poised to unlock significant value across Malaysia’s construction and infrastructure ecosystem.
