Kuala lumpur: Malaysia’s construction and infrastructure sectors are poised for substantial growth under the 13th Malaysia Plan (13MP), which allocates RM430 billion for development expenditure from 2026 to 2030, as reported by CIMB Investment Bank Bhd.
According to BERNAMA News Agency, CIMB noted that the RM430 billion allocation represents a RM15 billion or 3.6 per cent increase from the RM415 billion allocated in the 12th Malaysia Plan, equating to an annual expenditure of RM86 billion. This level of spending marks the highest under any Malaysia Plan, underscoring a commitment to bolstering domestic infrastructure amid global challenges.
CIMB’s flash note indicated that the construction sector will likely benefit from increased contract flows starting in the fourth quarter of 2025, gaining momentum into 2026-2027. While no new mega projects have been announced, the elevated development expenditure is expected to revitalize public infrastructure investments, especially in East Malaysia, where state elections in Sabah and Sarawak are anticipated by 2025 and 2027.
Key projects highlighted include a RM1 billion expansion of Penang International Airport’s main terminal, a RM3 billion to RM6 billion Penang Light Rail Transit system package, a RM2 billion Port Klang Link for the East Coast Rail Link, and the Johor Bahru-Singapore Rapid Transit System, slated for completion by December 2026.
CIMB also pointed to the potential acceleration of the KL-Singapore High-Speed Rail and the Mass Rapid Transit 3, the latter recently endorsed by the government with implementation expected to start in 2027.
Investor confidence is further supported by an investment push, with RM120 billion targeted under Malaysia’s Government-linked Enterprises Activation and Reform Programme, driven by six government-linked entities. An example of this is IJM Corporation Bhd’s memorandum of understanding with state agencies for developing an education technology park and food security hub on Carey Island.
The 13MP also aligns with Malaysia’s energy transition goals, as CIMB noted plans to launch the sixth cycle of the Large Scale Solar programme with a capacity of 5.2 gigawatts, following LSS 5 projects beginning in 2026-2027. The renewable energy initiative, covering waste-to-energy, biomass, hydrogen, and hydropower projects, is expected to present new opportunities for local contractors.
The momentum for waste-to-energy projects is evident with Malakoff Corporation Bhd’s concession for the Sungai Udang facility, signed in June 2025. Public-private partnership projects under the Pelan Induk Kerjasama Awam-Swasta 2030 are projected to rise, supporting the government’s fiscal consolidation strategy, with the federal fiscal deficit expected to drop to 3.8 per cent in 2025 from 5.5 per cent in 2022.
CIMB observed initial results of PIKAS, including the RM1.4 billion New Pantai Expressway extension by IJM; RM6.3 billion expressway projects by Ekovest Bhd; and the RM1 billion KL Sentral expansion by Malaysian Resources Corporation Bhd.
The RM4 billion Kota Madani housing project in Putrajaya, set to begin by September 2025, aims to be a model for the government’s plan to build one million affordable homes using advanced construction technologies.
On water and infrastructure projects, Gamuda Bhd is well-positioned for up to RM4 billion in projects in Sabah and Perak, while IJM is engaged in road connectivity projects under the Integrated Development Region in South Selangor corridor. The West Coast Expressway may also extend to connect Banting in Selangor to Gelang Patah in Johor.
CIMB forecasts robust contract activity for six to seven data center projects, valued at RM1 billion to RM2 billion each, supported by renewed interest in advanced logistics and industrial facilities.
Maintaining an ‘overweight’ stance on the construction sector, CIMB identified Gamuda, IJM, and MRCB as top choices, with Malayan Cement favored for its building materials exposure. CIMB emphasized that the 13MP sets a strong foundation for long-term infrastructure growth while reinforcing Malaysia’s economic resilience and sustainability objectives.