The government doesn't have the funds. This project will not be easy to kick-start. With 1,800 beds and the Private Finance Initiative (PFI) approach — build and lease back to the government — the cost is significant. Based on the benchmark of RM 1.5 million per bed (excluding equipment, which will be provided by the tenant/Ministry of Health), the total project value comes to:

RM 1.5 million × 1,500 beds = RM 2.25 billion

How many companies have the financial capacity to secure such large-scale financing? Even if split into few phases - assume 3 phases. 1 phase 1/3 = RM 750 mil.

This capital must be fully funded upfront. Only after completion can you slowly bill the government over time. It may look like a lucrative project, but the upfront financial risk is substantial. How long will the PFI terms take to recoup the initial capital?

If anything goes wrong, the company could go from hero to zero — straight into bankruptcy. I doubt many players are willing to participate once they understand the risks associated with PFI.



This post has been edited by nihility: Jun 26 2025, 08:15 PM

Sounds easy, but it’s not that easy.

PFI stands for Private Finance Initiative, which means the private sector funds the project entirely. If you take on the project, you must finance it yourself — the government will not give you any upfront funding.

In other words, you build the project using your own capital. If anything goes wrong — any "wintermelon taufu" mishap — the private sector bears the full risk.

Even if the project progresses or completes, you won’t receive immediate payment from the government. You have to absorb the construction cost and financing burden all the way to the end.

Only after the project is completed will the government lease the building back from you. Let’s say you spend RM 750 million upfront — you can then slowly bill the government over time. But how long will that take? You might still be waiting to recover your capital even after you’re in the grave.

Not many companies are willing to take that kind of risk. So, don’t be naïve in thinking every "cake" comes without risk.

Pasir Gudang was different. That one was Design & Built, government paid to the builder. Not PFI.

Such a statement reflects your ability to deduce and perceive the issue critically. A truly wealthy government would not need to constantly devise new ways to tax its citizens further.