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Rakan KKM public or private initiative?

Rakan KKM public or private initiative?

Malaysiakini18-07-2025
MP SPEAKS | Strictly, the question of whether an initiative or entity is public or private comes down to questions on ownership, control, sources of funding, distribution of profits, and purpose.
Rakan KKM Sdn Bhd is 100 percent owned by the Minister of Finance Incorporated (MOF Inc).
When a government-linked investment company (GLIC) investor comes in, the GLIC may take an equity stake in Rakan KKM Sdn Bhd.
Ownership of Rakan KKM remains with the government, directly or through GLICs, throughout its operations.
As for control, the Health Ministry is the "kementerian kawal selia" responsible for critical decisions over the management of the company.
Seed funding of RM25 million from the Finance Ministry was announced in the budget. Additional scale-up funding from GLICs will be explored in Phase 2, which will be repaid through the revenues/profits of Rakan KKM operations.
In all cases, sources of financing remain government or government-linked.
Profit distribution is to the shareholders/owners of Rakan KKM - ie MOF Inc or GLICs.
Rakan KKM's purpose
As a public initiative, Rakan KKM serves five key objectives which are in the public interest:
(a) In the environment of high medical price inflation, Rakan KKM provides premium economy value-based healthcare services to raise the ceiling,
(b) Excess revenue from Rakan KKM will be used to cross-subsidise the services for all public patients, thus raising the floor,
(c) Support the retention of ministry health workers by providing opportunities to increase their income considerably,
(d) Serve as a price benchmark, including for services provided by private hospitals, to moderate medical price inflation for all, including patients who do not directly use Rakan KKM services, and
(e) Provide appropriate returns for our GLIC shareholders and their members.
Act 586
But why is Rakan KKM licensed under the Private Healthcare Facilities and Services Act 1998 (Act 586)? Does that make it a private initiative?
The experts who drafted Act 586 had the foresight to anticipate the possibility that the government would provide health services through a corporate body.
This is important to ensure a level playing field with the private sector, especially if Rakan KKM is to play a role as a price benchmark.
The Act clearly states that a government corporate body should be regulated under this Act.
DZULKEFLY AHMAD is Kuala Selangor MP and health minister.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.
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