The government has completed six flood mitigation projects worth RM336 million, with 82 more under way and new projects announced in Budget 2027.
KUALA LUMPUR: Staying true to Prime Minister Datuk Seri Anwar’s promise made more than three years ago, the government has expedited the implementation of flood mitigation projects to ease the burden and financial hardship inflicted on victims almost seasonally by this natural disaster.
For the record, Anwar’s MADANI government has, albeit quietly, completed six flood mitigation projects to date, costing a total of RM336 million.
It is clear that the prime minister’s Unity government is taking the bull by the horns in reducing flood-related economic damage, something the rakyat can do without.
However, this is only the beginning of a concerted and whole-of-nation effort involving multiple ministries and agencies to fight what is surely a seasonal menace.
Six flood mitigation projects completed, 82 being implemented and more announced in Budget 2027
A staggering 82 flood mitigation projects are currently being implemented nationwide, including in Sabah and Sarawak, on schedule and without fanfare.
And the projects don’t end there.
Anwar, also the finance minister, revealed when tabling Budget 2027 on Oct 9 that major new projects include the Kuching City Flood Mitigation Project, the Sungai Golok Integrated River Basin Development (IRBD) Project Phase 2 in Kelantan and the Sungai Kemaman IRBD Project in Terengganu.
The government also allocated RM100 million for retention ponds in the densely populated Klang Valley, along with nearly RM320 million to repair and upgrade slopes, drainage systems and drains in local authority areas nationwide.
Anwar warned three years ago that if the government doesn’t take serious action to address floods, the damage and destruction will happen again and again.
Projects geographically spread out to cover flood-prone states
The flood problem was abundantly clear during Malaysia’s formative years, but beyond several small-scale ad hoc projects, a concrete plan to reduce damage and combat floods on a nationwide scale was missing.
Now, there is ample proof that the government continues to undertake massive flood-mitigation projects, including those announced in Budget 2027, to significantly reduce economic losses from natural disasters that affect Malaysia almost relentlessly during the monsoons.
Policymakers are keenly aware that Malaysia is exposed to the onslaught of two seasonal monsoons, namely, the Southwest Monsoon (June to August) and the Northeast Monsoon (November through February).
It’s not just bad weather. The consequent losses in ringgit terms are staggering.
According to a report by Bank Negara Malaysia, Malaysia’s flood losses in 2024 totalled RM933.4 million.
Last year, it declined but remained significant at RM636.9 million, or 0.03 per cent of gross domestic product (GDP).
Between 2008 and 2022, economic losses from floods averaged 9.13 per cent of annual GDP and displaced a staggering 935,000 Malaysians, both temporarily and permanently.
This includes damage to living quarters, vehicles, businesses and industrial premises, the agriculture industry, public assets and infrastructure.
So, the completion of the six flood mitigation projects to date will undeniably help reduce mounting economic losses from extensive damage to housing, public utilities and infrastructure.
To further break it down, there is no doubt the government’s continued investment in flood mitigation, slope protection and drainage upgrades is expected to reduce the negative fallout from massive floods.
These projects have contributed significantly to making life more bearable for those affected by strengthening public safety, reducing flood risks and minimising disruptions to homes, businesses and transport infrastructure.
However, the government is acutely aware that combating floods is not a zero-sum game.
That is why the government is deeply committed to dealing squarely with devastating floods because the priority is to help restore normalcy for the thousands of lives disrupted every time floods occur without warning.
Government measures include better drainage infrastructure and flood retention facilities that help reduce the impact of heavy rainfall on residential areas, businesses, and critical infrastructure.
Slope protection works lower the risks associated with slope failures and, in many instances, can save lives.
According to the Department of Statistics Malaysia (DOSM), floods cause major damage to furniture, household items, and electrical appliances such as washing machines, refrigerators and televisions.
From an economic perspective, the slew of flood mitigation projects has stimulated economic spillover benefits by creating fresh opportunities for the construction sector.
At the same time, construction and infrastructure companies undertaking flood mitigation projects are, in a way, fulfilling their national service and contributing to the sector’s projected growth of 5.7 per cent next year.
The sum of these initiatives, spread out geographically, especially in flood-prone states on the east coast as well as Kedah, Perlis, Johor and Perak, is aimed at improving the country’s overall resilience to flooding and related hazards.
Beyond their immediate benefits to communities, the planned flood mitigation projects undoubtedly provide a steady pipeline of infrastructure work for eager construction companies looking for fresh business opportunities.
Higher development expenditure and flood mitigation projects boost the construction sector
In a research note, Malacca Securities said it remained positive on the construction sector, citing higher development expenditure, infrastructure projects, including in Sabah and Sarawak, and flood mitigation works as factors expected to sustain order book opportunities.
The brokerage highlighted the ongoing flood mitigation projects and upcoming developments, including the Kuching City Flood Mitigation Project, Sungai Golok IRBD Phase 2 and Sungai Kemaman IRBD, as potential sources of construction activity.
The additional allocation for retention ponds, slope protection and drainage improvements would benefit a wider range of contractors.
For instance, it could further support demand for contractors involved in civil engineering, earthworks, drainage and related infrastructure construction.
There is no doubt that flood mitigation would remain a priority alongside broader infrastructure development.
As such, the continued rollout of public projects can provide greater visibility to contractors seeking new project awards, for which the government should be given credit.
It could also support order book replenishment over the coming years, which augurs well for the sector, as it would stimulate and expand business activities.
But there is much the people themselves need to do.
According to DOSM, it is important for the people to strengthen preparedness, enhance financial protection and build household resilience to mitigate the impact of future flood events.
Bank Negara, in an overview of Malaysia’s flood risk, said flash floods in Kuala Lumpur, Kuching and Penang also resulted from rapid urban expansion that led to deforestation and insufficient drainage.
A case in point is the RM6.5 million IOI Mall flood mitigation project in Puchong, which aims to address prevailing flash floods in the densely populated area.
Such flash floods bring heavy rains and disastrous flooding in almost all states, some worse off than others.
Precipitation levels increased steadily between 1951 and 2020, and more than one climate model predicts further yearly increases by the end of the 21st century.
Without adaptation efforts, Malaysia will face increased flood risk.
The dire prognosis is that, historically, 1-in-100-year floods could become as frequent as 1-in-50 or 1-in-25 years, with more damaging impacts expected.
According to the central bank’s report assessing the macroeconomic impact of flood risks, Malaysia is estimated to lose up to 4.1 per cent of GDP, or up to 4.0 per cent of gross output, in 2030 under a theoretical 1-in-20-year flood.
The agriculture sector in particular could be severely impacted by floods due to its wide geographical coverage.
The manufacturing and services sectors would also be heavily affected because of their large share of the economy.
Based on a survey conducted amongst 1,500 Malaysian companies, about a quarter were affected by floods in the past three years.
Small and medium enterprises (SMES) are likely to incur more damage and disruptions.
Affected firms attributed their losses mainly to a lack of awareness and understanding of flood risks and to inaction in strengthening preparedness to respond to them.
There is a range of coping strategies businesses can take to mitigate vulnerabilities, ensure robust business performance, reduce losses, speed recovery, and smooth expenses over time.
An effective flood management ecosystem is crucial to help flood victims
Coping strategies include adaptation measures that reduce flood impacts (e.g., flood walls) and insurance coverage.
But beyond flood mitigation projects, there have been discussions to tackle floods and their devastating impact from an overall perspective, enabling a national flood management ecosystem.
For instance, currently, flood insurance/takaful in Malaysia is typically offered as a non-mandatory ‘add-on’ peril to fire and motor protection products and is largely location-dependent.
Perhaps it’s time to be beyond these basics.
Some 80 per cent of insurers and takaful operators (ITOs) currently consider flood risks when assessing business clients.
The report also identifies six key policy priorities to ensure a facilitative ecosystem for effective flood management in Malaysia.
These include enhancing flood risk data availability and accessibility, developing a long-term flood risk adaptation strategy and supporting access to finance for adaptation and recovery.
It also entails building capabilities and raising awareness, deepening insurance markets, and strengthening the enabling environment for the financial sector.
Overall, flood mitigation and building an ecosystem for effective flood management are ongoing processes.
What is clear is that the government has put in place the necessary imperatives to tackle floods now and possibly create a flood management ecosystem that protects ordinary Malaysians from the pain and scourge of disastrous floods.