A review of value creation from procurement contracts and business models for district cooling systems in Malaysia

Abstract

A District Cooling System (DCS) is the favoured Air Conditioning System for buildings or facilities which have a large-scale cooling energy demand. The benefits offered by a DCS and the great support from the right wing of the Government of Malaysia’s Economic Planning Unit (EPU) have given big opportunities for all the players in the Air- Conditioning-Engineering-Based Industry to enter and become established in this business. This paper reviews the definition of a DCS; the categories of air conditioning systems; the advantages of a DCS and the list of completed and ongoing projects and business models over the past forty (40) years in Malaysia. This paper also reviews the definition of the business model and procurement, the procurement choices in DCS and the lifecycle of a DCS. Further, it reviews the relations between the parties involved in this business and the procurement contract types and lifecycle in the district cooling business. In discussion, the value creation from this business is discussed based on three (3) main elements: the economic; the social impacts and the knowledge and technology. Therefore, it is hoped that the findings could assist the Government Link Company (GLC) and the private sector players in this industry to make appropriate decisions about the best procurement mode and the best business model that will benefit their respective interests, whilst at same time providing benefits to the client and the end-user, as well as to the general public, as users involved in implementing the DCS.