MAl.

AYSIA,

PRIVATIZATION MASTERPLAN

UNr{ PeB;ANC)l.Nt:) eKo~o"-'I LtiD!m1.!icP~ Uibh

JABA "[ANI .P_~'R,DAN A ME.,IJ\II['i£~r Prtl1M Mm.l .... ''S l)e-~aitm~I!I' fA,W\.N D~TO' ONN

~1Mi~ :KUiill.t..... tErM.FUR

M.O\\LA YS1A _

PRIME MINISTER MALAYSIA

Foreword

Privatisation has now been accepted by both the Government and the people as an instrument of economic management of the nation. Privatisation is the antithesis of nationalisanon, the instrument that was once thought as the only effective way of sharing economic wealth equitably. It is now manifestly clear that nationalisauon has failed and has been abandoned even by its most ardent advocates. the communists. Privatisation has now achieved respectability but it is still very much misunderstood. Indeed the Malaysian public is still apprehensive of this policy and do not fully understand the Government's views or methods. II is therefore important that the Government make public its Privatisation Masterplan so that the public can not only participate but also understand the approach adopted by the Government.

When the Government first formulated the privausauon policy in the early 1980·s. Malaysia was among the first few nations to do so. Glasnost and perestroika were words that no one had heard of then. The socialists and communists had not openly rejected nationalisarion. Without the benefit of prior experience elsewhere we had no choice but to innovate. Fortunately we have not made too many mistakes as the success of the privatised agencies show. Much experience has now been gained and this has been augmented by studying the methods of privatisation in other countries which have adopted this approach.

We have identified some of the privatisation bottlenecks and taken the necessary remedial actions. For instance. we have amended several existing

. laws so as to allow for privatisation of entities which by law are the preserve of the Government. Besides the legal aspects. the Government has devised very clear principles and taken steps to streamline the administrative machinery and procedures. The role of Ministries in regulating those economic activities which involve monopolies has also been defined in order to prevent possible abuses by privatised monopolies.

This Privatisation Masterplan study by the Government is another step in this direction. Where before it w~s up to interested parties to propose the privatisation of Government services and corporations. now the

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~'I::utit rpla'rl nas l d'Enli,rh~;d' the service:~ and the bod ies that 211"...:: ,ope n to pr.iV~llisiliQJ]1 p~po-!>aJ!i' bl' U1JC prj,yale secior .. Th~~ wH] ~nabh~ :h'j~,~r~$led p,ar1.'ies [0 st1l1,dy and m ak:e gftc:n; wh~ en W.m be considered On the bas tSO f mmpiill~ailiyt. men t- Only in certain cases wil1 ~XChlS'~\I if)' be gr,anted. Even ihen eond:i'lions 'W ill be ~t:naehed which wHl prevent $iLl!i!Jt e xcl ust .... i'~:F front btln! miiS'IiIsed-

1 rI thi:5 furewerd, I wi sn 10 U ke the npportun i t)' (}f re h~ f;l'[i OS the ~ c(Jlmmh'ment of the OovemIri,al to furth~r :rech~ct· ttl:! public sector role in We ':C;(JllOWY by pn¥:ii~i,sin.g '!!ao~~ proj~c'~s aoo services mal CaE be better ,m anagl!:::d by me priva.l~ ;sl{l;ctOT. R:f:ce.rJt f!ubUc: ,tccSponse to the liS[l Ill! (1 f ,!l:h.aresilll tnt pn varised 'l!Ql:I'! p.::mies -and services ]n([ica~.e ,rene~aJ acceptance of the; wisd:omof ~ht1: (JovcromeIll' s poticy. P~ivl!!~i.satiort wil1 enhance me m]~e of tne p,r:i:va[~ .sll:(;'lOr ~n the ':C(!lnO'ffi,,' while iiiil't ln~ lame lime crea tin~ iIITIewopPliJ\rlllln"iti!!$ JOt Ih~ p.ulbli e, in pan.icu'l,a,r: IrH~: eJitllpJoye,cs Jj)f~r.t~ piJi vadsed proj LiCI:..§' as well as 1nc I~luhl~.pl!lte;ra CotfuiiuJn1ty 10 0''''-1) 'l,iI.I(:';.dth th;mu1llh the :purchase (i f Share$ ~n theSt: proj ects. Il :i s rhe Govemm em 's hope [h:a'~ m ore people u.i.l J ~ a,bl~ 10 sham the we;.a]dll Olf the nauon Enl$ way. T.he prl vads-ad on pmeess is d,s:oexpecied 10 ~ead Wward5 the' ~1C:.pansi.orl Of Wi! ca.pillal Ill~fke~ and1 so jFicte-a-sepriv ale ~Clnr 00 f:I ni bill tiOtl

~!O "ecC!nom~c gm'wt!:a. "Wbn e me Goverrsnen t can, 011 .ilnd! 011. lL:o'l:!llrib:U:llC [0

CC or:J;O:P1i,C ,g.rowlh tbIough e~pans:i,,,,naTJ! budgtdflig., 'Ibis Cann(]!t Pe _~'Us ~a:i nett T,ne ,economy .... ·m zrind Hl a bah or even go into reverse if GO'!.l''CiTIl1Ttcn1 ~ee'p;'S' en ifljel'la'in,g m!Orte)i 'iwioi'h,lc.h h dees :1;10\ have in cFrder to. bc,.ip£:ro ..... ·ln ..

Ill: JJIl,bliming this M3sE.erp,]an repcn~ t!lrne - uove-mmecl · S c(}~j'ecti 'lie t~ ~L": enable the public .a:ml the pri'''iIltl "Secmrs to 'be b~ue[ ~nformcrdBibot!~ lhe pDU~ie,i under the pn.\o',itllisatlOJ] programme:'and m.te m~Eme:n.t -Oi1PQflynhic$ created b.y it u it i s c;.'tpec£~d lbu in ad,d Idem U) me PTQjecu :identifie ~ b ~< the GovciIm'I!cm under me PrivililiS-:llioll AC.l~)r,;m Plan,. tilt ,pnv3te sector w~n cO!n.i:tll:lC 1:0. iden:lify and lniuete its OWll p.l'llvaEisaHon ·propo.sals' Jor the cQns;ider~don of the Oo'vt;mlmenl. ] believe (ha.l this M,e.$l~.tpl:a11 wjll aceetera me' rhe im pI ~me:n lil,don 'oJ lire pri "ratl sa [ion prog rarnme ~;nd hc,lp oontrib1Ju~ lQw!t1'~S ta!iter econo.m i c gro'w~h.

,AH.A.THIRB IN MOHAMAD

Kuala Lumpur

s hbruary ] 991

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to CONTENTS
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m Page
FOREWORD llH\'
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T PART 1 INTRODUCTION 3-4
f
e PART II THE POLICY IMPLEMENTATION 7-10
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PART III CONCEPTUAL FRAMEWORK 1.3
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PART IV BROAD POLICY FRAMEWORK 17-18
PART V SPECIFIC PRIVATIZATION - 21-19
RELATED ISSUES
(a) Objectives of Privatization 21
(b) Methods ,.,
(c) Valuation of Assets or Equities 14
(d) Personnel ,-
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(e) Changes in the Laws ,-
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(f) Regulatory Framework 26
(g) Capital Markets 26
(h) Bumiputera Participation 27
(i) Foreign Participation 27 v

CD Privatization Fund 28
I (k) ESOPs AND MBOs 28
i
! PART VI

PRIV A TIZA nON ACI10N PLAN

"""I 4- ;);)- )

Privatization Decision Grid

36

Other Factors Considered In Drawing Up The Privatization Action Plan

38

Major Components of the Privatization Action Plan

39

Implementation Programme

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PART VII

APPROACH TO PROJECT IMPLEMENT AnON

49-50

PART VIII ADMINISTRATIVE MACHINERY 53-54
Federal GOEs 53
Approach to Government - 53
Initiated Priivatization
Approach to Private-Sector - 53
Initiated Privatization
State GOEs 54 Vl

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CHARTS

CHART I ROlling Privatization Action Plan 34
CHART n Privatiz.ation Grid 37
CHART III Privatization of a Government 43
Department/Statutory Body
APPENDICES
APPENDIX 1 List of Privatized Projects 57-59
as at '31 December. 1990
APPENDIX 2 Summary Indicators of 60
Privanzable GOEs Identified
by the Privatization Masterplan
Study
APPENDIX 3 List of Privatizable GOEs 61-73
Identified by the Privatization
Masterplan Study
APPENDIX 4 Privatization Action Plan 74-78
1991-1992
APPENDIX 5 Application for the Privatization 79-96
of Government Project/Activity Vll

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Part I

Introduction

INTRODUCTION

The privatization policy was first announced as a national policy by the Government in 1983. It represents a llew approach in the national development policy and complements other national policies such as the Malaysia Incorporated policy developed to underscore the increased role of tne private sector in the development of the Malaysian economy. This approach signalled the Government's intent to reduce its presence in the economy. decrease both the level and scope of public spending and to allow market forces to govern economic activities. Without doubt. privatization has an important impact on the rate and manner of economic development

2. With the formulation of the policy in 1983, the Government published statements from time to time to explain to the public the intention and content of the policy as well as to keep the general public informed of the latest developments in the implementation of the policy .. In 1985. the Government published the "Guidelines on Privatization" detailing among others. the objectives of the policy. the methods applicable and the implementation machinery. Several developments have taken place since the policy was first announced. The significant changes which have been introduced by the Government include the amendments of the various laws in order to allow privatization to take place and the commissioning of a study to help in the drawing up of a privatization masterplan, In view of these changes. it is timely that the public be kept informed of the latest developments of the privatization programme. This would not only help to educate the public on the latest developments but more importantly 10 prepare their expectations in this public policy.

3. A great deal of success has been achieved in the implementation of the privatization programme thus far. Inspire of this, the Govemment intends to expand and accelerate further the pace of privatization process in order to expedite the achievement of the policy objectives. Towards this end. the Government engaged a consortium of local and foreign consultants to prepare the Malaysian Privatization Masterplan (PMP). The main purpose of this document is to explain to the public the "Privatization Masterplan" which has been. drawn up by the Govermnent to provide a guideline in the implementation of the policy. In this

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context. this document would review the background and progress achieved in the implementation Of the programme, the main issues addressed in the PMP and the future direction of the programme.

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Part II

The Policy Implementation

THE POLICY IMPLEMENTATION

4. Since the armouncement of the privatization policy, 37 projects have been privatized as shown in Appendix 1. Of these projects. 27 represent the taking over by the private sector of existing Government entities. while the remaining represent the construction of new infrastructure projects. The list does not include companies divested prior to 1983 under the scheme of transferring Government's equity in trust companies to Bumiputera, Under the scheme which was launched in 1981. some 30 Government companies have been transferred to Permodalan Nasional Berhad and thereafter to the Amanah Saham Nasional (ASN) Unit Trust holders and about 120 companies were sold to other private sector parties. The list also excludes minor privatization projects undertaken by various Government departments mainly through contracting out such as laundry. security and cleaning services.

5. Although the number of projects listed in Appendix 1 is not large. the methods used in privatization are quite varied. In fact, for a flew projects, a combination of methods have been used as clearly seen in Appendix 1. Of the existing projects. 17 were privatized through divestiture of ownership by way of sale of equity or assets to the public or by way of private placement and management buy-out, two through leasing. five through management contract. and two through a combination of sale of assets and leasing. In addition the National Electricity Board was corporatized as an initial step towards privatization. Of the new projects. eight were privatized in accordance with the "Build-Operate-Transfer" (BOT) concept while the remaining two were privatized by way of the "Build-Operate" (BO) method. The various methods are explained in Part V item (b) of this document

6. Another 18 projects have been approved by the Government for privatization. Of these. 11 represent existing projects while the remaining are new projects. Among the important privatization candidates that have been approved are the airports, the Royal Malaysian Navy Dockyard at Lumut, the Malayan Railway and rice milling complexes belonging 10 the Natio~ _~ldi and Rice Board. These entities would be corporatized initially with the view to privatizing them later. Negotiations are under way to finalize the privatization of the

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production. of animal vaccines. As for new projects. the Government has decided to privatize the Shah Alam Highway and the Seremban-Pon Dickson Highway through open tender.

7. 1n addition to the above, there are more than 50 candidates under

consideration for privatization and they include those initiated by the public and • private sectors. The candidates include the major ports. the Postal Services Department. and Government quarries.

ASSESSMENT OF PERFORMANCE

8. While it is still early to make an assessment of the effectiveness of the privatization programme. some measures of performance are available to indicate the extent of achievement in implementing the privatization policy.

(i) Efficiency Gains

9. There are clear indications that privatization has led to increased

efficiency. Several examples may be cited to illustrate this point. Prior to' privatization. the average turnaround time per vessel at the container tenninal of Klang Port was 11.7 hours but two years after privatization. it was teduced to 8.9 hours. With the licensing of Sistem Televisyen Malaysia Ber.""(STMBJ to operate a third television channel. TV3. competition was introduced in the industry which had been a monopoly of the public sector. spearheading improvements in the quality of television broadcast to the benefit of the viewing public. The company bas shown strong financial performance since it began operation as to. enable it to gain public listing in its fourth year.

10. In the case of STM. since its corporauzanon, the company has instituted several positive adjusunents in its management including the introduction of a detailed billing system which has reduced errors and complaints. the marketing of new services in order to increase earnings. the improvement in counter services such as the processing of applications resulting in a markedly faster response to applications for telephone installations and in attending ~ breakdowns,

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11. As for privatized new projects. in the case of the Labuan Water Supply,

. the project was completed ahead of schedule and within budget The solution proposed by the private sector was less costly than that initially put forward by the public sector authorities.

(iO Privatization And Growth

12. Privatization and economic growth have been closely related. In many instances. privatization has led to corporate expansion and greater utilization of growth opponunities through private sector motivation. In this context. STM. since its incorporation. has introduced. upgraded and marketed aggressively several new services that were scarcely known prior to corporatization, These include the Malaysian packet switched public data network (Maypac). a second automatic telephone using radio network, Intelsat Business Service (rBS) , telebanking, International Direct Dialling Service, Date! Service. private leased lines and others.

13. Privatization has also resulted in the generation of multiplier effects in the economy. In this respect. STMB's aggressive approach has provided a catalyst for growth in the domestic film making and advertising industries.

14. Growth has been generated in a more direct manner through the implementation of various "BOT" projects and granting of licensed activities. There has been an encouraging growth in private entrepreneurship in sectors which previously have been the domain of the Government. Privatized projects have expedited infrastructural development at a time when the public sector is cutting back its development expenditure, ·particularly with privatization of new projects through "BOT". The granting of a licence to operate a commercial TV station has enabled STMB to generate new investments of about $44 million to buildup its operation.

(iii) Relieving Administrative And Financial Burden Of Government

15. Privatization has succeeded in reducing the administrative burden of the Government particularly in tenns of personnel and financial obligation. The relief has been very significant with the privatization of large entities like the

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Telecommunications Department which had. prior to corporatization. some 29.000 employees and air average annual recurrent and development expenditures of $831 million and $1.371 million respectively. Overall. privatization has managed to reduce the size public sector workforce by about 54.000.

16. Privatization has generated one-off proceeds from sale of Government interests in companies totalling S 1,180 million. Apart from these one-off proceeds, recurrent revenue from privatization comes in the 'form of lease payments as in the case of Klang Container Tenninal (Kcr), and more generally. in the form of corporate tax. In addition, the exposure of the Government in some privatized projects is also rapidly declining with loan refinancing activities undertaken by STM and Malaysian International Shipping Corporation particularly.

17. Privatization of new pojects has relieved the Government of its financial burden. The value of financial relief that resulted from the implementation of new projects for infrastructural development on "BOT" and "BO" basis amounted to about $8.2 billion. The savings represent the amount that the Government wou1d have to spend if the projects had not been privatized. In addition. the Government is also relieved of capital expenditures that are incurred by entities that have been privatized. An example of such capital expenditure is that incurred by STM on development in order to meet the growing demands for its services and to keep abreast with technological advancements.

(iv) New Economic Policy (NEP)

18. In respect of the restructuring target of the NEP. the privatization programme has helped to increase Bumiputera participation in the corporate sector. Most of the privatization projects had at least 30% Bumiputera participation while Bumiputera promoters have played an active role in the privatization of new projects. In addition, the relief in financial burden afforded by privatization has enabled the Government to rechannel funds from these projects to other areas where poverty relief measures are needed more urgently.

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Part III

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Conceptual Framework

d ts

CONCEPTUAL FRAMEWORK

19. Privatization is defined as the transfer to the private sector of activities and functions which have traditionally rested with the public sector. This definition applies to enterprises already owned by the Government and to n~w projects which normally have been implemented by the public sector. In effecting such transfers, three essential organization-related components are involved, viz,

(i) Management responsibility;

(ii) Assets (with or without liabilities) or the rights to use assets: and

(iii) Personnel.

20. Several methods of privatization exist and not all methods entail the transfer of all the three components mentioned above. A privatization method must involve the transfer of at least one of the components. For the purpose of this document, privatization is restricted to those methods which entail the transfer of at least components (ii) and (iii) mentioned above, and those methods which involve the transfer of management responsibility only but have widespread impact on the economy.

21. In the broad sense, privatization has been implemented much earlier than 1983 mainly by way of methods not involving the transfer of assets or personnel. Contracting-out of services by municipalities and other Government organizations were already commonly practised even prior to the announcement of the policy.

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However. these were undenaken for reasons of efficacy of execution of activities

rather than to consciously achieve some national objectives. For the purpose of ·this Masterplan. contracting-out including contract on a turnkey basis is excluded.

Contracting-out will continue to be implemented according to existing fmancial procedures and regulations.

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Part IV

Broad Policy Framework

BROAD roucr FRAMEWORK

22. The privatization policy will be implemented within the broader national policy framework. supponed by other complemenUuy policies such as employment. capital market and fiscal policies.

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23. Privatization is premised on the superiority of market forces over

. administrative directives in governing economic activity to achieve efficiency.

The Government's intervention in the economy will be minimal and only if considered necessary to achieve certain national objectives. Such intervention will be undertaken indirectly in a more predictable fashion through various ways such as taxation and subsidies. provision of indirect assistance through infrastructure, training and research. In general. the Government's intervention will only be confined to influencing the private sector activity rathertban directing it Existing regulations on private sector activity will be continuously reviewed with a view to liberalizing them.

24. Apart from deregulation. the Government will allow the maximum practical degree of competition in privatized industries. Where competition is not economically viable as in the case of natural monopolies. effective regulation will be introduced as a substitute for competitive pressures. Regulatory systems which rely on discretionary powers to intervene in the commercial decisions of the privatized company will be avoided as such powers will produce an uncertain operating climate. and may stifle the commercial initiative which privatization is intended to encourage. Cosely defined powers to regulate price increases and to specify particular aspects of service quality represent a better solution.

25. An expanded privatization programme will exert heavy demands on managerial and entrepreneurial skills. While in the short term.jhese demands will have to be met from the .existing pool of expertise within the private and public sectors. in the long term the national policy on education and trAining will take into account the needs of the privatization programme. In addition. the privatization programme offers a unique opportunity to foster an expanded and more innovative Bumiputera business community and towards this end, the

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existing supportive programmes will be strengthened and new measures devise. to augment the supply of Bumiputera entrepreneurs and managers.

26. A more ambitious privatization programme will also place new demands on equity an4. debt capital. In order to avoid the crowding out of capital demand by the private sector for non-privatization purposes, a number of reforms are being considered to further promote investment demand panicularly by small shareholders. employees and the Bumiputera sector. These reforms wiU not only cater to the needs of the privatization programme but also simultaneously promote further development of the domestic capital market,

27. Several fiscal policies will be reviewed in order to facilitate an expanded privatization programme. Such changes include tax incentives and the award of concessions relating to privatized projects. Consideration will be given to these incentives when privatization based on terms favoured by the Government is

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difficult to be implemented. With the benefit of tax concessions and incentives.

the private sector can offer better prices or conditions. so that tax revenue 10S1 may be compensated in other ways. Another consideration for the review of the tax legislation is the need to eliminate the unintended effects of existing laws which discriminate against privatized entities.

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Part V

'eSt

OSI the

Specific Privatization-Related Issues

iWS

SPECIFlC PRIV A TIZA nON - RELATED ISSUES

28. The Government has made decisions on the following privatization issues

to govern the future implemention of .the privatization programme.

a) OBJECTIVES-OF PRWATIZATION

29. In the implementation of the programme, the following objectives as

originally formulated will continue to be pursued:

(i) Relieve the financial and administrative burden of Government;

(ij) Improve efficiency and productivity;

(iii) Facilitate economic growth;

(iv) Reduce the size and presence of the public sector in the economy; and

(v) Help meet the national economic policy targets.

(;J Relieve The Financial And Administrative Burden O/The Government

30. Privatization will continue to be aimed at relieving the financial and administrative burden of the Government in undertaking and maintaining a vast network of services. The policy is designed 10 relinquish commercial management to the private sector and leave the Government free to concentrate on traditional functions of maintaining law and order and providing the support for achieving growth and disuibutional objectives.

tit) Improve Efficiency And Productivity

31. Privatization is expected to improve efficiency and productivity of economic activities. Efficiency would be promoted through several means

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including the introduction and enhancement of competition, freeing of Government enterprises from political supervision and civil service rigidities. and the introduction of employee incentives.

(iii) Facilitate Economic Growth

32. An important consideration behind privatization is to achieve higher growth. In the context of achieving this objective, privatization will provide opportunities for the private sector to increase its role in development The commercial and profit orientation of the private sector is expected to provide the thrust for further growth. Through higher efficiency and profits. the Government will be able to gain additional revenue particularly in the fonn of corporate taxes to finance projects under its socio-economic development plan.

(iv) Reduce The Size And Presence O/The Public Sector In The Economy

33. The gradual disengagement of the Government from economic activities through privatization will result in the reduction in the size of the public sector. thus allowing the economy to be increasingly led by the private sector,

(v) Help Meet 'The National Economic Policy Targets

34. By enhancing the growth prospects of the private sector. particularly the corporate sector, privatization will provide opportunities for achieving further progress towards the fulfilment of the national economic policy objectives especially in respect of restructuring the ownership pattern in the economy.

b) METHODS

35. Privatization can be implemented by several methods as follows:

(i) Sale of assets or equity

(ii) Lease of assets

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:s (iii)

Management contract

(iv)

"Build-Operate-Transfer" (BOT) or "Build-Operate" (BO)

(i) Sale

36. The sale method can be applied to either Government equity or assets. Sale of equity applies to Government companies and results in the transfer of alI the three organization-related components, i.e .• management responsibility. assets (together with or without liabilities) and personnel. A sale of equity can either be partial or complete. A complete sale represents a transfer of 100% Government equity in a company, while a partial sale represents a transfer of less than 100%. Sale of assets mayor may not involve the transfer of all the three components. It can apply to assets of any Government organization be it company or other types of entity.

(ii) Lease

37. A lease involves the transfer of rights to use assets for a specified period in return for specified payments. 11 is usually applicable to fixed assets of a candidate to be privatized. particularly if the assets are large and its nature is strategic such as seaports and airports. Although there is no change in the ownership status of the assets, the acquisition of the leased assets can be arranged at the end of the leasin¥ period.

(iii) Management Contract

38. This method involves the contracting-in of private sector management expertise to manage a Government entity for a fee. It entails the transfer of management responsibility and mayor may not involve the transfer of personnel but does not result in the transfer of· assets.

(ill) "Build-Operate-Transfer" (BOT) And "Build-Operate" (80) .

39. .The above methods are applicable in privatizing new projects whose development has been traditionally rested with the public sector, These include

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infrastructural and utility projects such as roads and water supply projects. The "BOT" method Involves the private sector constructing a facility using its own funds, operating it for a period known as a concession period and transferring it to the Government at the end of that period. During the concession period. the private sector is allowed to collect revenue directly from the users of the facility or indirectly through an intennediary. usually a Government institution. The "BO" method is very similar to the "BOT" method except that the fonner does not involve the transfer of the facility to the Government, Both these methods will normally be accompanied by a grant of a licence and/or concession.

40. Either a .single method or a combination of methods may be chosen depending on the merits of each case. The choice of methods will be considered case by case. As a general rule. however. the method which results in the maximum practicable degree of private sector involvement will be aimed at. Comparatively. the sale method is expected to satisfy this criterion. In addition. the methods to be used will reflect the requirements of national objectives and the constraints in each case.

c) VALUATION OF ASSEIS OR EQUrrJES

41. Privatization involving the sale of assets or equities and lease_·;()f assets requires valuations to be made-of the assets or equiues-concomed. Fen- 'equities. various methods of valuation are available, namety9the Netq'antible AssettNTA) method. the Price-Earnings (PE) Multiple method and the Discounted Cash Flow (DCF) method. While the NT A method does not take into account of the future earnings prospects of the entity concerned. the other two methods do.

42. Generally. the Government will use the methods that do take into account of the future prospects of the entity. including its opportunities and contraints. Takirig into account these factors. there may be cases where the value of the entity may not fully reflect the market value of its physical assets or vice versa.

43. Potential earnings will also generally determine the value ofpbysical assets to be disposed of or leased. The value of the business based on the potential earnings of the entity to be privatized may be higher or lower tIiafi the value of the assets depending on whether the assets are subject to any encumbrances or not,

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If the assets are subject to encumbrances and are not allowed to be used for purposes other-1han what they were originally intended for. the value of those assets may be lower than what it would otherwise be.

d) PERSONNEL

44. The Government has imp1emented several policy decisions with regard to personnel affected by privatization. Firstly. no personnel can be retrenched within the first 5 years of privatization, except on disciplinary grounds. Staff redundancy. if any, is expected to be overcome through nonnal attrition. redeployment and expansion of activities. Secondly, upon privatization. affected personnel will be offered a package of no less favourable terms and conditions of service than those enjoyed by them while working with the Govenunent

45. Affected employees are given two options, either to join or not to join the privatized entity. Those who do not wish to join the privatized entity will be retired off and will be given their rightful retirement benefits immediately. Those who wish to join the privatized entity will be offered two schemes of service, one which replicates the Government scheme of service, and another which is commercially oriented. Under the latter scheme, the-employees are entitled, among others, to purchase the privatized entity's shares and to enjoy bonuses that are declared as and when warranted based on the perfonnance of the entity.

46. It should be emphasized that the above decisions only relate to the personnel of Govenunent departments and statutory bodies to be privatized and do not cover the personnel of Government companies.

e) CHANGES IN THE LAWS

47. In. order to facilitate the implementation of the privatization programme. the Govenunent has amended a number of laws which have posed as unintended obstacles to the programme. These amendments are in respect of both the laws which have general applicability such as the Constitution and the Pensions Act. 1980 as weD as laws relating to specific Government functions such as the Telecommunications Act. 1950 Port Authorities Act. 1963 and -the Electricity Act. 1949. The Govenunent forsees that many other laws still need to be amended for

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the same purpose. In this respect. the Government is reviewing the relevant laws and will'-make""the necessary amendments as and when the need arises.

f) REGULATORY FRAMEWORK

48. Privatization calls for economic reforms particularly by way of deregulation and lifting of barriers 10 entry in order t? .allow market forces to dictate economic activity and thereby improve efficiency and productivity. However. in respect of natural monopolies. there is a limited scope in increasing competition. In place of competition. an appropriate regulatory framework will be established and strengthened to regulate these natural monopolies in order to ensure that consumers' interests are protected "especially in terms of price. quality and availability of services. Although consumers' interests will be a focal point in developing the above regulatory framework. the Government will also ensure that the private monopolies enjoy the commercial freedom required to improve efficiency.

g) CAPITAL MARKETS

49. By virtue of the size of the public sector, privatization exerts" heavy demands on private sector financial resources. Consequently. this demand calls for: a much increased role for the various financial intennediaries and the stock exchange in mobilizing both debt and equity capital.

50. Privatization will have the effect of deepening and broadening the Malaysian capital market panicularly the stock market by increasing the number

. of stocks that will be made available as well as introducing new sectors into the market. While the privatization programme will have an impact on the supply side of the capital market. the demand side will also be taken into consideration to ensure that there will be sufficient absorptive capacity for the successful implementation of the policy. Towards this end. the Govenunent is reviewing policies and measures with a view to increasing and enhancing the absorptive capacity of the capital market

26

I

of ; to ity, ing be . to

lily lint LIre JVe

aws

vy tor: ck

h) BUMIPUTERA PARTICIPATION

51. The achievement of the distributional targets. in particular mat relating to the restructuring of society, will continue to be pursued in the implementation of the privatization programme. In respect of ownership of wealth. the privatization policy forms an integral pan of the _ Oovernment's strategy in realizing active participation by the Bwniputera in the corporate sector since the policy encompasses also the transfer of Government trust companies to the Bwniputera. In addition, the privatization programme will be used as a vehicle to correct the imbalances in the corporate sector by providing Bumiputera wider opportunities to participate in the privatization of non-trust agencies. In the implementation of the privatization programme therefore. the absorptive capacity of the Bumiputera will be taken into cognizance. The enhancement of their absorptive capacity will be promoted by encouraging collaborations between Institutional investors such as Lembaga Urusan dan Tabung Haji and Lembaga Tabung Angkatan Tentera, and individual entrepreneurs as well as companies, Active participation by the Bumiputera in the privatization programme will also be promoted through schemes for' employees such as management buy-outs and employee share ownership plans. A mechanism will be instituted to ensure the sustainment of Bumiputera participation once a Government entity is privatized.

i) FOREIGN PARTICIPATION

52. While the local investors are expected to take advantage of the bulk of the investment opportunities made available by the privatization programme. foreign participation can be considered in the fonowing cases:

he (i) Where their expertise is needed to upgrade efficiency and such
er expertise ~s not available locally;
ile
~y (ii) Where their participation is necessary to promote the export
)n market;
ill
)g (iii) Where me supply of local capital is insufficient to absorb the
'e shares offered; and 27

r

(iv) Where the nature of business requires global linkages and

international exposure.

53. Foreign participation in a privatized entity is limited to a maximum of 25 percent of its share capital. For projects of strategic and national importance, foreign ownership will have to be widespread in nature so as to ensure that no on~ foreign pany will have undue influence on 1he company.

j) PRIV ATlZATJON FUND

54. The implementation of the privatization programme involves several expenditures such as expenditures on conducting feasibility studies. restructuring of potential candidates for privatization and compensation that may arise as a result of privatization. While these expenditures may be financed by way of the normal Government budgetary process, the establishment of a special fund will provide the Government with a more efficient alternative fmancing arrangement, This Fund is expected to be self-financing with pan of privatization proceeds being used to fimd it A study is being undertaken to determine the feasibility of establishing this Fund.

k} £SOPs AND MBOs

55. To ensure success in the privauzanorrprogramme, it is esse..ntial that-not only acceptance and support of affected employees are secured but also incentives are given to motivate employees to contribute towards the further development of the entity they work for. Apart from the adoption by privatized compa_n1es of a more commercially oriented reward system which is largely based on performance, another fonn of incentive that will be introduced is employee share ownership. Several schemes for employee share ownership have been identified. In the past. shares of floated Govenunent companies have. been offered to employees. Such a scheme has not benefitted the lower category of employees very much due to their limited sources of financing. In addition. this scheme also has not succeeded in enhancing employees' sense of loyalty and commitment towards the company since a fair proponion of the employees who subscribed to the shares sold them shortly after they were listed on the Stock Exchange. A lo~ger term employee ownership is considered essential to bring about such a sense of loyalty and

28

and

25

Ice,

)ne

.

ral ng LIlt 131 he rld to 19

ot

)f a

.. .. ,

).

t,

h

o d

Y n

e d

commitment, Towards this end. the Employee Share Ownership Plans (ESOPs) will be introduced in future privatizations. Such a scheme involves the establishment of a trust to hold shares for the employees. Financing for the purchase of shares by employees will be arranged by the trust. Employees will only be able to sell their shares when they leave the company or upon retirement

. . .

56. Another means of bringing about long term employee ownership is through

Management Buy-Outs (MBOs) whereby the top managerial personnel of a company will be allowed to buy it out based on financing that is arranged by them. The management group could also team up with the rest of the employees in such an exercise as in Management-Employee Buy-Outs (MEBOs).

29

Part VI

Privatization Action Plan

r

PRIV A TIZA nON ACTION PLAN

57. In order to ensure that. the privatization effort is channelled to appropriate priority areas so as to optimise the impact of the policy implementation in terms of the achievement of the policy objectives, a Privatization Action Plan (PAP) has been fonnulated. The PAP thus represents a more systematic and organized manner of policy implementanon to be in consonance with the macro economic policies and development strategy.

58. The PAP consists of a two-year rolling plan which is reviewed at the end of each year, detailing the entities to be privatized and those to be prepared for privatization. The yearly review will take stock of the progress being made so as to determine the entities to be privatized in the next two years. An illustration is shown in Chan I.

33

Chan I

ROLLrNG PRIVATIZATION ACTION PLAN






--" End 1990

End 1991

End 1992

End 1993

End 1994

Prepare Review Review Review Review
action Implementation Implementation Implementation Implementation
Plan for in 199-1 in 1992 in 1993 in 1994
1991 and and prepare and prepare and prepare and prepare
1992 Plan tor Plan for Plan for Plan for
1992- 1993 - 1994 - 1995-
1993 1994 1995 1996 34

on

59. The formulation of the PAP has been guided by the PMP Study undertaken by private consultants who reviewed a large sample of Government-owned entities (GOEs) to determine both their feasibility and desirability fOT privatization. In all. 424 GOEs were reviewed cutting across functions of all levels of Government i.e., Federal. State 1 and Local Government 2 as well as the Government companies. Of these. a total of 246 entities were found by the consultants to be privatizable, with 69 privatizable within two years. 107 within two to five years and the remaining GOEs privatizable beyond five years. The summary indicators of these 246 GOEs are shown in Appendix 2.

60. A list of the GOEs identified by the consultants is given in Appendix 3. However. it must be noted that not all of these GOEs will be finally privatized. Careful consideration will be given to each of them before its incorporation into the PAP. In fact, upon a review made of the 246 GOEs. the Government has decided not to privatize several identified GOEs such as the Social Security Organization (SOCSO), the Registrar of Companies and the Registrar of Businesses. Survey and Mapping Department, and the Factories and Machinery Department. Privatization of departmental services such as hospitals. educational institutions and financial institutions such as banks as proposed by the Masterplan consultants need to be further studied to determine whether they are suitable. for privatization. Thus. the Government will not necessarily accept all the projects proposed by the consultants.

61. The Govenunent will undertake a continuous review of its entities to encompass those that were not covered by the PMP Study. A number of entities that have been identified in these review exercises will be selected to form the rolling PAP after detailed privatization studies have been undertaken on each of them. The first rolling PAP is set out in Appendix 4.

62. The 246 projects studied by the consultants and other projects that will be identified by the Goverrunent in subsequent review exercises will be deemed to be Government-initiated privatization projects and therefore will be subject to

1 Two states were covered in the PMP Study i.e., Selangor and Pahang.

2 Two local authorities were covered in the .PMP l.e., Georgetown and Gombak,

35

competitive bidding. Thus. proposals submitted by the private sector with regard to tbeseprojects prior to Govenunent's invitation for bidding will generally not be entertained. However, if a private sector proposal contains certain unique features as mentioned in paragraph 89 which indicates that no other private sector party can privatize the project in question. the proposal may be considered by the Government as a private sector initiated privatization.

Privatization Decision Grid

63. Several factors are taken into account in the preparation of the PAP. Firstly. the feasibility and desirability for privatization of those GOEs under review are considered. The feasibility criterion is determined by two factors Le., ease of privatization and attractiveness to the private sector. The ease of privatization is judged in terms of the requirement for restructuring to prepare for privatization and the need for legal and regulatory changes. The attractiveness of the candidate to the private sector is determined primarily by its competitive market position, growth potential and financial profile.

64. The desirability criterion is based on a sector analysis and is made in terms of the priority which the Government attaches to economic development and changes in that sector and the relative advantage. which the private sector could be expected to enjoy over Government in that sector in tennsof efficient provision of goods and services to meet national ebjeetives, The·comtNnauon·of the feasibility and the desirability criteria can be explained through a Privatization Grid as shown in Chan II.

36

Desirability (Economic Policy)

Low

High

., .. ., . .,-",'j.".j''' ,'''''',.,'', _ ,.'

Chart Ii

PRIVATIZATION GRID

Feasibility

(Easel Attract iveness)

High

Low

Immediate Priority
Privatization Restructuring
Back-bumer Consider
Future 37

65. A GOE which is evaluated based on the feasibility and desirability criteria may be located in any of the four quadrants of the Privatization Grid shown in the above Chan. The Grid divides privatization candidates into four categories. The "immediate privatization" category consists of candidates which rank high in ease of privatization and attractiveness to the private sector (feasibllity) and also in terms of the Government's objective priority (desirability). These will be the primary focus of actual privatization in the early years of the PAP.

66. The "priority restructuring" category consists of candidates which rank high in terms of the Government objectives but are either difficult to privatize or unattractive to the private sector in their present fonn. Some forms of restructuring therefore need to be undertaken in respect of these candidates before they are privatized.

67. The "back-burner" category consists of candidates which are perfectly feasible 10 be privatized but the benefits of privatization are likely to be less evident than in the case of other candidates. They are therefore less deserving for immediate privatization.

68. The "consider future" category consists of enterprises which rank poorly both in terms of feasibility and desirability for privatization. Thesesbouldremain in the public sector until such time as more attractive and -important candidates have been privatized.

Other Factors Considered In Drawing Up The Privatization Action Plan.

69. Apart from analysing candidates in terms of the above Privatization Grid, several other factors are also taken into consideration in the formulation of the PAP. An aspect which is taken into consideration is the impact which a project has on the economy. Based on this consideration, one or two fairly large candidates have been incorporated in each year of the rolling PAP. They are selected because of their potential to generate changes and benefits to the economy which their privatization can bring about

70. To ensure successful implementation. the PAP takes into account also the absorptive capacity of the domestic capital martel. The size of the programme

38

L

r

will be designed in a way so that demand for capital to fmance privatization will not crowd out demand for capital to finance other purposes,

71. The PAP also takes into account privatization projects which are initiated by the private sector. In addition. it considers new projects. the implementation of which can be privatized. The dev~lopment of these projects has traditionally rested with the public sector. A number of them are being identified in the fonnulation of the Sixth Malaysia Plan (1991 - 1995).

72. The formulation of the PAP takes into account the need to achieve a well-balanced programme likely to command a broad-based support and to develop its own momentum.

Major C omponents Of The Privatization Action Plan

73. Taking into account of all the considerations above. the PAP is formulated

to consist of six different parts as follows:

(i) Flagships;

(ii) Easily privatizable Government majority-owned entities;

(iii) Restructuring candidates;
(iv) Services;
(v) Minority or listed holdings; and
(vi) New projects.
(;) FLagships 74. These are privatization of GOEs which are of national importance. in terms of size and complexity and thus merit special treatment. Privatization of flagships will give momentum and visibility to the .programme. Flagship candidates include the Tenaga Nasional Berhad, STM and the airports,

39

Privatization of at least one flagship will be targetred for each year. Owing to their sheer size. the privatization of these candidates will be phased out over several years.

(ii) Easily Privatizable Government Majority-Owned Entities

75. These are mainly profitable Government companies already operating in competitive commercial environment like private sector entities and often have commercialised operations. GOEs under this category feature predominantly in the early years of the programme. Priority will be given to those in the sectors which are central in terms of achieving the broader economic policy objectives and those in the sectors where the private sector has most to offer. i.e .• in manufacturing and agricultural sectors.

(iii) R estructuring Candidates

76. These include non-profitable companies operating in competitive commercial sectors. For these companies. there are two types of restructuring exercises which need to be undertaken for the purpose of privatization. The first form is financial restructuring which is relevant in respect of GOEs that are profitable at the operating level but sufferlosse~.aftertaking into accounrfinancial . costs. The performance of such GOEs can be improved by fmancial restructuring. such as by injecting fresh equity or retiring' some of the' debt er swapping-1iebtfor equity to restore an acceptable and prudent level of gearing. The second type of restructuring which needs to be undertaken is at the operational level. The most radical fonn of operational restructuring may affect the whole industry. such as through mergers and ' closures where there is excess capacity. Other fonns of operational restructuring focus more on the operations of the enterprise itself covering such areas as organizational structure and production technology.

77. Where restructuring is found to be necessary to allow for privatization to take place, its costs and benefits will be considered .. Restructuring will only be undertaken if it is found to be justified. In general. the Government will only undertake the minimum restrucniring necessary before privatization and usually this will be confined to major candidates only and the restructUring form to be undertaken by the Government will be financial in nature. For medium and

40

"..__-----_ .... -- ..

small entities. the Government prefers to privatize them without being restructured even if it implies lesser proceeds. As regards to operational restructuring. the Government's involvement would be minimal. as it is considered that the private sector is better placed to assess the risks and returns involved.

I

J\:'

(iv) Services

78. Among the services that have been identified to be privatizable are training. health services. veterinary services and research. GOEs providing such services are not exposed to significant commercial competition. With the introduction of competition. their potential for privatization increases and by privatizing them. it is hoped that conswners will benefit by way of greater efficiency and better quality of services. However, these entities enjoy lower priority until the rest of the programme is well established. Improvements in the economic performance of such candidates are Jess easy for the private sector to achieve.

(v) Listed And Minority Holdings

79. In general, these entities are accorded a low priority since the involvement of the private sector in these entities is already substantial and consequently many of the privatization policy objectives have already been met to a considerable degree.

(vi) New Projects

I

80. These are projects that have traditiona11y been developed by the public sector. Examples of these are roads, bridges. water supply projects and electricity supply projects. These projects can be developed by the private sector if it is allowed to collect revenues from the users of these projects. Many such projects have already been privatized by way of the "BOT" concept Such projects are being identified during the fannulation of the Sixth M~aysia Plan.

41

IMPLEMENTATION PROGRAMME

81. For implementation purposes. the PAP further categorises the above

components of the programme into two pans:

(i) Those which need preparatory work to be undertaken before privatization can be implemented; and

(ii) Those which are ready for implementation.

82. Most of the flagships require extensive preparatory work to be done as many of them are still operating either as a Government department or a statutory body. Their privatization will have to be implemented in several stages as shown in Chart III.

42

as ry 'Il

Chan III

PRIVATIZATION OF GOVERNMENT DEPARTMENT; STATUTORY BODY

Commercialization

r-----------------~

Government Department

SeH-accounting

f-----~ Entity

Corporatization

State-owned Corporation

43

Divestiture

Private Sector Company

83. The first stage that the entity has to pass through is the commercialization stage. At this stage, user charges are introduced. followed by commercial accounting and commercia] performance objectives. The second stage is the corporatization stage. a process involving a change in the legal status of the entity from a department or statutory body into a company governed by the Companies Act. 1965. This stage involves the. transfer of Govenunent assets and liabilities from the Government depanment or a statutory body to a company still owned by the Government but operating on commercial lines. At this stage. several changes will be made with a view to enhancing productivity and efficiency. Some of these opportunities are as follows:

(0 Replacing bureaucratic administration with commercial management:

(ii) Introducing clear financial and operational performance targets and commercial accounting: and

(iii) Replacing centralised production-oriented decisions with consumer and market driven decisions.

84. The last stage that .a Government depanmCJl1/statutor-y bodyhas to go through in the privatization process is the divestiture stage. a stage involving the transfer of ownership of the corporation from the public to the private sector. There are several routes to divestiture. One or a combination of the following routes may be adopted:

(i) public flotation;

(ii) private sale; and

(iii) management buy-out (MBO)/employee share ownership plan (ESOP)

44

I

.

.

.. ;':

.• 'tic

85. Likewise, the restructuring candidates will require some preparatory work in terms of restructuring eitheroperational1y or financially. while the privatization of services calls for changes to be made to the market structure of those services by introducing competition and deregulation.

45

Part VII

Approach To Project Implementation

APPROACH TO PROJECT IMPLEMENTATION

86. The privatization of a OOE may be initiated by the Govermnennt or the private sector. In the case of a Government initiated privatization candidate. it will be offered to the public at large or speciflc target groups subject to competitive bidding as explained in paragraphs 93 and 94.

87. The private sector will at the same time be allowed to submit privatization

.

proposals. In the initial stage, the private sector should submit a comprehensive

conceptual proposal which will enable the Govenunent 10 determine its privatizabilityand uniqueness. Such proposals will be considered on a "first-comefirst-served" basis with a view to rewarding innovativeness and ingenuity and encouraging entrepreneurship. If the proposal meets the prescribed guidelines of privatizability and uniqueness, a letter of exclusivity will be given to the private sector party concerned to conduct a feasibility study and submit a complete proposal to the Economic Planning Unit Upon evaluation of the complete proposal. should the Government find it acceptable, negotiations will be carried out with-the private sector patty concerned and an award will be made when an agreement is reached.

88. Should the negotiations fail, however, the project will be privatized through competitive bidding as if it was a Government initiated project Recognizing that the initial private sector party which has been given exclusive right to conduct the feasibility study for the preparation of the proposal has invested money for the study. it may be compensated for the cost of the study. An arrangement will be made to enable it to be compensated by the successful bidder for the project For this purpose, a budget on the study will have to be agreed upon between the Govenunent and the initial private sector party. The compensation for the cost of the study by the successful bidder will therefore be incorporated as one of the terms of privatization.

89. The following criteria will be used as general guidelines to detennine the

uniqueness of a project:

Ci) the proposal contains a unique solution to an economic problem and offers a cost-effective method of solving the problem or offers

49

(ii)

the private sector party may be in a unique position to effect a successful privatization in view of its possession of certain patent rights or technical know-bow which becomes an essential feature in a privatization proposal; and

to generate potential savings to, the Government In such a case" J.!le Government is confident that the private sector proposer is capable of implementing the proposal;

(iii) the privatization candidate would not be viable if privatized on its , own and its viability dependent on being linked to another component of which a private sector party is already in possession. In such a case, the privatization of the project would be granted to the private pany who is in possession of the main component.

90. If the proposal is not unique, it will be subjected to competitive bidding to enable the Government to award the project to the best bidder.

_,

Screening Of Bidders

91. A more stringent screening of bidders will be made to ensure smooth implementation of project and compliance with policies of the Government 1be screening will also ensure that' thebiddcli possees the 'necessary;·financial and r technical capabilities. Such screening will apply to both Government and.private t sector initiated privatizations. The format to be followed is shown in Appendix t

~

5. I

~ t r

t,

I

~

50

Ie Id te x

Part VIII

liSe, r is

:t a :em. Un!

its ler In. to

rIg

Administrative Machinery

ADMINISTRATIVE MACIllNERY

FEDERAL GOEs

92. The administrative machinery that has been set up for the execution of the privatization policy is based on the principle of centralised planning and decentralised implementation. The administrative process involved in privatizing Federal GOEs varies with the nature of the project i.e .• whether it is Government initiated or private sector initiated. These administrative processes are discussed as follows:

Approach To Government-Initiated Privatization

93. Planning the programme for implementation will be centralised at the Economic Planning Unit TIlls function involves a continuous review of . Government activities and entities and identification of privatizable candidates. Subsequently, a programme will be drawn up for more indepth studies to be undertaken on these candidates. Based on the indepth studies the two-year rolling PAP will be drawn up. This Plan will be deliberated by the Inter-departmental Committee on Privatization (lCP), the highest decision-making body at the official level regarding privatization. The ICP will in tum put forth its recommendations on the PAP to the Government for a decision Upon approval of the Plan by the Government, the ICP will evaluate the various possible modes of privatizing the GOEs. The first rolling PAP that has been approved by the Government is shown in Appendix 4.

94. The responsible Ministries will thereafter extend invitations to the private sector through appropriate means to privatize these entities. The private sector can then respond to such invitations by the Ministries. The bids made by the private sector will be evaluated and thereafter an award will be made by the Ministry.

Approach To Private Sector-Initiated Privatization

95. For private sector-initiated privatizations, the proposals should be submitted

to the Economic Planning Unit at the following address: -

S3

Director General.

Economic Planning Unit. Prime Minister's Department, Jalan Dato' OM.

50502 Kuala Lumpur,

The approach to the implementation of private sector-initiated privatizationjs mentioned in paragraphs 87-:90. The proposal will be evaluated and if found to be acceptable by the Government, the award will be made by the Ministry responsible.

STATE GOEs

96. At the state level. a similar machinery has been set up. For private sectorinitiated projects. the proposals should be submitted to the respective State Secretariats.

,

I I

54

Appendices

APPENDIX 1

LIST OF PRIVATIZED PROJECTS AS AT 31.12.90

Government-Owned Entity Method Year
New Projects
L Sistem Televisyen Malaysia Berhad B.D. 1983
2. North Klang Straits Bypass B.O.T. 1983
3. J alan Kuching/Kepong Interchange B.O.T. 1985
4. Labuan Water Supply B.O.T. 1987
5. K.L. Interchanges B.O.T. 1987
6. North-South Highway B.O.T. 1988
7. Labuan-Beaufort Interconnection B.O.T. 1988
8. lpoh Water Supply B.O.T. 1989
9. Larut Matang Water Supply B.O.T. 1989
10. Desaru International Resort B.D. 1990
Existing Projects
11. Sports Toto Malaysia Bernad Sale of Equity 1985
12. Malaysia Airline System (MAS) _S~e of Equity 1985 57

1

13. RMAF Aircraft Maintenance Depot Lease 1985
14. Tourist Facilities at National Pai'k Management Contract 1986
15. Malaysian Intemational Shipping Sale of Equity 1986
Corporation Bernad (MISC~
16. Klang Container Terminal Lease + Sale of Assets 1986
17. Semenyih Dam Management Contract 1987
18. Marketing of Airtime. Radio Malaysia Management Contract 1987
19. RISDA Marketing Acti vities Management Contract 1987
20. Tradewinds Berhad Sale of Equity 1988
21. Maintenance of Tube Wells, Labuan Management Contract 1988
22. Syarikat Gu1a Padang Terap Sdn. Sale of Equity 1989
Bhd.
23. Cement Manufacturers Sarawak Sale of Equity . 1989
Berhad
24. Government Security Printing Lease + Sale of Assets 1990
25. Shah Alam Abattoir (Swine Section) Lease 1990
26. Lori Malaysia Berhad Sale of Equity 1990
27. Edaran Otomobil N asional Berhad Sale of Equity 1990
(EON)
28. Holiday Villages Seln. Bhd. Sale of Equity 1990 58

f

!

I

29. Cement Industries of Malaysia Sale of Equity 1990
Bernad (CIMA)
30. Pemas International Hotels and Sale of Equi[y 1990
Properties Berhad
31. Paremba Bernad M.B.O. 1990
32. Kumpulan F1MA Bernad M.B.O. 1990
33. Sungai Long Quarry, Selangor Sale of Assets 1990
34. Kuala Dipang Quarry, Perak Sale of Assets 1990
35. Penanti Quarry. Pulau Pinang Sale of Assets 1990
36. Syarikat Telekom Malaysia Bernad Sale of Equity 1990
C orporatization
37. Tenaga Nasional Berhad Note:

The above list does not include privatization projects which involve divestment of Government companies under the scheme of transfening Government-owned enterprises to Bumiputera.

B.O. B.O.T. M.B.O.

= Build-Operate

= Build-Operate-Transfer = Management-Buy-Out

59

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APPENDIX 3
UST OF PRIV A TIZABLE GOEs IDENTIFIED BY
THE PRIVATIZATION MASTERPLAN STUDY
1. MAJORlTY HOl.DINGS
PAlD-UP CAPrrAL
Share (%)
SECTOR/GOEs NUMBER $'000 Federal Slale Private
01 00 AGRlCUL TURE
Classification 1
Far East Holdings Bhd 36,165 0.0 100.0 0.0
Ketengah Perwira Sdn Bhd 28,500 51.0 0.0 49.0
Ladang Sabah Sdn Bhd 80.000 0.0 100.0 0.0
Syarika; Kumia Sdn Bhd 15.542 0.0 59.5 40.5
Syarikat Ladang LKPP Sendirian 250 0.0 100.0 0.0
Berhad
Ketengah Jaya Sdn Bhd 20.600 42.7 26.2 31.1
Johore Tenggara Oil Palm Sdn Bhd 10.577 100.0 0.0 0.0
Kilang Sawit Panji Alam Sdn Bhd 7,600 68.1 0.0 31.9
Sawira Sdn Bhd 35,000 70.0 0.0 30.0
Syarikat Ladang Sungai Terah Sdn 10.000 0.0 100.0 0.0
Bhd
Ladang Perbadanan Fima Sdn Bhd 57.152 40.0 60.0 0.0
11 301.386
Classification :z
Felda Agricultural Services Corp. 2,400 51.0 0.0 49.0
Amalania Koko Bhd 17.500 0.0 100.0 0.0
Desa Hatchery Sdn Bhd 16.000 0.0 100.0 0.0
KPD Holdings Sdn Bhd 50,000 0.0 100.0 0.0
PPES Ternak Holdings Sdn Bhd ]0,438 0.0 ]00.0 0.0
SAFIMA Plantations Sdn Bhd 12.600 50.0 50.0 0.0
FELDA Manufacturing Corporation 145.780 74.6 0.0 25.4
FELDA Palm Kernel Corporation 15,000 100.0 0.0 0.0
Kum. Ladang-Ladang Terengganu 20.000 0.0 100.0 0.0
Sdn Bhd
LKPP Sawit Sdn Bhd 8.300 0.0 100.0 0.0
FElDA Rubber Corporation 7.148 100.0 0.0 0.0
Supplies and Procurement Div., 0 0.0 0.0 0.0
RISDA
Marketing Division-RISOA 0 0.0 0.0 0.0
Processing and Exporting of Pepper- 0 0.0. 0.0 0.0
Pepper Marketing Board
14 305.166
61 T
I
l
PAID·U/, CAPITAL I
- Share (%)
SECTOR/GOEs NUMBER $'000 Federal Suue Private
Classification 3
Selangor Agricultural Corp. (SADC) 0 0.0 0.0 0.0
Copra Processing Centre 0 0.0 0.0 0.0 I
-Bagan Datuh, Perak-FAMA
Copra Processing Cenrre=-K. Selangor-s- 0 0.0 0.0 0.0
FAMA
Copra Processing Centre-s--Sab, Bernarn- 0 0.0 0.0 0.0
FAMA
4 0
TOTAL 0100 AORICUL.TURE 29 606.552
0200 FORESTRY & LooOtNO
Classification 2
Pcrkayuan Tenggara Sdn Bhd 10.000 8.6 91.4 0.0
5 yarikat Jengka Sendirian Berhad 49.000 93.9 6.1 0.0
Sabah Forest Industries Sdn Bhd 382.286 0.0 100.0 0.0
3 441.286
Classification 3
Amanah Saham Pahang Bhd (ASPA) 18.000 0.0 100.0 0.0
18,000
TOTAL 0200 FORESTRY & LooGING 4 459.286
0300 MINING & QUARRYIl'lG
Classification I
Sri Buana Sdn Bhd 867 0.0 100.0 0.0
Timah Dermawan San Bhd 14.207 0.0 70.0 30.0
Bkt Penggorak Central Quarry. Workshop 0 0.0 0.0 0.0
- &. Quarry Div., lKR. Pahang
Sg. Long Central Quarry, JKR 0 0.0 0.0 0.0
Selangor
: !
4 15.074
Ii Classllicatlon 2
Kedah MarbJe Sdn Bhd J6.0oo 0.0 75.0 25.0
Kampong Awah Quarry. Workshop 0 0.0 0.0 0.0
& Quarry Div •• lKR. Pahang
2 16.000
62 I

PAID-UP CAPITAL
Share (%)
SECTOR/GOEs NUMBER $'000 Federal State Private
Classification 3
Petronas Carigali Sdn Bhd 100.000 100.0 0.0 0.0
Bina Dara Sdn Bhd 937 100.0 0.0 0.0
Kuari Kerisek Sdn Bhd 620 0.0 )00.0 0.0
3 101.557
TOTAL 0300 MU.'1NG & QUARRYING 9 132.631
0400 CONSTRUCTJOK
Classification 2
FELDA Construction Corporation 3.000 100.0 0.0 0.0
Peremba Construction Sdn Bhd 5,350 100.0 0.0 0.0
2 8,350
Classification 3
Urban Development Authority 0 0.0 0.0 0.0
(UDA)
1 0
TOTAL 0400 CONSTRUCTJO:\ 3 8.350
0500 MANUFACTURIKG
0501 MANUFACTURING-FooD BASED
Classification I
Gula Padang Terap Bhd )07,000 72.0 15.9 12.2
Malaysia Cocoa Manufacturing Sdn 24.000 51.0 0.0 49.0
Bhd
Pineapple Cannery of Malaysia Sdn 26.200 100.00 0.0 0.0
Bhd
Coffee Processing & Production 0 0.0 0.0 0.0
Cenlcr-B&nling-FAMA
Milk CoUection & Processing 0 0.0 0.0 0.0
Operation- V eterinary Department
5 157.200
Classification 1
Sabah Fish Marketing Sdn Bhd 17.071 0.0 100.0 0.0
Koko Malaysia Sdn Bhd 17.750 10.1 - - 21.4 8.4
Kumpulan Fima Bhd 189.343 99.5 0.5 0.0
3 224.164
63 PAID-UP CAPITAL
Share (%)
SECTOR/GOEs NUMBER $'000 Federal State Private
0502 MANUFACTURlNG- WOOD BASED
Classification 1
Sinora Sdn Bhd 7,000 0.0 70.0 30.0
Forescom Plywood Berhad 13,000 0.0 100.0 0.0
2 20,000
Classification 2
Perpa Moulding Sdn Bhd 4,600 0.0 100.0 0.0
ASPA-Samick Furniture Sdn Bhd 5.745 0.0 100.0 0.0
Maran Sawmill Sdn Bhd 1.326 0.0 51.0 49.0
Modal Moulding Sdn Bhd 2,200 0.0 100.0 0.0
Permit Plywood Sdn Bhd 7,400 0.0 100.0 0.0
Syarikat Goodwood Industries Sdn Bhd 600 0.0 100.0 0.0
Sumber Perindu 5dn Bhd 0 0.0 0.0 0.0
7 21,871
Classification 3
Perkayuan Pahang (Lipis/Jerantut) Sdn 200 0.0 ]00.0 0.0
Bhd
Syarikat Perusahaan Cini Sdn Bhd 681 0.0 100.0 0.0
2 881
0503 MANUFACTURING-RuBSER B...s.ED
Classification 2
Malaysia Rubber Development Corpn 123.348 100.0 ,0.0 0.0
Bhd
1 123,348
0504 MAf'ljFACTljRISG-PETROl.UEM
BASED
Classification 2
Sabah Gas Industries Sdn Bhd 371.900 0.0 100.0 0.0
1 371.900
C)asslnca tion 3
PETRONAS Penapisan (Terengganu) 80.000 100.0 0.0 0.0
Sdn Bhd
PETRONAS Gas Sdn Bhd 50,000 100.0 0.0 0.0
2 130,000
64 PAID-UP CAPrrAL
Share (%)
SECTOR/GOEs NUMBER $'000 Federal State Private
0505 MANUFAcrURING-NoN-MATEWC
BASED
ClassifieR lion 1
Selangor Industrial Corp. Sdn Bhd 40.000 0.0 100.0 0.0
Cement Manufacturers Sarawal:: Sdn 16.000 0.0 100.0 0.0
Bhd
2 56.000
Classification 2
Cement Industries (Sabah) Sdn Bhd 28.000 0.0 70.0 30.0
Perak-Hanjoong Simen Sdn Bhd 149.570 0.0 60.0 40.0
Kedah Cement Sdn Bhd 180.000 40.2 25.0 34.8
3 357.570
0506 MANUFACTURING--OTHEIlS
Classlfiea tlon 1
Fima Melal Box Holding Sdn Bhd 26.177 52.0 0.0 48.0
Kima Sdn Bhd 20.282 100.0 0.0 0.0
2 46.459
ClasslfleatJon 2
Antara Steel Mills Sdn Bhd 25.000 38.0 38.0 24.0
Kinabalu Motor Assembly Sdn Bhd 12.785 0.0 100.0 0.0
Pernas Engineering Sdn Bhd 10,000 100.0 0.0 0.0
Perwaja Terengganu Sdn Bhd 250,000 51.0 19.0 30.0
Malaysia Shipyard & Engineering Sdn 100,000 78.0 0.0 22.1
Bhd
Sabah Shipyard Sdn Bhd 206.700 0.0 100.0 0.0
Central Medical Store 0 0.0 0.0 0.0
7 604,485
Sub-total Classification 1 11 279,659
Classification 2 22 1.703.338
Classification 3 4 130.881
TOTAL 0500 MANUFACTURINO 37 2.113.878
65 PAID·UP CAPITAL
Share (%)
SECTOR/GOEs NUJ,{BER $'000 Federal State Private
0600 TRANSPORTATIOS
0601 TRANSPORTATJON-
INFRASTR.UCTURE
Classification 1
Johor Port Authority 0 0.0 0.0 0.0
Lembaga Pelabuhan Kelang 0 0.0 0.0 0.0
Suruhanjaya Pelabuhan Pulau Pinang 0 0.0 0.0 0.0
Airports 0 0.0 0.0 0.0
4 0
Classification 2
Bintulu Port Authority 0 0.0 0.0 0.0
Kuantan Port Authority 0 0.0 0.0 0.0
Kuching Port Authority 0 0.0 0.0 0.0
Rajang Port Authority 0 0.0 0.0 0.0
Sabah Ports Authority 0 0.0 0.0 0.0
5 0
0602 TRANSPORTATIOK-5uVICES
ClassJfication 1
Ekspres National Bhd 12.805 61.0 0.0 39.0
Hornbi1l Skyways Sdn Bhd 13.500 0.0 77.8 22.2
Malaysian Helicopter Services Bhd 28.985 41.4 31.1 27.6
Syarikat Sri Jengka Sdn Bhd 515 ]00.0 0.0 0.0
4 55.865
Classffication 2
FELDA Transport Corporation 3,450 51.0 0.0 49.0
Lori Malaysia Berhad 10.634 98.5 0.0 1.5
Perbadanan N asionaJ Shipping Line 49.000 100.0 0.0 0.0
Bhd
Keretapi Tanah Melayu (KTM) 0 0.0 0.0 0.0
4 63.084
SUB-TOTAL CLASSIFICATION 1 8 55,865
CLASSIFJCA nON 2 9 63.084
CLASSIFICA nON 3
TOTAL 0600 TRANSPORTATION 17 118,949
66 1

PAID-UP C, .. rrrs:
Share ('10)
SECfOR/GOEs NUMBER $'000 Federal Slale Private
0700 UTILm£S
Classlrication 1
Lembaga Letrik Negara 0 0.0 0.0 0.0
Postal Services Department 0 0.0 0.0 0.0
2 0
Classification 2
Syarikat Telekorn Malaysia Berhad 500.000 100.0 0.0 0.0
500.000
TOTAl, 0700 UnuTIES 3 500.000 0800 FINANCE
Classification 1
Perbadanan Pembangunan Borneo Sdn 20.000 0.0 100.0 0.0
Bhd
United Malayan Banking Corpn Berhad 333.333 94.6 0.0 5.4
Borneo Housing Mortgage Finance Bhd 126.420 0.0 100.0 0.0
3 479.753
Classification 2
~,
Pembangunan Leasing Corporation Sdn 11.003 100.0 0.0 0.0
Bhd
Perwira Habib Bank Malaysia Berhad 405.000 86.1 0.0 13.9
Sabah Bank Berhad 178.492 61.6 34.0 5.4
United Asian Bank Berhad 457.470 79.1 0.0 20.9
National Saving Bank 0 0.0 0.0 0.0
5 1.051.965
Classification 3
Bank Kernajuan Perusahaan Malaysia 50.000 100.0 0.0 0.0
Bhd
Sabah Development Bank Berhad 110.000 0.0 100.0 0.0
2 160.000
TOTAL 0800 FINANCE 10 1.691.718
67 P AlD-U1' CA1'rrAL
Shore (%)
SECTOR/GOEs NUMBER $'000 Federal Slate Private
0900 MARKETING & DISTRIBUTJO,,"
Classification 1
. Sabah Marketing Corporation Sdn Bhd 15,700 0.0 100.0 0.0
FELDA-lohore Bulkers Sdn Bhd - 16,000 60.0 0.0 40.0
2 31.700
Classification 2
Fima Palmbulk Services Sdn Bhd 18.000 76.3 0.0 23.7
FELDA Marketing Corporation 4,500 51.0 0.0 49.0
FELDA Trading Corporation 7.000 51.0 0.0 49.0
Pasaranika Dan Sdn Bhd 1.000 100.0 0.0 0.0
PERNAS Edar Sdn Bhd 14.000 100.0 0.0 0.0
PERNAS Trading Sdn Bhd 25.000 100.0 0.0 0.0
Asian Supply Base Sdn Bhd 23.900 0.0 100.0 0.0
7 93.400
ClasslOcation 3
PETRONAS Dagangan Sdn Bhd 50,000. 100.0 0.0 0.0
SO.OOO
TOTAL 090(\ MARKETING & ]0 175.100
DISTRIBUTION 1000 HOTEL & RECREA nON Classification 1

PERNAS OUE (KL) Sdn Bhd PERNAS OUE Sdn Bhd Malacca SUaits Inn Sdn Bhd

Darul Makmur Stadium Corporation Stadium Merdeka Corporation Totalisator Board of Malaysia

60.200 77.126 17.000

o o o

70.0 0.0
70.0 0.0
0.0 81.0
0.0 0.0
0.0 0.0
0.0 - 0.0 30.0 30.0 19.0

0.0 0.0 0.0

6 154.326

68

1

T

PAID-UP CAPITAL

Share (%)

SECTOR/GOEs

NUMBER $'000

Federal

SUJle

Private

Classlficatjon Z
Kuantan Beach Sdn Bhd 750 0.0 50.9 49.1
Desaru Tourist Complex 0 0.0 0.0 0.0
Holiday Villages of Malaysia S~ Bhd 13.100 40.0 30.0 30.0
Kinabalu International Hotel Sdn Bhd 23.000 .0.0 100.0 0.0
.Kuching Hotels Sdn Bhd 11.500 0.0 51.0 49.0
Pantai Trengganu MOlel Sdn Bhd 31.113 0.0 100.0 0.0
Perkasa Hotel Holdings Sdn Bhd 20.000 0.0 100.0 0.0
Tanjung Jara Beach Hotel Sdn Bhd 20.760 100.0 0.0 0.0
Pemas Hotel Chain (Selangor) Sdn Bhd 56.331 93.3 0.0 6.7
9 176.554
TOTAL 1000 HOTEL & 15 330.880
RECREATION 1200 REAL EsTATE
Classification I
Pasdec Corporation Sdn Bhd, Pahang • 5.313 0.0 100.0 0.0
Selaman Sdn Bhd 20.000 0.0 100.0 0.0
HICOM Properties Sdn Bhd 10.000 100.0 0.0 0.0
Darulaman Realty Sdn Bhd 11.000 25.0 50.0 25.0
Pemas Properties Sdn Bhd 100.000 100.0 0.0 0.0
·5 146.313 Classification 2

Kedah Holdings Sdn Bbd Pasdec Properties 5dn Bhd

TOTAL 1200 REAt. EsTATE

20.250 0.0 60.0 40.0
12.337 0.0 82.1 17.9
2 32,587
7 178.900
69 1
PAID-UP C.."rrAL
".
Share ('!o)
SECI'OR/GOEs NUMBER $'000 Federal State Private
1300 OTHE.R SERVlCES
1304 GENERAL SERVICES
Classification 2
Syarikat Percetakan Inderapura Sdn 1.235 0.0 )00.0 0.0
Bhd
FELDA Computer Services 3.200 100.00 0.0 0.0
Corporation
FELDA Security Services 720 51.0 0.0 49.0
Corporation
Peremba Management Sdn Bhd 326 100.0 0.0 0_0
Borneo Filern Organization Sdn Bhd 48.833 0.0 100.0 0.0
5 54.3 )4
TOTAL 1300 OTHER SERVlCES 5 54.314
TOTAL DJVESTME~T CANDIDATES 149 6.370.558 70

2. SERVJCES

SECTOR/GOEs C lassificat ion

J\griculture

Veterinary Services Department. Pulau Pinang Veterinary Services Department, Pahang

1 3

]\1aoulacturiog

Rice Milling Factories-LPN

2

'Transportalion

Pilotage Sarawak Marine Department Bus Services-c-P, Pinang Mun. Council

Pilotage &. Towage Operations-Marine Dept., Sabah Government Vessels Operation-Marine Dept .• Sarawak

1 2 3 3

Utilities

L-ighthouses. Buoys & Hydrography Operation-Marine Dept., Sarawak Navigation &. Lighthouse Operation-Marine Dept .• Sabah

L-ight Dues Board. Peninsular Malaysia

Water Works Departmenl-JKR Pahang

Water Works Department-JKR Selangor

Sewerage. Garbage Collection-s-Health Dept .• Gombak District Council Garbage Collection. Health Dept-P. Pinang Mun. Council

Machinery Div.-Engineering Dept-P. Pinang MunicipaJ Council Maintenance Division-Drainage &. Irrigation Dept .• Kuantan

Sewerage Dept-P. Pinang MunicipaJ Council

Development Division-Drainage &. Irrigation Dept .• Kuaman

I 2

2

2 2

2 2 2 3

Finance

Social Security Organisation

2

Marketing & Distribution

Terminal Arangbaru, Pelabuhan Kelang

2

Medical & Dental

Hospital Besar, Ipoh

}-Jospital Besar, Alor Setar Hospital Besar, KOla Bharu Hospital Besar, Kuala Lumpur Hospital Besar, Kuala Terengganu Hospital Besar, Kuantan

Hospital Besar, Melak.

Hospital Besar, Perlis

Hospital Beser, Pulau Pinang Hospital Besar, Seremban

Hospital Besar. T. Ampuan Rahimah, Klang Hospital Su]tanah Aminah. Johor Bahru

3 3 3 3 3 3 3 3 3 3 3 3

71

SECTOR/GOEs

Other Serp;ces

C lassificat ion

R &: D Organisation and Industry

Standards & Industrial Research Institute of Malaysia (SIRlM) Malaysian Rubber Research & Development Board (MRRDB)

Palm Oil Research & Dev. Board/Palm Oil Research Institute (PORIM) Rubber Research Institute Malaysia (RR1)

The Tin Industry Board

Specialist Consulting Services

Assessment Department-s-P. Pinang Municipal Council Assessment Depanment--Gombak District Council Survey And Mapping Department. Malaysia

Survey Div •• Engineering Department P. Pinang Municipal Council Chemistry Department

Geologica] Survey Department

Valuation & Property Services Dept.

Training

National Productivity Centre Instinn Perguruan Sultan Idris

Instinn Tadbiran Awam Negara (}NT AN) Kent Teacher Training College. Sabah Maktab Perguruan Ilmu Khas

Maktab Per guru an Balu Limang

Maklab Perguruan Gaya

Maktab Per guru an Ipoh, Perak

Maktab Perguruan Islam

Maktab Perguruan Rajang

Malctab Perguruan Keningau

Malctab Perguruan Kinta

Maktab Perguruan KOla Bharu

Maktab Perguruan Kuala Terengganu Maktab Perguruan Lembah Pantai Malctab Perguruan Mohd Khalid

Maklab Perguruan Pasir Panjang

Maklab Perguruan Persekuruan P. Pinang Maktab Perguruan Raja Melawar

Maktab Perguruan Sarawak

Maktab Pcrguruan Seri Kala

Maktab Perguruan Sri Pinang

Maktab Perguruan Sultan Abdul Halim Maktab Perguruan Teknik

Maktab Perguruan Temenggong Ibrahim Maktab Perguruan Tengku Ampuan Afz.an Maklab Perguruan Teruntum

Maktab Pergmuan Perempuan Melayu Community Services Centre

Maktab Perguruan Sandakan Language Institule

72

3

..

,;,

3 3 3

1 1 1

2

3

3

I 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

1

SECfOR/GOEs

Classification

General Services

PrintingIDislribution Dewan Bahasa &. Pustaka National Printing Department

Engineering Depamnem-c-Gombak Disuicl Council Filem Negua, Malaysia

National Film Development Corporation

Engineering Dept-KEMUBU AgricultUral Dev Authority Labuln Worlesho~Marine Dept., Sabah

SEA Dredging &, Clearing of Sea Pollutants. Kelang ]KR Workshop. Selangor

Parks and Garden Division=-P. Pinang Municipal Council Recreation &. Parle Dept-Gombak District Council

Road Division-P. Pinang Municipal Council

Statistics Department Malaysia

1 2 2

2 2 2 2 2 2 3

Govt Admin Services

Vehicle ReJistration Numbers-JPJ

Reg & Vehicle Licencing/Testing & Driver Licensing Division-JPJ Vehicle Inspection Div-JPJ

Registrar of Businesses

Registration of Companies Office

Regis. Licencing &. Inspection of Ships. Marine Dept., Suawak Official Assignee Department

Public Trustee Department

Factory and Machinery Department

1 1 2 2 2 2

NOT£:

Classification ]

privatizable in the short term (within 2 years);

Classification 2 - privalizable in the medium term (2-5 years);

Classification 3 - . priv atizable in the long term (over 5 years)

73

-i,

APPENDIX 4

PRIVATIZATION ACTION PLAN 1991-1992 .

Candidates To Be Preparedikestructured

1. Perak-Hanjoong Simen Sdn. Bhd. @+

2. Seremban-Port Dickson Highway"

3. Shah Alam Highway "

4. Kedah Cement Sdn. Bhd.@*

5. Tanjung Jara Beach Hotel Sdn. Bhd. @

6. Government Medical Laboratory and Store

7. Bukit Jong Quarry, PWD Terengganu •

8. Airports s

9. Postal Services Department #

1991

74

Candidates To Be Divested/Privatized

1. Production and Marketing of Animal Vaccines

2. Seremban-Port Dickson Highway"

3. Shah Alam Highway "

4. Tenaga NasionalBerhad

5. Tanjung Jara Beach-Hotel Sdn. Bhd. @

6. Government Medical Laboratory and Store

7. Bukit Jong Quarry, PWD Terengganu •

S. Klang Port Authority

9. Melaka Pon

1

i

j

10. Penang Pon Commission #

11. Johor Port Authority #

12. Malaysian Rubber Development Corporation

13. Abattoir. Kempas, Johor

14. Abattoir. Mergong, Kedah

15. Abattoir, Ku an tan. Pahang

16. Abattoir (Beef Section), Shah Alam. Selangor

17. Praton Haus Bhd. @

18. New Kl.-Karak Highway ..

19. Pemas OUE (KL) Sdn. Bhd. @

20. Sawira Sdn. Bhd.

21. Kayu Sedia Sdn. Bhd. @

22. Pemas Hotel Chain (Selangor) Sdn. Bhd. @

23. Jabatan Percetakan Negara

75

10. Malaysian Shipyard Engineering @

11. Malaysian Rubber Development Corporation

12. Menara Kuala Lumpur

13. Abattoir, Kempas, Johor

14. Abattoir. Mergong. Kedah

15. Abattoir. Kuantan, Pahang

] 6. Abattoir (Beef Section), Shah Alam, Selangor

17. Praton Haus Bhd. @

18. New KL-Karak Highway .f

19. Pemas OUE(KL) Sdn. Bhd@

20. Sawira Sdn. Bhd.

21. Kayu Sedia Sdn, Bhd. @

22. Pemas Hotel Chain (Selangor) Sdn. Bhd. @

23. Masmara Sdn. Bhd. @

1
I
24. Lumut Dockyard #
25. Keretapi Tanah Melayu (KTM) #
26. Pasaranika Dara Sdn. Bhd.
27. Perusahaan Otomobil Nasional
(Proton) Sdn. Bhd.
28. Rice Milling Complexes of the
National Padi dan Rice Board #
29. Ketengah Perwira Sdn. Bhd.
30. Ketengah Jaya Sdn. Bhd.
31. Kilang Sawit Panji Alam Sdn, Bhd.
32. Malaysia-Singapore Second Crossing "
33. North-South Link. Expressway If
34. National Institute of Cardiology ,"
35. Labuan Port 76

1992

1. Kuantan Port Authority

2. Bintulu Port Authority

3. Sabah Gas Industries Sdn, Bhd, +

4. Pemas Propenies Sdn. Bhd. @

5. Stadiums

6. Coffee Processing Centre, Banting - FAMA

7. Pemas DUE Sdn. Bhd. @

8. Mara Holdings @

9. Commercial Vehicle Inspection, Department of Road Transport

10. Milk Collection Centre, Veterinary Services Department

11. Timah Dennawan Sdn. Bhd. @

12. Taman Pertanian Malaysia, Bukit Cahaya

77

1. Perusahaan Otomobil Nasional (proton) Sdn. Bhd.

2. Perak-Hanjoong Simen Sdn.:

Bhd.@

3. Sabah Gas Industries Sdn.

Bhd.+

4. Pemas Properties Sdn, Bhd. @

5. Pasaranika Dara Sdn. Bhd.

6. Coffee Processing Centre Banting - FAMA

7. Pemas DUE Sdn. Bhd. @

8. Kedah Cement Sdn. Bhd. @*

9. Commercial Vehicle Inspection, Department of Road Transport

10. Milk Collection Centre, Veterinary Services Department

11. Timah Dennawan Sdn. Bhd. @

12. Ketengah Jaya Sdn. Bhd.

13. Pembangunan Leasing Corporation Sdn. Bhd. @

14. National Savings Bank

15. Radio Televisyen Malaysia & Filem Negara Malaysia #

16. Maintenance Workshop for MINDEF Armoured Vehicles ..

17. Borneo Film Organization Sdn. Bhd. +

18. BERNAMA =##

19. Elevated Highway Over Sungai KIang

20. Selangor Water Supply

21. Perwaja Steel Sdn. Bhd.

Notes:

@ • Trust company

+ - State Govemment-owned entity

13. Kilang Sawit Panji Alam Sdn,

14. Ketengah Perwira Sdn, Bhd.

* - Joint Federal-State Government-owned entity

It

New projek

# - Corporatization

78

I

APPENDIX 5

APPLICATION FOR.THE PRIVATIZATION OF GOVERNMENT PROJECT/ACTIVITY

Project! Activity To Be Privatized

Ministry/Department Involved

79

,I
:1
'[
;;
I
iii
u
,I 1.
II
'I
:1
i·
:1:
~l
I
:'1
,
'I
!
:i
i
,
I
!
I
!'II PARTICULARS OF PROPOSER COMPANY

A. COMPANY PROFlLE

(i) Name

80

I

T I

(vii) Name of Major Shareholders

Name

81

Number of Shares

Percentage of total

(please provide the following paniculars of every Director including the Cnairman)

B. PARTICULARS OF DIRECTORS (pROPOSER COt-.1PANY)

I
(i) Full Name I
1
'j
(ii) IIC No. 1
I
1
I
1
(iii) Age 1
(iv) Occupation
I
I
1,
(v) House Address 1
I (vi) Business Address _

(vii) Telephone No. (Office) _

(viii) Nationality

(ix) Name of Bank(s) and Account Number(s)

j

I I

I 1

J 1

1

1

I 1

(x)

Experienre ___

82

(xi) Involvement in other companies ........_ _

(xii) Have you been declared a bankrupt?

Yes/No

If so please give details

(xiii) Have you been convicted of any crime?

Yes/No

If so please give details

83

I

"

""

L:,.:'- i

",,,,c

c. PARTICULARS OF PROPOSER"S BUSINESS PERFORMANCE AND -TYPE OF ACITVITY

Please submit copies of the proposer company's annual repons and audited fmancial statements for the last 3 years.

D. OTHER PARTICULARS WHICH CAN SUPPORTTIIIS APPLICATION

(Such as technology, expertise and other support)

84

T

I

I

n. W1U A COMPANY BE FORMED TO MANAGE THE PRIVATIZED ENTITY?

IF SO. PLEASE GIVE THE FOLLOWING INFORMATION:

A. COMPANY PROFILE

(i) N arne of company which will operate/manage the project/activity

(ii) Date of incorporation

(iii) Business Registration Number

(iv) Address of Registered Office

(v) Telephone Number _

(vi) Capital

Authorised Capital $. _

I I

I-

Ii,

1.1

Paid-Up Capital $. _

85

(vii) Paid-Up Capital held by:
Bumiputera %

Non Bumiputera %

Foreigner %

(viii) Name of major Shareholders
Number Percentage
Name of Shares of total 86

T

B. PARTICULARS OF MEMBERS OF BOARD OF DIRECTORS OF COMPANY WIllCH WILL MANAGE AND OPERATE THE PROJECf/ACl1VITY

(please provide the following particulars of every Director including the Cnairman)

(i) Full Name -
(ii) IIC No.
(iii) Age
(iv) Occupation
(v) House Address (vi) Business Address _

(vii) Telephone No.

(viii) Nationality

(ix) Name of Bank(s) and Account Number(s)

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(x) Experience

(xi) Involvement in other com~anies _

(xii) Have you been declared a bankrupt?

Yes!No

If so please give details

(xiii) Have you been convicted of any crime?

Yes/No

If so please give details

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n. PARTICULARS RELATING TO THE PRIVATIZATION PROPOSAL

A. DESCRIPTION OF THE PROJECT/ACTIVITY TO BE PRIVATIZED

(i) Activity involved

(ii) Location

(iii) Financial performance for the past few years

(please provide audited financial statements of existing company to be privatized)

(iv) Employees (full-time)

Number Of Employees

Category Of Employees

Bumiputera Non-Bumiputera Foreign Total

Management

Technical and production

Oerical

Labourer

Total

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B. METHOD OF PRIVATIZATION

(Tick U) the applicable box)

(i) Purchase of assets /___;:
(ii) Purchase of equity /_j
(iii) Lease of assets /_j
(iv) Management contract /_j
(v) 'Build-Operate- Transfer' (BOT) /_j
(vi) 'Build-Operate' (BO) j__j
(vii) Others (please Specify) f_j 90

(SOOO)
(i) Asset
(ii) Equity
(iii) Lease of asset
(iv) Management fees
(v) BOT/BO
(please provide details as
to proposed charges such as
tolls and concession period
if appli cable) C. PRICE OFFERED

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D. FUTURE INVESTMENT PLANS

Investments to be made on the project to be privatized

Details

(i) Land

(ii) Infrastructure

(please Specify)

91

Estimated Cost (SOOO)

Year I Year Il

(iii) Buildings

(Please Specify)

(vi) Machinery and equipment (please Specify)

(v) Others

(Please Specify)

92

E. FINANCE

Please provide the following details on financing sources for the privatization proposal

(i)

Equity capital

(a) Bumiputera

(b) Non Bumiputera

(c) Foreigner

Total

(ii) Name of major equity holders and amounts

Name

93

Amount

($000)

Amount

($000)

(iii) Loan capital

(iv)

(a) Local

(b) Foreign

(State the financial institution which is providing the Joan)

Other sources

(a)

(b)

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-

Amount

(SOOO)

Amount

($000)

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F. ElvIPLOYEES (FULL-TIME) OF PROPOSER COMPANY

Number Of Employees

Category Of ------ ... -----------------------

Employees Bumiputera Non-Bumiputcra Foreigner Total

Management

Technical and production

Oerical

Labourer

Total

G. PROFITABILITY

Please submit projected cash flow. and profit projections for the privatization project/activity for first 5 years of privatization.

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IV. DECLARATION

I hereby declare that the particulars given in this application fOIlD are true and complete.

Applicant's Signature

Full Name

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Date:

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Position In Company

L-A13726.