Muhamad Aminurlah Bin Jamin A128652

Task 3: Privatisation Question Kajang Municipality intends to redevelop the stadium into an Innovative Research Park. The park is intended to take advantage of a number of universities and research centres in Kajang area to turn the municipality into centre for innovative, high value added industries. However the administration is in no position to fund the proposed project. You are required to propose a viable solution to ensure the success of the project. Explain the responsibility of all parties involved in the project, the benefit of your proposal and the problem that might occur in the future. Solution 1) Privatisation programme:-

This approach is to facilitate the Kajang Municipality economic growth, reduce the financial and administration burden of the municipality, lower the level and scope of public spending and allow market forces to govern economic activities and improve efficiency and productivity. The privatisation develops the project in short term duration where it can be done in fast track in term of development. Together with the lower cost consumption and optimization on man workers. A full responsibilities given to the private sector to make the project planning succeed with under supervision from the government sector. Task or work given includes the developing, operating, maintaining and solving a potential problem. The advantages or benefits is gained by both parties in term of economical profit share and being able to work under one roof. 2) Implementation:-

In implementing the policy, the Government published statements from time to time to explain to the public the objective and content of the policy as well as to keep the

general public informed. The Government published the Malaysian Privatisation Master Plan (PMP) in 1991 followed by Guidelines on Privatisation to ensure that the

privatisation effort is channelled to appropriate priority areas to optimize the impact of the policy implementation in terms of the achievement of the policy objectives. The Master Plan explained the implementation of the policy as well as the progress achieved and addressed the future direction of the programme. The Guidelines on Privatisation detailed 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 to allow privatization to take place and the commissioning of a study to help in the drawing up of a privatisation Master Plan. Privatization can be implemented by several methods as follows: 3) Sale Lease Management Contract Build Build-Operate-Transfer (BOT) Build-Operate-Own Build-Operate Build-Lease-Transfer Land Development/Land Swap Management buy out

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 on a case by case basis.

However, as a general rule the target is for a method which produces a maximum practicable degree of private sector involvement. Comparatively, the sale method is

expected to fulfil this criterion. In addition, methods to be used will reflect the requirements of national objectives and the constraints in each case. In order to facilitate the implementation of privatisation programme, the Government has amended several laws such as Pension Act 1980, Telecommunication Act 1950, Port Act 1963, and Electricity Act 1949. 4) Advantages of privatisation 1. Increase in efficiency and Profitability Most Govt. industries and services are inefficient and running in losses, when these will be transferred to private sector, their administration will improve and non-development expenditures will be reduced, their efficiency will increase and will be converted into profitable ventures. 2. Decrease in Political Pressure There are always political pressures on Govt. owned industries, banks and other institutions for employment of political workers and loan facilities from banks. When these enterprises will go in the hands of private owners then these illegal pressures will be reduced to a great extent. 3. Use of Latest Technology and Know-How Private domestic investors and foreign investors will adopt latest technology and know-how for the increase in output and their profits. This will result in the increase in national product, thus national income of the country will grow.