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Civil & Structural Department

Faculty of Engineering & Built Environment


The National University of Malaysia

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KKKH 4284
SUSTAINABLE URBAN DEVELOPMENT
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PRIVATISATION
Redevelopment of Kajang Stadium into an
Innovative Research Park



NAME : SITI NURLIYANA BINTI ABDUL HASIF
MATRIC NO. : A132529
LECTURER : PROF. IR. DR. RIZA ATIQ ABDULLAH BIN O.K. RAHMAT

1.0 PROBLEM STATEMENT
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, project component, the benefit of your
proposal and the problem that might occur in the future.

2.0 INTRODUCTION
Privatisation has been proven to be one of the solutions to solve funding problems and lessen
the burden on the government by reducing the role of the state and encouraging the growth of
the private sector enterprises. However, privatisation takes a number of forms and has been
approached in various ways during the transition from state control to other forms of
ownership in developing and industrialised countries.
Any debate on the boundaries of privatisation raises the question as to how far can
privatisation be taken and where the boundaries lie. One view is that everything can be
privatised, except where there are important externalities, such as national defence. In this
case, the privatisation of an Innovative Research Park is a viable solution as it allows for the
project to receive the attention it needs. However, it is important to note that privatisation is a
political process and has important economic and social implications that not only effect
enterprise performance, but also social welfare and stability. The social effects have to be
considered in any impact assessment, particularly those related to employment, social safety
net measures, social privatisation that results from the extension of share ownership to small
investors and employees, and the role of public utilities and services in economic and social
development. It is therefore important that the framework for evaluating policy
developments, including all forms of privatisation, is clearly set in advance. Clearly, the
crucial question is how should success be measured? If privatisation is part of an integrated
policy framework, critical questions about priorities should emerge that reflect both technical
analysis and value judgements about the tradeoffs between objectives.
3.0 SITE BACKGROUND
Kajang is a township located in the eastern part of Selangor and is the district capital of Hulu
Langat. It is located 21 kilometers Kuala Lumpur and already has an extensive transportation
network as it is well connected with many major highway and expressway like Kajang
Dispersal Link Expressway as a ring road of Kajang, Cheras-Kajang Expressway, North-
South Expressway with Kajang exit and Kajang-Seremban Expressway at the south of
Kajang near Semenyih. Because the position of Kajang between three major city (Kuala
Lumpur, Seremban and Putrajaya), this city is included in Klang Valley or Greater Kuala
Lumpur. Public transports available in Kajang are bus, taxi, and train.

The total population of Kajang has grown rapidly in the past few years, with estimated
population growth of 9% per annum. Apart from primary and secondary schools, Kajang
houses various tertiary education institutions that encompasses a broad range of studies.
One of Kajang's landmarks is Stadium Kajang which is situated in the heart of the town.

Map of Kajang showing the proposed site and its surroundings

4.0 PARTIES INVOLVED
4.1 GOVERNMENT BODY
The government body responsible for the area of Kajang is the Kajang Municipal
Council (MPKj). As legislated by the Local Government Act 1976, Town and Rural
Planning Act 1976 and Strata and Title Act 1985, all matters regarding the
administrative and establishments are under the jurisdiction of the Local Authority.
Apart from that the plannings and projects to be carried out in the areas under the
jurisdiction of the Council need to be suitable with the local condition and inline with
the current development circulation. The roles of mpkj in this situation are to give
support as well as draw the line where the private sectors influence in the project lie.
The governments roles:
- Transfer of the land title to the developer with a reduced price
- Give assistance to get necessary approval
- Allow the demolishment of existing structures and buildings on the proposed site
- Ensure that the surrounding government-based education institutions are
cooperating when needed
- Allow the private company to construct an open-space shopping complex on one
area of the proposed site


4.2 PRIVATE COMPANIES
The private company that will invest in this project should be able to fulfil their part
of the bargain as in the long-term effect; the private sector will benefit much from this
project.
The private companies roles
- Construct a project plan for the Innovative Research Park
- Coordinate with local transportation service providers to allow for smooth
transportation network between the site to surrounding areas
- Ensure that the project will get support and the attention of research-based
institutions to conduct researches there
4.3 EDUCATION INSTITUTIONS
Since this project has a very close tie with the education sector, nearby education
sectors in the surrounding area should provide as much support as possible as they too
will benefit from the service to be offered at the Innovative Research Park in Kajang.
Education Institutions Roles:
- Participate in the planning of the Research Park by providing information on how
much capacity should the Research Park accommodate
- Give feedbacks on the effectiveness and needs of the research facilities
- Join the future researches to be conducted there

5.0 PROJECT COMPONENTS
The project component will consist of among others:
a) Laboratory and workshop facilities
b) Administration office
c) Prebuilt labs and offices available with short-term leases
d) Meeting rooms, discussion rooms and main seminar hall
e) Cafeteria
f) Lounge and foyer
g) Parking area
h) Open-air shopping compound

6.0 PROS AND CONS OF PRIVATISATION OF PROPOSED KAJANG INNOVATIVE
RESEARCH PARK
6.1 BENEFITS
a) Cost Effective
It has been widely established that the main reason the local authority turn to
privatisation is to minimise the monetary burden on the government. Moreover,
private enterprise is more efficient than government at allocating resources due to
the profit incentive; it increases investment; it allows the markets to operate
freely.

b) Increase Flexibility
Privatization gives state officials greater flexibility to meet program needs.
Officials can replace the private firm if it isn't meeting contract standards, cut
back on service, add to service during peak periods, or downsize as needed.

c) Improve Service Quality
Private companies has competition induces in-house and between other private
service providers to provide quality services in order to keep complaints down
and keep the contract.

d) Improved Maintenance
Private owners are strongly motivated to keep up maintenance in order to preserve
the asset value of the investment in the facility. Public owners often defer
maintenance due to political considerations, increasing overall long-term costs.

6.2 POTENTIAL SETBACKS
a) Different Priorities
Public sector strives to provide customer service while the private company
maintains profit-making as its main objective. Maximising profits for the private
company could result in cutting corners and products of lesser quality as well as
lack of maintenance in equipment.

b) Costly Transition
Should the contract fail for unforeseen reasons, it is costly to return to public
services that may also result in interruption in services.