---------------------------------------------------------------------- KKKH 4284 SUSTAINABLE URBAN DEVELOPMENT ----------------------------------------------------------------------
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.