KKKH4284 SUSTAINABLE URBAN PLANNING

SEMESTER II, SESSION 2013/2014

TASK 3 PRIVATISATION

NAME
MUHAMAD FIRDAUS BIN JAHIDI

MATRIC NO
A133447

DEPARTMENT
CIVIL AND STRUCTURAL ENGINEERING DEPARTMENT

LECTURER
PROF. IR. DR. RIZA ARIQ ABDULLAH BIN O.K RAHMAT
DR. MUHAMAD NAZRI BIN BORHAN
NORLIZA BINTI MOHD AKHIR

Problem:
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.

Solution:
This problem can be solved by the method of privatisation the project itself. Privatisation
is a good way to develop the research project because it is can generate very fast development,
with lower cost and more optimization on labours. The price that been given by the privatisation
are much more cheaper because it leads to lower prices and greater quality of supply the
quantities. Besides that, the privatisation will give a chance to private company to handle the
more bigger project. From here, the municipal can deal with the private company that been chose
based on criteria given.
Other than that, the privatisation is expensive and generates a lot of income in fees for
specialist adviser such as banks and professional workers. As well as the government being
motivated by short term pressures, this is something private firms may do as well. To please
shareholders they may seek to increase short term profits and avoid investing in long term
project.
For these project, some of the problems need to be identified and overcome it (Kajang
area). Mostly, they are facing flood problem which occur when a heavy rain come. Maybe some
of the building existed is not suitable with that area. The drainage and irrigation also need
attention. This is because it can be the main reason why the severe flood occurs once in a while.
Moreover, the contour or elevation/platform level of Kajang area need to be considered in any
research because it also contribute to the impact of flood problem.

Besides that, the traffic congested is one of the daily problem occur in Kajang town area.
It occurs in peak hour which is 7.00 am -9.00 am and 5.00 pm- 8.00 pm. From my point of view,
maybe the position of building or shop outlet are not suitable in that area. The building is too
near to the existing road and the parking area is situated in front of every shop outlet. There are
also illegal parking in that area makes the traffic become more worse.

ADVANTAGES
Privatisation and Growth
Privatisation played an important role in accelerate economic growth through greater investment
which led to corporate expansion. Growth was also generated through efficiency gains as more
output was produced using lesser amount of resources. The construction of highways for
example, led to increased growth in manufacturing activities for construction based industries
and resulted in time savings to motorists as well as reduced operating costs for vehicle. With
privatisation, more resources were also available for the Government to spend on others sectors
of the economy, thus contributing to the growth of those sectors.

Savings
Private companies have more profit incentive to cut costs and this lead to a more efficient
development. If we work for a government running a project, managers do not usually share in
any profits. Recurrent income from privatization in the form of lease rentals further
contributed to the Government revenue. These savings and proceeds from the sale of assets
and equity and corporate tax enabled the Government to reduce its borrowing as well as
reallocate resources to other sectors such as education and health. It also contributed
towards balanced budget, thereby strengthening public sector finances.

Lack of Political Interference.
It is mainly known that governments make poor economic managers. They are motivated by
political pressures rather than sound economic and business sense. For example a state enterprise
may employ surplus workers which is inefficient. The government may be reluctant to get rid of
the workers because of the negative publicity involved in job losses. Therefore, state owned
enterprises often employ too many workers increasing inefficiency.
Efficiency and Productivity
Privatisation contributed towards increased efficiency and productivity of the privatised entities
through improvement of quality of service and management systems. The overall performance of
the privatisation entities improved due to the expansion of capacity and service networks as well
as acquisition of modern equipment and technology. In addition, the development of positive
attitudes as well as changes in the mind-set of employees of privatisation entities contributed to
their increased efficiency and productivity.

Technology Transfer
Privatisation enabled Malaysian to acquire new technologies and expertise through collaboration
with foreign equity holders, management contract or consultancy services. Local engineers
acquired the latest technologies in concrete pavement design and construction and made use of
recycled materials in construction of road pavements.

DISADVANTAGES
Government loses out on potential dividends.
Many of the privatised companies are quite profitable. This means the government misses out on
their dividends, instead going to wealthy shareholders.

Problem of regulating private monopolies.
Privatisation creates private monopolies, such as the water companies and rail companies. These
need regulating to prevent abuse of monopoly power. Therefore, there is still need for
government regulation, similar to under state ownership. As the research park has been
developed, there will still be need monitoring by the municipal itself. The municipal must
enforce regulations and laws so that the private sector must follows and less dominate the field.

REQUIRED PARTIES:

Government (Majlis Perbandaran Kajang)


Transfer the land title to the developer

Allow the developer to construct the Innovative Research Park

Give assistance to get necessary approval

Give assistance to make sure developer follow the related guideline appropriately

Make sure the developer consider the environmental issue in Kajang area

Monitor all the works done by the developer

Take any action if there is abuse of power by the developer

Look after the righteousness of Kajangs residents

Developer

Get the approval for running the project from the authority

Upgrade existing road infrastructure surrounding the development

Follow the guideline related to their development

Protect the righteousness of Kajangs residents and not giving any problem to the
residents of Kajang along the way of construction

Announce everyone about the project detail

Making the research park is user friendly to everyone as it also can act as theinformation
centre for tourist

Commercialized any attraction that existed in Kajang

Making research on the problem happened in Kajang area

Provide a best solution to solve any problem occur in Kajang area



OTHERS PARTIES:
Designer
This department has to design the complex and ensure the design approved by the municipal
according to the specification given
Builder/ Contractor
This department must build the complex and ensure the safety of the building and the insured
period.
Operation and Management
This department must hire workers for operation and manage the complex until the concession
ends.
Financial Management
This department must manage all the financial of this project before, during and after the
completion of the project until the operation.
Maintenance
This department must take safety measures to all aspect including workers, public and
environment.

BENEFIT OF MY PROPOSAL

The Innovative Research Park towards Sustainability

Develop faster with the interference of private sector

Reduce corruption

The righteousness of resident of Kajang is cared

Residents Kajang much more comfortable

The development of Kajang will improved

The facility in Kajang area will enhanced

More employment opportunities in Kajang area

THE PROBLEM THAT MIGHT OCCUR IN THE FUTURE

If the facility increase, the living cost will be higher
Air pollution in the area will be polluted because of the increasing construction
Burglaries and robberies will increased because the demand of living cost are higher

Conclusion
It shows that Kajang are the strategic place for progressive development and has a good
economic base as it can provide a good employment chance. The research park need to come out
with the idea to commercialized Kajang by using the resource that come from Kajang itself.
Hence, it will ensure brighter future for the sustainability of the development.