1. Kkkh4284
Sustainable urban planning
Task 3: privatisation
NAME : RoshafizahBtRoslan
MATRIC NUMBER : A133549
LECTURER : Prof. Ir. Dr. RizaAtiq Abdullah Bin O.K Rahmat
Dr. Muhammad Nazri Bin Borhan
PuanNorliza Bt. MohdAkhir

2. Task 3:
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
1. SITE LOCATION
One of Kajang's landmarks is Stadium Kajang which is situated in the heart of the town.
It is near a popular hangout place among the locals named Haji Samuri, which is also
home to the famous dish satay Kajang. The stadium can accommodate up to 5,000 people
and is used throughout the year for the community soccer competitions.
The stadium is a prominent landmark as it is located in the centre of Kajang town.Its
main entrance faces JalanKelab while the back portion looks out to JalanCheras leading
to the bustling JalanBesar.In its heyday, many important football league and club
matches, involving legendary football players like MokhtarDahari and M. Chandran were
played at the stadium to capacity crowds.

3. 2. CONCEPT OF PRIVATISATION
Privatization is the incidence or process of transferring ownership of a business,
enterprise, agency, public service or property from the public sector which is the state or
government to the private sector which is businesses that operate for a private profit or to
private non-profit organizations.
The privatization refers to the process of private, usually for-profit businesses
taking over the provision of public, government provided services. This includes
contracting with or selling to private parties the functions or firms previously controlled
or owned by governments. Privatization covers a wide spectrum of government
operations, management, and ownership arrangements. Some types of privatization which
may be considered include the following:
a) Outsourcing - a government agency delegates some of its in-house operations
or processes to a third party. It is a contracting transaction where the
government agency purchases services from a private firm while keeping
ownership and ultimate responsibility for the underlying processes. They
inform the private firm of what they want and how they want the work
performed. The private firm can be authorized to operate as well as redesign
basic processes in order to ensure even greater cost and efficiency benefits.
b) Design, Build, Operate (DBO) - negotiating a contract with a private firm for
design and construction services with comprehensive operating agreements
for new, expanded, or upgraded facilities. The project and implementation
components are procured from the private sector in a single contract with
financing secured by the public sector. From design through operation, these
contracts can extend for periods of up to 20 years or more.
c) Public-Private Partnership - cooperative arrangement between a local
government and a private organization in which both parties assume some
responsibility for operating a program or service. Each party brings something
to the arrangement that contributes to the operation of that particular service.
d) Asset Sale - the sale of government-owned assets to private companies, such
as the sale of water/wastewater and electric utility assets. Proponents of

4. privatization often point to success stories which demonstrate cost savings,
while opponents express concerns about accountability and undermining
organized labor, which results in jobs without health, pension, and other
benefits.
3. RESPONSIBILITY OF THE PARTIES INVOLVED
a) Government
 Transfer the land title to the developer
 Responsibility in assist to relocate the squatters and land owners
 Assist in transfer the land to the developer
 Assist in getting the necessary approval
 Give assistance to transfer the ownership of part of the area from land
owners to the developer
 Allow the developer to construct a modern mega research center.
b) Developer
 Transfer of certain floor area of completed office space to the
government
 Construct low cost houses to be given free of charge to the squatters
 Construct infrastructure network, including two grade separated
intersection
 Construct a number of houses to be given to the land owners as offset
of their land lots.
 Construct an underground pedestrian crossing
4. BENEFIT OF THE PRIVATISATION IN REDEVELOP THE STADIUM
Privatization indeed is beneficial for the growth and sustainability of the state-owned
enterprises. The advantages of privatization can be perceived from both microeconomic
and macroeconomic impacts that privatization exerts.
a) Microeconomic advantages

5.  State owned enterprises usually are outdone by the private enterprises
competitively. When compared the latter show better results in terms of
revenues and efficiency and productivity. Hence,privatization can provide the
necessary impetus to the underperforming.
 Privatization brings about radical structural changes providing momentum
in the competitive sectors.
 Privatization leads to adoption of the global best practices along with
management and motivation of the best human talent to foster sustainable
competitive advantage and improvised management of resources.
b) Macroeconomic advantages
 Privatization has a positive impact on thefinancial health of the sector
which was previouslystate dominated by way of reducing the deficits
anddebts.
 Helps in escalating the performance benchmarks of the industry in general
 Can initially have an undesirable impact on the employees but gradually in
the long term, shall prove beneficial for the growth and prosperity of the
employees.
 Privatized enterprises provide better and prompt services to the customers
and help in improving the overall infrastructure of the country.
5. PROBLEM THAT MIGHT OCCUR IN FUTURE
Privatization in spite of the numerous benefits itprovides to the state owned enterprises, there
is theother side to it as well. Here are the prominentdisadvantages of privatization:
a) Private sector focuses more on profitmaximization and less on social
objectives unlikepublic sector that initiates socially viableadjustments in case
of emergencies and criticalities.
b) There is lack of transparency in private sector and stakeholders do not get the
complete information about the functionality of the enterprise.

6. c) Privatization has provided the unnecessarysupport to the corruption and
illegitimate ways ofaccomplishments of licenses and business dealsamongst
the government and private bidders.Lobbying and bribery are the common
issuestarnishing the practical applicability ofprivatization.
d) Privatization loses the mission with which theenterprise was established and
profit maximizationagenda encourages malpractices like production oflower
quality products, elevating the hiddenindirect costs, and price escalation.
e) There can be a conflict of interest amongststakeholders and the management
of the buyerprivate company and initial resistance to changecan hamper the
performance of the enterprise.
f) Privatization escalates price inflation in generalas privatized enterprises do not
enjoy governmentsubsidies after the deal and the burden of thisinflation
affects the common man.