1) Kajang Municipality intends to redevelop a stadium into an Innovative Research Park but lacks funding for the project. 2) The solution proposed is to privatize the project, which would generate fast development at lower cost through private sector efficiency. 3) Under privatization, the private company would develop the park, with the municipality providing approvals and oversight to ensure guidelines and environmental concerns are addressed.

1. KKKH 4284
PERANCANGAN BANDAR
LESTARI
Task 3
(Privatisation)
Nama : Nurul Afina Bt Abd Mutalib
No.Matrik : A 134187
Nama Pensyarah : Prof. Ir. Dr. Riza Atiq Abdullah Bin O.K Rahmat
Tarikh : 20/03/2014

2. 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

3. 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.

4. 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.

5. REQUIRED PARTIES:
Government(MajlisPerbandaranKajang)
 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 Kajang’s 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 Kajang’s 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

6. OTHER’S 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
 Resident’s Kajang much more comfortable
 The development of Kajang will improved
 The facility in Kajang area will enhanced
 More employment opportunities in Kajang area

7. THE PROBLEM THAT MIGHTOCCUR 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.