KKKH 4284 Urban Planning and Sustainable Development Task 3 - Privatisation UKM 2013/2014 Lecturers : Prof Ir. Dr. Risa Atiq Abdullah O.K. Rahmat Dr. Nazri Borhan Dr. Norliza Mohd Akhir

1. KKKH 4284
URBAN PLANNING AND SUSTAINABLE
DEVELOPMENT
TASK 3
JULIANIZA ARIFFIN
A132737
DEPARTMENT OF CIVIL &
STRUCTURAL ENGINEERING
THE NATIONAL UNIVERSITY OF MALAYSIA
JUN 2014

2. 1.0 INTRODUCTION
Kajang Municipal currently has exciting and ambitious plans for development of the
2.4 ha piece of public square which was built in 1970’s into an Innovative Research
Park. The investment of millions ringgit Malaysia by Kajang Municipal Council
(MPKj) from Government will paves the way for developing a thriving research and
innovation campus over the next decade and beyond.
(a) (b)
Figure 1: Kajang Stadium in before reconstructed and after reconstruction in
2010
Set in a central part of the Kajang and connected with many established centre
of research excellence in biotechnology, manufacturing, consulting and, Kajang
Innovation Research Park encourages collaboration between business and academia
allowing both to flourish in a mutually supportive environment. From supporting spin-
out and start-up companies to providing flexible laboratory and office accommodation
and facilities for Small Medium Entrepreneurs(SME) and growing companies, the
Research Park will become the hub for business and technology and become national
centre of sciences research with expertise in the research and development pipeline
from nearby institutions.
Additional works to deliver improvements to the car parks, lighting, road
junctions and IT infrastructure that will allow the longer term development of the
Research Park will be accommodate by private sectors using privatization method.

3. Reasons for privatization :
1. To reduce the burden on Government
2. To strengthen competition
3. To improve Public finances
4. To fund infrastructure growth
5. Accountability to shareholders
6. To reduce unnecessary interference
7. More disciplined labor force
2.0 PRIVATISATION CONCEPT
Privatization process to develop the the public square area into a Research Park was
defined in several alternatives :
1. Transfer of ownership from the Public to Private sector.
2. Transfer of Management of an Enterprise from the Public to Private sector.
3. Withdrawal of the state from an industry or sector partially or fully.
4. Opening up of an industry that has been reserved for the Public sector to the
Private sector including governmental functions like revenue collection and
law enforcement.
One of the main highlights for the privatization of publicly owned operations is
the estimated increases in efficiency that resulted from private ownership. The
increased efficiency is expected to come from the greater importance private owners
tend to place on profit maximization as compared to government, which tends to be
less concerned about profits.
Normal medium companies start as private companies funded by a small group of
investors. As they grow in size, they will often access the equity market for financing
or ownership transfer through the sale of shares. In some cases, the process is
subsequently reversed when a group of investors or a private company purchases all of

4. the shares in a public company, making the company private and, therefore, removing
it from the stock market.
Modes of privatization :
1. Sales of an enterprise
2. Sale privatization a global phenomenon
3. Improves operating and financial performance
4. Lease of entity
5. Joint ventures
6. Public share offers
The methods of privatization normally adopted :
1. Generous pay and benefits.
2. At lower levels in particular.
3. Overtime.
4. Offer of shares through a Public offering both domestic and global, which may
or may not involve a change in ownership/management.
3.0 RESPONSIBLE PARTIES
Government
1. Transfer of the land title to the developer.
2. Give assistance to relocate the squatters and land owners.
3. Give assistance to transfer the ownership of part of the area from land owners
to the developer.
4. Allow the developer to construct a modern mega commercial building.
5. Give assistance to get necessary approval.
Developer
1. Construct infrastructure network, including two grade separated intersection.

5. 2. Construct a number of highrise office up to plot ratio 8.0.
3. Transfer of certain floor area of completed office space to laboratory with fully
furnish equipment.
4. Construct a bus terminal.
5. Construct an amphitheatre.
6. Transfer of certain floor area of completed office space to City Hall of Kajang.
7. Upgrade existing road infrastructure surrounding the development, improve
infrastructure network, including a grade separated intersection.
8. Construct and maintain a public garden
9. Construct a Mosque
Research Partners
1. Collaborate together creating a Research Park base in Kajang and thus
connecting several academic institution and researches agency nearby.
2. Cover several scope of study and provide business joint.
3. Provide consultation in respected area.
Research
Partners
Universiti
Kebangsaan
Malaysia
Universiti
Tenaga
Nasional
UniKL
German
Malaysian
Institute
KPTM
Bangi
New Era
College
Malaysian
Nuclear
Agency
GENOM
Malaysian
Institute
(MOSTI)
UPM's
Hospitals

6. Potential stakeholder/investor
1. Referring to the private sector that interested in using research for their own
profit or company.
2. This group of people will invest in this project.
3. Once the project completed, these investor will gain their profit by
rehabilitating new method with latest technology.
4.0 PROJECT COMPONENT
Scope of work
The work to be accomplished starting from initiating project idea, finding investor,
and construction of Park building which focused on quantity and quality of work.
Budget
Costs need and used measured in Malaysian Ringgit (RM) and invested money by
private nor public sectors.
Scheduling
The logical sequencing and timing of the project to be performed through several
process which is :
1. Initiating
2. Planning
3. Executing
4. Managing
5. Closing

7. 5.0 BENEFITS OF PRIVATIZATION
Accomplishments of Privatization
1. Privatization helps to reduce the burden on Government.
2. It will help profit making public sector unit to modernize and diversify their
business.
3. It will help in making public sector unit more competitive.
4. It will help to improving the quality of decision making, because the decisions
are free from any political interference.
5. It encourage new innovations without any restrictions.
6. It promotes industrial growth.
7. Increase the foreign investment.
8. Increase in efficiency
9. The best way to rebuild weakened Public sectors.
10. Stops making public sector loss from adding to government debt.
11. Raises more money for government through taxing.
12. Creates more jobs and generating wealth for the country.
Graph shows the increasing number of telecom privatisation in Qatar over years.

8. Graph shows impact of competition creating from privatization showing high
revenue over the years in Qatar’s Telecom company, Telstra.
6.0 PROBLEMS FROM PRIVATISATION
Problems in Privatization
1. Ownership to a privileged few
2. The payer could suffer while public assets get sold off.
3. Ownership would be transferred from public hands to the private firms
4. Restructuring need money.
5. Timing and menu of options.
6. Social safety net as before worker need to paid severance and compensation.
7. Severance, retraining of public works.
8. Managing the process takes challenge, time and effort.
9. Consultation and participation from stakeholder and partner interested to ensure
success.
10. Laborers would be at the mercy of the private owners, not government
anymore.

9. 11. Loss of experienced managerial expertise
Timing and Sequencing of Labor Restructuring
1. Complicates negotiations
2. Pragmatic
3. Joint decisions
4. Mixed approach
5. Delays
6. Wrong results
7. Dispute settlement
8. Safety net
9. Restructure first
10. Political/social considerations
11. Lower value
12. Market based
13. Speed
14. Leave to private sector
7.0 CONCLUSION
Alternatives to total privatization
1. Public Utility: The enterprise can remain as a public utility
2. Non-Profit: The enterprise could be managed by a private non-profit
organization.
3. Bankruptcy: State can wait until the enterprise becomes bankrupt.