The municipality of Kajang intends to redevelop the local stadium into an innovative research park but lacks funding. Privatizing the project is proposed as a solution. This would involve transferring ownership and development responsibilities to a private company. The private company would fund, build, and manage the research park, benefiting from any profits, while the municipality would maintain oversight. Privatization could speed development at lower cost than public funding. However, regulating any private monopolies created would still be needed to prevent abuse of power.

1. KKKH 4284
PERANCANGAN BANDAR LESTARI
Task 3: Privatization
AZIZA BINTI ESA
A133613
DEPARTMENT OF CIVIL & STRUCTURAL ENGINEERING/4
Lecturers:
Prof. Ir. Dr. RIZA ATIQ ABDULLAH BIN O.K. RAHMAT
PUAN NORLIZA BINTI MOHD AKHIR
Dr. MUHAMMAD NAZRI BIN BORHAN

2. TASK 3: PRIVATISATION
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 centre 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, the benefit of your proposal and the problem that might
occur in the future.
INTRODUCTION
Kajang is a town in the eastern part of Selangor, Malaysia. Kajang is the district capital of
Hulu Langat. It is located 21 kilometers (13 mi) from Malaysia's capital, Kuala Lumpur. The
current location gravity of growth in Kajang would be Sungai Chua. The total population of
Kajang has grown rapidly in the past few years, with estimated population growth of 9% per
annum. The soon-to-be-realized Klang Valley MRT station in Bandar Kajang will boost the
property value in Sungai Chua. As of 2004, a few townships have been developed in Kajang,
such as Taman Prima Saujana (straight from Jalan Cheras), Sungai Chua, Taman Kajang
Perdana (Kajang Highlands). Lately, many high-end developments has mushroomed in
Kajang such as Twin Palms, Sri Banyan, Country Heights, Jade Hills and Prima Paramount.
Areas surrounding these new townships are easily accessible via the SILK Expressway.
Kajang is governed by the Majlis Perbandaran Kajang.
The center of Kajang is the bustling Old Town, where all the roads meet. Most of the
colonial-era buildings were constructed around 1920s to 1930s. The architecture of these
shophouses is a combination of traditional Chinese and European designs. The ground floor
was used mostly for commercial activities and the upper floor as the family living quarter.
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. People come from all over Malaysia to taste the satay here. The
stadium can accommodate up to 5,000 people and is used throughout the year for the
community soccer competitions. Another landmark is the Kajang Mosque or Masjid Kajang,

3. which is easily recognisable by its bright yellow facade. The mosque was painted and
decorated by a local wealthy man, Datuk Ujang bin Bagong, for the benefit of the local
Muslims. The mosque is lively at night with Islamic activities.
SOLUTION
This problem can be solved by the method of privatization the project itself. Privatization is a
good way to develop the research project because it is can generate very fast development,
with lower cost to be worried. It is a lot cheaper because it leads to lower prices and greater
supply and least corruption. The municipal wouldn’t have to worry about the cost as it is
develop by the private company itself, operates by them, and maintained by them. The
municipal just have to monitor the project and this will lead both party benefits. Privatization
will give a chance to many private company to handle more bigger project.
ADVANTAGES
Performance
State-run industries tend to be bureaucratic. A political government may only be motivated to
improve a function when its poor performance becomes politically sensitive, and such an
improvement can be reversed easily by another regime.
Improvements
Conversely, the government may put off improvements due to political sensitivity and
special interests — even in cases of companies that are run well and better serve their
customers' needs.
Accountability
Managers of privately owned companies are accountable to their owners/shareholders and to
the consumer and can only exist and thrive where needs are met. Managers of publicly
owned companies are required to be more accountable to the broader community and to
political "stakeholders". This can reduce their ability to directly and specifically serve the
needs of their customers, and can bias investment decisions away from otherwise profitable
areas

4. 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.
Increased Competition
Often privatization of state owned monopolies occurs alongside deregulation such as policies
to allow more firms to enter the industry and increase the competitiveness of the market. It is
this increase in competition that can be the greatest spur to improvements in efficiency. For
example, there is now more competition in telecoms and distribution of gas and electricity.
However, privatization doesn’t necessarily increase competition; it depends on the nature of
the market.
DISADVANTAGES
Government loses out on potential dividends
Many of the privatized companies are quite profitable. This means the government misses
out on their dividends, instead going to wealthy shareholders.
Lack of market discipline
Poorly managed state companies are insulated from the same discipline as private companies,
which could go bankrupt, have their management removed, or be taken over by competitors.
Private companies are also able to take greater risks and then seek bankruptcy protection
against creditors if those risks turn sour
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

5. 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
• Assist in transferring the land the developer
• Give assistance to get necessary approval
• Transfer of the land title to the developer
• Give assistance to relocate the squatters and land owners
• 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 centre.
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
• Upgrade existing road infrastructure surrounding the development
• Construct and maintain a public garden