Task 3: Privatisation

Question: 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.

Answer:

A research park is a research facility that is often linked with a major research university. It

exists to create linkages between the university, industry and the community. Combining the

knowledge assets of a community with local business expertise in order to create high-paying

jobs is the aims of research parks.

Most of the research park is focusing on protect, preserve and conserve the natural

environment as they are located in the forest or some kind of similar place where the place can

be called as undisturbed area. But for this case, it has a bit different where the location of the

stadium is located in the middle of Kajang town and the capacity of the population is high.

Therefore, this research park should be more focus in the development of Kajang town.

There are a few steps that we can do to ensure the success of the project. First, we do a

privatisation programme. This approach is to facilitate the Kajang Municipality economic

growth, reduce the financial and administration burden of the municipality, lower the level and

scope of public spending and allow market forces to govern economic activities and improve

efficiency and productivity. The privatisation develops the project in short term duration where it

can be done in fast track in term of development. Together with the lower cost consumption and

optimization on man workers. A full responsibilities given to the private sector to make the

project planning succeed with under supervision from the government sector. Task or work given

includes the developing, operating, maintaining and solving a potential problem. The advantages

or benefits is gained by both parties in term of economical profit share and being able to work

under one roof.

Next is implementation, where in implementing the policy, the Government can publish

statements from time to time to explain to the public the objective and content of the policy as

well as to keep the general public informed. The Government published the Malaysian

Privatisation Master Plan (PMP) in 1991 followed by Guidelines on Privatisation to ensure that

the privatisation effort is channeled to appropriate priority areas to optimize the impact of the

policy implementation in terms of the achievement of the policy objectives. The Master Plan

explained the implementation of the policy as well as the progress achieved and addressed the

future direction of the programme.

The Guidelines on Privatisation detailed among others, the objectives of the policy, the

methods applicable and the implementation machinery. Several developments have taken place

since the policy was first announced. The significant changes which have been introduced by the

Government include the amendments of the various laws to allow privatization to take place and

the commissioning of a study to help in the drawing up of a privatisation Master Plan.

Privatization can be implemented by several methods as follows:

- Sale

- Lease

- Management Contract

- Build- Build-Operate-Transfer (BOT)

- Build-Operate-Own

- Build-Operate

- Build-Lease-Transfer

- Land Development/Land Swap

There are some advantages of privatisation which are increase in efficiency and

profitability, decrease in political pressure and use of latest technology and know-how.

1. Increase in efficiency and profitability

Most Govt. industries and services are inefficient and running in losses, when these will be

transferred to private sector, their administration will improve and non-development

expenditures will be reduced, their efficiency will increase and will be converted into

profitable ventures.

2. Decrease in Political Pressure

There are always political pressures on Govt. owned industries, banks and other institutions

for employment of political workers and loan facilities

from banks. When these enterprises will go in the hands of private owners then these illegal

pressures will be reduced to a great extent.

3. Use of Latest Technology and Know-How

Private domestic investors and foreign investors will adopt latest technology and know-how

for the increase in output and their profits. This will result in the increase in national product,

thus national income of the country will grow.