Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
KKKH 4284 PERANCANGAN BANDAR LESTARI Task 3 : Privatization NURHAYATI BINTI ABDUL RAZAK A133731 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 TASK 3 : PRIVATIZATION 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 Introduction Kajang is a town in the eastern part of Selangor, Malaysia. Kajang and its surrounding areas is a sub-district located within the Hulu Langat District in the state of Selangor. It is situated approximately 14 miles southeast of Kuala Lumpur. From Kuala Lumpur, Kajang can be reached by roads and rails. Kajang is also linked with Putrajaya, the National Administrative Centre and Cyberjaya, the National Multimedia City. On its west is situated Puchong town, Batu 3 and Klang. Basically Kajang consists of a number of Malay, Chinese and Indian settlements. Map of Kajang City The center of Kajang is the bustling Old Town, where all the roads meet. Most of the colonial-era buildings were constructed around the 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. 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. What is privatization? Privatisation, also spelled privatization, may have several meanings. Primarily, it is the process of transferring ownership of a business, enterprise, agency, public service, or public property from the public sector (a government) to the private sector, either to a business that operates for a profit or to a non-profit organization. It may also mean government outsourcing of services or functions to private firms, e.g. revenue collection, law enforcement, and prison management. The privatisation policy was first announced as a national policy by the Government in 1983. It represents a new approach in the national development policy and complements other national policies such as the Malaysia Incorporated policy, developed to underscore the increased role of the private sector in the development of the Malaysian economy. This approach is to facilitate the country’s economic growth, reduce the financial and administrative burden of the Government, reduce the Government's presence in the economy, lower the level and scope of public spending and allow market forces to govern economic activities and improve efficiency and productivity in line with the National Development Policy. In respect of ownership of wealth, the privatisation policy forms an integral part of the Government's strategy in realizing active participation by Bumiputera in corporate sector to correct the imbalances in the corporate sector participation. The privatised entity should allocate 30% of its equity to Bumiputera. Foreign participation in a privatized entity is limited to a maximum of 25 % of its share capital. Privatization (sometimes referred to as contracting out, outsourcing, competitive sourcing or public-private partnerships) is really an umbrella term referring to a range of policy choices involving some shift in responsibility from the government to the private sector, or some form of partnership to accomplish certain goals or provide certain services. Recent decades have seen privatization shift from a concept viewed as radical and ideologically-based to a well-established, proven policy management tool. Indeed, local policymakers in many jurisdictions in the United States and around the world have used privatization to better the lives of citizens by offering them higher quality services at lower costs, delivering greater choice and more efficient, effective government. Virtually every local government service from road maintenance, fleet operations and public works to education, recreation and public health services has been successfully privatized at some point in time somewhere around the world. In recent years, government's role is evolving from service provider to that of a broker of services, as the public sector is increasingly relying far more on networks of public, private and non-profit organizations to deliver services. This trend is not confined to any particular region, or to governments dominated by either major political party. In fact, privatization is a bipartisan trend, embraced by pragmatic local policymakers from both sides of the aisle. The reason for the widespread appeal of privatization is straightforward: it works. Decades of successful privatization policies have proven that private sector innovation and initiative can do certain things better than the public sector. Privatization can also boost the local economy and tax base, as private companies under government contract pay taxes into government coffers and offer employment to communities. The experiences of the thousands of other local governments around the country (and indeed, around the world) that have embraced privatization demonstrate that there is indeed another more entrepreneurial and pragmatic way to govern. When implemented with care, due diligence and a focus on maximizing competition, privatization is an approach that puts results, performance and outcomes first and can deliver high-quality public services at a lower cost. Advantages of Privatization 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 nondevelopment expenditures will be reduced, their efficiency will increase and will be converted into profitable ventures. 2. Increase in Foreign Investment and Export Earnings Privatization will increase foreign investment when foreigners will purchase them. Their production will increase which will more foreign exchange for Pakistan and if these enterprises are set up by foreign loans, these loans will be repaid out of the sale proceeds, which will reduce the burden of foreign loans. 3. Broaden the Base of Share Capital and Stock Market Sale of enterprises through stock exchanges will broaden the base of share capital hence stock market will develop, because general public will be in position to purchase their shares and investment opportunities for general public will increase. 4. 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. 5. 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. 6. Decrease in Deficit Budgeting and Increase in Infrastructure Govt. enterprises usually run into losses and to keep them going. Govt. provides funds every year. After privation, Govt. need not to resort to deficit financing and the funds provided to these enterprises will be utilized for construction of social infrastructure of the economy. Disadvantages of Privatization 1. Privatization is expensive and generates a lot of income in fees for specialist advisers such as banks. 2. Public monopolies have been turned into private monopolies with toolittle competition, so consumers have not benefited as much as had beenhoped. This is the main reason why it has been necessary to createregulators. This is an important point. It partly depends on how the privatization took place. For example, the railways were privatized in bit of a rush and there might have been other ways to do it so that morecompetition was created. It partly depends on the market. Some markets are'natural monopolies' where competition is difficult. For example, it would bevery wasteful and expensive to build two sets of track into Liverpool Street just to create some competition. Natural monopolies create a special justification for public ownership in the general public interest. 3. The nationalized industries were sold off too quickly and too cheaply.With patience a better price could have been had with more beneficialresults on the government's revenue. In almost all cases the share prices rosesharply as soon as dealing began after privatisation. 4. The privatized businesses have sold off or closed down unprofitable partsof the business (as businesses normally do) and so services eg transport inrural areas have got worse. 5. Wider share ownership did not really happen as many small investorstook their profits and didn't buy anything else. Parties Involved Government 1. Assist in transferring the land the developer 2. Give assistance to get necessary approval 3. Transfer of the land title to the developer 4. Give assistance to relocate the squatters and land owners 5. Give assistance to transfer the ownership of part of the area from land owners to the developer 6. Allow the developer to construct a modern mega research centre. Developer 1. Transfer of certain floor area of completed office space to the government 2. Construct low cost houses to be given free of charge to the squatters 3. Construct infrastructure network, including two grade separated intersection 4. Construct a number of houses to be given to the land owners as offset of their land lots. 5. Construct an underground pedestrian crossing 6. Upgrade existing road infrastructure surrounding the development 7. Construct and maintain a public garden