KKKH 4283 SUSTAINABLE URBAN DESIGN

TASK 3: PRIVATISATION OF REDEVELOPMENT OF STADIUM INTO AN INNOVATIVE RESEARCH PARK IN KAJANG

NAME MATRIC NUMBER DEPARTMENT FACULTY LECTURER

: RABIAH ADAWIYAH BINTI ABD RAHMAN : A128847 : CIVIL AND ENVIRONMENTAL ENGINEERING : ENGINEERING AND BUILD ENVIRONMENT : PROF. DR. IR. RIZA ATIQ ABDULLAH BIN O.K. RAHMAT

UNIVERSITI KEBANGSAAN MALAYSIA

1.0 INTRODUCTION Innovative Research Park was established for the purpose of attracting industrial, federal and state tenants in an attractive quality of life setting and in close proximity to top tier research universities. Research park have the characteristics of collaborative, innovative, entrepreneurial communities that incubate and nurture new business. By providing a location which government, universities and private companies cooperate and collaborate, innovative research park create an environment that foster collaboration and innovation. They enhance the development, transfer and commercialize of technology. Other than that, the development of this innovative research park provides a platform for the establishment of strategic business technology linkages between research institutions, academia, financial community and industry, local and global. Besides, it also can encourage visitors to take an active interest in science and technologies. 2.0 PROBLEM DEFINITION Kajang Municipality intends to redevelop the stadium into an Innovative Research Park. The park is intended to take advantages of a number of universities and research centre in Kajang area to turn the municipality into centre for innovative, high value added industries. As we know, Kajang have lot of higher institution of learning such as Universiti Kebangsaan Malaysia (UKM), Universiti Nottingham Kampus, Universiti Kuala Lumour Malaysia, University Tunku Abdul Rahman (UTAR) and many more. So, it is a suitable places to develop an Innovative Research Park. However, the administration is in no position to fund the proposed project. Thus, administrators come out with solution for the redevelopment of the stadium into an Innovative Research park by privatized the project to a private developer. It is believed that privatization has a higher efficiency in management and performance due to the effect from competitors. To ensure the success of the project, all the parties involved in the project should know their responsibilities and administrators also come out with the proposal of benefits and problems in the future.

3.0 CONCEPT OF PRIVATIZATION Privatization is an essential part of the overall strategy in the country development. The privatization program contributes towards the growth and development of the economic. In Malaysia, privatization is generally defined as the transfer of ownership from public to private sector. It could be referred as changing status of a business, service or industries from state, government or public to private ownership or control. Other than that, it also includes the use of private contractors to provide service previously rendered by the public sector. There are lots of privatization method in the economy policy such as Built operate transfer (BOT), built own operate transfer (BOOT), built own operate (BOO), built lease transfer (BLT), design build finance operate (DBFO) and many more. For this project, we choose to used built operate transfer (BOT) method. In the BOT framework a third party such as administrator, delegates to a private sector entity to design and build infrastructure and to operate and maintain the facilities for a certain period. During this period, the private party has the responsibility to raise the finance for the project and is entitled to retain all revenues generated by the project and is the owner of the regarded facilities. The facility will then be transferred to the public administration at the end of concession agreement. 4.0 OBJECTIVES OF PRIVATIZATION: 1. To relieve the financial and administrative burden of the government. 2. To improve efficiency and increase productivity. 3. To facilitate economic growth. 4. To reduce the size and presence of the public sector in the economy. 5. To assist in meeting the national development policy target. 5.0 RESPONSIBILITIES OF GOVERNMENT (MPKj) 1) Kajang Municipality must provide the blueprint to the private company and also the design for the Innovative research Park. 2) Kajang Municipality will facilitate, coordinate, purchase contract on market services by the private company and give any assistance to get any necessary approval.

3) Private company also can apply loan from government agencies. This is because, government will support the private sector since this project give beneficial to publics.

6.0 RESPONSIBILITIES OF PRIVATE COMPANY 1) With the design and blueprint provided by the government, the private companies are responsible to complete the project without violating the particulars contained in the contract that was agreed. 2) Private company should ensure that they will provide the best services and facilities to the innovative research park. 3) During the construction and rebuild of the stadium for innovative research park, they must minimize the environment impact and make it more sustainable. 4) Construct sufficient infrastructure and facilities that can attract the researcher and universities students. 7.0 BENEFITS OF THE PROPOSALS Privatization on the project of redevelops the stadium into an Innovative Research park give benefits to the government in decreasing the expenses in the development of the country. It is because, the budget that suppose been given to the government agencies can be used to another important government project. This condition ensure the expenses does not burden the government as well as it will not be the excuse for the proceed of any advantages project to the public. On the other hand, when the facilities provided by the public sector become privatized, consumers gain greater advantages. For example, for this project they can use all the various facilities at the lower cost and can make Kajang area to turn into centre for innovative and high value added industries. Besides, the private company will have competitors among them. Thus, they will show their ability to convince the client by delivering a service in more efficient, higher quality of materials, multiple choices and less in corruption.

8.0 PROBLEMS THAT MIGHT OCCUR IN FUTURE

In Build Operate Transfer (BOT) project, the project company obtains its revenue through a fee charge to the government rather than tariffs charge to consumers. Thus, private company need to bears a certain type risk such as technical risk and financial risk. The technical risk such as construction difficulties and the financial risk such as change in the rate of raw materials, income risk which is over optimistic cash flow forecast and cost overrun risk. All the risk must be taken into consideration to ensure that the project will run smoothly. So, in return, government should purchase a minimum level of output to ensure that the private operator recovers its cost during the operation of the building.