NORSHARINA BT KAMSANI A133981 TASK 3 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 The problem can be solved by the method of privatisation. This is a process of transferring the control of an enterprise from the government sector to the private sector. By privatization, a service that is being provided by government is sold, partly or wholly to the public who then become the shareholders or stakeholders. Privatization is the most common forms of alternative service delivery for-profits and non-profits-oriented enterprises. ADVANTAGES 1. Government can raise funds to pay off other debts fast because of relieve from financial burden of the public sector enterprises being privatized 2. It raises more money for government through taxing former public sector enterprises 3. In practice, all levels of government, seeking to reduce costs, have begun turning to the private sector to provide some of the services that are ordinarily provided by government. The spread of the privatization movement is grounded in the fundamental belief that market competition in the private sector is a more efficient way to provide these services and allows for greater citizen choice. 4. With privatization solidly on ground, costs will be reduced at the long run.

5. Privatized enterprises provide better and prompt services to the customers and help in improving the overall infrastructure of the country.

6. Profit incentive may deliver better outcomes, for example, staff down-sizing to increase efficiency, more staff motivation, and cheaper prices to be competitive.

DISADVANTAGES 1. Government no longer receives profits (if it was previously profitable), therefore, the revenue accruing to the government from public sector enterprises becomes shortened as a result of privatization. 2. In extremely unavoidable cases, staff down-sizing could result to workers lay-off, and then unemployment rises 3. Prices may actually rise if the service was previously subsidized by the government. This is a common experience after a successful privatization process. This becomes imperative in a bid to provide qualitative service, improve efficiency and profitability. 4. Privatization alone may not lead to better quality or cost reduction in public service delivery 5. Privatization has provided the unnecessary support to the corruption and illegitimate ways of accomplishments of licenses and business deals amongst the government and private bidders. Lobbying and bribery are the common issues tarnishing the practical applicability of privatization 6. A major concern to the organized labour is the impact of privatization on job security and employment. Workers layoffs, erosion of wages and benefits, and decreased levels of union membership could be parts of labours setbacks for embracing privatization. 7. One of the disadvantages is that the privatized company will no longer operate in the public interest. While a state-owned company primarily serves the citizens of the state, the primary goal of a privately operated company is to make profit. It may make these profits at the expense of its customers without serving them properly. For example, it may choose the market which is most profitable to operate in and leave less wealthy customers without a service.

REQUIRED PARTIES: Government: 1. 2. 3. 4. 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

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. 2. 3. 4. 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. 5. Construct an underground pedestrian crossing 6. Upgrade existing road infrastructure surrounding the development 7. Construct and maintain a public garden

EVALUATION OF PRIVATISATION It depends on the industry in question. An industry like telecoms is a typical industry where the incentive of profit can help increase efficiency. However, if you apply it to industries like health care or public transport the profit motive is less important. It depends on the quality of regulation. Do regulators make the privatised firms meet certain standards of service and keep prices low. Is the market contestable and competitive? Creating a private monopoly may harm consumer interests, but if the market is highly competitive, there is greater scope for efficiency savings. At the onset, privatization bites very hard, but at the long run, the benefits are multifarious and immeasurable.