1. 1PRIVATISATION MOHAMAD AFFENDI BIN ISMAIL 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. Solution: This problem can be solved by the method of privatisation the project itself. Privatisation 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 more cheaper because it leads to lower prices and greater supply and least corruption.The municipal wouldnt 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.Privatisation 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.

2. 2PRIVATISATION MOHAMAD AFFENDI BIN ISMAIL 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 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 privatisation 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, privatisation doesnt necessarily increase competition, it depends on the nature of the market. DISADVANTAGES Government loses out on potential dividends. Many of the privatisedcompanies 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. 3. 3PRIVATISATION MOHAMAD AFFENDI BIN ISMAIL 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 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 4. 4PRIVATISATION MOHAMAD AFFENDI BIN ISMAIL Upgrade existing road infrastructure surrounding the development Construct and maintain a public garden