Application of Public-Private Partnership Concept in a Tourism Destination: a Case Study of Penang Hill

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Application of Public-Private Partnership Concept in a Tourism Destination: a Case Study of Penang Hill APPLICATION OF PUBLIC-PRIVATE PARTNERSHIP CONCEPT IN A TOURISM DESTINATION: A CASE STUDY OF PENANG HILL MOHD FIRDAUS BIN HABIB MOHD UNIVERSITI SAINS MALAYSIA 2018 APPLICATION OF PUBLIC-PRIVATE PARTNERSHIP CONCEPT IN A TOURISM DESTINATION: A CASE STUDY OF PENANG HILL by MOHD FIRDAUS BIN HABIB MOHD Thesis submitted in fulfillment of the requirements for the degree of Doctor of Philosophy September 2018 ACKNOWLEDGEMENT Alhamdulillah to Almighty Allah and Rasulullah (pbuh) for giving me the strength, courage, patience and inspiration to finish writing this dissertation. I would like to dedicate this dissertation to my parents, Zubytha binti Majid and Habib Mohd bin Mohamed Sha and my younger sister, Noor Hayati and brother-in-law, Nor Izzudin, who sacrificed so much for me throughout the duration of my study. I am also very grateful and wish to thank my main supervisor, Professor Chan Ngai Weng, for his guidance and supervision throughout my candidature in Universiti Sains Malaysia (USM). My gratitude also extends to Professor Suriati Ghazali, Professor Badaruddin Mohamed and Professor Amran Hamzah for their invaluable inputs and advice in improving this thesis. I wish to thank Dr Mohamed Amiruddin Fawzi Bahaudin, Associate Professor Dr Azizan Marzuki and colleagues in Politeknik Sultan Abdul Halim Mu’adzam Shah (POLIMAS) for their advice, assistance and support. I wish to also extend my gratitude to the Dean and the staffs of the School of Humanities USM for providing me with the research facilities. To friends, especially Faizul, Mastura, Ratna, Faezah, Jaspal, Mages, Sofiyah, and Fairuz, I wish to convey my gratitude for their generous support throughout the duration of my study. I would also like to express my appreciation to all the respondents for their support. I would also like to express my gratitude for the funding provided by MyBrain15 because without the financial support, I would have never been able to realize the completion of my dissertation. ii TABLE OF CONTENTS ACKNOWLEDGEMENT ii TABLE OF CONTENTS iii LIST OF TABLES x LIST OF FIGURES xi LIST OF ABBREVIATIONS xiii ABSTRAK xv ABSTRACT xvi CHAPTER 1 - INTRODUCTION 1.1 Introduction 1 1.2 Problem Statement 4 1.3 Research Objectives 8 1.4 Research Questions 9 1.5 Research Context of Penang, Malaysia 9 1.5.1 Penang Hill 10 1.5.2 Penang Hill Corporation (PHC) 13 1.6 Research Significance 14 1.7 Study Organization 15 CHAPTER 2 - LITERATURE REVIEW 2.1 Introduction 17 2.2 Government Centric Model 17 2.2.1 Government Centric Model, Penang Hill Corporation (PHC) 19 iii 2.2.2 Government Centric Model, Chief Minister Incorporation (CMI) 23 2.3 Privatization Model 24 2.4 Public - Private Partnership (PPP) Model 26 2.5 Public-Private Partnership (PPP) in Malaysia 30 2.6 Governance Public-Private Partnership (PPP) in Malaysia 33 2.7 Public-Private Partnership (PPP) Model and Environmental Protection 34 2.8 Management Model in Relation to Good Governance and Environmental Protection 36 2.9 Types of Public-Private Partnership (PPP) 37 2.9.1 Supply and Management Contracts 38 2.9.2 Turnkey Contracts 49 2.9.3 Lease 40 2.9.4 Concessions 41 2.10 Critical Success Criteria of Public Private Partnership (PPP) 42 2.11 Public Private Partnership (PPP) Practice in Penang Hill 44 2.11.1 Lease of State Government’s Own Bungalows 45 2.11.2 Lease Crag Hotel 47 2.11.3 Development of Penang Hill Hawker Center or Astaka 48 2.11.4 Eco-Tourism Venture or The Habitat 49 2.12 Sustainable Management Model 52 2.13 Theoretical and Conceptual Base 56 2.14 Stakeholder Theory 56 2.15 Conceptual framework for Sustainable Management of Penang Hill 58 2.16 Summary 61 iv CHAPTER 3 - METHODOLOGY 3.1 Introduction 62 3.2 Research Design 62 3.3 Qualitative Interview 64 3.3.1 Case Study 64 3.3.2 Research Population and Sampling 67 3.3.3 Sourcing Interview 68 3.3.4 Face-to-face In-depth Interviews 72 3.3.5 Usage of Existing Secondary Data 74 3.4 Data Analysis 75 3.4.1 Transcription of Interviews 75 3.4.2 Thematic Analysis 76 3.5 Limitation of Study 80 3.5.1 Generalizability 80 3.5.2 Accuracy 80 3.5.3 Validity and Reliability 80 3.6 Summary 82 CHAPTER 4 - STUDY AREA 4.1 Study Area, Penang 84 4.2 Penang Hill 87 4.2.1 Location of Penang Hill 90 4.2.2 Population of Penang Hill. 91 4.2.3 Land Use 92 4.2.4 Development Plans of Penang Hill 94 v 4.2.5 Water Catchment Area 94 4.2.6 Physical Feature, Topography and Climate 9 4.2.7 Vegetation and Agriculture 97 4.2.8 Natural Heritage, Flora and Fauna of Penang Hill 99 4.2.9 Special Features of Species, Endemism, and Rarity and Highland Specialty 100 4.2.10 History and Memories of Penang Hill via Writings and Paintings and Heritage Views 101 4.2.11 Heritage Buildings, Gardens and Landscape. 106 4.2.12 Heritage Trails 108 4.2.13 Transportation and Accessibility 110 4.2.14 Penang Hill Funicular Train 112 4.2.15 Infrastructure and Utilities Drainage 112 4.2.16 Solid Waste, Water Supply and Sewerage 113 4.2.17 Electricity Supply and Telecommunication 114 4.2.18 Tourism 115 4.2.19 Tourists Arrival 115 4.2.20 Management and Organization 116 4.2.21 Carrying Capacity 117 4.3 Summary 120 CHAPTER 5 - RESEARCH FINDINGS AND DISCUSSION 5.1 Introduction 121 5.2 Stakeholders’ Background 122 5.3 Management Aspects of Penang Hill 125 vi 5.4 Management of Penang Hill 125 5.4.1 Selections of Managers and Decision-Makers 125 within Penang Hill Corporation (PHC) 5.4.2 Independent Management Groups 127 5.4.3 Mismanagement of Publicly Owned Properties 128 5.4.4 Human Made Attractions of Penang Hill 131 5.5 Public-Private Partnership (PPP) and Management 135 of Penang Hill Corporation (PHC) 5.5.1 Suitability of Public-Private Partnership (PPP) 135 5.5.2 Public-Private Partnership (PPP) Will Not Be 140 Suitable 5.5.3 Public Private Partnership (PPP) Projects in Penang Hill 141 5.5.4 Involvement of NGOs and Professional Bodies 149 5.6 Public-Private Partnership (PPP) and Environmental Protection 151 5.6.1 Public-Private Partnership (PPP) as a Tool 152 to Safeguard the Environment 5.6.2 Hill Clearing 155 5.6.3 Illegal Farming 156 5.6.4 Illegal Collection of Flora and Fauna 160 5.6.5 Establishing Hill Botanic Garden 159 5.6.6 Reintroduction of Flora and Fauna 160 5.6.7 Penang Hill as a Research Center for Tropical 161 Hill Biodiversity 5.6.8 Forest Park 163 5.7 Summary 164 vii CHAPTER 6 - CONCLUSION AND MANAGEMENT FRAMEWORK OF A HILL STATION AND APPLICATION OF THE PPP CONCEPT 6.1 Introduction 167 6.2 Stakeholders’ Background 167 6.3 Management Aspects of Penang Hill 168 6.3.1 Management Aspects of Penang Hill Corporation (PHC) with Regards to Selection of Personal 168 6.3.2 Independent Management Group 169 6.3.3 Mismanagement of Publicly-Owned Properties 169 6.3.4 Human Made Attractions of Penang Hill 172 6.4 Public-Private Partnership (PPP) and Management of Penang Hill Corporation (PHC) 171 6.4.1 Suitability of Public-Private Partnership (PPP) 171 6.4.2 Public-Private Partnership (PPP) Will Not Be Suitable 172 6.4.3 Public-Private Partnership (PPP) Projects on Penang Hill and the Comparison with The Habitat 173 6.4.4 Involvement of NGOs and Professional Bodies 176 6.5 Public-Private Partnership (PPP) and Environmental Protection 178 6.5.1 Public-Private Partnership (PPP) as a Tool to Safeguard the Environment 178 6.5.1(a) Environmental Protection of Penang Hill 178 6.5.1(b) Nature Tourism as Conservation Effort on Penang Hill 180 6.6 Sustainable Management Framework of Penang Hill and Public, Private, NGOs and Professional Bodies Partnership (PPNPP) 181 6.7 Management Aspect of Penang Hill 182 6.8 Environmental Protection of Penang Hill 184 viii 6.9 Theoretical and Practical Contributions 188 6.10 Review on Methodology Used for This Research 188 6.11 Practical Implication of Proposed Framework 188 6.12 Limitations of the Research and Future Studies 189 6.13 Conclusion 190 REFERENCES 192 APPENDICES LIST OF PUBLICATIONS ix LIST OF TABLE Page Table 2.1 Tourist Arrival and Receipts to Malaysia from 1998-2016 20 Table 3.1 Selection of Respondents based on Cooper et al. 2009 71 Table 4.1 Tourist Arrivals to Penang from 2005-2016 87 Table 4.2 Trails of Penang Island 110 Table 4.3 Number of Tourist Arrivals to Penang Hill from Year 2007 – 2017 116 Table 5.1 Respondents’ Background 123 x LIST OF FIGURES Page Figure 2.1 Evolution of Public-Private Partnership (PPP) chronology in Malaysia 31 Figure 2.2 Main building of Crag Hotel 48 Figure 2.3 The Habitat’s nature trails 51 Figure 2.4 The Habitat’s Langur Way 55 Figure 2.5 Sustainable management model by Elkington, 1997 51 Figure 2.6 Diagram showing the relation between government and private model, PPP and sustainable management 55 Figure 2.7 Conceptual framework for this study 60 Figure 3.1 Visual model of the coding process in qualitative research 77 Figure 3.2 Illustration of Themes for this research 82 Figure 4.1 Total Population of Penang by District (2010) 86 Figure 4.2 Map of Penang 86 Figure 4.3 Location of Penang Hill 90 Figure 4.4 Population of Penang Hill in year 1980, 1991, 2000 and 2010 92 Figure 4.5 Population by Gender, Age group and ethnicity in Penang Hill 92 Figure 4.6 Land Use of Penang Hill 93 Figure 4.7 Water Catchment area of Penang Hill 96 Figure 4.8 Heritage View Corridors of Penang Hill 103 Figure 4.9 Trials of Penang Island 109 Figure 4.10 Accessibility in Penang Hill 111 Figure 4.11 Penang Hill railway from 1930 – Present 112 Figure 4.12 Existing Land Use and Core Development Area of Penang Hill 119 xi Figure 5.1 Shows the condition of the Fernhill bungalow owned by the state government 131 Figure 5.2 Penang Hill entrance 137 Figure
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