PRIVATISATION OF WATER, SANITATION & ENVIRONMENT-RELATED SERVICES IN MALAYSIA Japan International Cooperation Agency (JICA) Malaysia Office 1999 JICA...A Study of Privatisation in Malaysia TABLE OF CONTENTS EXECUTIVE SUMMARY.....................................................................................IX CHAPTER 1 A STUDY OF PRIVATISATION IN MALAYSIA: INTRODUCTION................... 1-1 1.1 INTRODUCTION........................................................................................... 1-1 1.2 OBJECTIVES AND SCOPE OF WORK OF THE STUDY ........................................ 1-3 1.3 METHODOLOGY ADOPTED ........................................................................... 1-4 1.4 LITERATURE REVIEW .................................................................................. 1-4 1.5 SCHEDULE OF WORK AND TASKS ................................................................ 1-8 CHAPTER 2 PRIVATISATION IN MALAYSIA: CONCEPT, POLICY AND PRACTISE ........ 2-1 2.1 INTRODUCTION............................................................................................ 2-1 2.2 THE CONCEPT ............................................................................................ 2-2 2.3 THE RATIONALE .......................................................................................... 2-2 2.4 FUTURE DIRECTION..................................................................................... 2-3 2.5 PRIVATISATION POLICY AND PLAN ................................................................. 2-3 2.5.1 Privatisation Master Plan (PMP)..........................................................................2-3 2.5.2 Privatisation Action Plan (PAP)..........................................................................2-4 2.5.3 Project Selection Criteria.....................................................................................2-5 2.5.4 Participating Corporate Criteria...........................................................................2-6 2.6 METHODS OF PRIVATISATION ....................................................................... 2-7 2.7 PRIVATISATION PROCESS ............................................................................ 2-8 2.8 ADMINISTRATIVE SYSTEMS AND STRUCTURES ............................................... 2-9 2.8.1 The Administrative Machinery...........................................................................2-9 2.8.2 Administrative System and Structure.................................................................2-9 2.8.3 Government-initiated privatisation.....................................................................2-9 2.8.4 Private sector-initiated privatisation...................................................................2-10 2.8.5 Review Mechanism............................................................................................2-10 2.8.6 Public Participation…………………………………………………………….2-10 2.9 POST-PRIVATISATION ROLE OF THE GOVERNMENT ....................................... 2-11 CHAPTER 3 OVERVIEW OF PRIVATISATION IN THE HEALTH SECTOR......................... 3-1 3.1 BACKGROUND............................................................................................. 3-1 3.2 PRIVATISATION EXPERIENCES .................................................................... 3-3 3.2.1 PJ Medical Stores.................................................................................................3-3 3.2.2 Non-medical Services..........................................................................................3-4 3.2.3 Corporatisation of the National Heart Institute (IJN)..........................................3-6 PE Research Sdn Bhd i JICA...A Study of Privatisation in Malaysia 3.2.4 FOMEMA (privatisation of health monitoring system for migrant workers)......3-7 3.3 OTHER PROPOSED PRIVATISATION PLANS .................................................... 3-8 3.4 KEY ISSUES................................................................................................ 3-9 3.5 COSTS AND BENEFITS ............................................................................... 3-10 3.6 LESSONS FOR OTHER COUNTRIES .............................................................. 3-12 CHAPTER 4 CLINICAL WASTES MANAGEMENT AND NON-MEDICAL SERVICES PRIVATISATION............................................................................................... 4-1 4.1 BACKGROUND............................................................................................. 4-1 4.2 STATUS BEFORE PRIVATISATION .................................................................. 4-6 4.3 PRIVATISATION PLAN FOR THE SECTOR ........................................................ 4-7 4.4 STATUS AFTER PRIVATISATION................................................................... 4-12 4.5 KEY ISSUES.............................................................................................. 4-13 4.6 COSTS AND BENEFITS ............................................................................... 4-15 4.7 SUMMARY REMARKS ................................................................................. 4-16 CHAPTER 5 HAZARDOUS WASTES PRIVATISATION ....................................................... 5-1 5.1 BACKGROUND............................................................................................. 5-1 5.2 STATUS BEFORE PRIVATISATION................................................................... 5-3 5.3 INTEGRATED WASTE MANAGEMENT PLAN ..................................................... 5-5 5.4 STATUS AFTER PRIVATISATION ..................................................................... 5-8 5.5 KEY ISSUES.............................................................................................. 5-10 5.6 COSTS AND BENEFITS ............................................................................... 5-13 5.7 SUMMARY REMARKS ................................................................................. 5-15 CHAPTER 6 SOLID WASTES PRIVATISATION................................................................... 6-1 6.1 BACKGROUND............................................................................................. 6-1 6.2 STATUS BEFORE PRIVATISATION................................................................... 6-4 6.3 PRIVATISATION PLAN FOR THE SECTOR......................................................... 6-6 6.3.1 Privatisation Plan for the Ayer Hitam Landfill Project in Selangor.....................6-6 6.3.2 Privatisation of the National Solid Waste Management System..........................6-7 6.4 STATUS AFTER PRIVATISATION ................................................................... 6-12 6.5 KEY ISSUES.............................................................................................. 6-11 6.6 COST AND BENEFITS ................................................................................. 6-17 6.7 SUMMARY REMARKS ................................................................................. 6-19 PE Research Sdn Bhd ii JICA...A Study of Privatisation in Malaysia CHAPTER 7 WATER SUPPLY PRIVATISATION.................................................................. 7-1 7.1 BACKGROUND............................................................................................. 7-1 7.2 STATUS BEFORE PRIVATISATION................................................................... 7-4 7.3 PRIVATISATION PLAN FOR THE SECTOR....................................................... 7-11 7.4 STATUS AFTER PRIVATISATION ................................................................... 7-15 7.5 KEY ISSUES.............................................................................................. 7-17 7.6 COSTS AND BENEFITS ............................................................................... 7-19 7.7 SUMMARY REMARKS ................................................................................. 7-22 CHAPTER 8 SEWERAGE SERVICES PRIVATISATION ..................................................... 8-1 8.1 BACKGROUND............................................................................................. 8-1 8.2 STATUS BEFORE PRIVATISATION................................................................... 8-2 8.3 PRIVATISATION PLAN FOR THE SECTOR......................................................... 8-3 8.4 STATUS AFTER PRIVATISATION ..................................................................... 8-6 8.5 KEY ISSUES................................................................................................ 8-8 8.6 COSTS AND BENEFITS ............................................................................... 8-13 8.7 SUMMARY REMARKS ................................................................................. 8-14 CHAPTER 9 ENVIRONMENTAL MONITORING PRIVATISATION....................................... 9-1 9.1 BACKGROUND............................................................................................. 9-1 9.2 STATUS BEFORE PRIVATISATION................................................................... 9-4 9.3 PRIVATISATION PLAN FOR THE SECTOR......................................................... 9-4 9.4 STATUS AFTER PRIVATISATION ..................................................................... 9-8 9.5 KEY ISSUES.............................................................................................. 9-10 9.6 COSTS AND BENEFITS ............................................................................... 9-10 9.7 SUMMARY REMARKS 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