CHALLENGES AND WAY FORWARD ON BROWNFIELD DEVELOPMENT VIA PPP Presented by : Dato’ Dr. Tan Yew Chong Deputy Director General (Development II) Public-Private Partnership Unit, Prime Minister’s Department of Malaysia 11 th August 2015 Royale Chulan, Kuala Lumpur This paper is not to be published in part or in full without prior written permission from Public- Private Partnership Unit, Prime Minister’s Department of Malaysia
PRESENTATION OUTLINE Introduction Challenges The Way Forward Conclusion 2
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INTRO RO – BROWNF NFIEL IELD D DE DEVE VELOPM PMEN ENT No common definition on brownfield adopted Brownfield is real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant (US EPA, 2011) Brownfield' land is an area of land or premises that has been previously used, but has subsequently become vacant, derelict or contaminated. This term derived from its opposite, undeveloped or 'greenfield' land. 4 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
INTRO RO – PU PUBLIC C PR PRIVATE TE PARTNER ERSHIP SHIP No universally accepted definition of PPP In Australia PPP as being where the private sector provides public infrastructure and any related services and there is private investment or financing. UKAS PPP is a form of collaboration between public and private sectors in which stand alone business entity is formed, financed and operated by private sectors which includes construction, development, maintenance and refurbishment of public sector’s assets such as buildings, infrastructures and facilities. 5 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
INTRO RO - PP PPP P EV EVOLUTION ION 2010 10 1983 1983 2009 2009 Facilitation Fund Malaysia Incorporated Policy PPP Guidelines Introduced Privatization Policy Current rrent 1985 1985 2009 2009 Various PPP Models adopted: Privatization Guidelines UKAS is formed a) Build-Operate-Transfer b) Build-Operate-Own c) Build-Lease-Maintain-Transfer 1991 1991 2006 2006 d) Build-Lease-Maintain-Operate- Transfer Privatization Masterplan PPP – PFI was introduced e) Management /Operation outsourcing f) Leasing g) Sales of Public Asset/Equity h) Land Swap 6 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
PP PPP M P MODE DEL IN MALAYSIA SIA PUB PUB UBLIC UBLIC LIC PRI LIC PRI RIVATE RIVATE VATE PAR VATE PAR ARTN ARTN TNERSHIP TNERSHIP ERSHIP ERSHIP PFI Privatization Equity/Asset sale B.L.T Lease Management Contract B.L.M.T B.O.T B.O.O Land swap B.L.M.O.T Corporatization 7 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
INTRO RO – UKA KAS,JPM PM PPP Commit itte tee Negotiat tiatio ions ns Acts as Secretariat to PPP Committee Negotiates the terms and conditions of PPP arrangements Facilita litatio tion n Fund Manages and Supervises the Facilitation Fund Corridor idor Developm pmen ent Act as Secretariat for implementing projects in the 5 Corridors i.e. ECER, IM, SCORE, SDC, NCER Monitor toring ing Monitors the implementation of projects under PPP, Facilitation Fund and Corridor Development. 8 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
INTRO RO – PP PPP P GOVE VERNANC ANCE E Implementation Private Sector Initiated Financial Committee Private Public PPP Planning & Partnership Committee Cabinet Coordination Unit Technical Committee Ministries Other Agencies State Governments Government-Initiated Implementation 9 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
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CH CHALLE LLENG NGES ES Among challenges in developing brownfield projects in Malaysia - Land must be vested to FLC for concession to be signed. Land is a state matter. Sewer consist of pipelines which pass Land Ownership Land Ownership through several lands. 11 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
CH CHALLE LLENG NGES ES Limited PPP approach might be applied due to fiscal constraint. Public Infra projects usually incur high capex High rates or fees imposed may burden public. Financial Impediment Financial Impediment Project’s viability and bankability. 12 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
CH CHALLE LLENG NGES ES “Not on our backyard sentiment” of public. Information on the projects made available to public is limited. Public Acceptance Public Acceptance 13 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
CH CHALLE LLENG NGES ES There is need to synergize interest between federal & states in project management. Departmental red-tapes & SOP may hinder project Inter Inter-departments departments to take off early. Coordination Coordination 14 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
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THE E WAY FORWARD ARD Unlocking potential value of the land by way of land swap arrangement Venturing into more greener solution projects Centralized working platform PPP Committee 16 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
THE E WAY FORWARD ARD Creative source of revenue is allowed to help reducing rates / tipping fees e.g. electricity generation. Enhancing public engagement to disseminate relevant information on projects Stronger policy support from relevant authorities 17 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
Conc nclusi lusion on 18
CO CONCL CLUSI USION ON o Development of brownfield projects via PPP is fairly new to Malaysia. Commercialization of STP land might be new era of the industry. o Commercialization of STP land has unlock the potential value of brownfield land. o It has also optimize the scarce resources available to the GoM thus creating the VfM in the PPP project towards a sustainable development via PPP. 19 This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia
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