Challenges in Privatization Development Projects under Local Government in Malaysia

Abstract

In Malaysia’s development plan, privatization continued to be an important part of the overall strategy to enhance the role of the private sector in the country’s economic development. For several years, local governments in Malaysia had used privatization to expand facilities, which made local governments a significant player in the economic development of cities. However, studies had also shown that the privatization programmes among local governments in Malaysia are not entirely successful. Some of privatization development failed not achieving project goals. There are some criteria which lead the privatization into failure. The effectiveness of privatization requires efficiency and transparency in its implementation. Therefore, the study explores the challenges that have been studied in the development of privatization projects among local governments. By adopting a qualitative approach, the primary data are obtained using semi-structured interviews, where 16 respondents are selected using Purposive Stratified Sampling from five local authorities that actively implemented privatization in development projects. Thematic network analysis was adopted in analyzing the primary data. Finding transpired that there are eight critical challenges: political interferences, internal company problems, communication between parties, current financial situation, existing experts, compliance with prescribed conditions, land status issues, and objection and complaints from the community.