BROWNFIELD DEVELOPMENT VIA PPP Presented by : Dato Dr. Tan Yew - - PowerPoint PPT Presentation

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 11th 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This paper is not to be published in part or in full without prior written permission from Public-Private Partnership Unit, Prime Minister’s Department of Malaysia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

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INTRO RO – BROWNF NFIEL IELD D DE DEVE VELOPM PMEN ENT

This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia 4

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,

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contaminant (US EPA, 2011) Brownfield' land is an area

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land

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premises that has been previously used, but has subsequently become vacant, derelict or

• contaminated. This term derived from its
• pposite, undeveloped or 'greenfield' land.

No common definition on brownfield adopted

INTRO RO – PU PUBLIC C PR PRIVATE TE PARTNER ERSHIP SHIP

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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

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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.

INTRO RO - PP PPP P EV EVOLUTION ION

1983 1983 Malaysia Incorporated Policy Privatization Policy 1985 1985 Privatization Guidelines 1991 1991 Privatization Masterplan 2006 2006 PPP – PFI was introduced 2009 2009 UKAS is formed 2009 2009 PPP Guidelines

2010 10 Facilitation Fund Introduced

Current rrent

Various PPP Models adopted: a) Build-Operate-Transfer b) Build-Operate-Own c) Build-Lease-Maintain-Transfer d) Build-Lease-Maintain-Operate- Transfer e) Management /Operation outsourcing f) Leasing g) Sales of Public Asset/Equity h) Land Swap

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PP PPP M P MODE DEL IN MALAYSIA SIA

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PFI

B.L.T B.L.M.T B.L.M.O.T

Privatization

Equity/Asset sale Lease Management Contract B.O.T B.O.O Land swap Corporatization

PUB UBLIC LIC PRI RIVATE VATE PAR ARTN TNERSHIP ERSHIP PUB UBLIC LIC PRI RIVATE VATE PAR ARTN TNERSHIP ERSHIP

INTRO RO – UKA KAS,JPM PM

PPP Commit itte tee Acts as Secretariat to PPP Committee Negotiat tiatio ions ns 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.

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INTRO RO – PP PPP P GOVE VERNANC ANCE E

Private Public Partnership Unit Ministries Other Agencies PPP Committee Cabinet State Governments

Planning & Coordination

Private Sector Initiated

Government-Initiated

Technical Committee Financial Committee Implementation Implementation

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CH CHALLE LLENG NGES ES

Among challenges in developing brownfield projects in Malaysia -

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Land Ownership Land Ownership

 Land must be vested to FLC for concession to be signed.  Land is a state matter.  Sewer consist

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pipelines which pass through several lands.

CH CHALLE LLENG NGES ES

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Financial Impediment Financial Impediment

 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.  Project’s viability and bankability.

CH CHALLE LLENG NGES ES

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Public Acceptance Public Acceptance

 “Not

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backyard sentiment”

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public.  Information on the projects made available to public is limited.

CH CHALLE LLENG NGES ES

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Inter Inter-departments departments Coordination Coordination

 There is need to synergize interest between federal & states in project management.  Departmental red-tapes & SOP may hinder project to take off early.

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THE E WAY FORWARD ARD

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Unlocking potential value of the land by way of land swap arrangement Venturing into more greener solution projects Centralized working platform  PPP Committee

THE E WAY FORWARD ARD

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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

Conc nclusi lusion

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CO CONCL CLUSI USION ON

• Development of brownfield projects via PPP is fairly new to
• Malaysia. Commercialization of STP land might be new era of the

industry.

• Commercialization of STP land has unlock the potential value of

brownfield land.

• 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.

This paper is not to be published in part or in full without the written permission from Unit Kerjasama Awam Swasta (UKAS), Malaysia 19

THANK YOU!

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www.ukas.gov.my

PUBLIC-PRIVATE PARTNERSHIP UNIT PRIME MINISTER’S DEPARTMENT