vi
TABLE OF CONTENTS
CHAPTER
1
TITLE
PAGE
DECLARATION
ii
ACKNOWLEDGEMENTS
iii
ABSTRACT
iv
ASBTRAK
v
TABLE OF CONTENTS
vi
LIST OF TABLES
xiii
LIST OF FIGURES
xvi
LIST OF ABBREVIATIONS
xix
LIST OF APPENDICES
xxi
INTRODUCTION
1.1
Introduction
1
1.2
An Overview of Urban Development and Local
2
Infrastructure Provision
1.3
Current Issues in Local Infrastructure Provision
3
1.4
The Definition
5
1.5
Problem Statements
9
1.6
Research Questions
13
1.7
Purpose of the Research
14
1.8
Scope of Research
15
1.9
Significance of the Research
16
1.10 Expected Contributions of the Research
18
1.11 Thesis Structure
20
1.12 Conclusion of the Chapter
23
vii
2
LOCAL INFRASTRUCTURE PROVISION AND
PLANNING APPROVAL SYSTEM: A
THEORETICAL FRAMEWORK
2.1
Introduction
24
2.2
Local Infrastructure Provision: The Previous Studies
24
2.3
Public and Private Initiative in Infrastructure Provision
27
2.4
Local Infrastructure Provision: Why Private Sector?
30
2.5
Private Delivery of Local Infrastructure Provision
33
2.5.1 Issuing Municipal Bonds
34
2.5.2 Traditional Public Contracting
35
2.5.3 Service/Management Contracts
35
2.5.4 Lease Contracts
35
2.5.5 Public-Private Partnership (PPP)
36
2.5.6 Private Financial Initiative (PFI)
36
2.5.7 Build Operate and Transfer (BOT) Schemes
37
2.5.8 Concession/Franchise Agreements
38
2.5.9 Joint Ventures
38
2.5.10 Full Privatization
39
2.6
Classification of Infrastructure
39
2.7
Planning Approval System and Off-site Infrastructure
44
Provision
2.7.1 Planning System and Development Plans
44
2.7.2 Development Process and Planning Approval
46
2.7.3 Planning Gains and Planning Approval Process
50
2.7.4 Planning Approval Mechanism to Secure Off-site
57
Infrastructure
2.7.4.1 Planning Contributions
58
2.7.4.2 Development Charges
58
2.7.4.3 Planning Agreements
59
2.7.5 Negotiating Off-site Infrastructure Provision
62
viii
2.8
2.9
3
Comparative System of Local Infrastructure Provision
65
2.8.1 Ireland
65
2.8.2 Australia
66
2.8.3 Germany
68
2.8.4 United States
69
Conclusion of the Chapter
71
PLANNING APPROVAL SYSTEM IN MALAYSIA
3.1
Introduction
73
3.2
Urbanisation and Infrastructure Development
73
3.3
The Framework of Planning System
75
3.3.1 Planning System in Malaysia
75
3.3.2 The Administrative Functions of Local Authority
78
3.3.3 Administrative Framework of Planning System
82
3.3.4 Legislation Framework for Development Control
83
3.3.5 Planning System and Infrastructure Provision
85
3.4
Development Plan and Infrastructure Provision
86
3.5
Development Process and Planning Approval
89
3.6
Conclusion of the Chapter
95
ix
4
LOCAL INFRASTRUCTURE PROVISION IN MALAYSIA
4.1
Introduction
96
4.2
An Overview of Infrastructure Development in Malaysia
96
4.3
Local Infrastructure Provision in Malaysia
100
4.3.1 Local Infrastructure Development
101
4.3.2 Local Expenditures on Infrastructure Development
103
4.4
Source of Funds for Infrastructure Development
107
4.5
Planning Approval System and Infrastructure Provision
109
4.6
Planning Approval and Planning Contribution
111
4.6.1 Development Charge
112
4.6.2 Unilateral Undertaking of Planning Obligation
112
4.6.3 Improvement Service Fund (ISF)
114
4.6.4 Issuing of Municipal Bonds
115
Conclusion of the Chapter
115
4.7
5
RESEARCH METHODOLOGY
5.1
Introduction
117
5.2
Research Process
117
5.3
Conceptual Framework
122
5.4
Research Approach
123
5.5
Methods of Data Collection
125
5.5.1 Fieldwork Survey
126
5.5.2 Questionnaire Design
127
5.5.2.1 Local Authority
128
5.5.2.2 Developer
130
5.5.3 Sampling Design and Procedure
131
5.5.3.1 Local Authority
131
5.5.3.2 Developer
134
x
5.5.4 Pilot Survey
135
5.5.5 In-depth Interview
136
5.5.6 Library Research
138
5.6
Validity and Reliability
139
5.7
Methods of Data Analysis
141
5.8
Documentation of Research Findings
144
5.9
Limitations of the Study
145
5.10 Conclusion of the Chapter
6
146
PRACTICE OF SECURING OFF-SITE LOCAL
INFRASTRUCTURE PROVISION
6.1 Introduction
148
6.2 The Background of Respondents
148
6.2.1 Local Authority
149
6.2.2 Developers
152
6.3 The practice of Local Infrastructure Provision
155
6.3.1 The Present Practice of Off-site Local
155
Infrastructure
6.3.2 The Reasons of Using Private Sector
158
6.3.3 The Type of Off-site Infrastructures Most Needed
160
by Local Authority
6.3.4 The Responsibility of Providing Off-site
162
Infrastructure
6.3.5 The Costs of Off-site Infrastructure
163
6.3.6 Delay in Obtaining the Planning Approval
165
6.3.7 The Influence of Infrastructure Distribution
167
on Project Locations
6.3.8 The Major Drivers of Private Sectors Involvement
in Off-site Infrastructure Provision
170
xi
6.4 The Application of Planning Approval System to Secure
171
Off-site Infrastructure Provision
6.4.1 The Perceptions over the Methods Applied to
171
Secure Off-site Infrastructure
6.4.2 The Effectiveness of Negotiations
172
6.4.3 Developers’ Reaction of Off-site Infrastructure
174
Requirements
6.5 The Problems Relating to Off-site Infrastructure
176
Provision during the Planning Approval Stage
6.5.1 The Constraints of Private Involvement
176
6.5.2 The Appropriate Forms of Off-site Infrastructure
178
Provisions
6.5.3 Weaknesses of the Present Practice of Off-site
180
Infrastructure Provision
6.5.4 The Developers Perceptions on Off-site Local
182
Infrastructure Provision Requirements
6.6 Suggestions to Promote Off-site Infrastructure Provision
185
6.7 Existing Perceptions on the Appropriate Type of Delivery
189
of Off-site Infrastructure Provision
6.8 Conclusion of the Chapter
7
192
PROPOSED IMPROVEMENT OF OFF-SITE LOCAL
INFRASTRUCTURE PROVISION
7.1 Introduction
196
7.2 The discussion of the Key Findings
196
7.2.1 The Present Practice of Local Infrastructure
196
Provision
7.2.2 The Application of Planning Approval System
199
to Secure Infrastructure Provision
7.2.3 The Problems Faced by Local Authorities to
Secure Off-site Infrastructure Provision
200
xii
7.2.4 The Perceptions of the Possible Mechanisms to
203
Secure Off-site Infrastructure
7.2.5 Summary of Findings
206
7.3 The Key Issues of Off-site Local Infrastructure Provision
207
7.4 Towards the Improvement of Local Infrastructure
209
Provision System
7.4.1 The Conceptual Framework of the System
210
7.4.2 The Components of the System
212
7.4.3 Incorporating Planning Approval and Negotiations
214
Process
7.4.4 Incorporating Private Delivery Methods in Local
219
Infrastructure Provision
7.5 Recommendations to Improve the Planning Approval
222
System with Regards to Off-site Infrastructure Provision
7.6 Conclusion of the Chapter
8
227
SUMMARY AND CONCLUSION
8.1 Introduction
227
8.2 Summary of Discussion
227
8.3 Key Issues for Future Research
229
8.4 Conclusion
231
REFERENCES
233-259
APPENDICES A - C
260-316
xiii
LIST OF TABLES
TABLES NO.
TITLE
PAGE
1.1
Revenue of major municipalities in Malaysia, 2003
11
1.2
Local infrastructure expenditure in major local
12
authorities in the State of Johor (2000-2004)
2.1
The range of responsibility for infrastructure funding
43
2.2
Types of gains as reported by local authorities
61
2.3
The distribution of planning applications and planning
62
gain agreements in Wokingham, 1974-1981
2.4
Some infrastructure provided by private options in
67
Australia
3.1
The distribution projection of urban population in
74
Peninsular Malaysia, 1911-2020
4.1
Public financing for infrastructure development
98
in Malaysia, 1991-2000
4.2
Local infrastructure investment required for central
sewerage system in major towns Malaysia
102
xiv
4.3
Local infrastructure investment required for domestic
103
solid waste in Malaysia
4.4
Local infrastructure expenditures in Municipal Council
106
of Penang Island Financial 1992-1995
5.1
The purpose of in-depth interview
137
6.1
Type of local authority
149
6.2
The procedures applied to expedite planning approval which
156
involves off-site infrastructure requirements
6.3
The reasons of using private sector for off-site
159
infrastructure provision
6.4
Development cost involved and the percentage of
164
allocation for off-site infrastructure
6.5
Planning permission processing period by development cost
167
6.6
Factors influence developer’s decision to determine
168
project locations
6.7
The major drivers of private involvement in off-site
170
infrastructure provision
6.8
Methods applied to secure off-site infrastructure
171
6.9
The effective of negotiation methods
173
6.10
Developers’ reactions when off-site infrastructure
175
imposed by local authority
xv
6.11
The constraint of private involvement in local
177
infrastructure provision
6.12
The appropriate form of contribution of off-site
179
infrastructure provisions
6.13
Weaknesses of the present practice of off-site infrastructure
181
provision as observed by developers
6.14
The perceptions of off-site local infrastructure practices
183
6.15
The problems faced by developers related to off-site
184
infrastructure provision
6.16
Suggestions to promote off-site infrastructure provision
188
6.17
Local authority and developers’ perception on
191
the appropriate
xvi
LIST OF FIGURES
FIGURE NO.
TITLE
PAGE
1.1
Thesis structure
22
2.1
The range of infrastructure provision
32
2.2
Types of local infrastructure components
42
2.3
The stages of property development process
48
2.4
The outline of British decision-making procedure in
49
planning permission approval
2.5
The cycle of development gain expenditure
54
2.6
Local infrastructure provision (off-site and on-site)
72
3.1
The overall government development machinery
76
3.2
The concepts of state-level administrative boundaries
79
3.3
The location of major municipalities and population
81
in Peninsular Malaysia
xvii
3.4
Land-use planning framework
83
3.5
Development process in Malaysia
90
3.6
Development approval process in Peninsular Malaysia
92
4.1
Expenditure for infrastructure development in Malaysia,
99
1991-2005
4.2
Municipal Councils of Penang Island development
105
expenditure 1992-2004
5.1
The comparison of process involved in qualitative
119
and quantitative type of research
5.2
The research process
121
5.3
The flow of field work survey and the distribution
133
of respondents
5.4
The relationship between reliability and validity
140
in qualitative research
6.1
Years of experience of respondents (Local Authority)
150
6.2
Involvement with off-site infrastructure provision by
151
type of local authority
6.3
Status of ownership of the developer
152
6.4
The years of establishment of the developers
153
6.5
The average of development cost
154
xviii
6.6
The present methods of off-site infrastructure provision
157
6.7
The distribution of off-site infrastructures mostly needed
161
by local authority
6.8
Responsibility of providing off-site infrastructure
162
Facilities
6.9
Development cost allocated for off-site infrastructure
163
6.10
Planning approval timeframe
166
7.1
The practice of local infrastructure procurement
209
(funding and delivery system) in Malaysia
7.2
Local authority infrastructure provision (off-site and on-site)
214
funding and delivery mechanisms
7.3
Proposed integration of planning approval and negotiation
215
process of local infrastructure
7.4
The negotiations process during planning approval stages
216
7.5
Integrating planning approval and negotiation process
219
7.6
Proposed improvement for local authority infrastructure
224
provision (off-site and on site) funding and delivery
system
xix
LIST OF ABBREVIATIONS
Act 133
: Street, Drainage and Building Act 1974 (Act 133)
B.O.O.T
: Build Operate Own Transfer
B.O.T
: Build Operate Transfer
DBKL
: Dewan Bandaraya Kuala Lumpur (City Hall of Kuala Lumpur)
EIA
: Environmental Impact Assessment
FMP
: Fourth Malaysia Plan
IWK
: Indah Water Konsortiun
LA
: Local Authority
LP
: Local Plan
LPAs
: Local Planning Authorities
MBJB
: Majlis Bandaraya Johor Bahru (City Council of Johor Bahru)
MoHLG
: Ministry of Housing and Local Government
MPPJ
: Majlis Perbandaran Petaling Jaya
MPSJ
: Majlis Perbandaran Subang Jaya
MBSA
: Majlis Bandaraya Shah Alam
MPK
: Majlis Perbandaran Klang
NDP
: National Development Policy
NEP
: New Economic Policy
OPP1
: Outline Perspective Plan 1
OPP2
: Outline Perspective Plan 2
xx
BPA
: Pihak Berkuasa Air
P.F.I
: Private Finance Initiatives
P.P.P
: Public-Private Partnership
PBTPG
: Pihak Berkuasa Tempatan Pasir Gudang
(Local Authority of Pasir Gudang)
REDHA
: Real Estate Developer and Housing Association
SMP
: Second Malaysia Plan
SP
: Structure Plan
SPC
: State Planning Committee
STM
: Syarikat Telekom Malaysia
SYABAS
: Syarikat Air Selangor
TCP
: Town and Country Planning Act 1976 (Act 172)
TNB
: Tenaga Nasional Bhd.
WTO
: World Trade Organisation
IMF
: International Monetary Fund
xxi
LIST OF APPENDICES
APPENDIX
A1
TITLE
Evaluation of alternative local infrastructure
PAGE
260
funding measures
A2
Different type of private sector involvement
264
in local infrastructure delivery
B1
Method of privatisation of major infrastructure
265
in Malaysia (National level of infrastructure)
B2
Infrastructure expenditures in City Council
266
of Johor Bahru 2000-2004
B3
Infrastructure expenditures in Municipal Council
267
of Johor Bahru Tengah (2002-2004)
B4
Infrastructure Expenditures in Municipal Council
268
of Kulai (2000-2004)
B5
List of the completed projects funded by federal
269
government allocation for MBJB, 2003
B6
List of projects under construction funded by federal
government allocation for MBJB (2003)
270
xxii
B7
List of projects under construction funded by federal
271
government allocation for MBJB,2003
B8
List of the completed projects funded by State
271
Government allocation for MBJB, 2003
B9
List of projects under construction funded by internal
272
funds for MBJB, 2003
B10
List of development projects in MPJBT, 2003
273
B11
List of development projects in Majlis Perbandaran
274
Kulai (MPK), 2002-2003
B12
Examples of Planning Agreement by local authority
275
to secure off-site infrastructure from private sector
C1
The distribution of local authority in Malaysia
279
C2
Set A1 - Local Authority Survey
280
C3
Set A2 - In depth Interview for Local Authority Survey
294
C4
Set B1 - Developer Survey
299
C5
Set B2 - In depth Interview for developer
312