|| Many challenges and opportunities
face the city of Kuala Lumpur in this new millennium. The Kuala Lumpur
Structure Plan 2020 will be the instrument to guide it over the next
20 years and will also form the basis for the preparation of the Kuala
Lumpur Local Plan. Strategies and policies have been formulated in
earlier chapters of this Plan, which are derived from the all-embracing
vision of Kuala Lumpur as A World-Class City. In order to realise
these strategies and policies, implementation measures encompassing
the organisational, legal and financial aspects of CHKL must be determined.
|| These measures must be forward looking
if they are to be effective and must be aimed at creating a world-class
governance that can maintain the impetus necessary to keep Kuala Lumpur
at the forefront of major cities both in the region and internationally.
situation and issue
|| The responsibility of managing the
development of Kuala Lumpur is entrusted to CHKL headed by the Mayor
of Kuala Lumpur. The Federal Capital Act 1960 provides for the appointment
of an Advisory Board to advise the Mayor. The Mayor is assisted by
a Director General who heads the administration of CHKL, which comprises
23 departments. The existing organisational structure of CHKL is shown
in Figure 18.1.
|| CHKL is one of the biggest employers
in the City with over 8,000 employees of which more than 300 are professionals
and managers. It is responsible for providing and maintaining roads,
drains and community facilities such as public open spaces, parks
and cemeteries. In addition, it performs other functions such as urban
planning, traffic management as well as management and enforcement
of business premises, hawkers and petty traders and public housing.
Ten branch offices have been established with the objective of improving
the efficiency of its services and closer relation with the general
|| Coordination problems have arisen
with authorities both from within and outside Kuala Lumpur. Ineffective
coordination has been evident in land use planning, urban design,
implementation of infrastructural projects, traffic management, flood
mitigation, housing and squatter management, waste collection and
disposal, enforcement and monitoring of the environment.
|| The relocation of the federal governments
administration from Kuala Lumpur to Putrajaya, together with other
major developments in the region, notably the KLIA and Cyberjaya,
has resulted in a substantial dispersal of the Citys functions
to areas outside the City. Each of these entities is separately administered
and determines policies independent of each other. This situation
may not be conducive for overall planning control and management in
the long run and some form of coordination will be necessary to enhance
Lack of coordination with other government bodies and agencies.
|| The Federal Territory (Planning) Act
1982 introduced the structure and local planning systems for Kuala
Lumpur. The Kuala Lumpur Structure Plan 2020 is prepared under the
provisions of the Act.
|| The Planning (Development) Rules 1970
were enacted under the powers conferred by the Emergency (Essential
Powers) Ordinance No. 46 of 1970. These set out in details the procedures
for making applications for planning permission and the fees payable.
|| The City of Kuala Lumpur (Planning)
Development Charges Rules 1979 and the City of Kuala Lumpur (Planning)
(Use Classes) Rules 1980, which set out the permissible uses for the
different categories of land use, were gazetted under the powers conferred
by the City of Kuala Lumpur (Planning) Act 1973.
Figure 18.1: City Hall Kuala Lumpur Organisational Chart, 2003
|| Both these rules and regulations were
enacted prior to the Federal Territory (Planning) Act 1982 and are
in urgent need of review.
|| Rules and Regulations enacted
prior to the Federal Territory (Planning) Act 1982 need to be revised.
|| The major sources of operating revenue
for CHKL in year 2000 are derived from property assessment (comprising
approximately 62 percent of the total revenue), returns on investment
(about 11 percent), charges for development planning and control (about
6 percent), rentals from public housing (about 6 percent), grants
from the federal government (about 6 percent) and licences and fines
(about 5 percent). About 58 percent of property assessment revenue
is derived from commercial sector and the other 42 percent from residential
sector (refer Figure 18.2).
|| CHKLs operating expenditures
include costs relating to the provision of services (accounting for
approximately 43 percent), public housing (18 percent), social, sports,
recreation and culture (10 percent) and enforcement and licensing
(9 percent) (refer Figure 18.3). Analysis of the operating accounts
indicates that CHKL has had comfortable surpluses in net revenue from
1990 to 2000 (refer Table 18.1).
|| Development expenditure generally
covers spending on projects such as construction and improvement of
public facilities, sports complexes, public housing for the low income
groups, road network, drainage and landscaping. Development expenditure
was funded predominantly by contribution from General Rate of Fund
(50 percent), federal government grants (27 percent) augmented by
loans (19 percent) and contributions from developers (2 percent) (refer
to Table 18.2).
|| Past trends indicate that CHKL has
been financially able, and has no difficulties in sourcing funds for
its development projects.
expenditure and revenue growth rates
|| Prior to 1991, CHKLs operating
expenditure always exceeded revenue and growth rates for expenditure
were also much higher than those for revenue. The situation improved
with the upward revision of the property assessment charges in 1992.
Since 1997, CHKL has continued to experience a larger average annual
growth rate for operating expenditure as compared to operating revenue
(refer Table 18.3). This situation if left unchecked could lead to
financial deficits, which, in turn, will affect the efficiency of
CHKLs public services.
Figure 18.2: Operating Revenue, 2000
Figure 18.3: Operating Expenditure, 2000
Table 18.1: CHKL Operating Revenue and Expenditure, 1980 -
Table 18.2: CHKL Sources of Fund for Development, 1995 - 2000
|| Increases in development and operating
costs in Kuala Lumpur have arisen as a consequence of rising land
prices, higher construction costs, the accelerating deterioration
of the urban fabric and difficulties involved in carrying out public
works in the older, more congested areas of the City Centre.
|| Increasing growth rate of operating
Table 18.3: CHKL Operating Revenue and Expenditure, 1995 -
income and population
|| The Citys residents contribute
to CHKLs revenue directly by way of payments of assessment rates
on their properties and indirectly by spending on locally sold goods
and services. The traders of these goods and services, in turn, pay
higher rates on the enhancement of real property value and other local
taxes due to growth of new businesses. Higher income groups are better
able to pay for their properties and have a greater propensity to
spend on goods and services sold or provided locally as compared to
the lower income population. Business premises, in turn, will reflect
a better turnover or profitability, thus, increasing the economic
base of the City. Population movement in relation to income is, therefore,
significant as a population with a larger personal income can maintain
the City better than a population with a smaller income, as it is
able to provide a better revenue base.
|| The declining proportion of high and
middle cost housing and the generally high cost of living in the City
are expected to affect the population profile of Kuala Lumpur. An
outward movement of the urban population comprising a relatively high
proportion of the middle and upper income groups will lead to a fall
in the Citys per capita income and a decline in economic activity
leading to a fall in total revenue.
|| Already, many people work in Kuala
Lumpur but stay in residential areas outside the City in the neighbouring
townships of Petaling Jaya, Subang Jaya or even further afield in
Klang or Seremban. People are attracted to these areas by the lower
cost of living and because improvements in the road network and public
transportation, in particular the LRT and the KTM commuter train services,
have greatly facilitated commuting into the City.
|| If this trend continues, CHKLs
resources will be significantly affected by the increasing need to
meet the costs of maintenance and providing services in the City for
both residents and nonresidents alike, while at the same time suffering
reduced revenue as a consequence of the decreasing proportion of middle
and upper income groups residing in the City.
|| Loss of revenue from residential
population due to out-migration of middle and highincome group.
|| The projection of revenue and expenditure
(2000 - 2020) for CHKL is shown in Table 18.4. This projection takes
cognisance of past financial growth trends, population growth, property
value by sector (at current rates) and future requirements.
Table 18.4: Operating Revenue and Expenditure Projection, 2000-2020
|| Despite the differences in growth
rates between revenue and expenditure CHKL is expected to have surplus
budgets throughout the Plan period. However, the surplus is expected
to diminish over the years due to increasing rates of expenditure.
|| Decreasing surplus of revenue
|| In order to create a world-class governance
which is able to meet the challenges of the 21st century and which
is able to effectively implement the Kuala Lumpur Structure Plan 2020,
CHKL aims to:
enhance its organisational and management structure and practices;
establish a proper legal framework to make enforcement more
ensure the sufficiency of funds available for development of
programmes and projects; and
ensure the optimal efficient and effective utilisation and
management of all resources.
|| The management of a world-class city
requires a world class organisation. Such an organisation does not
emerge by chance but is built by design, directed by visions, nurtured
by ambitions and perfected by its actions. Such an organisation possesses
a level of strategic and operational excellence which is at least
on a par with similar organisations elsewhere in the world. It must
have a clear vision, understand its functional obligations and place
emphasis on quality. It must also be efficient, responsible, accountable
and flexible enough to change with changing situations. In addition,
management must be able to set its priorities clearly and manage available
|| The implementation of the Kuala Lumpur
Structure Plan 2020 and the formulation of local plans require the
best elements of organisation and management. This is to ensure that
the management resources within CHKL are well in place to provide
the necessary planning, monitoring and control of the Citys
development. Sufficient funds will have to be invested in new technology,
manpower training and in research and development. There will also
be the need to carry out regular reviews on systems and procedures
and to introduce new management tools. Improvements to the system
must be consciously introduced on a regular basis so as to ensure
that it can cope with the changing demands of society.
|| Services must be customer oriented
and leadership, which is mission driven, must be responsive and sensitive
to the needs and values of the Citys population while, at the
same time, being pro-active in planning ahead to anticipate future
needs and expectations.
|| Being a local government organisation,
CHKL has to deal face to face with the Citys residents and their
everyday problems. Its decisions, or lack thereof, have profound and
immediate effects on peoples everyday lives. There are many
ways that CHKL can improve the quality of its services including strengthening
institutional coordination, improving its planning capabilities, promoting
business development, encouraging public participation, enhancing
its ICT capability, improving monitoring and enforcement, conserving
resources and expanding departmental responsibilities.
institutional coordination and integration and enhance planning functions
|| CHKL has to take a more effective
holistic approach in addressing Kuala Lumpurs future needs.
It is strategic that CHKL collaborates more effectively and closely
with relevant outside organisations. This will involve institutional
strengthening through a greater understanding of the capabilities
and perspectives of other agencies in order to forge more effective
|| In so far as Kuala Lumpur forms part
of the wider Kuala Lumpur and its conurbation (KLC), Kuala Lumpur
cannot be planned and managed in isolation. CHKL must interface with
the local authorities of surrounding areas and, in terms of planning
and development, it must also work closely with other governmental
agencies and utility
|| The services provided by CHKL may
not yet be of a world-class standard, but most of the ingredients
to produce good governance are in place, such as a strong organisational
set up and a properly qualified workforce. However, in managing the
increasing demand for better services, the departments in CHKL must
be more pro-active in addressing the needs of the Citys population.
In this respect, there is a need to improve the planning functions
of all departments in order to support the control and operational
functions. All departments in CHKL will place emphasis on proper planning
prior to the implementation of programmes and projects.
|| The present CHKL organisational set
up which consists of three major functions; administration, management
and development shall be reviewed to strengthen its planning and coordination
||CHKL shall review its organisational
set up to ensure that planning and coordination functions are
|| Tourism is destined to become the
largest single industry worldwide. Malaysia and Kuala Lumpur in particular,
as the main gateway to the nation, have benefited greatly in recent
years from the growth in tourism. Chapter 8: Tourism covers policies
and proposals related to tourism development. A dedicated department
needs to be set up to implement policies and proposals related to
tourism marketing and promotion, development of tourism resources,
facilities, infrastructure and support services. This department will
enhance the efforts of the Kuala Lumpur Tourism Council (KLTC) and
other related agencies. In order to maximize the tourism potential
in cultural and sports facilities, the department must also coordinate
with other relevant authorities and agencies to promote the development
of related facilities and activities.
|| Policies and proposals pertaining
to the physical structure of Kuala Lumpur have been formulated in
this Plan, which are intended to enhance the urban environment to
be equivalent to that of a world-class city. In addition, other policies
relate to the need to conserve and preserve Kuala Lumpurs unique
historical and cultural elements as integral parts of the modern city.
Chapter 14: Urban Design and Landscape covers policies and proposals
related to urban design and landscape.
|| In order to ensure that greater emphasis
is given to urban design and conservation, it is imperative that a
dedicated department is set up. This department would be responsible
for the overall planning and coordination of urban design, landscaping
and conservation including the drafting and implementation of urban
|| The provision of adequate and appropriate
housing, particularly for the lower income group, is a matter of utmost
importance in any city. Although various projects and programmes undertaken
since 1984 have been relatively successful in providing sufficient
low-cost housing, there is still a mismatch between the types of housing
required and those that are being developed. Chapter 12: Housing covers
policies and proposals related to housing
|| The challenge of addressing these
new expectations requires the upgrading and expansion of the responsibilities
of the Housing Management Department. Apart from ensuring that adequate
housing for squatter relocation is provided and managing the process
of relocation, the department will also need to concern itself with
the availability of an adequate land bank to ensure that future housing
needs can be fulfilled.
and promote development
|| Due to the ever changing needs of
City businesses and the global influences of the Citys operating
environment, city managers can no longer afford to react to market
forces, but must rather take a pro-active approach to face the impact
of globalisation and increased competition. The challenges of globalisation
must be met and full advantage must be taken of the opportunities
presented. Development has to be initiated and actively promoted to
attract businesses and, therefore, priority must be given to facilitate
the economic development of the City. Particular attention shall be
given to the development of the International Zones and Comprehensive
Development Areas due to their strategic locations and economic importance.
|| The development of Kuala Lumpur is
taking place at a rapid pace. In order to be efficient and pro-active
in decision-making, CHKL must enhance its research and development
programmes and also work closely with other related local, regional
and international organisations. CHKL must also facilitate business
partnerships, networking and marketing of the Citys businesses.
In addition, a comprehensive depository of data and information on
urbanisation needs to be collected, analysed, categorised and disseminated.
||CHKL shall enhance its resources
to develop and promote the Citys economy.
|| CHKL must be sensitive to the needs
of the Citys population and take the initiative in finding quick
and effective solutions to community needs and services. Public participation
should be promoted via consultative committees to provide channels
for people to express their views. Public hearings currently practiced
provide valuable insights into public opinion regarding CHKLs
policies and procedures and serve as avenues where the publics
views are taken into account. Other methods of facilitating public
participation such as dialogue sessions, meetings and exhibitions
should also be utilised.
|| Currently the Social Development Division
of the Economic Planning and Social Facilities Department plans and
implements community development projects for managing current social
issues related to urban poverty. Projects for education, health and
youth are channelled through community development programmes involving
bilateral processes between CHKL and voluntary bodies.
|| Improved partnerships, networking
and cooperation must be developed with relevant agencies in order
to implement planned programmes and projects. To this end, CHKL must
work together with stakeholders including professionals, NGOs, CBOs,
institutions of higher learning and voluntary organisations. Through
such partnerships, a sense of communal responsibility can be inculcated
together with a greater feeling of involvement and belonging. These
community-based programmes could be redesigned to be in line with
the structure of Local Agenda 21.
|| A neighbourhood matching
fund will be established in CHKLs annual budget to provide grants
to Kuala Lumpur neighbourhood groups and organisations for a broad
array of neighbourhood initiated improvement programmes and projects.
Such neighbourhood groups may be established to undertake specific
projects or programmes. Once a project has been approved, the communitys
contribution of volunteer labour, materials, professional services
or cash will be matched by a grant from the neighbourhood matching
||CHKL shall promote greater
public participation in decisions involving community needs
information communication technology capability
|| In the age of information technology,
computing capability and information management is essential in the
management of cities. With the objective of increasing the quality
of work and quality of life, the National Information Technology Council
(NITC) has formulated the National Information Technology Agenda (NITA),
an integral part of which is the E-Public Services (EPS). The main
objective of EPS is to increase the efficiency and skill with which
various public services are provided through the electronic medium.
|| CHKL shall provide services electronically
to other government agencies, the private sector and the community
as a whole. These services are intended to provide pro-active and
high quality services, giving value for money while
simultaneously increasing the productivity of the public services,
the business community and the general public.
||CHKL shall enhance its information
communication technology capability in all city functions.
the effectiveness of the monitoring and enforcement capability
|| Improving CHKLs monitoring and
enforcement capability is a vital factor in enhancing the quality
of life in Kuala Lumpur. The need for effective monitoring and enforcement
is not only confined to development and building control but also
relates to environmental control, industrial pollution control, maintenance
of general cleanliness, illegal parking and the unauthorised usage
||CHKL shall enhance the efficiency
and effectiveness of its enforcement capability.
|| The use of dedicated bodies to facilitate
development is well established in other countries. The development
corporations, used to boost economic activities, have been a feature
of planning since the 1980s. These corporations are essentially business
enterprises in which the government owns most of the equity and but
which are able to enter into partnerships with the private sector.
They operate under company law and are, therefore, relatively free
from the administrative constraints of government bureaucracy.
|| Section 49 of the Federal
Territory (Planning) Act, 1982 provides the legal basis for the formation
of a development corporation.
||CHKL shall set up development
corporations to undertake specific development programmes.
|| The current planning rules and regulations
enacted under the Emergency (Essential Powers) Ordinance No. 46 of
1970 and the City of Kuala Lumpur (Planning) Act 1973 need to be updated
comprehensively and regularised with the provision of the Federal
Territory (Planning) Act 1982.
||CHKL shall undertake to revise,
amend and update all planning rules.
|| Acceptable means of financing economic
and social activities by CHKL will include all existing sources such
as property assessment, development charges, return on investment,
licensing charges and fines, rental, grants and assistance from the
|| In addition, in order to be able to
improve and expand the provision of the services by CHKL, other means
of revenue sourcing will need to be investigated including widening
the scope of current sources of revenue, introducing new taxes related
to the conservation of resources and protection of the environment
and expanding the scope of current user charges and user fees.
|| Whilst the present property tax structure
and rates are already bringing in surplus operating revenue for CHKL,
it would be prudent to investigate the need to restructure the rates
and base values, as well as the valuation principles of the current
tax system to determine whether they have kept pace with growth of
the City. Other taxes and licenses could also be considered in relation
to business and entertainment activities in the City.
|| New taxes could also be
introduced not only with the objective of increasing revenue but also
as means of promoting resource conservation, protecting the environment
from pollution and encouraging enterprises to be more environmentally
and socially responsible. These taxes could include various forms
of automotive taxes aimed at reducing or easing traffic congestion
in the City as well as conserving resources and addressing air pollution
|| User charge financing is the most
common method of recovering the costs of providing a service that
can be directly linked to the use of the Citys urban resources
or facilities. It is a very direct way of generating revenue by charging
for the use of public facilities as, for example, the levying of entrance
fees for recreational parks or the imposition of effluent discharge
fees for industrial premises. Not only may the charges be adjusted
to be in line with costs but they can also increase efficiency in
the allocation of existing service capacity and help guide investment
|| Local businesses are important in
fostering economic growth in their areas and local business rates
are the financial connection between local businesses and the local
authority. Business rates give CHKL the capacity to respond to the
needs of businesses within its jurisdiction and by improving the local
economy, create more revenue with which to budget for future needs.
One of the most productive ways of creating jobs and stimulating the
local economy is by attracting new businesses and industries or by
expanding those that already exist in the area.
|| A means of stimulating the local business
environment is through Local Economic Development Actions (LEDA).
Possible forms of LEDAs include tourist related events, the holding
of major national or international events, tax incentives and rebates
for local businesses especially those that contribute to the local
economy. Revenue raising exercises to finance special projects can
also be implemented through the issuance of securities or municipal
bonds by CHKL. Typically, bonds should be used only to finance projects
that have both a known and proven life expectancy. In cooperation
and partnership with local businesses, activities to promote and establish
social and economic regeneration should also be encouraged.
|| It is important to ensure that methods
adopted to increase revenue sourcing are not perceived as being exploitative
and do not induce inflationary pressures. To that extent, such methods
must be acceptable and maintain a reasonable balance between efficiency,
financial feasibility and equity.
||CHKL shall adopt acceptable
means of financial sourcing for economic and social activities.
reduction and efficiency measures
|| CHKL will explore all available opportunities
to form partnerships with the private sector in order to reduce the
burden of heavy public budget financing. Private and public sector
partnerships in the form of joint ventures, services privatisation
and leasing or concession agreements can be utilised as a means of
financing capital or operating costs.
|| Private sector participation enables
the provision of services more economically and effectively. The contribution
of the private sector in the form of capital and skills investment
has enabled services to be improved, infrastructure development to
be accelerated and economic growth to be stimulated. Privatisation
and joint venture projects undertaken by CHKL include residential,
commercial, recreational & public services as well as services
such as garbage collection. Up until 1998, a total of 26 projects
were carried out between CHKL and private sector organisations. As
of 2000, there were 27 approved projects whilst 22 projects were under
|| Service and management contracts are
entered into with the private sector to render services on CHKLs
behalf. An example would be rendering of solid waste collection and
disposal services where a private collector is contracted to take
the responsibility under the terms of a service contract. Alternatively,
CHKL may collect tariffs from property owners for the contracting
of solid waste collection and disposal.
|| Leasing agreements provide an alternative
means of financing facilities and limiting CHKLs liability,
while helping to reduce unnecessary administrative expenditure. Under
this type of arrangement, a private sector agency would pay a leasing
fee to CHKL under a lease agreement to provide a particular service
or for the use of land or buildings for a specified period. The private
sector agency would be responsible for collecting income from users
of the rendered service.
|| Concession agreements awarded to private
agencies to manage and develop existing infrastructure are similar
to leasehold agreements but are generally for longer periods (generally
between 20-30 years). Contractual arrangements in concession agreements
specify tariffs as well as the infrastructure that must be developed
during the concession period. At the end of the concession period,
the infrastructure including that developed by the private sector
agency reverts to the local authority.
|| In all privatised contracts, monitoring
and public accountability are paramount concerns. Rigorous performance
criteria must be set and financial penalties imposed for failure to
meet specified minimum standards. Tender procedures must be transparent
and conducted as regularly as is desirable depending on the type of
privatised service or arrangement.
||CHKL shall undertake cost
reduction measures in the provision of services and management
of development of the City.