Digitalisation has been permeating into services by city councils such as parking fees are now paid via apps. It is good that local councils want to adopt and adapt to the visions of the future but any move that involves tax revenues needs to be studied first. — LOW LAY PHON/The Star
IT was certainly a big deal for Theta Edge Bhd
, a smallish IT-related company, when it won a 20-year RM673.8mil contract.
Averaging RM33.7mil a year, Theta Edge has substantial revenue prospects on a yearly basis. It earned RM144mil of revenue and RM9.6mil of profit in 2023.
There is ambiguity about the contract, which Theta Edge says is for the Internet of Things for a Smart Economy in Ampang Jaya.
The scope of work, according to Theta Edge, is that “the Smart Business Initiative is a revolutionary project aimed at transforming Ampang Jaya into a model smart city, leveraging advanced technology to improve business operations, enhance public services, and drive sustainable growth.”
“Theta will work closely with MPAJ to assess and identify the best smart city solutions to transform Ampang Jaya into an integrated digital district and provide state-of-the-art technology solutions that meet the evolving needs of modern urban environments.
“This joint commitment signifies a major step toward MPAJ’s Smart City Framework which is a visionary plan developed in January 2022 to transform Ampang Jaya into a smart city with a focus on Smart Infrastructure, Smart Economy, Smart Community, Smart Environment, and Smart Governance.”
Smart cities are a burgeoning concept in Malaysia and have been introduced in some areas by other jurisdictions.
ITMax System Bhd, which has won contracts from DBKL and Iskandar Puteri, says on its website that smart city solutions in Malaysia refer to the use of advanced technologies and data-driven strategies to improve the quality of life for citizens, enhance the efficiency of city operations, and promote sustainable development.
ITMAX goes on to say that those solutions can include a range of applications, from smart transportation systems and energy management to public safety and healthcare services.
Digitalisation has been permeating into services by city councils. Today, parking fees are paid via apps and over time, surely there will be a host of other services that are going to be rolled out by local councils.
The issue here is as this is something new, is there any oversight over what is being asked and paid for by local councils?
According to reports, the Ampang Jaya Municipal Council (MPAJ) collects an annual revenue of RM85mil in assessment. It plans to increase its assessment tax by up to 25% for unaltered or unmodified properties and collection from renovated properties might be subject to higher rates. This increase is expected to add RM14mil to MPAJ’s collection.
MPAJ was also reported to have been looking at the potential for revenue generation from the remaining residential and commercial zones, which make up 19.11% and 3.08% of the area respectively. It was reported that these areas have become “cold” in terms of economic value, reducing revenue for the council.
Other sources of revenue will include waste collection and business licensing fees.
It is good that local councils want to adopt and adapt to the visions of the future but any move that involves tax revenues needs to be studied first.
As it stands, it does appear that the services being required remain ad hoc. Yes, traffic monitoring and CCTVs do offer a valuable service to the local council and also to residents.
The issue is how is it going to materialise and benefit the locality.
Some years ago, DBKL, together with other government agencies, had implemented the Integrated Transport Information System (ITIS) management system. It was used to monitor traffic flow and accidents and communicate that information to road users.
The system was ahead of its time as whatever technology then would be obsolete today. The main problem for city residents is that information would only be gleaned mainly through message boards and traffic information was mainly communicated through radio programmes.
What is the long-term viability of the systems that are going to be rolled out?
Spending money on smart cities is fine but if such information does not reach the end user, which has to be the residents and users of the premises and facilities maintained by the local councils, how are people going to benefit?
Theta Edge indicates that project financing will be via local financial institutions and that MPAJ will facilitate the licensing requirements as well as the digitisation process of council administration through revenue sharing.
Does revenue sharing indicate a means to use digitalisation process as a means to generate money?
Users can only be expected to pay if there is value being accreted to them. Otherwise, there can be allegations that the entire process is just a money-making scheme by the local council.
Public services should remain a welfare function. After all, the assessment fees and other traditional collections by local councils should be used to improve services to the public.
Whatever extra income it intends to collect should be on a voluntary basis by residents and companies that see the value of such digital services.
This article first appeared in Star Biz7 weekly edition.
