Tuesday, April 06, 2010

NEM: Favoured Deals Continue

The New Economic Model (NEM) announced by the Prime Minister, Datuk Seri Najib Abdul Razak has promised transparency and competition as its cornerstone.

He had announced that “to promote higher levels of economic investment, expansion and growth, several parcels of land in... Kuala Lumpur have been identified to be tendered out and developed by the private sector.”

However, at the same time, he announced that the “Government of Malaysia and the EPF will form a joint-venture to promote the development of 3,000 acres of land in Sungei Buloh into a new hub for the Klang Valley.”

Now it has been speculated that the project will be given to Malaysia Resoruces Corporation Berhad (MRCB), which will be appointed the master developer.

If it is true that MRCB will indeed be appointed the master developer of the mega 3,000 acres piece of prime land in Sungai Bulah, then it will run in direct opposite of what the Prime Minister had promised in the NEM. The joint venture with EPF and the appointment of MRCB raises the following questions:

  1. On what basis is EPF appointed as the joint venture developer for the 3,000 acres of land?
  2. On what basis is MRCB appointed as the master developer for the project?
  3. Why has there not been any open tenders for the project?
 When Singapore wanted to build two integrated resorts in Marina Bay and Sentosa with gross development value of S$4 to 6 billion each, they had called for an international bid to attract the best ideas and proposals. An initial 19 bids were received before about 5 proposals were shortlisted for each of the projects. A ministerial committee headed by senior ministers was set up to review the proposals in detail before they were finally awarded to Las Vegas Sands and Genting International.

The question is why is the Government favouring MRCB which itself was facing financial difficulties without any open bidding or proposals from the Malaysian or even international business community for a project which the Prime Minister has estimated will cost up to RM5 billion to develop.

Like the direct award of the proposed Malaysia's largest exhibition and convention centre by Matrade to Naza TTDI without any open tenders, the Government has once again shown that it is unwilling to let go of its policy to award sweetheart deals to crony companies without any transparency. This runs smack in the face of Datuk Seri Najib Abdul Razak's promise that “we can no longer tolerate practices that support the behavior of rent-seeking and patronage, which have long tarnished the altruistic aims of the New Economic Policy,” in his speech yesterday on the NEM.
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