Sunday, September 30, 2012

Budget 2013: 2012 Deficit Would Have Been 6.7%

Budget deficit would have been 6.7%; 2015 2.5% deficit target a lost cause

Based on the Economic Report, the Government was able to keep its deficit below 5% at 4.7% for 2012 only because of an unbudgeted increase in revenue by RM21 billion for the year.  If not for the above, based on the Government’s expenditure in 2012, our deficit would have increased to 6.7%.

The Government has announced its plan in the 2013 budget to keep the deficit at 4.0%.  However, it has become clear that the Government’s original target as late as 2011 to reduce our deficit to 2.5% by 2015 is no longer achievable.  The steep decline of growth in the government’s revenue will make the task seemingly impossible.

No political will

The budget demonstrates no political will on the part of the Federal Government to make the necessary structural changes to the way we manage our budget.  We see a decline in the proportion of funds spent on development expenditure. We also do not see a serious effort to tackle federal government debt, both “official” and “hidden”.

The 2013 Budget reads like a repeat of prior year budgets, using the same formula without taking into consideration the changing circumstances and increasing economic challenges we face today.

Saturday, September 29, 2012

Budget 2013: Federal Government Debt RM502 billion

Our Federal Government debt has increased rapidly from RM242 billion in 2004 to RM363 billion in 2009 and RM456 billion in 2011.  For 2012, it is projected that our debt will hit RM502 billion. That represents a marked 107.4% increase in debt over the past 8 years.

More worryingly, the debts have increased our structural debt service commitments significantly.   The rate at which our debt servicing commitments are growing will severely constrict our future operational and development expenditure.  This together with a much slower rate of growth in government revenue as shown in the budget for 2013 will have a major impact to our economy, given its current heavy reliance on public spending and investments.

From 2003 to 2008, our debt servicing obligations increased by 21.9% from RM10.5 billion to RM12.8 billion.  However, in the next 5 years from 2008 to 2013, the annual commitment has increased by a whopping 73.4%!

The official federal government debt is also expected to increase as a proportion of our GDP from 51.8% to 53.7%, staying marginally below the 55% legal federal government debt limit.  However, even the 53.7% is an artificial figure as it fails to take into consideration the Government’s contingent liabilities and hidden debts which amounted to RM117 billion as at Dec 2011.

What is frightening is, the Government’s contingent liability is expected to increase exponentially in 2013 due to the expenditure for the RM53 billion MRT project as well as other mega-infrastructure projects.  These debt driven expenses are completely off-balance sheet or not considered part of the official Federal Government debt, despite it ultimately being Federal Government funded.

In Europe, Spain is facing major financial crisis which requires hundreds of billions of Euro bailout, has an “official” debt to GDP ratio of 68.5%.  But due to various contingent liability and bank bailouts, the “real” ratio which is significantly higher has caused a near collapse of the economy, in a crisis that is still evolving.

We must not allow ourselves to get entangled in a similar crisis.

Friday, September 28, 2012

Budget 2013: Slowing Revenues, Declining Development Expenditure

Budget 2013 signals the end of an era of record budgets with a slow down in Government revenues.

Over the past few years, the Government has been able to increase its budget tremendously to achieve record expenditures annually. This has allowed the Government to prop up the economy as we faced challenges in attracting private investments, as well as a drop in our trade contributions.

However, the Budget has projected an increase of only 0.7% (2012: 11.8%; 2011: 16.1%) in projected revenues from RM207.2 billion to RM208.6 billion in 2013.  This is the slowest projected increase in the tabled budget since 1999, barring the global financial crisis in 2009.

Consequently the Government is forced to table a smaller budget than the prior year. The proposed operating expenditure has been reduced by 0.3% from RM202.6 billion to RM201.9 billion, while the development expenditure is also reduced from RM46.9 billion to RM46.7 billion or 0.4%.

The marked decline in revenue growth will have a very significant impact on the Government’s ability to impact growth in the Malaysian economy through fiscal means.  The fact that we have not been able to reduce our budget deficit below 4% over the past few years reflects the years of wasted opportunities, where we have failed to curb our expenditure through reduced wastages, abuses and corruption.

Consistent Decline in Development Expenditure

Of concern is also how the Government has consistently reduced its emphasis on Development Expenditure which will create greater multiplier effects on our economy.

The proportion of the budget expenditure dedicated to Development Expenditure has reduced from 31.5% in 2003 to 27.1% in 2007 to 21.3% in 2012.  The worrying trend continues in 2013 where the proportion is reduced further to only 18.6%, a record low in Malaysia’s history.

This represents lower investment by the Government with its current revenue, which will result only in lower returns to the economy in future years.

Why So Evasive Over Syed Mokhtar's RM34.3b Debt?

Hazlan Zakaria 1:20PM Sep 27, 2012

The government may be hiding details of a "potential economic disaster" from the public, claims an opposition MP.

"I suspect they are hiding something about the commercial debts of business tycoon Syed Mokhtar Al-Bukhary's (right) business empire.

“It is a potential economic disaster waiting to happen," Petaling Jaya Utara MP Tony Pua said today.

He claimed that the situation was similar to what happened when the Renong group collapsed last time, throwing the national economy into near chaos as its over RM20 billion in debts to local banks turned bad.

As of now, Pua alleged, Syed Mokhtar's group had borrowed over RM34 billion from financial institutions.

He said this in reference to the Dewan Rakyat speaker's rejection of his question on the business tycoon's commercial debts.

Pua lamented during a press conference at the lobby of Parliament that this was the third time the government and the Finance Ministry had pulled a fast one on his queries.

The first was when the ministry refused to answer his written question for information on corporate debts, saying this was "confidential" and on the second occasion, the ministry again  refused to answer the question on this when he brought it up in Parliament.

Click here for full story on Malaysiakini.

Najib Says George Kent Best for LRT Job

Najib: George Kent is fit for LRT job

Prime Minister and Finance Minister Najib Abdul Razak has come to the defence of construction company George Kent, which was alleged to have failed competency tests but was still given the Ampang Line LRT extension project.

The premier argued that George Kent's joint venture with Lion Pacific was fit for the RM1.084 billion tender.

In a written reply to a question by Tony Pua (DAP-Petaling Jaya Utara) in Parliament on Tuesday, Najib said George Kent consortium had passed technical evaluation and it also offered the second lowest price among the eight bidders.

"GKLP JV (George Kent-Lion Pacific Joint Venture) is a combination of local companies with financial ability and are listed in Bursa Malaysia.

"The bidder that offered a price lower than GKLP JV was not considered because it did not completely meet the contract criteria," Najib said.

He said the bidding result was accepted by other international bidders and they showed no sign of disgruntlement.

Najib also rebutted the allegation that George Kent has no experience in railway construction because the consortium, comprising various local companies, has expertise in the railway subsystem while the signalling subsystem will be managed by Thales, a technical partner with high credibility.

The tender, he explained, also took into consideration the need to develop local companies and vendors in high technology industries by involving them directly in projects such as the LRT extension.

The prime minister also stressed that the tender process had been open and transparent.

However, the DAP member for Petaling Jaya Utara, Tony Pua, at a press conference in the Parliament lobby today quoted a report from The Edge to rebut Najib's reply.

The report said one of the bidders, Siemens, was not happy with the tender result.

Pua urged the Finance Ministry to explain in greater detail its reasons for giving the contract to the George Kent consortium.

For the full story on Malaysiakini, click here.

Friday, September 21, 2012

Pakatan Is Ready To Rule

Pakatan says ready to rule Malaysia
By Mohd Farhan Darwis September 19, 2012

KUALA LUMPUR, Sept 19 ― Pakatan Rakyat (PR) leaders are convinced of their fitness to govern the country if Barisan Nasional (BN) loses hold of Putrajaya in the coming polls, pointing to their achievements in the four states they currently lead.

The three-party pact of DAP, PKR and PAS now administer the states of Selangor, Penang, Kedah and Kelantan, following their historic electoral performance in Election 2008 when they denied BN its customary two-thirds parliamentary majority.

DAP publicity secretary Tony Pua noted that in 2008, PR had not expected to make the gains it did, much less being voted into four state administrations.

“But we succeeded,” he said. “Now, we are really ready and that is proof that we are ready to rule.”

Today, the Petaling Jaya Utara MP added that it PR will be judged based on its policies and not just the personalities behind them.

“The policies are more important... it does not matter who becomes a minister, it is the policy (that matters),” he said.

“It doesn’t matter who is elected (from PR), we are definitely much better (than BN).”


Like Pua, PAS vice-president Salahuddin Ayub also disagreed with the observers and recounted PR’s achievements in the states it governs as an example of the pact’s ability.

He said PR’s track record was strong enough to dispel doubts over the abilities of its leaders, even if they have never governed the entire country.

“I feel what is more important is our integrity and our track record... these are the most valuable assets that the PR governments have shown they possess.

“We have produced many qualified leaders who can be trusted... no misappropriation or abuse like leaders from BN,” said the Kubang Kerian MP, adding that he was proud of PR’s mentri besars and chief minister.

“For three consecutive years, the Auditor-General’s Report has proven that we have governed well,” he said.

Agreeing with her colleagues, PKR vice-president Nurul Izzah Anwar said that not only did PR’s track record prove its competence, the pact’s joint manifesto has also bound all three parties together and shown that they are a united front.

“World history and democracies have shown that it is the wants and choices of the people that will decide who should be given the mandate to rule.

“If the people’s aspirations are not fulfilled, the people will be the judge and select a replacement... on national level, almost all policies and issues of PR have been used by BN,” she said.

The BN coalition has been the only federal government since the country was formed, having previously ruled as the Alliance Party.

For the full story on The Malaysian Insider, click here.

Monday, September 17, 2012

Najib Shows He Is Not Malaysian First

Bernama reported that the Prime Minister said that “the 13th general election is not an ordinary election. Instead, it will determine the survival of the Malays.”

He used the threat of “the survival of the Malays” to threaten Malays into supporting Barisan Nasional.  The Umno president said “Malays should realise that as the backbone of the Barisan Nasional (BN), Umno would be able to continue the struggle of the Malays and Islam.”

The above statements proved that Dato’ Seri Najib Razak failed as a Prime Minister for all Malaysians, especially as the nation celebrates the 49th anniversary of Malaysia Day today.

At the start of Dato’ Seri Najib’s premiership, he has made the “1Malaysia” slogan the cornerstone of his entire administration, which he defined as “every Malaysian perceives himself or herself as Malaysian first, and by race, religion, geographical region or socio-economic background second and where the principles of 1Malaysia are woven into the economic, political and social fabric of society” in the Government Transformation Programme (GTP).

However his exhortation to the Malays proved that the Prime Minister is more than willing to play the racial card to protect BN’s hold on power.  He has shown that he speaks not as the Prime Minister for all Malaysians, but an instigator of continued racial division in the country.

Dato’ Seri Najib’s speech also exposed the fact that like his Deputy, Tan Sri Muhyiddin Yassin, they see themselves as “Malays first”, and not “Malaysians First” as defined in the GTP.  Tan Sri Muhyiddin had said in 2009 “How can I say I’m Malaysian first and Malay second? All the Malays will shun me and say that it is not proper.”

As we celebrate both our independence from our colonial masters on 31st August and formation of Malaysia on 16th September, a Prime Minister for all Malaysians should be extolling the virtues of a united nation regardless of race, religion, class or geography.  However, what we have is a Prime Minister who tells the Malay community that they are being attacked and threatened by the other races in the country.

It is hence not a surprise that Dato’ Seri Najib never reprimanded Tan Sri Muhyiddin’s public declaration that he is “Malay first” despite the clear contradiction to the 1Malaysia definition in the GTP. It is not a surprise because they both see themselves as “Malay first” and not Malaysian First.

This also shows that Najib’s “1Malaysia” is pretty on the outside, but empty on the inside.  The whole “1Malaysia” campaign is to present a false picture of Malaysian First, with no sincere leadership or intent build a truly Malaysian First country.

The Prime Minister’s position blots our 49th anniversary celebration of Malaysia Day and it raises the question as to why, after 49 years of nationhood, we are unable to elect a Prime Minister who puts the interest of all Malaysians, above that of a person’s race.  We can only hope that the Malay community will not be so easily threatened by Dato’ Seri Najib and will, together with all other Malaysians, pick a government that will be fair to all its citizens regardless of race, religion, class and geography in the next general election.

Saturday, September 15, 2012

Ministry of Education Should Make Available Full Reports

Opposition MPs call for release of detailed reports on current education system
By Lisa J. Ariffin September 14, 2012

KUALA LUMPUR, Sept 14 — Pakatan Rakyat (PR) today urged Putrajaya to disclose detailed reports on the current education situation to encourage constructive criticisms and recommendations to its new education blueprint.

Lembah Pantai MP Nurul Izzah Anwar and Petaling Jaya Utara MP Tony Pua were referring to UNESCO’s April 2011 review of Malaysia’s education system, the World Bank’s report on the country’s expenditure and two other reports on education by a local as well as international review panel.

Nurul Izzah and Pua believed access to detailed reports on weaknesses in the current education system would enable the public to make necessary and relevant recommendations on the new education masterplan, which will run from 2013 to 2025.

“Our biggest worry is on its (blueprint) credibility. The Education Ministry has not highlighted the weaknesses of current education system including a detailed report,” Nurul Izzah told a press conference.

She said the ministry had instead “given glossy view of things”.

“This is not sufficient to convince these are necessary steps to improve the quality of the system,” she said, referring to the 11 “shifts” comprising the report.

The education masterplan comprises 11 “shifts” to inculcate six attributes in children: knowledge, thinking skills, leadership, bilingual proficiency, ethics and national identity.

The shifts include empowering state and district education departments and schools to customise solutions based on need and recruiting only the top 30 per cent of graduates for teacher training.

Pua said relevant documents were needed in order for the public to contribute constructively.

“We will submit our report in October. Without documents, the report won’t be as comprehensive,” he said, referring to PR’s feedback report on the blueprint.

“We’re not here to condemn but to make it better for future generation,” he added.

The two opposition leaders also announced the formation of a Pakatan Rakyat Education Taskforce (PET), consisting of nine leaders across the coalition, to study and respond to Putrajaya’s blueprint.

“Prime Minister Datuk Seri Najib Razak said to de-politicise education. We hope our recommendations are also included in the blueprint and implemented to improve the education system,” Pua said.

In the new masterplan launched on Tuesday, Malaysia aims to be in the top third of the Programme For International Student Assessment (PISA) test within the next 13 years. The country is currently ranked in the bottom third.

The education masterplan report is available for free from the Education Ministry website.

For the full story on The Malaysian Insider, click here.

Thursday, September 13, 2012

More Defence Scandals

The reprimand by the Sultan of Johor, Sultan Ibrahim Ismail on the acquisition of Rapid Intervention Vehicles (RIVs) at exhorbitant prices highlights the malaise in the Ministry of Defence procurement exercises

On Saturday 8 September 2012, the Sultan of Johor, Sultan Ibrahim Ismail asked that “nobody should take advantage of the situation for personal gains when acquiring equipment for the Special Forces,” adding that recently four Rapid Intervention Vehicles (RIV) were purchased for RM2.76mil or RM690,000 each by the Ministry of Defence.

Sultan Ibrahim then displayed one of the RIV vehicles and another personal vehicle that he purchased for RM150,000.

“Which of these will be your choice? I do not understand why government purchases involve exorbitant charges that do not make sense,” Sultan Ibrahim, who is also a Colonel in the Special Forces, was reported to have said.

The above acquisition follows a series of controversial procurement of defence vehicles by the Ministry of Defence that have raised major question marks over whether the tax payers are getting value for their money.

In 2008 the Ministry of Defence has acquired 12 Eurocopter Cougar EC725 for RM2.3 billion or RM193 million each despite the same model helicopter being acquired for only RM82.8 million each by the Brazillian government.  The Ministry had attempted to justify their higher purchase price to the Parliamentary Accounts Committee on the basis that there were “customisations” on the vehicle to meet the needs of the local air force.

Last year, the Ministry also awarded a RM6 billion contract to Boustead Naval Shipyard to build 6 offshore patrol vessels and a RM7.55 billion contract to purchase 257 units of 8x8 Armoured Personnel Carriers (APCs) from DRB Hicom Bhd.

The RM6 billion contract was subsequently inflated to a RM9 billion contract and the Minister of Defence, Datuk Seri Zahid Hamidi had justified the both the acquisition and the increase in price on the fact that Malaysians are acquiring the state of the art “littoral combatant ships” (LCS).

It was subsequently exposed that the Ministry of Defence had merely “renamed” the German-made “Gowind Class” naval vessels into “LCS”, which is the name for the more technologically advanced ships built for the United States.  We can only interpret that the "renaming" of the ships is done to mislead the public into believing that we were indeed acquiring the best-in-class ships with the RM9 billion contract.

Similarly, it was exposed that while we are buying 257 APCs from DRB-Hicom for RM7.55 billion, DRB-Hicom is acquiring the 257 APCs from Turkish defence contractor for RM1.7 billion.  While DRB-Hicom will still need to install certain optional equipment, such as the turret guns and software systems onto the APCs, it is beyond reasonable believe that such additional “customisations” will cause the bill to be inflated from RM1.7 billion to RM7.55 billion; or from only an average of RM6.6 million to RM29.4 million for each vehicle.

When the above controversies were exposed, I was accused by the Minister of Defence as a foreign spy seeking to expose national defence secrets and criticised as being ill-informed with regards to defence technology.

However, when the critique comes from the Sultan of Johor, the Minister has no choice but to concede an investigation into the glaring financial irregularity.  Datuk Seri Zahid Hamidi had responded yesterday that “the Defence Ministry takes note of the comment positively. [He] will look into the difference in prices between the RIV awarded by Sultan Ibrahim priced at RM150,000 compared with the RM690,000 sold by the supplier.”

We call upon all of the above deals to be investigated and scrutinised not the Ministry of Defence itself, but by an independent Parliamentary Oversight Committee.  Malaysians have no faith that the Ministry will be able to conduct an investigation that is fair and above board.

In the light of procurement transparency promoted by the Government Transformation Programme, it is critical that the Ministry of Defence supports the set up of the Oversight Committee to prove that all is above board.  After all, if all the above transactions are of value for money to the Government, then surely there is nothing to hide from this independent panel.

Friday, September 07, 2012

Chua Tee Yong Doubts KPMG Too?

Datuk Chua Tee Yong is proving himself to be the worst MCA Minister, first with his bogus RM1 billion Talam Debt Bailout claim and now, insinuating incompetence and fraud by in the audit by independent auditors KPMG by referring to the US Enron scandal.

On 3 July 2012, Datuk Chua Tee Yong commenced a series of malicious allegations against the Selangor state government led by Pakatan Rakyat with concocted claims that Selangor abused RM1 billion to bailout Talam Corporation by purchasing the latter’s properties at high prices, allowing the latter to recover from financial distress.  This has included the fictitious claim that Talam’s shares were lifted from suspension on Bursa Malaysia as a result of Selangor’s actions.

We have already proven that Talam was never suspended on Bursa Malaysia, and the company completed its financial regularization plan, which was approved by Securities Commission in 2009, well before any agreements was signed with the current Selangor state government.

Despite the embarrassment of making false allegations, as well as the detailed explanations given with regards to the fact that no money was ever paid to Talam Corporation by the state government and the non-existence of any RM1 billion abuse of any kind, MCA prodigy has been relentless in touring Selangor’s hills and lakes to continue the accusations that the state government either “over-paid” or made unsound investment decisions which disadvantaged the state, and benefited Talam.

The state government led by Menteri Besar Tan Sri Khalid Ibrahim has taken the simple step of appointing independent international auditors KPMG to conduct a due diligence on the Talam deal immediately to ensure that the Malaysian public not only gets to hear from the state government, they have a open and transparent mechanism to evaluate the state’s competence.

The independent auditors have completed their due diligence study and were given access to every document requested to conduct the investigations.

KPMG has confirmed in its report that “the Selangor State Government entered into two debt settlement agreements with Talam in order to recover an amount of RM392 million of debts owed by Talam…” where “the debt settlement was in the form of settlement assets, comprising 9 plots of land, 2 properties and 60% shares in a subsidiary of Talam and cash/debt assignment.

Most importantly, the auditors concluded that “the settlement agreements entered into with Talam were purely a debt settlement arrangement” which means there is only collection from Talam, and no payment to Talam to purchase any properties from the latter as repeatedly accused by Datuk Chua and his merry men.

In fact, after reviewing all documents on the transactions, including valuation reports conducted by both the Federal government agencies as well as private property valuers, KPMG was happy to concluded that “the Selangor State Government made a sound commercial decision”.  KPMG further added that “the gross consideration is sufficient… to recover the Talam debts, with no debt waiver by Menteri Besar Incorporated”.

There can be no stronger endorsement on the decisions made by the state government under the Talam debt settlement agreement to prove not only that they were above board, they were also made in the interest of the state.  There was no “haircut” undertaken by Selangor in the recovery exercise.

Instead of hiding from sheer embarrassment, Datuk Chua Tee Yong has decided to humiliate himself further by stating in his tweet yesterday, “(an) audit report depends on the scope of the work. Enron and a lot of (other) cases show that (an) audit and its results are limited to the documents available," he said in a tweet.”

Datuk Chua Tee Yong is fast proving himself to be the least competent of the many incompetent MCA Ministers and Deputy Ministers in the Cabinet.  After clamouring for independent reports, Datuk Chua is now insinuating that he knows more, or has in his possession more documents than was supplied to KPMG in the latter’s audit.  He is now clearly insinuating that KPMG is not competent in its audit exercise and has taken part in audit fraud by comparing the Talam audit to the mega Enron audit scandal in the United States.

Datuk Chua is shameless in making such accusations especially since he himself claims to be a qualified Australia-certified Chartered Accountant.

If he has any further evidence to the contrary, we have set up a forum or debate in his constituency of Labis this coming weekend on 9th September 7.30pm for him to prove himself in front of his own constituents.

The state government has now officially appointed us, Dr Dzulkefly Ahmad, William Leong and Tony Pua to be the official spokespersons for the government on this issue.  There is no longer basis for Datuk Chua to give excuses that we do not represent the state and hence are unfit to “debate” him.

If Datuk Chua is not even willing to defend himself in front of his own voters who put him in office, then he should just forever hold his peace on the Talam issue and start focusing on more pressing issues in the Ministry of Agriculture such as recovering the RM250 million outstanding from National Feedlot Corporation.

Thursday, September 06, 2012

Stop Persecuting SUARAM

The Companies Commission of Malaysia has shown remarkable diligence in raiding the offices of Suara Inisiatif Sdn Bhd, the operating entity of Suara Rakyat Malaysia (SUARAM) non-governmental organization (NGO).

Yesterday, officers from the Companies Commission of Malaysia (CCM) had gone to Suara Inisiatif Sdn Bhd’s company secretary and auditor’s office and conducted a search and seized documents related to the company.

The notices to search and seize were issued under Section 7C and 7D(1) of the Companies Act 1965.  The above sections of the law are essentially the powers of CCM to conduct searches and seizures or “fishing expeditions”, indicating no particular offence committed by SUARAM.

The raid was conducted despite SUARAM having written to CCM on 20th July 2012 that they will provide full cooperation to the latter and will provide further documents and information upon receiving written requests to do so.

Even PERKESO, the agency which manages SOCSO payments had ordered SUARAM to produce a list of documents to the office on 30th August 2012. In compliance to the notice, SUARAM had produced the requested documents to the relevant officer, who in-turn was completely clueless to SUARAM’s presence.

The actions by the Government agencies, under pressure from UMNO and right-wing racist organisations  such as Jaringan Melayu Malaysia and PERKASA, particularly by CCM are of extreme prejudice in nature.

Over the past year, I have exposed many companies which have flouted many laws in the Companies Act 1965.  They’ve included the companies owned by Datuk Seri Shahrizat Jalil’s family members who own the National Feedlot Corporation (NFC).

For example, NFC has granted personal loans to the directors of the company that breached Section 133 and 133A of the Companies’ Act where such loans are clearly prohibited.

The family’s other companies, National Meat & Livestock Company Sdn Bhd, Real Food Company Sdn Bhd and Meatworks Sdn Bhd have failed to hold the company’s Annual General Meetings, file its Annual Returns to the Registrar of Companies together with their Audited Financial Report.  These offences are clear breached of Section 169A of the Companies Act, which carries the penalty 5 years in prison and/or RM30,000.

Similarly, Yayasan Gerakbakti Kebangsaan (YGK) owned by UMNO Youth with Khairy Jamaluddin and Datuk Abdul Rahman Dahlan as directors, has never filed their accounts since 2009.

Why is it that up to today, despite the above exposes being made at least 6 months ago, the CCM has failed to act against the above companies despite the proven breaches? On the other hand, why is it that despite having done no wrong, the CCM and the other government agencies have been relentless in their pursuit to charge SUARAM.

It is clear as day that the current persecution is mediated the exposes on Najib and the multibillion ringgit Scorpene submarine scandal.

We call upon the CCM to stay away from politically motivated actions which will only tarnish its image as an impartial entity.  If it has to act against SUARAM, then surely action must be taken against the many companies of UMNO leaders, family members and cronies which have clearly breached many aspects of the law

SUARAM has done an impeccable job with the Scorpene submarine scandal which implicates the Prime Minister himself.  We hope SUARAM will maintain the course and double up its efforts especially to ensure that those corrupt leaders who abuses power will be rejected outright.

Tuesday, September 04, 2012

PEMANDU Must Retract Safest Country in Southeast Asia Claim

PEMANDU has in its Government Transformation Programme (GTP) Annual Report 2011 and its many presentations, claimed that “for the first time ever, Malaysia attains “most peaceful” and “safest nation” titles Malaysia’s position as the most peaceful country in Southeast Asia and the 4th safest in the Asia Pacific region behind New Zealand, Japan and Australia was validated by the 5th edition of the Global Peace Index (GPI) 2011.”

What’s more, PEMANDU claimed credit for Malaysia being “ranked the safest country among 19 upper middle income countries by the World Justice Project’s Rule of Law Index 2011. Both external validations underscored the good progress made under the Reducing Crime NKRA.”

The recent expose by an anonymous letter accused the Royal Malaysia Police (PDRM) of manipulating crime statistics to present an artificial picture of the crime situation in Malaysia was confirmed with the data provided by PDRM.

Based on the PDRM statistics, they successfully reduced the official crime statistics from 209,572 in 2007 to 157,891 in 2011, or 24.7% over the period.  However, this was achieved at the expense of the unpublished “non-index crime”, which increased from 42,752 to 72,106 or a massive 68.7% over the same period.  More obviously, in the first year of the GTP Reducing Crime NKRA, the official crime index dropped by 15.4% in 2010 but the non-index crime increased by 21.5%.

Most suspiciously, “non-index crime” is increasing annually as a proportion of total crime since 2007 based on PDRM data.  It has increased from 16.9% of total crime in 2007 to 21.9% (2008) to 22.8% (2009) to 29.8% (2010) to a record of 31.4% in 2011.

The clear-cut disjoint between the significant drop in “index crime” versus the drastic increase in “non-index crime” points strongly towards data manipulation, and validates the accusation by the anonymous letter writer that the PDRM is systematically re-classifying “index crime” to “non-index crime” cases.

Hence all the supposed achievements which PEMANDU has been trumpeting from the rooftop, including the unbelievable claim that Malaysia is the safest country in Southeast Asia, even safer than Singapore, is built on artificial and manipulated data.

While other countries like Singapore include all types of crime – including moral and white-collar crimes in their crime statistics, Malaysia has to massage its crime data by publishing “index crime” data and hiding “non-index crime” from official statistics.  In United Kingdom, even “anti-social behaviour” is classified as a crime on the Police website.

Malaysians are completely puzzled as to why a robbery is re-classified into a “non-index crime” just because the weapon is “concealed”.  Similarly, according to PDRM, “if a house break-in occurred but no goods or belongings were evidently removed by the burglar, e.g. if perpetrator escaped before he or she managed to take any goods… the investigation officer will necessarily charge the offender with a lesser offence such as Section 452 and 453” which are “non-index crimes”.

Instead of crowing on the PDRM achievements via manipulated statistics, such as the claim of an alleged 39.7% fall in street crimes between 2009 and 2011, PEMANDU must overhaul its entire crime reporting and evaluation mechanism.  PEMANDU must immediately recommend the scrapping of the ludicrous official “index crime” and the hidden “non-index crime” classification which is clearly subjected to manipulation and to artificially improve “perception” among Malaysians.

In fact it is the police and the Government’s persistent pre-occupation with “perception” of crime, instead of effectively fighting crime which inevitably leads to statistical manipulation by those responsible.

Monday, September 03, 2012

Najib Must Disclose EDL Buy Back Compensation

The Prime Minister must practice full disclosure on the proposed acquisition of the Eastern Dispersal Link from Malaysian Resources Corporation Berhad (MRCB) to ensure the latter does not profit enormously from the exercise

We welcome the news from the Minister from the Prime Minister’s Department, Tan Sri Nor Mohamed Yakcop who announced that the Government intents to buy-back the Eastern Dispersal Link (EDL) from the concession holder.

This proves that the proposals by Pakatan Rakyat to acquire toll concessions is financially viable and will not “bankrupt” the country as accused repeated by Barisan Nasional (BN) leaders. As my colleague, PKR Strategy Director Rafizi Ramli has highlighted earlier, it also shows that BN is desperately copying policies from our Buku Jingga in order to dampen the support for Pakatan Rakyat.

However, the Government must be completely transparent in the buy-back exercise to ensure that they will not end up compensating Malaysian Resources Corporation Bhd (MRCB) with astronomical amount of profit.

Malaysians, especially Johoreans do not want to see a repeat of the aborted Gerbang Perdana “crooked bridge” project fiasco where the concessionaire was compensated RM257 million.  This was despite the fact that they would only be paid RM100 million to build the bridge. That meant it cost the Government more money to stop the project halfway, than it is to actually complete it!

We do not want the Government to agree to buy-back the concession only to compensate for “loss of future profits” to MRCB – which effectively means the taxpayers’ money will be used to pay for toll upfront to MRCB.

We call on the Government to:

  1. Declassify and make public the EDL concession agreement so that Malaysians will know the complete terms of the agreement.  There’s no reason why the Government cannot do this as past concession agreements have already been declassified by former Works Minister, Datuk Seri Mohd Zin Mohamed in 2009.
  2. Based on terms in past concession contracts, the Government is only required to pay for the “value of the Construction Works” of the Highway and “12% interest returns per annum to shareholders' capital and loan invested”.

Given that the RM1.2 billion project (MRCB Annual Report 2011) was built with RM1,044 million of sukuk bonds, the shareholders’ contribution to the project is only approximately RM160 million.  Assuming that the RM160 million was invested upfront in 2007 when the concession was awarded, the maximum total compensation payable to MRCB on top of their investment sum is 12% of RM160 million multiplied by 5 years or RM96 million.

Hence given the initial estimates, based on the presumption that the concession contract terms for expropriation by the Government is the same as previously declassified agreements, the maximum compensation the Government should agree to is:

   RM1,044 million (sukuk)
+ RM160 million (shareholders’ capital and/or loan)
+ RM96 million (5 years’ interest on shareholders’ capital and/or loan)
= RM1,300 million

Therefore the Government must compensate the concessionaire in accordance to the 34-year concession agreement and not to unfairly compensate for more than what was specified in the agreement.

By paying MRCB anything more than RM1.3 billion, it will show that BN is abusing its powers to profit its crony companies and is failing in its fiduciary duty to protect and defend the interest of ordinary Malaysian taxpayers.  The Prime Minister, Dato’ Seri Najib Razak promised that the “people’s interest comes first”, and there is no better time to prove it in the expropriation of the EDL concession.