Dato' Seri Najib Razak is practising “kangkung” economics by awarding lucrative
multi-billion contracts to qualified parties who are not the lowest bidders.
On 28th February, the Energy Commission (EC) confirmed weeks of alleged “baseless speculation”
that 1MDB will be awarded the new Independent Power Producer (IPP) 2,000MW coal-fired
power plant concession. The project is said to be worth RM11 billion.
Showing posts with label New Economic Model. Show all posts
Showing posts with label New Economic Model. Show all posts
Wednesday, March 05, 2014
Thursday, August 09, 2012
George Kent LRT Award: Proof Rent-Seeking Alive & Well
The Prime Minister Datuk Seri Najib Razak famously declared that “we can no longer tolerate practices that support the behavior of rent-seeking and patronage…” when he launched his landmark New Economic Model (NEM) to replace the New Economic Policy (NEP) on 30 March 2010.
I had openly applauded the statement on intent when it was first announced, but cautioned then against the sincerity and political will of the Prime Minister to carry out the necessary reforms to our distorted economy.
The recent award of the RM1.18 billion Ampang LRT Extension Project to George Kent Bhd has become just another one of the many nails hammered tightly into the NEM coffin. The award has proven that not only has Datuk Seri Najib Razak failed to rent-seeking and patronage in the Government procurement and tender processes, these behaviours are becoming increasingly blatant and flourishing in the country.
Over the past weeks, the various exposés have shown firstly that George Kent won the bid despite being priced RM167 million higher than the originally recommended bid the project owner Syarikat Prasarana Negara. Secondly, George Kent was awarded the contract despite failing the technical criteria which has caused the company to be initially rejected by the professional evaluation consultants.
Worse, George Kent won the bid over other establish rail players such as Siemens, Balfour Beatty, Bombardier, Posco and Colas despite having zero experience in rail projects. The company’s expertise is in the manufacture and supply “control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers”, as well as “fibre glass reinforced polyester (FRP) panel tanks for bulk water storage”.
But the industry feedback on the award as reported by the latest issue of The Edge is most damning on the integrity and credibility of the high-power Ministry of Finance Committee headed by Datuk Seri Najib Razak himself.
An industry executive was quoted saying that “George Kent might have to subcontract about 70% to 80% of the value of the contract since it is not the original equipment manufacturer of any of the components that are needed for the systems work”.
A top executive from Siemens has also confirmed that they have been approached by George Kent to participate in the project as a subcontractor. Similarly, another tenderer for the project Balfour Beatty has also been approached, but executives close to the UK-based group say it has “spurned” the offer.
A rail-sector project consultant was then quoted to say “subcontracting more than 30% of the specialised work packages, is questionable since the main contractor would have been selected for its specific technical capabilities”. This is as opposed to George Kent being awarded the contract despite having no such expertise in the industry.
The award shows that Ali-Baba like contractors who survive on their political connections as well as their expert navigation of the government procurement processes continue to dominate in Malaysia. At the same time, the complicity of the Prime Minister, who is also the Finance Minister in the award process proves full support for these companies.
We are completely aghast at how Datuk Seri Najib Razak can continue to talk about the “New Economic Model” and “Economic Transformation” when Barisan Nasional cronies continue to win lucrative government tenders via rent-seeking and patronage, and not because of competency, quality and price competitiveness.
I had openly applauded the statement on intent when it was first announced, but cautioned then against the sincerity and political will of the Prime Minister to carry out the necessary reforms to our distorted economy.
The recent award of the RM1.18 billion Ampang LRT Extension Project to George Kent Bhd has become just another one of the many nails hammered tightly into the NEM coffin. The award has proven that not only has Datuk Seri Najib Razak failed to rent-seeking and patronage in the Government procurement and tender processes, these behaviours are becoming increasingly blatant and flourishing in the country.
Over the past weeks, the various exposés have shown firstly that George Kent won the bid despite being priced RM167 million higher than the originally recommended bid the project owner Syarikat Prasarana Negara. Secondly, George Kent was awarded the contract despite failing the technical criteria which has caused the company to be initially rejected by the professional evaluation consultants.
Worse, George Kent won the bid over other establish rail players such as Siemens, Balfour Beatty, Bombardier, Posco and Colas despite having zero experience in rail projects. The company’s expertise is in the manufacture and supply “control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers”, as well as “fibre glass reinforced polyester (FRP) panel tanks for bulk water storage”.
But the industry feedback on the award as reported by the latest issue of The Edge is most damning on the integrity and credibility of the high-power Ministry of Finance Committee headed by Datuk Seri Najib Razak himself.
An industry executive was quoted saying that “George Kent might have to subcontract about 70% to 80% of the value of the contract since it is not the original equipment manufacturer of any of the components that are needed for the systems work”.
A top executive from Siemens has also confirmed that they have been approached by George Kent to participate in the project as a subcontractor. Similarly, another tenderer for the project Balfour Beatty has also been approached, but executives close to the UK-based group say it has “spurned” the offer.
A rail-sector project consultant was then quoted to say “subcontracting more than 30% of the specialised work packages, is questionable since the main contractor would have been selected for its specific technical capabilities”. This is as opposed to George Kent being awarded the contract despite having no such expertise in the industry.
The award shows that Ali-Baba like contractors who survive on their political connections as well as their expert navigation of the government procurement processes continue to dominate in Malaysia. At the same time, the complicity of the Prime Minister, who is also the Finance Minister in the award process proves full support for these companies.
We are completely aghast at how Datuk Seri Najib Razak can continue to talk about the “New Economic Model” and “Economic Transformation” when Barisan Nasional cronies continue to win lucrative government tenders via rent-seeking and patronage, and not because of competency, quality and price competitiveness.
Friday, August 03, 2012
George Kent LRT Award: What Says PEMANDU?
What is the point of setting up PEMANDU when the Prime Minister himself tramples on its proposals as he likes, putting to waste hundreds of millions of ringgit in developing, promoting and implementing the Government Transformation Programme (GTP) and the National Key Result Areas (NKRA)
Those who are in the know, would be aware that I have a high degree of respect for Datuk Idris Jala, the Minister in the Prime Minister’s Office in-charge of the “high-powered” Performance Management and Delivery Unit (PEMANDU), especially with regards to his sincerity in wanting to make change happen. I have at various times criticised policy proposals by PEMANDU, but that is directed towards making them better, and not questioning the intent of those who have worked at drafting the policies.
However, I can only see the sheer hopelessness of the efforts put in by Datuk Idris and his team, when some of these key proposals are given only lip service support. When it comes to the crunch, many of the policies drafted by the PEMANDU team and its highly paid consultants were either completely ignored or are trampled upon at will by the Prime Minister and his Ministers.
As seen recently, Datuk Seri Najib Razak has shown complete contempt of the PEMANDU GTP programme by repeatedly interfering with the award of the projects for the LRT Extension Programme for both the Kelana Jaya and the Ampang lines.
In June 2011, the Finance Ministry committee had ordered Syarikat Prasarana Negara Bhd to award the deal to the Hartasuma Sdn Bhd-Bombardier joint-venture, whose RM890 million bid is nearly 50 per cent higher than the lowest bid from the Prasarana-recommended Ingress Corp Bhd-Balfour Beatty Rail Sdn Bhd, of RM610 million, the lowest. The decision was subsequently reversed, and awarded to the Colas and CMC Engineering Sdn Bhd joint venture for RM670 million.
More blatantly, the same committee chaired by none other than the Datuk Seri Najib Razak himself, has overturned recommendations by Prasarana to award the Ampang Line project to George Kent-Lion Pacific joint venture this month. They have secured the contract for RM1.18 billion despite despite the fact that the consortium had failed both the technical and commercial evaluations for the contract.
What is beyond belief is that George Kent is a manufacturer and supplier of “control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers”, as well as “the manufacture of fibre glass reinforced polyester (FRP) panel tanks for bulk water storage” can be qualified for a billion ringgit LRT project. George Kent made only net profits of RM19.3 million on revenues of RM152 million for the financial year ended January 31, 2012.
PEMANDU has in its GTP paper clearly stated that “we will reduce leakages of funds allocated for national development and operational expenditure and ensure transparency in the award of contracts” and admitted that “currently the public perceives that there is a lack of transparency in our procurement processes.”
PEMANDU also wrote that “it is well established that transparency is crucial for a fair and efficient government procurement process. This is because transparency increases public scrutiny on the procurement process and helps ensure that accountability and well-defined policies, regulations and procedures have been put in place and followed closely.”
However, as shown in the above 2 LRT contracts, what PEMANDU proposed mattered little to the Prime Minister, who also holds the position of the Finance Minister. It is clear that PEMANDU’s role in the Najib’s administration is to present a façade of reformist credentials for the BN Government and to act as apologists for his failure to implement any tangible reforms.
As at June 2011, PEMANDU has spent RM27.5 million on “communicating” the GTP and ETP to the Malaysian public and another RM36.9 million running dozens of labs led by various consultants. The above forms only part of the overall NKRA operating budget of RM334 million in 2010.
Instead of spending the money to bring about real transformation by improving transparency, accountability and integrity, hundreds of millions of ringgit are wasted on thousands of pages of plans and presentations, dazzling publicity drives as well as half-hearted implementation efforts to present a semblance of reform to the general public.
If the Prime Minister is in reality going to ignore GTP and award contracts directly to his own preferred vendors regardless of the “open tender” outcomes, then he might as well save the people the hundreds of millions of ringgit spent on the dog-and-pony PEMANDU show.
Those who are in the know, would be aware that I have a high degree of respect for Datuk Idris Jala, the Minister in the Prime Minister’s Office in-charge of the “high-powered” Performance Management and Delivery Unit (PEMANDU), especially with regards to his sincerity in wanting to make change happen. I have at various times criticised policy proposals by PEMANDU, but that is directed towards making them better, and not questioning the intent of those who have worked at drafting the policies.
However, I can only see the sheer hopelessness of the efforts put in by Datuk Idris and his team, when some of these key proposals are given only lip service support. When it comes to the crunch, many of the policies drafted by the PEMANDU team and its highly paid consultants were either completely ignored or are trampled upon at will by the Prime Minister and his Ministers.
As seen recently, Datuk Seri Najib Razak has shown complete contempt of the PEMANDU GTP programme by repeatedly interfering with the award of the projects for the LRT Extension Programme for both the Kelana Jaya and the Ampang lines.
In June 2011, the Finance Ministry committee had ordered Syarikat Prasarana Negara Bhd to award the deal to the Hartasuma Sdn Bhd-Bombardier joint-venture, whose RM890 million bid is nearly 50 per cent higher than the lowest bid from the Prasarana-recommended Ingress Corp Bhd-Balfour Beatty Rail Sdn Bhd, of RM610 million, the lowest. The decision was subsequently reversed, and awarded to the Colas and CMC Engineering Sdn Bhd joint venture for RM670 million.
More blatantly, the same committee chaired by none other than the Datuk Seri Najib Razak himself, has overturned recommendations by Prasarana to award the Ampang Line project to George Kent-Lion Pacific joint venture this month. They have secured the contract for RM1.18 billion despite despite the fact that the consortium had failed both the technical and commercial evaluations for the contract.
What is beyond belief is that George Kent is a manufacturer and supplier of “control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers”, as well as “the manufacture of fibre glass reinforced polyester (FRP) panel tanks for bulk water storage” can be qualified for a billion ringgit LRT project. George Kent made only net profits of RM19.3 million on revenues of RM152 million for the financial year ended January 31, 2012.
PEMANDU has in its GTP paper clearly stated that “we will reduce leakages of funds allocated for national development and operational expenditure and ensure transparency in the award of contracts” and admitted that “currently the public perceives that there is a lack of transparency in our procurement processes.”
PEMANDU also wrote that “it is well established that transparency is crucial for a fair and efficient government procurement process. This is because transparency increases public scrutiny on the procurement process and helps ensure that accountability and well-defined policies, regulations and procedures have been put in place and followed closely.”
However, as shown in the above 2 LRT contracts, what PEMANDU proposed mattered little to the Prime Minister, who also holds the position of the Finance Minister. It is clear that PEMANDU’s role in the Najib’s administration is to present a façade of reformist credentials for the BN Government and to act as apologists for his failure to implement any tangible reforms.
As at June 2011, PEMANDU has spent RM27.5 million on “communicating” the GTP and ETP to the Malaysian public and another RM36.9 million running dozens of labs led by various consultants. The above forms only part of the overall NKRA operating budget of RM334 million in 2010.
Instead of spending the money to bring about real transformation by improving transparency, accountability and integrity, hundreds of millions of ringgit are wasted on thousands of pages of plans and presentations, dazzling publicity drives as well as half-hearted implementation efforts to present a semblance of reform to the general public.
If the Prime Minister is in reality going to ignore GTP and award contracts directly to his own preferred vendors regardless of the “open tender” outcomes, then he might as well save the people the hundreds of millions of ringgit spent on the dog-and-pony PEMANDU show.
Wednesday, August 01, 2012
George Kent LRT Award: Najib Broke All Rules
Datuk Seri Najib Razak shamelessly broke every single rule on transparency, accountability and integrity, making a complete mockery of the Ampang Line LRT “open tender” and exposed his cornerstone “Government Transformation Programme” as nothing more than rhetorical propaganda
After playing hide-and-seek with the Malaysian public for more than a month, Syarikat Prasarana Negara Berhad (Prasarana), the project and asset owner for the LRT Line Extension Project (LEP), said in a statement today that the contract for “Engineering, Procurement, Construction, Testing and Commissioning of System Works” for the Ampang Line Extension Project has been awarded to a George Kent-Lion Pacific joint venture.
The consortium led by George Kent, is at the centre of repeated opposition allegations that it received preferential treatment from the government is understood to have secured the contract for RM1.18 billion. This is despite the fact that the consortium had failed both the technical and commercial evaluations for the contract.
PKR Strategy Director Rafizi Ramli has exposed that the MoF’s Acquisition Committee, which met this January 25, had originally over-ruled initial lower-priced recommendation from Prasarana decided to award the contract to British engineering firm, Balfour Beatty-Invensys Consortium, which bid RM1.01 billion for the job.
Subsequently it was exposed that the MoF Acquisition Committee headed by none other than the Prime Minister himself, reversed the earlier decision to awarded an even higher priced contract to the George Kent consortium.
What is completely beyond belief in the sheer abuse of power by the Prime Minister himself is that George Kent a manufacturer and supplier of “control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers”, as well as “the manufacture of fibre glass reinforced polyester (FRP) panel tanks for bulk water storage” can be qualified for a billion ringgit LRT project.
What is worse is the fact that George Kent made only net profits of RM19.3 million on revenues of RM152 million for the financial year ended January 31, 2012. What justification can be given by Datuk Seri Najib Razak that a company with only RM152 million in revenue could be awarded a RM1.18 billion ringgit contract, despite having been disqualified technically from the project?
The Ampang LRT project isn’t the first to suffer from abuse and controversy. In June 2011, the Finance Ministry committee had ordered Syarikat Prasarana Negara Bhd to award the deal to the Hartasuma Sdn Bhd-Bombardier joint-venture, whose RM890 million bid is nearly 50 per cent higher than the lowest bid from the Prasarana-recommended Ingress Corp Bhd-Balfour Beatty Rail Sdn Bhd, of RM610 million, the lowest. The decision was subsequently reversed, and awarded to the Colas and CMC Engineering Sdn Bhd joint venture for RM670 million.
The decision to proceed with the award proves beyond doubt that Datuk Seri Najib Razak is willing to shamelessly break every single rule on transparency, accountability and integrity, despite the scandal having been exposed. The decision and announcement makes a complete mockery of the Ampang Line LRT “open tender” which does not play by the book and will severely dent the confidence of Malaysians in the multi-billion ringgit projects to be similarly awarded via “open tender” such as the RM53 billion MRT and RM8.7 billion Langat 2 water treatment plant.
The blatant crony award of the RM1.18 billion contract above also confirms that the Prime Minister’s cornerstone “Government Transformation Programme” (GTP) to improve transparency and reduce corruption is nothing more than rhetorical propaganda. This is because none other than Datuk Seri Najib Razak himself has chosen to dismiss the policies proposed with the GTP.
Malaysians are expressing both outrage and disappointment with the Prime Minister who has promised so much with his “transformation” agenda but delivered so little. Despite all the promises and pledges, Datuk Seri Najib Razak has chosen to continue the crony capitalism practices carried out by his predecessors at the expense of good government and the rakyat’s interest.
After playing hide-and-seek with the Malaysian public for more than a month, Syarikat Prasarana Negara Berhad (Prasarana), the project and asset owner for the LRT Line Extension Project (LEP), said in a statement today that the contract for “Engineering, Procurement, Construction, Testing and Commissioning of System Works” for the Ampang Line Extension Project has been awarded to a George Kent-Lion Pacific joint venture.
The consortium led by George Kent, is at the centre of repeated opposition allegations that it received preferential treatment from the government is understood to have secured the contract for RM1.18 billion. This is despite the fact that the consortium had failed both the technical and commercial evaluations for the contract.
PKR Strategy Director Rafizi Ramli has exposed that the MoF’s Acquisition Committee, which met this January 25, had originally over-ruled initial lower-priced recommendation from Prasarana decided to award the contract to British engineering firm, Balfour Beatty-Invensys Consortium, which bid RM1.01 billion for the job.
Subsequently it was exposed that the MoF Acquisition Committee headed by none other than the Prime Minister himself, reversed the earlier decision to awarded an even higher priced contract to the George Kent consortium.
What is completely beyond belief in the sheer abuse of power by the Prime Minister himself is that George Kent a manufacturer and supplier of “control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers”, as well as “the manufacture of fibre glass reinforced polyester (FRP) panel tanks for bulk water storage” can be qualified for a billion ringgit LRT project.
What is worse is the fact that George Kent made only net profits of RM19.3 million on revenues of RM152 million for the financial year ended January 31, 2012. What justification can be given by Datuk Seri Najib Razak that a company with only RM152 million in revenue could be awarded a RM1.18 billion ringgit contract, despite having been disqualified technically from the project?
The Ampang LRT project isn’t the first to suffer from abuse and controversy. In June 2011, the Finance Ministry committee had ordered Syarikat Prasarana Negara Bhd to award the deal to the Hartasuma Sdn Bhd-Bombardier joint-venture, whose RM890 million bid is nearly 50 per cent higher than the lowest bid from the Prasarana-recommended Ingress Corp Bhd-Balfour Beatty Rail Sdn Bhd, of RM610 million, the lowest. The decision was subsequently reversed, and awarded to the Colas and CMC Engineering Sdn Bhd joint venture for RM670 million.
The decision to proceed with the award proves beyond doubt that Datuk Seri Najib Razak is willing to shamelessly break every single rule on transparency, accountability and integrity, despite the scandal having been exposed. The decision and announcement makes a complete mockery of the Ampang Line LRT “open tender” which does not play by the book and will severely dent the confidence of Malaysians in the multi-billion ringgit projects to be similarly awarded via “open tender” such as the RM53 billion MRT and RM8.7 billion Langat 2 water treatment plant.
The blatant crony award of the RM1.18 billion contract above also confirms that the Prime Minister’s cornerstone “Government Transformation Programme” (GTP) to improve transparency and reduce corruption is nothing more than rhetorical propaganda. This is because none other than Datuk Seri Najib Razak himself has chosen to dismiss the policies proposed with the GTP.
Malaysians are expressing both outrage and disappointment with the Prime Minister who has promised so much with his “transformation” agenda but delivered so little. Despite all the promises and pledges, Datuk Seri Najib Razak has chosen to continue the crony capitalism practices carried out by his predecessors at the expense of good government and the rakyat’s interest.
Sunday, February 05, 2012
Najib's Poor Leadership Stalls Economic Reforms
Najib’s poor leadership stalling economic reforms, says Pakatan
By Shazwan Mustafa Kamal February 02, 2012
KUALA LUMPUR, Feb 2 — Pakatan Rakyat (PR) leaders have blamed Datuk Seri Najib Razak’s poor leadership as prime minister and Umno president as the main cause behind stalled economic reforms, saying he lacked the political will to weed out corruption and push for transparency in the awarding of lucrative government contracts.
The PR leaders were commenting on banker Datuk Seri Nazir Razak who had said economic reforms are not moving as fast as was hoped due to distractions from a general election which has to be held by early next year.
While agreeing with what the CIMB group chief executive officer said about the state of the government’s economic reforms, opposition leaders charged that the impending general election should actually push Najib’s administration to expedite reforms, not stall them.
“Reforms have stalled because Najib lacked the political will to overturn the patronage and gravy train system in BN and particularly in Umno.
“Najib is fearful that the reforms will destroy the very fabric that glues Umno together, that is the opportunity for its leaders and members to secure lucrative contracts with the government and government-linked companies,” DAP national publicity secretary Tony Pua told The Malaysian Insider.
Pua pointed out that despite transparency and accountability being a cornerstone of Najib’s Government Transformation Programme (GTP), lucrative procurement contracts continue to be dished out without any open tenders.
The Petaling Jaya Utara MP has been leading in demanding Najib reveal the details of its direct negotiations with Kumpulan Europlus Bhd (KEuro), a company which, he said, has no experience in building the RM7 billion West Coast Expressway (WCE).
KEuro announced on Thursday that it has been awarded a 60-year concession for the RM7.07 billion WCE, which will connect Banting in south Selangor to Taiping in north Perak. The new highway will serve as an alternative to the North-South Expressway.
“I completely agree that economic reforms are completely stalled and the NEM (New Economic Model) and ETP (Economic Transformation Programme) have now become a programme of continuity and not of the purported transformation,” said Pua.
He charged that the prime minister showed failure in leadership by not expressing or acting against senior Umno ministers involved in financial scandals, citing the National Feedlot Corporation (NFCorp) as an example.
For the full article in The Malaysian Insider, click here.
By Shazwan Mustafa Kamal February 02, 2012
KUALA LUMPUR, Feb 2 — Pakatan Rakyat (PR) leaders have blamed Datuk Seri Najib Razak’s poor leadership as prime minister and Umno president as the main cause behind stalled economic reforms, saying he lacked the political will to weed out corruption and push for transparency in the awarding of lucrative government contracts.
The PR leaders were commenting on banker Datuk Seri Nazir Razak who had said economic reforms are not moving as fast as was hoped due to distractions from a general election which has to be held by early next year.
While agreeing with what the CIMB group chief executive officer said about the state of the government’s economic reforms, opposition leaders charged that the impending general election should actually push Najib’s administration to expedite reforms, not stall them.
“Reforms have stalled because Najib lacked the political will to overturn the patronage and gravy train system in BN and particularly in Umno.
“Najib is fearful that the reforms will destroy the very fabric that glues Umno together, that is the opportunity for its leaders and members to secure lucrative contracts with the government and government-linked companies,” DAP national publicity secretary Tony Pua told The Malaysian Insider.
Pua pointed out that despite transparency and accountability being a cornerstone of Najib’s Government Transformation Programme (GTP), lucrative procurement contracts continue to be dished out without any open tenders.
The Petaling Jaya Utara MP has been leading in demanding Najib reveal the details of its direct negotiations with Kumpulan Europlus Bhd (KEuro), a company which, he said, has no experience in building the RM7 billion West Coast Expressway (WCE).
KEuro announced on Thursday that it has been awarded a 60-year concession for the RM7.07 billion WCE, which will connect Banting in south Selangor to Taiping in north Perak. The new highway will serve as an alternative to the North-South Expressway.
“I completely agree that economic reforms are completely stalled and the NEM (New Economic Model) and ETP (Economic Transformation Programme) have now become a programme of continuity and not of the purported transformation,” said Pua.
He charged that the prime minister showed failure in leadership by not expressing or acting against senior Umno ministers involved in financial scandals, citing the National Feedlot Corporation (NFCorp) as an example.
For the full article in The Malaysian Insider, click here.
Wednesday, February 01, 2012
Will Pemandu Stop the RM7b West Coast Expressway Contract?
The Prime Minister Dato’ Seri Najib Razak started his premiership with much fanfare over his transformation programmes, starting with the “Government Transformation Programme” (GTP) launched in December 2009.
One of the key “National Key Result Area” (NKRA) contained within the GTP is to fight against corruption. The GTP admitted that “the perception of corrupt practices has risen in recent years, evidenced by Malaysia’s declining ranking in Transparency International’s (TI) Corruption Perception Index (CPI). In 2009, Malaysia’s ranked dropped 9 places from 47 to 56.”
Najib’s administration has since failed its own transformation objectives with Malaysia falling to its lowest level ever in TI CPI in 2011 at 60th place. The fall in rankings doesn’t come as a surprise at all scandals being exposed hard and fast over the past two years including the RM12.5 billion Port Klang Free Zone project, RM9 billion naval patrol vessel and RM7.55 billion armoured personnel carrier acquisitions, the RM330 million “cows and condos” fiasco and now a RM7.07 billion West Coast Expressway privatisation concession.
To stop the rot, PEMANDU Chairman Tan Sri Koh Tsu Koon must declare if the latest mega-highway concession has been awarded according to the principles and policies set out by the GTP to meet the Prime Minister’s goals on “transformation”.
The GTP promised that “we will reduce leakages of funds allocated for national development and operational expenditure and ensure transparency in the award of contracts.”
It further added that “it is well established that transparency is crucial for a fair and efficient government procurement process. This is because transparency increases public scrutiny on the procurement process and helps ensure that accountability and well-defined policies, regulations and procedures have been put in place and followed closely.”
However the award of the RM7.07 billion 60-year highway concession to Europlus flies in the face of GTP’s promises, especially with the unexplained increase in cost by 134% from RM3.02 billion and extension of concession period by 27 years from the original 33 signed in 2007.
PEMANDU must demand that the Prime Minister’s Office (PMO) disclose all details including the concession terms in the award to Europlus especially since the award was made via direct negotiation. It has been more than 5 days since the announcement made by Europlus on Bursa Malaysia and yet the Government has been steadfast in its refusal to shed light on the project.
PEMANDU must ensure that PMO is transparent and accountable by explaining the projected profits of the concessionaire, the future toll burden to be bourne by commuters. As the agency in-charge of GTP which promised “people first, performance now”, PEMANDU must ensure that lightning will not strike multiple times on the same spot as per previous BN government privatisation agreements. What’s more, the Government had to extend a RM2.24 billion soft loan and up to 3% in interest subsidy to Europlus commercial loans to undertake the WCE project.
The rakyat has been “taxed” mercilessly with lopsided concession agreements signed with independent power producers, highway operators such as the North South Highway (PLUS) and the Lebuhraya Damansara Puchong (LDP) as well as utility companies such as water suppliers.
Will Tan Sri Koh Tsu Koon have the audacity to demand that the WCE project be suspended pending review to ensure that Malaysia recovers from the pits of the TI CPI or will he chicken-out by shirking his responsibility as the chairman of PEMANDU?
One of the key “National Key Result Area” (NKRA) contained within the GTP is to fight against corruption. The GTP admitted that “the perception of corrupt practices has risen in recent years, evidenced by Malaysia’s declining ranking in Transparency International’s (TI) Corruption Perception Index (CPI). In 2009, Malaysia’s ranked dropped 9 places from 47 to 56.”
Najib’s administration has since failed its own transformation objectives with Malaysia falling to its lowest level ever in TI CPI in 2011 at 60th place. The fall in rankings doesn’t come as a surprise at all scandals being exposed hard and fast over the past two years including the RM12.5 billion Port Klang Free Zone project, RM9 billion naval patrol vessel and RM7.55 billion armoured personnel carrier acquisitions, the RM330 million “cows and condos” fiasco and now a RM7.07 billion West Coast Expressway privatisation concession.
To stop the rot, PEMANDU Chairman Tan Sri Koh Tsu Koon must declare if the latest mega-highway concession has been awarded according to the principles and policies set out by the GTP to meet the Prime Minister’s goals on “transformation”.
The GTP promised that “we will reduce leakages of funds allocated for national development and operational expenditure and ensure transparency in the award of contracts.”
It further added that “it is well established that transparency is crucial for a fair and efficient government procurement process. This is because transparency increases public scrutiny on the procurement process and helps ensure that accountability and well-defined policies, regulations and procedures have been put in place and followed closely.”
However the award of the RM7.07 billion 60-year highway concession to Europlus flies in the face of GTP’s promises, especially with the unexplained increase in cost by 134% from RM3.02 billion and extension of concession period by 27 years from the original 33 signed in 2007.
PEMANDU must demand that the Prime Minister’s Office (PMO) disclose all details including the concession terms in the award to Europlus especially since the award was made via direct negotiation. It has been more than 5 days since the announcement made by Europlus on Bursa Malaysia and yet the Government has been steadfast in its refusal to shed light on the project.
PEMANDU must ensure that PMO is transparent and accountable by explaining the projected profits of the concessionaire, the future toll burden to be bourne by commuters. As the agency in-charge of GTP which promised “people first, performance now”, PEMANDU must ensure that lightning will not strike multiple times on the same spot as per previous BN government privatisation agreements. What’s more, the Government had to extend a RM2.24 billion soft loan and up to 3% in interest subsidy to Europlus commercial loans to undertake the WCE project.
The rakyat has been “taxed” mercilessly with lopsided concession agreements signed with independent power producers, highway operators such as the North South Highway (PLUS) and the Lebuhraya Damansara Puchong (LDP) as well as utility companies such as water suppliers.
Will Tan Sri Koh Tsu Koon have the audacity to demand that the WCE project be suspended pending review to ensure that Malaysia recovers from the pits of the TI CPI or will he chicken-out by shirking his responsibility as the chairman of PEMANDU?
Saturday, November 05, 2011
Forum: Malaysia's Economy - Where To?
Date: 7 November 2011 (Monday)Speakers:
Time: 8pm
Venue: Hotel Sri Petaling,30 Jalan Radin Anum, Bandar Baru Sri Petaling (Google Map)
- Teh Chi-Chang, Executive Director of REFSA on "The 2012 Malaysian Budget and its Shadow"
- Tony Pua, MP for Petaling Jaya Utara on “Economic Transformation: For Better or Worse?”
Moderator:
- Teresa Kok, Senior Exco Member of the Selangor State Government and Member of Parliament for Seputeh
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Saturday, October 08, 2011
Budget 2012: Najib Fails Reform Credentials
Budget 2012 fails to live up to the Prime Minister’s reform pledges in NEM, GTP and ETP
The expectations were high for a pre-election budget where Datuk Seri Najib Abdul Razak will stamp his “reformist” credentials. It is for the Prime Minister to put into action the various reform pledges made in his cornerstone policy blueprints – the New Economic Model (NEM), Government Transformation Programme (GTP) and the Economic Transformation Programme (ETP).
However, the announcement of the budget left much to be desired as little has changed beyond tweaking the budget of the previous financial year. Instead what is perhaps the most worrying is that Malaysians are like the proverbial frog in the hot soup – where the frog does not realise the soup is slowly but surely reaching the boiling point.
We may not yet be facing the crisis of Greek proportions, but Budget 2012 is doing very little to avert such eventuality, leaving the Malaysian economy nakedly exposed to the inevitability.
Federal Government Debt
Our Federal Government debt has increased rapidly from RM242 billion in 2004 to RM363 billion in 2009 and RM456 billion in 2011. That represents a marked 88.4% increase in debt over the past 7 years. It is also an increase of 25.6% or nearly RM100 billion over 2 years.
The increase in debt has increased the pressure on reigning in our budget deficit as our annual debt service commitments have increased to RM20.5 billion next year from only half the amount 5 years ago in 2007.
While our federal government debt to GDP ratio is still at a moderate 53.8%, a far cry from Greece's 117%, we are not far from Spain's 64% or Ireland's 67%, both of whom are facing economic turbulence of their own.
Our debt levels will only worsen in the next few years as we embark on record levels of infrastructure spending such as the RM53 billion Klang Valley MRT project which is expected to be funded entirely on debt.
Wages and Pensions
At the same time, our public sector expenditure is increasingly mirroring that of the European countries with ballooning civil service obligations. The budgeted expenditure for wages and pensions for 2012 is a whopping RM64.1 billion, an increase of RM6.2 billion or 10.8% budgeted for 2011. The increase is even more worrying when contrasted against the budgeted RM36.9 billion 2007, a 73.7% increase in just 5 years.
The GTP had promised a more efficient and cost effective government and civil service. What we are seeing from the Budget is only on which is indebting our children, entrenching our structural problems and very weak expenditure controls.
Economic Growth
Despite the Governments efforts in the ETP, our manufacturing and export statistics paint a starkly different picture.
Our export sector grew a miserly 2.7% in 2011 against 13.2% in 2010. However, we should be further alarmed by the fact that the growth was a result of increased contributions from exports of rubber, paper, textiles, clothes and shoes which grew in excess of 15%, and the petroleum products by 9.3%. Our electrical and electronics sector, which constitutes 26.4% of our total exports industry shrunk by 4.9% in 2011.
From the above indicators, there appears to be a shift away from higher value-added export sectors to the primary products industry such as rubber, wood, textiles and crude oil. This is the exact reverse of what we are trying to achieve via the ETP.
Budget deficit
Based on the Economic Report, we are expected to meet our deficit target of 5.4% for this year only because our revenues had grown beyond the expected in the 2010 budget due to very strong commodity prices. The Government has managed to collect RM21.1 billion of extra revenue on top of the originally budget RM165.8 billion. If not for the unexpected increase in government revenue, our budget deficit would have been a shocking 7.9%.
The Government is planning a 4.7% deficit for 2012, a figure which doesn't give hope that the 2.5% deficit target promised by Najib can be met by 2015. Even then, based on poor expenditure controls and the habitual ad hoc expenditure patterns of past BN governments, even meeting the 4.7% target will be a challenge, especially if commodity prices were to fall below expectations next year.
Optimistic projections
Finally, despite having achieved on 4.2% growth in the first half of 2011, and a slowing global economy in the face of another potential economic crisis, the Government has retained its unrealistic growth assumptions of 5.0 to 5.5%. To meet the target, Malaysia's economy will have to grow by at least 5.7% in the 2nd half of the year, which is highly optimistic to say the least.
The Federal Government's unrealistic expectations coupled with a budget which failed to demonstrate substantive reforms and political will for change makes the 2012 budget a highly disappointing and puts in serious doubt our ability to become a high income nation as aspired in Najib's New Economic Model.
The expectations were high for a pre-election budget where Datuk Seri Najib Abdul Razak will stamp his “reformist” credentials. It is for the Prime Minister to put into action the various reform pledges made in his cornerstone policy blueprints – the New Economic Model (NEM), Government Transformation Programme (GTP) and the Economic Transformation Programme (ETP).
However, the announcement of the budget left much to be desired as little has changed beyond tweaking the budget of the previous financial year. Instead what is perhaps the most worrying is that Malaysians are like the proverbial frog in the hot soup – where the frog does not realise the soup is slowly but surely reaching the boiling point.
We may not yet be facing the crisis of Greek proportions, but Budget 2012 is doing very little to avert such eventuality, leaving the Malaysian economy nakedly exposed to the inevitability.
Federal Government Debt
Our Federal Government debt has increased rapidly from RM242 billion in 2004 to RM363 billion in 2009 and RM456 billion in 2011. That represents a marked 88.4% increase in debt over the past 7 years. It is also an increase of 25.6% or nearly RM100 billion over 2 years.
The increase in debt has increased the pressure on reigning in our budget deficit as our annual debt service commitments have increased to RM20.5 billion next year from only half the amount 5 years ago in 2007.
While our federal government debt to GDP ratio is still at a moderate 53.8%, a far cry from Greece's 117%, we are not far from Spain's 64% or Ireland's 67%, both of whom are facing economic turbulence of their own.
Our debt levels will only worsen in the next few years as we embark on record levels of infrastructure spending such as the RM53 billion Klang Valley MRT project which is expected to be funded entirely on debt.
Wages and Pensions
At the same time, our public sector expenditure is increasingly mirroring that of the European countries with ballooning civil service obligations. The budgeted expenditure for wages and pensions for 2012 is a whopping RM64.1 billion, an increase of RM6.2 billion or 10.8% budgeted for 2011. The increase is even more worrying when contrasted against the budgeted RM36.9 billion 2007, a 73.7% increase in just 5 years.
The GTP had promised a more efficient and cost effective government and civil service. What we are seeing from the Budget is only on which is indebting our children, entrenching our structural problems and very weak expenditure controls.
Economic Growth
Despite the Governments efforts in the ETP, our manufacturing and export statistics paint a starkly different picture.
Our export sector grew a miserly 2.7% in 2011 against 13.2% in 2010. However, we should be further alarmed by the fact that the growth was a result of increased contributions from exports of rubber, paper, textiles, clothes and shoes which grew in excess of 15%, and the petroleum products by 9.3%. Our electrical and electronics sector, which constitutes 26.4% of our total exports industry shrunk by 4.9% in 2011.
From the above indicators, there appears to be a shift away from higher value-added export sectors to the primary products industry such as rubber, wood, textiles and crude oil. This is the exact reverse of what we are trying to achieve via the ETP.
Budget deficit
Based on the Economic Report, we are expected to meet our deficit target of 5.4% for this year only because our revenues had grown beyond the expected in the 2010 budget due to very strong commodity prices. The Government has managed to collect RM21.1 billion of extra revenue on top of the originally budget RM165.8 billion. If not for the unexpected increase in government revenue, our budget deficit would have been a shocking 7.9%.
The Government is planning a 4.7% deficit for 2012, a figure which doesn't give hope that the 2.5% deficit target promised by Najib can be met by 2015. Even then, based on poor expenditure controls and the habitual ad hoc expenditure patterns of past BN governments, even meeting the 4.7% target will be a challenge, especially if commodity prices were to fall below expectations next year.
Optimistic projections
Finally, despite having achieved on 4.2% growth in the first half of 2011, and a slowing global economy in the face of another potential economic crisis, the Government has retained its unrealistic growth assumptions of 5.0 to 5.5%. To meet the target, Malaysia's economy will have to grow by at least 5.7% in the 2nd half of the year, which is highly optimistic to say the least.
The Federal Government's unrealistic expectations coupled with a budget which failed to demonstrate substantive reforms and political will for change makes the 2012 budget a highly disappointing and puts in serious doubt our ability to become a high income nation as aspired in Najib's New Economic Model.
Thursday, August 25, 2011
MRT: Bumi Quota
MRT Bumi quota shows NEM like NEP, say Pakatan leaders
By Boo Su-Lyn August 24, 2011
KUALA LUMPUR, Aug 24 — The 30 per cent Bumiputera quota for the Klang Valley Mass Rapid Transit (MRT) construction packages shows that the New Economic Model (NEM) is no different than the New Economic Policy (NEP), Pakatan Rakyat (PR) lawmakers charge.
Syarikat Prasarana Negara Bhd (Prasarana) said yesterday that the nation’s largest construction project ever will have fixed reservations for Bumiputera.
The MRT is due to begin operations in January 2017.
“This proves beyond doubt that the NEM is not in the least bit different from the NEP,” DAP publicity chief Tony Pua told The Malaysian Insider last night.
“All the associated problems arising and related to the NEP over the past few decades — such as declining competitiveness, brain drain — will continue to be aggrieved, if not made worse, by such policies,” added the Petaling Jaya Utara MP.
Abdul Malik Azman, Prasarana’s head of the MRT Procurement Management Department, told The Malaysian Insider that the quota was part of the government’s “national agenda”.
The Malaysian Malay Chamber of Commerce and Industry and also Malay rights groups had previously demanded Prasarana’s stringent contractors requirements were relaxed so that more Bumiputera companies qualified.
Read the full article at The Malaysian Insider here.
By Boo Su-Lyn August 24, 2011
KUALA LUMPUR, Aug 24 — The 30 per cent Bumiputera quota for the Klang Valley Mass Rapid Transit (MRT) construction packages shows that the New Economic Model (NEM) is no different than the New Economic Policy (NEP), Pakatan Rakyat (PR) lawmakers charge.
Syarikat Prasarana Negara Bhd (Prasarana) said yesterday that the nation’s largest construction project ever will have fixed reservations for Bumiputera.
The MRT is due to begin operations in January 2017.
“This proves beyond doubt that the NEM is not in the least bit different from the NEP,” DAP publicity chief Tony Pua told The Malaysian Insider last night.
“All the associated problems arising and related to the NEP over the past few decades — such as declining competitiveness, brain drain — will continue to be aggrieved, if not made worse, by such policies,” added the Petaling Jaya Utara MP.
Abdul Malik Azman, Prasarana’s head of the MRT Procurement Management Department, told The Malaysian Insider that the quota was part of the government’s “national agenda”.
The Malaysian Malay Chamber of Commerce and Industry and also Malay rights groups had previously demanded Prasarana’s stringent contractors requirements were relaxed so that more Bumiputera companies qualified.
Read the full article at The Malaysian Insider here.
Saturday, August 13, 2011
Tajuddin settlement proof political patronage alive and well
Tajuddin settlement proof political patronage alive and well, says Pakatan
By Shannon Teoh August 11, 2011
KUALA LUMPUR, Aug 11 —Pakatan Rakyat (PR) has flayed Putrajaya’s decision to drop all claims against Tan Sri Tajuddin Ramli, calling it proof that Barisan Nasional (BN) is resorting to political patronage to fund its war chest ahead of the next general election.
Opposition lawmakers said the out-of-court settlement was a “scratch-your-back, you-scratch-mine” deal that would allow the former chairman of Malaysia Airlines (MAS) to further reduce an initial RM1.8 billion owed to state-owned debt restructuring firm Danaharta.
[...]
DAP publicity chief Tony Pua also said that “this shows that political patronage is alive and well in the country.”
“This sounds the death knell of Datuk Seri Najib Razak’s New Economic Model and Economic Transformation Programme when the prime minister can allow cronies to get away at the expense of public interest,” the Petaling Jaya Utara MP said.
He added that as 37 other parties were told to drop suits against Tajuddin, a poster boy of the Mahathir-era policy to raise Malay corporate captains on government largesse, total funds including interest lost to the public could be in the tens of billions.
The Malaysian Insider reported today that Putrajaya has directed all government-linked companies, including MAS and Danaharta, to cease all civil suits against Tajuddin.
For the full article on The Malaysian Insider, click here.
By Shannon Teoh August 11, 2011
KUALA LUMPUR, Aug 11 —Pakatan Rakyat (PR) has flayed Putrajaya’s decision to drop all claims against Tan Sri Tajuddin Ramli, calling it proof that Barisan Nasional (BN) is resorting to political patronage to fund its war chest ahead of the next general election.
Opposition lawmakers said the out-of-court settlement was a “scratch-your-back, you-scratch-mine” deal that would allow the former chairman of Malaysia Airlines (MAS) to further reduce an initial RM1.8 billion owed to state-owned debt restructuring firm Danaharta.
[...]
DAP publicity chief Tony Pua also said that “this shows that political patronage is alive and well in the country.”
“This sounds the death knell of Datuk Seri Najib Razak’s New Economic Model and Economic Transformation Programme when the prime minister can allow cronies to get away at the expense of public interest,” the Petaling Jaya Utara MP said.
He added that as 37 other parties were told to drop suits against Tajuddin, a poster boy of the Mahathir-era policy to raise Malay corporate captains on government largesse, total funds including interest lost to the public could be in the tens of billions.
The Malaysian Insider reported today that Putrajaya has directed all government-linked companies, including MAS and Danaharta, to cease all civil suits against Tajuddin.
For the full article on The Malaysian Insider, click here.
Monday, May 09, 2011
1Malaysia Email: Truth & Lies (II)
I had taken the opportunity to read every word in the advertorial placed by PEMANDU to explain and justify the “1Malaysia Email Project” controversy across all major newspapers and even news portals yesterday.
I also read with interest the repeated assertions with regards to “misrepresentations spewed by the vocal minority”. Datuk Idris Jala had clarified that “the reason why PEMANDU is clarifying this situation is to make sure that the general public is not misinformed by people who distort the truth” and that “PEMANDU believes in integrity and transparency.”
I am not sure if I’m included in this exclusive circle of “vocal minority” who is “bent on distorting the truth”, and I shall not be so bold as to think that the criticisms are directed at me. However, after reading the “comprehensive” reply, I’m felt compelled to compile my own list of “frequently asked questions” (FAQs) on “truths and lies about MyEmail”
Q1: Is the “1Malaysia Email Project” a Government initiative or a private initiative?
Fact #1: Tricubes issued a statement on Bursa Malaysia on 4 April 2011 “The Board of Directors of TRICUBES wishes to announce that the Company has on 4 April 2011 accepted the appointment by the Government of Malaysia represented by Malaysian Administrative Modernisation and Management Planning Unit (“MAMPU”) vide MAMPU's letter of award dated 29 March 2011 to implement the 1Malaysia Email Project. TRICUBES will enter into a definitive agreement with Government of Malaysia to finalise the detailed terms and conditions of the appointment in due course.”
Fact #2: The original text description of the project on PEMANDU website says “The 1Malaysia Email project is a government initiative in providing a unique and official email account and ID for the citizens of Malaysia”. After the initial public outcry, the description was however changed to “The 1Malaysia Email project which features the domain name of ‘myemail.my’ is a private sector initiative led by Tricubes Berhad to provide a unique and official email account and user ID for interested citizens of Malaysia.”
Fact #3: Datuk Idris Jala now reclarifies that “it was always seen as a Government initiative, funded by the private sector”. The Advertorial also added that “a competitive selection process was undertaken [by MAMPU and GITN] to ensure high technical standards and the right business model are adopted at the lowest cost and highest quality. The evaluation team [from MAMPU and GITN] selected Tricubes Berhad based on these criteria.”
Truth or Lie?
The “facts” above issued by PEMANDU and Tricubes is riddled with contradictions which are self-explanatory. What is the truth and which is the lie?
Q2: Is there a “concession” or not in the 1Malaysia Email award?
Fact #4: PEMANDU says “MyEmail is neither a concession nor a long-term commitment which binds the Government to use it for all its correspondences to the public… If there is any company that can come up with a better, cheaper and even more secure email service, the Government and public agencies are completely at liberty to use their services instead of Tricubes.
Fact #5: PEMANDU claimed “the selection process is merely an assessment to find out which company would likely succeed in rolling out the email service based on its capabilities. It does not mean that other companies cannot offer their own version of the service.
Fact #6: PEMANDU also stated that “however, overlapping projects could lead to waste of resources and that is why the evaluation team only selected one company.”
Truth or Lie?
The Government claims absolutely anyone can offer the “email” services. At the same time, it went through a “competitive selection process” and argued that “overlapping projects could lead to waste of resources” (Fact #3). Tricubes has announced that it’ll be signing a “definitive agreement” with the Government of Malaysia (Fact #1).
So what type of agreement will that be? A “definitive non-binding agreement”? Or certain preferences or advantages will be granted to Tricubes which will not be available to any other companies? What is the truth and which is the lie?
Q3: Will the Government pay nothing for the services?
Fact #7: PEMANDU says “there are a small group of detractors who keep asserting without basis that this project is a waste of public funds. How can this be a waste of public money when not a single sen of public money is or will be spent, while a lot of public money can be potentially saved?”
FACT #8: PEMANDU added that “… Tricubes can generate revenue through service charges to the Government, its agencies and private sector clients as well as users of their value-added services… While the Government will spend money for the services rendered by Tricubes similar to other services it uses, the amount spent will be significantly less than what it is current(ly) spending.”
Truth or Lie?
So will the Government pay or will the Government not pay? What is the truth and which is the lie?
PEMANDU is perhaps misdirected in its response, intentionally or otherwise. The people are asking why pay 50 sen for every email sent? That is “a waste of public funds”. PEMANDU is arguing that the Government doesn’t have to pay for the project, just as the BN Government has argued that the Government need not fork out a single sen to build the various “private” highways. You only pay for it later via toll, as you use the highway, or government compensation.
Q4: Will the Government save RM200 million?
FACT #9: PEMANDU says “the Government benefits because… it can save about 50% of the current cost of sending correspondences. In 10 years, the project can save the four agencies used in the simulations at least RM200 million.”
FACT #10: According to PEMANDU, “Government agencies pay up to RM1 per mail and even RM2 for each returned hardcopy correspondence… when you use the MyEmail platform… cost up to 50 sen per email.”
FACT #11: By outsourcing it, the Government will avoid having to invest RM50 million and avoid spending money operating the email system… It is more cost efficient and effective to use best-in-practice platforms offered by specialised private entities.”
Truth or Lie?
Based on the simulation figures cited by PEMANDU, these 4 agencies alone will issue 400 million emails over 10 years, in order to save at least RM200 million based on RM1 per physical correspondence and 50 sen payable to Tricubes for each email.
Tricubes will hence be investing the assumed RM50 million, gets back RM200 million over 10 years, a 300% return. And if more than 4 Government agencies use the system, then the return will be even higher. Is this ‘outsourcing’ mechanism more cost efficient and effective? Should the Government to trying to save RM200 million or RM350 million, if the so-called MyEmail project is indeed so effective?
Q5: Is 50 sen per email reasonable?
FACT #12: PEMANDU says “the cost saving is derived from the free email delivery. The remaining cost of 50 sen goes towards extracting the information required from the database and presenting them in the respective formats. Most agencies do not possess this system, also known as the digital bill presentment solution.”
FACT #13: PEMANDU says “by investing up to RM50 million in a secure and efficient email system and value-added services over five years, Tricubes can generate revenue through service charges to the Government, its agencies and private sector clients as well as users of their value-added services. The plain email service is free.”
Truth or Lie?
PEMANDU or Tricubes should perhaps come out in the open to say for certain, if the 50 sen per email charge is based on emails delivered to accounts in Tricubes’ database, or is the 50 sen inclusive of setting up the entire hardware and software infrastructure to deliver government bills and notices to an electronic format, or the so-called “digital bill presentment solution”.
They are 2 completely different types of project. The email portion just takes the “output” from the “digital bill presentment solution” and delivers them electronically via email to the account holders. The second involves restructuring and reengineering the billing systems of the Government agencies.
Citibank and Maybank also have “digital bill presentment solutions”, but they can still deliver their statements and bills to account holders via free email accounts like Gmail or Yahoo! Mail. Is Tricubes also responsible for the implementation of “digital bill presentment solutions” in these Government agencies? This is of a vastly different scope from what has been presented about the “1Malaysia Email project” so far.
I can go on raising questions on the points raised in the PEMANDU advertorial. But the above 5 questions alone will give you points to ponder. Am I among the “small minority that has already made up their minds” that “even after [PEMANDU] publish these facts, this small group will continue to reject the facts and find ways and means to distort the truth”, that Datuk Idris Jala is referring to?
I’ve presented the statements made by the Government, PEMANDU and Tricubes itself. Malaysians can decide for themselves, what are the truths and which are the lies. It is unfortunate that I will not be able to spend tax-payers’ monies to publish the above in all major newspapers and portals.
I also read with interest the repeated assertions with regards to “misrepresentations spewed by the vocal minority”. Datuk Idris Jala had clarified that “the reason why PEMANDU is clarifying this situation is to make sure that the general public is not misinformed by people who distort the truth” and that “PEMANDU believes in integrity and transparency.”
I am not sure if I’m included in this exclusive circle of “vocal minority” who is “bent on distorting the truth”, and I shall not be so bold as to think that the criticisms are directed at me. However, after reading the “comprehensive” reply, I’m felt compelled to compile my own list of “frequently asked questions” (FAQs) on “truths and lies about MyEmail”
Q1: Is the “1Malaysia Email Project” a Government initiative or a private initiative?
Fact #1: Tricubes issued a statement on Bursa Malaysia on 4 April 2011 “The Board of Directors of TRICUBES wishes to announce that the Company has on 4 April 2011 accepted the appointment by the Government of Malaysia represented by Malaysian Administrative Modernisation and Management Planning Unit (“MAMPU”) vide MAMPU's letter of award dated 29 March 2011 to implement the 1Malaysia Email Project. TRICUBES will enter into a definitive agreement with Government of Malaysia to finalise the detailed terms and conditions of the appointment in due course.”
Fact #2: The original text description of the project on PEMANDU website says “The 1Malaysia Email project is a government initiative in providing a unique and official email account and ID for the citizens of Malaysia”. After the initial public outcry, the description was however changed to “The 1Malaysia Email project which features the domain name of ‘myemail.my’ is a private sector initiative led by Tricubes Berhad to provide a unique and official email account and user ID for interested citizens of Malaysia.”
Fact #3: Datuk Idris Jala now reclarifies that “it was always seen as a Government initiative, funded by the private sector”. The Advertorial also added that “a competitive selection process was undertaken [by MAMPU and GITN] to ensure high technical standards and the right business model are adopted at the lowest cost and highest quality. The evaluation team [from MAMPU and GITN] selected Tricubes Berhad based on these criteria.”
Truth or Lie?
The “facts” above issued by PEMANDU and Tricubes is riddled with contradictions which are self-explanatory. What is the truth and which is the lie?
Q2: Is there a “concession” or not in the 1Malaysia Email award?
Fact #4: PEMANDU says “MyEmail is neither a concession nor a long-term commitment which binds the Government to use it for all its correspondences to the public… If there is any company that can come up with a better, cheaper and even more secure email service, the Government and public agencies are completely at liberty to use their services instead of Tricubes.
Fact #5: PEMANDU claimed “the selection process is merely an assessment to find out which company would likely succeed in rolling out the email service based on its capabilities. It does not mean that other companies cannot offer their own version of the service.
Fact #6: PEMANDU also stated that “however, overlapping projects could lead to waste of resources and that is why the evaluation team only selected one company.”
Truth or Lie?
The Government claims absolutely anyone can offer the “email” services. At the same time, it went through a “competitive selection process” and argued that “overlapping projects could lead to waste of resources” (Fact #3). Tricubes has announced that it’ll be signing a “definitive agreement” with the Government of Malaysia (Fact #1).
So what type of agreement will that be? A “definitive non-binding agreement”? Or certain preferences or advantages will be granted to Tricubes which will not be available to any other companies? What is the truth and which is the lie?
Q3: Will the Government pay nothing for the services?
Fact #7: PEMANDU says “there are a small group of detractors who keep asserting without basis that this project is a waste of public funds. How can this be a waste of public money when not a single sen of public money is or will be spent, while a lot of public money can be potentially saved?”
FACT #8: PEMANDU added that “… Tricubes can generate revenue through service charges to the Government, its agencies and private sector clients as well as users of their value-added services… While the Government will spend money for the services rendered by Tricubes similar to other services it uses, the amount spent will be significantly less than what it is current(ly) spending.”
Truth or Lie?
So will the Government pay or will the Government not pay? What is the truth and which is the lie?
PEMANDU is perhaps misdirected in its response, intentionally or otherwise. The people are asking why pay 50 sen for every email sent? That is “a waste of public funds”. PEMANDU is arguing that the Government doesn’t have to pay for the project, just as the BN Government has argued that the Government need not fork out a single sen to build the various “private” highways. You only pay for it later via toll, as you use the highway, or government compensation.
Q4: Will the Government save RM200 million?
FACT #9: PEMANDU says “the Government benefits because… it can save about 50% of the current cost of sending correspondences. In 10 years, the project can save the four agencies used in the simulations at least RM200 million.”
FACT #10: According to PEMANDU, “Government agencies pay up to RM1 per mail and even RM2 for each returned hardcopy correspondence… when you use the MyEmail platform… cost up to 50 sen per email.”
FACT #11: By outsourcing it, the Government will avoid having to invest RM50 million and avoid spending money operating the email system… It is more cost efficient and effective to use best-in-practice platforms offered by specialised private entities.”
Truth or Lie?
Based on the simulation figures cited by PEMANDU, these 4 agencies alone will issue 400 million emails over 10 years, in order to save at least RM200 million based on RM1 per physical correspondence and 50 sen payable to Tricubes for each email.
Tricubes will hence be investing the assumed RM50 million, gets back RM200 million over 10 years, a 300% return. And if more than 4 Government agencies use the system, then the return will be even higher. Is this ‘outsourcing’ mechanism more cost efficient and effective? Should the Government to trying to save RM200 million or RM350 million, if the so-called MyEmail project is indeed so effective?
Q5: Is 50 sen per email reasonable?
FACT #12: PEMANDU says “the cost saving is derived from the free email delivery. The remaining cost of 50 sen goes towards extracting the information required from the database and presenting them in the respective formats. Most agencies do not possess this system, also known as the digital bill presentment solution.”
FACT #13: PEMANDU says “by investing up to RM50 million in a secure and efficient email system and value-added services over five years, Tricubes can generate revenue through service charges to the Government, its agencies and private sector clients as well as users of their value-added services. The plain email service is free.”
Truth or Lie?
PEMANDU or Tricubes should perhaps come out in the open to say for certain, if the 50 sen per email charge is based on emails delivered to accounts in Tricubes’ database, or is the 50 sen inclusive of setting up the entire hardware and software infrastructure to deliver government bills and notices to an electronic format, or the so-called “digital bill presentment solution”.
They are 2 completely different types of project. The email portion just takes the “output” from the “digital bill presentment solution” and delivers them electronically via email to the account holders. The second involves restructuring and reengineering the billing systems of the Government agencies.
Citibank and Maybank also have “digital bill presentment solutions”, but they can still deliver their statements and bills to account holders via free email accounts like Gmail or Yahoo! Mail. Is Tricubes also responsible for the implementation of “digital bill presentment solutions” in these Government agencies? This is of a vastly different scope from what has been presented about the “1Malaysia Email project” so far.
I can go on raising questions on the points raised in the PEMANDU advertorial. But the above 5 questions alone will give you points to ponder. Am I among the “small minority that has already made up their minds” that “even after [PEMANDU] publish these facts, this small group will continue to reject the facts and find ways and means to distort the truth”, that Datuk Idris Jala is referring to?
I’ve presented the statements made by the Government, PEMANDU and Tricubes itself. Malaysians can decide for themselves, what are the truths and which are the lies. It is unfortunate that I will not be able to spend tax-payers’ monies to publish the above in all major newspapers and portals.
Saturday, May 07, 2011
MRT: The Recipe to Over-Pay
The MRT, which is estimated to cost in excess of RM53 billion by CIMB Research is by far the country’s largest ever infrastructure project.
The Government Transformation Programme (GTP) launched by the Prime Minister, Datuk Seri Najib Abdul Razak himself, and promoted by Pemandu, quoted PEMUDAH which estimated that corruption could cost Malaysia as much as RM10 billion a year, “when business decisions are made for the wrong reasons.”
As one of the key measures to tackle corruption, the GTP specifically sought to “reduce leakages of funds allocated for national development and operational expenditure and ensure transparency in the award of contracts.”
The GTP even quoted a 2007 Survey by Merdeka Centre which revealed that 71% and 54% of corporates and public respectively perceives “no transparency and openness” in “the current procurement process or system used for awarding major government projects”.
Hence the GTP called to “disclose details of government procurement contracts” and recognises the role of public scrutiny to increase accountability and reduce corruption and wastage.
In the written parliamentary reply to me for my oral question on the Gamuda-MMC “project delivery partner (PDP) contract” on 6 April 2011, the Prime Minister confirmed that the contract has been awarded with no price fixed despite claims that the PDP will bear all cost-overruns on the MRT project. It is an oxymoron for Najib to argue that the PDP will bear all cost-overruns when its own project contract value has yet to be finalised, and may be increasing as we speak, as the cost of the MRT project has already ballooned from a budgeted RM36 billion to now, an estimated RM53 billion.
And as first exposed by The Malaysian Insider, initially denied but now admitted by Syarikat Prasarana Negara Bhd (SPNB), the Government’s wholly-owned vehicle to own the MRT project, an “Independent Check Engineer” (ICE) role has been awarded to a consortium led by HSS Integrated Sdn Bhd (HSSI) in a cloak and dagger fashion.
When The Malaysian Insider first exposed the award on 15th April, SPNB Group Managing Director, Shahril Mokhtar immediately refuted the report, claiming that “the appointment of the KVMRT ICE is not finalised. Speculation of the ICE fee quantum at this point will only jeopardise our ability to negotiate competitive fees from the ICE candidates.
However, Syarikat Prasarana Negara Berhad (SPNB) group director for project development Zulkifli Yusoff admitted that an engineering consortium led by HSSI has been on board as an independent check engineer (ICE) since February, clearly contradicting SPNB’s initial response.
What is perhaps of greatest concern to Malaysian tax-payers is the fact that while an ICE should not have an existing relationship with the parties managing the project to ensure independence, HSSI has been the contracting engineers for Gamuda’s double-tracking projects. Furthermore, the speculated 2% consultancy fee on the cost of the entire project, which has yet to be finalised, is substantially above market rates, understood to be in the region of 0.8%.
Based on the above, assuming a RM50 billion project cost, the HSSI consortium will pocket RM1 billion in fees, RM600 million more than the estimated market rate of RM400 million. It also appears that while the Gamuda-MMC joint-venture is meant only to be a “PDP” and all projects are to be awarded by SPNB, the PDP gets to dictate who gets the contracts for the project, signalling the commencement of crony contract awards for the MRT project.
The above clearly makes a complete mockery of Najib’s so-called reforms via the GTP, and raises the question of how much the Malaysian tax-payers will be over-paying for the MRT project. Given the nature and size of the project, PEMUDAH will need to come up with new and higher estimates on how much corruption and government wastage is costing our economy.
The Government Transformation Programme (GTP) launched by the Prime Minister, Datuk Seri Najib Abdul Razak himself, and promoted by Pemandu, quoted PEMUDAH which estimated that corruption could cost Malaysia as much as RM10 billion a year, “when business decisions are made for the wrong reasons.”
As one of the key measures to tackle corruption, the GTP specifically sought to “reduce leakages of funds allocated for national development and operational expenditure and ensure transparency in the award of contracts.”
The GTP even quoted a 2007 Survey by Merdeka Centre which revealed that 71% and 54% of corporates and public respectively perceives “no transparency and openness” in “the current procurement process or system used for awarding major government projects”.
Hence the GTP called to “disclose details of government procurement contracts” and recognises the role of public scrutiny to increase accountability and reduce corruption and wastage.
It is well established that transparency is crucial for a fair and efficient government procurement process. This is because transparency increases public scrutiny on the procurement process and helps ensure that accountability and well-defined policies, regulations and procedures have been put in place and followed closely…However, the opaque and obtuse management of the RM53 billion MRT project has proven beyond doubt that Najib’s administration is “all talk, and no action”.
People in both public and private sectors are particularly sceptical of unnecessary projects, award decisions that are not made public or sufficiently justified, project delays, contract variations and concealment of substandard work. (GTP pp133-135)
In the written parliamentary reply to me for my oral question on the Gamuda-MMC “project delivery partner (PDP) contract” on 6 April 2011, the Prime Minister confirmed that the contract has been awarded with no price fixed despite claims that the PDP will bear all cost-overruns on the MRT project. It is an oxymoron for Najib to argue that the PDP will bear all cost-overruns when its own project contract value has yet to be finalised, and may be increasing as we speak, as the cost of the MRT project has already ballooned from a budgeted RM36 billion to now, an estimated RM53 billion.
And as first exposed by The Malaysian Insider, initially denied but now admitted by Syarikat Prasarana Negara Bhd (SPNB), the Government’s wholly-owned vehicle to own the MRT project, an “Independent Check Engineer” (ICE) role has been awarded to a consortium led by HSS Integrated Sdn Bhd (HSSI) in a cloak and dagger fashion.
When The Malaysian Insider first exposed the award on 15th April, SPNB Group Managing Director, Shahril Mokhtar immediately refuted the report, claiming that “the appointment of the KVMRT ICE is not finalised. Speculation of the ICE fee quantum at this point will only jeopardise our ability to negotiate competitive fees from the ICE candidates.
However, Syarikat Prasarana Negara Berhad (SPNB) group director for project development Zulkifli Yusoff admitted that an engineering consortium led by HSSI has been on board as an independent check engineer (ICE) since February, clearly contradicting SPNB’s initial response.
What is perhaps of greatest concern to Malaysian tax-payers is the fact that while an ICE should not have an existing relationship with the parties managing the project to ensure independence, HSSI has been the contracting engineers for Gamuda’s double-tracking projects. Furthermore, the speculated 2% consultancy fee on the cost of the entire project, which has yet to be finalised, is substantially above market rates, understood to be in the region of 0.8%.
Based on the above, assuming a RM50 billion project cost, the HSSI consortium will pocket RM1 billion in fees, RM600 million more than the estimated market rate of RM400 million. It also appears that while the Gamuda-MMC joint-venture is meant only to be a “PDP” and all projects are to be awarded by SPNB, the PDP gets to dictate who gets the contracts for the project, signalling the commencement of crony contract awards for the MRT project.
The above clearly makes a complete mockery of Najib’s so-called reforms via the GTP, and raises the question of how much the Malaysian tax-payers will be over-paying for the MRT project. Given the nature and size of the project, PEMUDAH will need to come up with new and higher estimates on how much corruption and government wastage is costing our economy.
1Malaysia Email: Truth & Lies
Pakatan asks why public funds used to defend Tricubes
By Boo Su-Lyn May 06, 2011
KUALA LUMPUR, May 6 — Pakatan Rakyat (PR) today demanded the government explain why public funds were spent to buy newspaper advertorials defending the 1 Malaysia email project when it was a private initiative.
A two-page advertorial headlined “Truths and Lies about MyEmail” by the Performance Management & Delivery Unit (Pemandu) on the controversial project was published in major newspapers today.
[...]
DAP publicity chief Tony Pua similarly denounced Pemandu’s advertorial. “I think it has come to a really silly stage where the government is spending tens of thousands in advertorials to defend a so-called private initiative because ‘Pemandu believes in integrity and transparency’,” said Pua.
“If that’s really the case, then just disclose the request for proposal (RFP) documents from the government as well as the full contract terms and letter of award given to Tricubes. Publish them online and save the tens of thousands of tax-payers’ money,” the Petaling Jaya Utara MP added.
Pemandu refused to divulge the cost of the advertorial when questioned by The Malaysian Insider today. “We have answered your question... I have nothing to add,” Pemandu corporate communication chief Ku Kok Peng told The Malaysian Insider on the phone.
Pemandu also emailed a statement to The Malaysian Insider and said it commissioned the advertorials to “make sure that the general public is not misinformed by people who distort the truth.”
In the advertorial, Pemandu CEO Senator Datuk Seri Idris Jala said Tricubes Bhd would invest 100 per cent of the RM50 million MyEmail project that was conceptualised as an Entry Point Project (EPP) under the Economic Transformation Programme (ETP). Jala also stressed that the government “will not spend a single sen” in the project’s investment and operating costs.
“On the other hand, it is estimated that the government stands to save at least RM200 million over 10 years,” he said.
He explained that government agencies would make savings of almost 50 per cent by paying 50 sen per email to myemail.my accounts, as government agencies currently paid up to RM1 per mail and RM2 for each returned hardcopy correspondence.
Pua pointed out government agencies should instead encourage the public to register their own email accounts. “Now you’re paying 50 sen to someone else to send it [electronically]. Why not send it to (email) addresses provided by people and save the entire RM1?” asked Pua.
[...]
Pua also questioned why the government conducted a selection process if the project was merely a private initiative. “If it’s completely private, [they] don’t need to go through Pemandu or Mampu (Malaysian Administrative Modernisation and Management Planning Unit). Just go to the government department and sell their services,” said Pua.
Jala said today that the selection process was an assessment to find out which company would likely succeed in rolling out the email service. “Other parties who are not selected or did not submit a proposal earlier can still pursue the opportunity if they see a viable business case for it,” said Jala.
[...]
For the full article, read it here.
By Boo Su-Lyn May 06, 2011
KUALA LUMPUR, May 6 — Pakatan Rakyat (PR) today demanded the government explain why public funds were spent to buy newspaper advertorials defending the 1 Malaysia email project when it was a private initiative.
A two-page advertorial headlined “Truths and Lies about MyEmail” by the Performance Management & Delivery Unit (Pemandu) on the controversial project was published in major newspapers today.
[...]
DAP publicity chief Tony Pua similarly denounced Pemandu’s advertorial. “I think it has come to a really silly stage where the government is spending tens of thousands in advertorials to defend a so-called private initiative because ‘Pemandu believes in integrity and transparency’,” said Pua.
“If that’s really the case, then just disclose the request for proposal (RFP) documents from the government as well as the full contract terms and letter of award given to Tricubes. Publish them online and save the tens of thousands of tax-payers’ money,” the Petaling Jaya Utara MP added.
Pemandu refused to divulge the cost of the advertorial when questioned by The Malaysian Insider today. “We have answered your question... I have nothing to add,” Pemandu corporate communication chief Ku Kok Peng told The Malaysian Insider on the phone.
Pemandu also emailed a statement to The Malaysian Insider and said it commissioned the advertorials to “make sure that the general public is not misinformed by people who distort the truth.”
In the advertorial, Pemandu CEO Senator Datuk Seri Idris Jala said Tricubes Bhd would invest 100 per cent of the RM50 million MyEmail project that was conceptualised as an Entry Point Project (EPP) under the Economic Transformation Programme (ETP). Jala also stressed that the government “will not spend a single sen” in the project’s investment and operating costs.
“On the other hand, it is estimated that the government stands to save at least RM200 million over 10 years,” he said.
He explained that government agencies would make savings of almost 50 per cent by paying 50 sen per email to myemail.my accounts, as government agencies currently paid up to RM1 per mail and RM2 for each returned hardcopy correspondence.
Pua pointed out government agencies should instead encourage the public to register their own email accounts. “Now you’re paying 50 sen to someone else to send it [electronically]. Why not send it to (email) addresses provided by people and save the entire RM1?” asked Pua.
[...]
Pua also questioned why the government conducted a selection process if the project was merely a private initiative. “If it’s completely private, [they] don’t need to go through Pemandu or Mampu (Malaysian Administrative Modernisation and Management Planning Unit). Just go to the government department and sell their services,” said Pua.
Jala said today that the selection process was an assessment to find out which company would likely succeed in rolling out the email service. “Other parties who are not selected or did not submit a proposal earlier can still pursue the opportunity if they see a viable business case for it,” said Jala.
[...]
For the full article, read it here.
Monday, May 02, 2011
Muhyiddin & Mahathir: Biggest Obstacles to High Income Nation
Datuk Seri Najib Razak's ambitious goal of becoming a high income nation of US$15,000 per capita by 2020 faces the biggest stumbling blocks in the form of his predecessor Tun Dr Mahathir Mohammed and his likely successor, Tan Sri Muhyiddin Yassin for their strident opposition to a fairer and more inclusive Malaysian society.
The just released World Bank report on brain drain in Malaysia proved beyond doubt that "social injustice" as a result of the New Economic Policy (NEP) was the key reason why hundreds of thousands of the country's best talents had left our shores for greener pastures. The report survey had indicated that 60% of respondents have cited "social injustice" as a key reason for their leaving the country.
In addition, an overwhelming 87% of respondents had suggested that a "paradigm shift away from race-based towards needs-based affirmative action" may entice a migrant to return to Malaysia. At the same time, 82% of respondents also called for "fundamental and positive change in the Government and public sector".
The World Bank model also found that Malaysia would have attracted more than 5 times our Foreign Direct Investment (FDI) at US$15 billion instead of only US$3.8 billion in the 3 years 2007-2009 had we retained our skills base and adopted a more open investment policy regime.
The Report has called for a comprehensive policy on "inclusiveness" to bring back talent into the country and stem the accute outflow of skilled workers as a critical measure to fulfil our goals of becoming a high income nation by 2020.
Prime Minister Najib had taken some initial steps towards greater inclusiveness by defining "1Malaysia" in the Government Transformation Plan (GTP) as the goal where every Malaysian sees themselves as Malaysians first, their race, religion, class and geography second.
The "original" New Economic Model as announced by Najib had called for reforms on the race-based affirmative action system to a need-based one.
However both these initiatives which are crucial towards a more "inclusive" Malaysia were killed with the strident racial supremacy agenda expounded by Najib's Deputy, Muhyiddin and his predecessor, Mahathir.
Muhyiddin made a joke of the "1Malaysia" definition by stating that he's "Malay First" with his now infamous quote "How can I say I'm Malaysian first and Malay second, all the Malays will shun me". He has further aggravated the racial schism with his open endorsement of Utusan Malaysia's "1Melayu, 1Bumi" movement just a week ago.
Mahathir who has on the other hand dismissed the World Bank report "useless" and accused them of being "politically motivated" without even bothering to rebutt any of the results of the study. In fact, Mahathir must take the biggest responsibility for causing the huge drain in talent during his long reign from 1982 to 2003 which has consistently increased to some 1 million people today.
Instead of taking a statesman role to encourage greater racial unity and integration post retirement, Mahathir has chosen to sponsor and be the patron of the increasingly militant Perkasa movement, hell-bent on institutionalise a Malay-dominant society. It was Perkasa rapid rise which had caused Najib to roll back the most critical reforms in NEM needed to achieve a high income nation status.
Najib must pay heed to the advise and warnings presented in the World Bank Report. By remaining in denial, or succumbing to the pressures from Muhyiddin and Mahathir will not only lead to the failure of Talent Corporation, but also Malaysia missing out on our high income nation target.
The just released World Bank report on brain drain in Malaysia proved beyond doubt that "social injustice" as a result of the New Economic Policy (NEP) was the key reason why hundreds of thousands of the country's best talents had left our shores for greener pastures. The report survey had indicated that 60% of respondents have cited "social injustice" as a key reason for their leaving the country.
In addition, an overwhelming 87% of respondents had suggested that a "paradigm shift away from race-based towards needs-based affirmative action" may entice a migrant to return to Malaysia. At the same time, 82% of respondents also called for "fundamental and positive change in the Government and public sector".
The World Bank model also found that Malaysia would have attracted more than 5 times our Foreign Direct Investment (FDI) at US$15 billion instead of only US$3.8 billion in the 3 years 2007-2009 had we retained our skills base and adopted a more open investment policy regime.
The Report has called for a comprehensive policy on "inclusiveness" to bring back talent into the country and stem the accute outflow of skilled workers as a critical measure to fulfil our goals of becoming a high income nation by 2020.
Prime Minister Najib had taken some initial steps towards greater inclusiveness by defining "1Malaysia" in the Government Transformation Plan (GTP) as the goal where every Malaysian sees themselves as Malaysians first, their race, religion, class and geography second.
The "original" New Economic Model as announced by Najib had called for reforms on the race-based affirmative action system to a need-based one.
However both these initiatives which are crucial towards a more "inclusive" Malaysia were killed with the strident racial supremacy agenda expounded by Najib's Deputy, Muhyiddin and his predecessor, Mahathir.
Muhyiddin made a joke of the "1Malaysia" definition by stating that he's "Malay First" with his now infamous quote "How can I say I'm Malaysian first and Malay second, all the Malays will shun me". He has further aggravated the racial schism with his open endorsement of Utusan Malaysia's "1Melayu, 1Bumi" movement just a week ago.
Mahathir who has on the other hand dismissed the World Bank report "useless" and accused them of being "politically motivated" without even bothering to rebutt any of the results of the study. In fact, Mahathir must take the biggest responsibility for causing the huge drain in talent during his long reign from 1982 to 2003 which has consistently increased to some 1 million people today.
Instead of taking a statesman role to encourage greater racial unity and integration post retirement, Mahathir has chosen to sponsor and be the patron of the increasingly militant Perkasa movement, hell-bent on institutionalise a Malay-dominant society. It was Perkasa rapid rise which had caused Najib to roll back the most critical reforms in NEM needed to achieve a high income nation status.
Najib must pay heed to the advise and warnings presented in the World Bank Report. By remaining in denial, or succumbing to the pressures from Muhyiddin and Mahathir will not only lead to the failure of Talent Corporation, but also Malaysia missing out on our high income nation target.
Sunday, May 01, 2011
Najib "In Denial" over Brain Drain
The Talent Corporation is doomed to fail given that Najib is in denial over the World Bank Report on ‘Brain Drain’ in Malaysia
The Prime Minister, Najib was extremely quick and swift to “refute” the conclusions of the World Bank Report on “brain drain” in Malaysia without providing any substantive evidence in doing so. He first denied that the New Economic Policy (NEP) which dictated priority for bumiputeras has led to brain drain. At the same time, he also denied that the NEP and brain drain has resulted in a drop in investment flow into the country.
Najib is obviously in denial because it was his very own “Government Transformation Programme” (GTP) which stated in no uncertain terms that
Is he also saying that World Bank study which conducted a survey on the three top reasons for brain drain in Malaysia where 60% cited “social injustice” as the key reason for brain drain?
Najib has also dismissed the role of NEP and brain drain on our foreign direct investment (FDI) by citing the statistics that FDI had increased to US$9 billion in 2010 from US$1.4 billion in 2009.
Firstly, the fact that a student improved his Mathematics score from 10/100 to 50/100 isn’t something to be celebrated joyously. 2009 marked the 2nd lowest FDI Malaysia has received over the past 20 years, and making an improvement over the sum doesn’t sudden make Malaysia a super attractive FDI destination.
But more importantly, the World Bank Report conduct studies based on trends in Malaysia’s FDI over the past 20 years, and not just the year where we “improved” the most. For example, by comparing FDI over a 3-year period between 2007-2009 and 1990-1992, the World Bank showed that we were the only country in the region where FDI has declined and significantly so (Figure 1.57)! Malaysia’s FDI dropped by 35.5% over the period while all the other countries increased – Indonesia (+23.3%), Philippines (+51.6%), Singapore (+53.8%) and Thailand (+119.0%).
The World Bank Report also conducted was a hypothetical model where it measured Malaysia’s potential relative to performances of other countries in the region (Table 1.1 of the World Bank Report, pp46). It was determined that had Malaysia retained its talent as well as implemented an open investment policy regime, our FDI should be closer to US$15 billion instead of only US$3.8 billion for the 2007-2009 period, or more than 5 times our actual achievement. This proves the severe under-achievement of our potential under the BN administration.
Despite denying the role of NEP on brain drain, Najib did acknowledge that brain drain is indeed a serious issue which needs to be addressed and hence the setting up of Talent Corporation. However, if Najib and the BN administration is steadfast in its refusal to recognise the impact of “social injustice” on talent leaving the country, then all the efforts by Talent Corporation will all go to nought.
Talent Corporation will suffer the same ignominy as the “Brain Gain Programme” under Najib’s predecessor, Datuk Seri Abdullah Ahmad Badawi which failed miserably in attracting returning and stemming the massive outflow of talent. Najib’s instant denial of such a comprehensive and rigourous study by World Bank, and even forgetting about his own GTP is a harbinger of Talent Corporation’s fate.
The Prime Minister, Najib was extremely quick and swift to “refute” the conclusions of the World Bank Report on “brain drain” in Malaysia without providing any substantive evidence in doing so. He first denied that the New Economic Policy (NEP) which dictated priority for bumiputeras has led to brain drain. At the same time, he also denied that the NEP and brain drain has resulted in a drop in investment flow into the country.
Najib is obviously in denial because it was his very own “Government Transformation Programme” (GTP) which stated in no uncertain terms that
“An unintended outcome of the National Economic Policy (NEP) was a sense of deprivation, discrimination and even resentment felt by the non-Bumiputeras, which was attributed to the over-zealous attitude and approach in implementation by some officers in certain agencies. There has also been a widening of the income gap within the Bumiputera community, leading to rising discontent amongst certain segments of that community. These factors have pushed many Malaysians, especially professionals, to work and reside overseas, in economically more advanced countries with attractive pull factors such as higher income, wider exposure and opportunities, better quality of life and education for their children. May have chosen to settle permanently, and there are signs that this brain drain has become increasingly serious. It is imperative that these issues […] are addressed, as not only is our economy’s competitiveness, stability and sustainability at stake, but continued widening and rising disparities will jeopardize national unity.”Is Najib now saying that the GTP got it completely wrong?
Is he also saying that World Bank study which conducted a survey on the three top reasons for brain drain in Malaysia where 60% cited “social injustice” as the key reason for brain drain?
Najib has also dismissed the role of NEP and brain drain on our foreign direct investment (FDI) by citing the statistics that FDI had increased to US$9 billion in 2010 from US$1.4 billion in 2009.
Firstly, the fact that a student improved his Mathematics score from 10/100 to 50/100 isn’t something to be celebrated joyously. 2009 marked the 2nd lowest FDI Malaysia has received over the past 20 years, and making an improvement over the sum doesn’t sudden make Malaysia a super attractive FDI destination.
But more importantly, the World Bank Report conduct studies based on trends in Malaysia’s FDI over the past 20 years, and not just the year where we “improved” the most. For example, by comparing FDI over a 3-year period between 2007-2009 and 1990-1992, the World Bank showed that we were the only country in the region where FDI has declined and significantly so (Figure 1.57)! Malaysia’s FDI dropped by 35.5% over the period while all the other countries increased – Indonesia (+23.3%), Philippines (+51.6%), Singapore (+53.8%) and Thailand (+119.0%).
The World Bank Report also conducted was a hypothetical model where it measured Malaysia’s potential relative to performances of other countries in the region (Table 1.1 of the World Bank Report, pp46). It was determined that had Malaysia retained its talent as well as implemented an open investment policy regime, our FDI should be closer to US$15 billion instead of only US$3.8 billion for the 2007-2009 period, or more than 5 times our actual achievement. This proves the severe under-achievement of our potential under the BN administration.
Despite denying the role of NEP on brain drain, Najib did acknowledge that brain drain is indeed a serious issue which needs to be addressed and hence the setting up of Talent Corporation. However, if Najib and the BN administration is steadfast in its refusal to recognise the impact of “social injustice” on talent leaving the country, then all the efforts by Talent Corporation will all go to nought.
Talent Corporation will suffer the same ignominy as the “Brain Gain Programme” under Najib’s predecessor, Datuk Seri Abdullah Ahmad Badawi which failed miserably in attracting returning and stemming the massive outflow of talent. Najib’s instant denial of such a comprehensive and rigourous study by World Bank, and even forgetting about his own GTP is a harbinger of Talent Corporation’s fate.
Friday, April 29, 2011
Limp reforms fuelling brain drain
Pakatan: Limp reforms fuelling brain drain
By Shazwan Mustafa Kamal April 29, 2011
KUALA LUMPUR, April 29 — The government’s failure to see through announced reforms were partly to blame for the country’s chronic brain-drain problem, Pakatan Rakyat (PR) lawmakers claimed today
Opposition leaders today said Prime Minister Datuk Seri Najib Razak’s inability to deliver on promises of equality and a “needs-based” economic model, coupled with his “conceding” to ultra-Malay voices within his own party will only result in Malaysia being mired in the middle-income trap.
“Najib is not addressing the critical issues affecting talent in leaving the country... His message of inclusiveness is lost in translation as existing policies are discriminatory against the non-Malays in the country. This has been verified by the proportion leaving the country,” DAP national publicity secretary Tony Pua said today.
According to a World Bank report yesterday, more than one million Malaysians currently live abroad. The report stated that policies favouring the majority Malays were contributing to the country’s brain-drain while holding back its economy and limiting foreign investment.
Today, Pua said Najib’s “U-turn” over his heavily-publicised New Economic Model (NEM) has left little room in the country’s competition for talent.
“The fact is these policies do not encourage competition and a poor economy will deter prospective talents from staying. He has failed in an attempt from moving from a race-based culture to a needs-based,” Pua told The Malaysian Insider.
In a Bloomberg news service report, World Bank senior economist Philip Schellekens was also quoted as saying that foreign investment could be five times the current levels if the country had Singapore’s talent base.
“Migration is very much an ethnic phenomenon in Malaysia, mostly Chinese but also Indian,” Schellekens told Bloomberg in Kuala Lumpur on Tuesday.
Governance issues and lack of meritocracy are “fundamental constraints” to Malaysia’s expansion because “competition is what drives innovation,” he said.
For the full story, read it here.
By Shazwan Mustafa Kamal April 29, 2011
KUALA LUMPUR, April 29 — The government’s failure to see through announced reforms were partly to blame for the country’s chronic brain-drain problem, Pakatan Rakyat (PR) lawmakers claimed today
Opposition leaders today said Prime Minister Datuk Seri Najib Razak’s inability to deliver on promises of equality and a “needs-based” economic model, coupled with his “conceding” to ultra-Malay voices within his own party will only result in Malaysia being mired in the middle-income trap.
“Najib is not addressing the critical issues affecting talent in leaving the country... His message of inclusiveness is lost in translation as existing policies are discriminatory against the non-Malays in the country. This has been verified by the proportion leaving the country,” DAP national publicity secretary Tony Pua said today.
According to a World Bank report yesterday, more than one million Malaysians currently live abroad. The report stated that policies favouring the majority Malays were contributing to the country’s brain-drain while holding back its economy and limiting foreign investment.
Today, Pua said Najib’s “U-turn” over his heavily-publicised New Economic Model (NEM) has left little room in the country’s competition for talent.
“The fact is these policies do not encourage competition and a poor economy will deter prospective talents from staying. He has failed in an attempt from moving from a race-based culture to a needs-based,” Pua told The Malaysian Insider.
In a Bloomberg news service report, World Bank senior economist Philip Schellekens was also quoted as saying that foreign investment could be five times the current levels if the country had Singapore’s talent base.
“Migration is very much an ethnic phenomenon in Malaysia, mostly Chinese but also Indian,” Schellekens told Bloomberg in Kuala Lumpur on Tuesday.
Governance issues and lack of meritocracy are “fundamental constraints” to Malaysia’s expansion because “competition is what drives innovation,” he said.
For the full story, read it here.
Saturday, April 23, 2011
Rent-Seeking a-la-NEM?
Najib and Pemandu must come clean with the “1Malaysia Email Project” details by revealing all terms and conditions of the concession awarded to Tricubes Berhad, and stop digging a deeper hole for themselves with flip-flopping answers
It is almost comical the way our Prime Minister, Datuk Najib Abdul Razak and Pemandu officials are heaping layers of misleading and contradictory statements in an attempt to cover up the “1Malaysia email project” fiasco.
First, Pemandu had to take the trouble to edit the description of the project from a “government initiative” to a “private sector initiative”, despite the fact that Tricubes Bhd has announced on Bursa Malaysia that it was awarded the email project by the Malaysian Administrative Modernisation and Management Planning Unit (Mampu).
Then, Datuk Seri Najib Razak had to assure Malaysians via Twitter that the much-criticised project would not be funded by the government and nor made compulsory.
However, in a radio interview with BFM yesterday, business services NKEA communications content and infrastructure director Dr Fadhlullah Suhaimi Abdul Malek disclosed that government agencies will pay Tricubes Bhd to use the company’s 1Malaysia e-mail database.
Fadhlullah Suhaimi said he expected agencies to pay Tricubes about 50 sen per e-mail, “cheaper than the RM1.00 printing, stationery, postage and dispatch cost of sending a regular letter.”
This disclosure comes as a complete shock to Malaysians because the Prime Minister has assured us that the Government will not be paying a sen for the project! And yet, it is now obvious that the “1Malaysia email project” is a scheme designed to fleece tax-payers monies with a service that is completely unnecessary.
The fact of the matter is the creation of an "official email" account is absolutely unnecessary in "official" dealings with the Government. At this point of time, even Maybank and Citibank are able to send my monthly bank and credit card account statements to my Yahoo or Gmail accounts. I also have no problems receiving my monthly mobile phone bills from Digi Telecommunications. The signing up of a "1Malaysia" account is not only a hassle, it is clearly a barrier created specifically for certain parties to profit.
While Dr Fadhlullah tried hard to justify the project by claiming that Government agencies will only pay 50 sen for each email sent via the 1Malaysia email account as opposed to RM1 for cost of printing and postage, he failed to explain why 50 sen should even be paid when banks and telecommunication companies pay absolutely nothing to send us our bills and statements today without having to set up "special" email accounts!
Clearly the design and nature of the "1Malaysia email project" is to create an artificial need for a concession to provide rent-seeking opportunities for companies which may find it difficult to provide real value-added services in a competitive environment.
Given that the Prime Minister and Pemandu officials have been tripping over each other to provide flip-flopping explanations which repeatedly contradict each other, Pemandu must to the right thing and disclose in full the contract awarded to Tricubes Berhad so that the public can know the full truth.
The failure of Pemandu to do so will only make a mockery of its own Government Transformation Programme (GTP) which calls for the elimination of rent-seeking while increasing transparency and accountability. Pemandu should protect its reputation by calling a spade a spade, and call for the withdrawal of the project which has without a doubt, become an international embarrassment for the Najib administration.
It is almost comical the way our Prime Minister, Datuk Najib Abdul Razak and Pemandu officials are heaping layers of misleading and contradictory statements in an attempt to cover up the “1Malaysia email project” fiasco.
First, Pemandu had to take the trouble to edit the description of the project from a “government initiative” to a “private sector initiative”, despite the fact that Tricubes Bhd has announced on Bursa Malaysia that it was awarded the email project by the Malaysian Administrative Modernisation and Management Planning Unit (Mampu).
Then, Datuk Seri Najib Razak had to assure Malaysians via Twitter that the much-criticised project would not be funded by the government and nor made compulsory.
However, in a radio interview with BFM yesterday, business services NKEA communications content and infrastructure director Dr Fadhlullah Suhaimi Abdul Malek disclosed that government agencies will pay Tricubes Bhd to use the company’s 1Malaysia e-mail database.
Fadhlullah Suhaimi said he expected agencies to pay Tricubes about 50 sen per e-mail, “cheaper than the RM1.00 printing, stationery, postage and dispatch cost of sending a regular letter.”
This disclosure comes as a complete shock to Malaysians because the Prime Minister has assured us that the Government will not be paying a sen for the project! And yet, it is now obvious that the “1Malaysia email project” is a scheme designed to fleece tax-payers monies with a service that is completely unnecessary.
The fact of the matter is the creation of an "official email" account is absolutely unnecessary in "official" dealings with the Government. At this point of time, even Maybank and Citibank are able to send my monthly bank and credit card account statements to my Yahoo or Gmail accounts. I also have no problems receiving my monthly mobile phone bills from Digi Telecommunications. The signing up of a "1Malaysia" account is not only a hassle, it is clearly a barrier created specifically for certain parties to profit.
While Dr Fadhlullah tried hard to justify the project by claiming that Government agencies will only pay 50 sen for each email sent via the 1Malaysia email account as opposed to RM1 for cost of printing and postage, he failed to explain why 50 sen should even be paid when banks and telecommunication companies pay absolutely nothing to send us our bills and statements today without having to set up "special" email accounts!
Clearly the design and nature of the "1Malaysia email project" is to create an artificial need for a concession to provide rent-seeking opportunities for companies which may find it difficult to provide real value-added services in a competitive environment.
Given that the Prime Minister and Pemandu officials have been tripping over each other to provide flip-flopping explanations which repeatedly contradict each other, Pemandu must to the right thing and disclose in full the contract awarded to Tricubes Berhad so that the public can know the full truth.
The failure of Pemandu to do so will only make a mockery of its own Government Transformation Programme (GTP) which calls for the elimination of rent-seeking while increasing transparency and accountability. Pemandu should protect its reputation by calling a spade a spade, and call for the withdrawal of the project which has without a doubt, become an international embarrassment for the Najib administration.
Thursday, April 21, 2011
ETP: RM9.6b plucked from thin air?
Is the Najib administration so desperate to showcase the "success" of the ETP that it has now taken to announcing multi-billion ringgit worth of projects which are nothing more than hot air as at this point of time?
The Prime Minister, Datuk Seri Najib Razak celebrated his 5th "update" by announcing a total of RM11.16 billion worth of projects and claiming that the Economic Transformation Programme (ETP) is right on track.
The Government must be congratulated if it is really able to attract such an amount of projects within a short period of time, especially if it is due to the ETP.
However, upon closer scrutiny of the projects announced, it becomes clear that the numbers quoted provided a skewed and misleading picture of ETP "developments".
Firstly, of the 12 “entry-point projects” (EPPs) in this update, 5 have been previously announced making them a repetition of projects which have already been disclosed.
Secondly, of the RM11.2 billion worth of projects announced, the Karambunai Integrated Resort City project alone constituted RM9.6 billion or a whopping 86% of all the value of all the projects added together!
Thirdly and perhaps most importantly, the value for the Karambunai project appears to be plucked out from thin air for it appears as if nothing has yet been finalised which will justify any announcement to the public!
The Karambunai resort project is led by gaming tycoon Tan Sri Chen Lip Keong’s group of companies on a 1,100ha piece of land, owned by Karambunai Corp Bhd and Petaling Tin Berhad. Tan Sri Chen has substantial shareholdings in both these companies, and is the president of both.
As if on cue after the Prime Minister made his ETP announcement, Petaling Tin Bhd announced on Bursa Malaysia yesterday that it “has not signed any agreement with any parties pertaining to the resort project and there are no corporate developments that warrant future disclosures to the stock exchange at this juncture.”
In other words, Datuk Seri Najib Razak’s boast of the RM11.16 billion EPP projects, including the RM9.6 billion Karambunai Integrated Resort Project is nothing more than a “trial balloon” inflated with hot air!
In fact, even some of the smaller EPPs failed the scrutiny test, such as the RM50 million “1Malaysia email project”, where it now appears that the company which has been awarded the project, Tricubes Bhd, which isn’t only loss making as at this point of time, but is at a risk of being delisted from the ACE market after being issued a GN3 status by Bursa Malaysia.
The project awarded by the Government aims to provide an email account to all Malaysians above the age of 18 is supposed to be privately financed. However, the company which is facing serious financial difficulty has not disclosed how it will even be able to finance the project on its own.
It is disappointing that the Prime Minister, in an attempt to make his administration and the ETP look good to the man-on-the-street, has chosen to boast of projects with dubious economic value, like the “1Malaysia email project” as well as incorporating huge projects with their multi-billion ringgit valuations being plucked out from thin air.
Malaysians want to see real success and real tangible benefits from government policies and projects, and not just listen empty pronouncements made to make the Barisan Nasional government look good.
The Prime Minister, Datuk Seri Najib Razak celebrated his 5th "update" by announcing a total of RM11.16 billion worth of projects and claiming that the Economic Transformation Programme (ETP) is right on track.
The Government must be congratulated if it is really able to attract such an amount of projects within a short period of time, especially if it is due to the ETP.
However, upon closer scrutiny of the projects announced, it becomes clear that the numbers quoted provided a skewed and misleading picture of ETP "developments".
Firstly, of the 12 “entry-point projects” (EPPs) in this update, 5 have been previously announced making them a repetition of projects which have already been disclosed.
Secondly, of the RM11.2 billion worth of projects announced, the Karambunai Integrated Resort City project alone constituted RM9.6 billion or a whopping 86% of all the value of all the projects added together!
Thirdly and perhaps most importantly, the value for the Karambunai project appears to be plucked out from thin air for it appears as if nothing has yet been finalised which will justify any announcement to the public!
The Karambunai resort project is led by gaming tycoon Tan Sri Chen Lip Keong’s group of companies on a 1,100ha piece of land, owned by Karambunai Corp Bhd and Petaling Tin Berhad. Tan Sri Chen has substantial shareholdings in both these companies, and is the president of both.
As if on cue after the Prime Minister made his ETP announcement, Petaling Tin Bhd announced on Bursa Malaysia yesterday that it “has not signed any agreement with any parties pertaining to the resort project and there are no corporate developments that warrant future disclosures to the stock exchange at this juncture.”
In other words, Datuk Seri Najib Razak’s boast of the RM11.16 billion EPP projects, including the RM9.6 billion Karambunai Integrated Resort Project is nothing more than a “trial balloon” inflated with hot air!
In fact, even some of the smaller EPPs failed the scrutiny test, such as the RM50 million “1Malaysia email project”, where it now appears that the company which has been awarded the project, Tricubes Bhd, which isn’t only loss making as at this point of time, but is at a risk of being delisted from the ACE market after being issued a GN3 status by Bursa Malaysia.
The project awarded by the Government aims to provide an email account to all Malaysians above the age of 18 is supposed to be privately financed. However, the company which is facing serious financial difficulty has not disclosed how it will even be able to finance the project on its own.
It is disappointing that the Prime Minister, in an attempt to make his administration and the ETP look good to the man-on-the-street, has chosen to boast of projects with dubious economic value, like the “1Malaysia email project” as well as incorporating huge projects with their multi-billion ringgit valuations being plucked out from thin air.
Malaysians want to see real success and real tangible benefits from government policies and projects, and not just listen empty pronouncements made to make the Barisan Nasional government look good.
Thursday, February 10, 2011
NEM No More?
A confluence of criticisms by a member of the National Economic Action Council (NEAC), a former Minister and the former US Ambassador to Malaysia, together with an announcement by the Prime Minister, Datuk Seri Najib Abdul Razak himself have confirmed the death and irrelevance of the New Economic Model (NEM). Instead, the Government has chosen to extend the lifespan of the New Economic Policy (NEP) with no expiry date in sight.
Reluctant NEAC member Datuk Dr Zainal Aznam Mohd Yusof argued that Najib’s administration has “insufficient political will” to implement the required reforms, and this has resulted in the canning of proposals such as the “Equal Opportunities Commission (EOC)”.
Similarly, the NEM Part II which was intentionally “watered down” reintroduced the NEP’s 30% bumiputera equity target, which was originally rescinded in NEM Part I. Instead the NEM Part I had proposed the “deliberate shifting of affirmative action towards moving down to the bottom 40 per cent.”
Datuk Dr Zainal also added that the appointment of Tan Sri Mohd Isa Samad as the chairman of FELDA with his “track record of graft had raised alarm bells. It was a sad day when Isa was appointed chairperson of Felda.”
At the same conference, former Tourism, Arts and Culture Minister Datuk Seri Abdul Kadir Sheikh Fadzir also lamented that “if the founding fathers could see what is happening now, they will turn in their graves. Corruption is everywhere, you have to bribe people to get things done. Cronyism is everywhere.”
In a reference to Najib’s plans such as the NEM, GTP, ETP etc., he added that “there are beautiful statements (made), but they do not reflect the real state of affairs.”
Similarly, former ambassador to Malaysia, Mr John Mallot wrote in his Wall Street Journal column that “although Mr Najib held out the hope of change a year ago with his New Economic Model, which promised an ‘inclusive’ affirmative action policy that would be, in Mr. Najib’s words, ‘market friendly, merit-based, transparent and needs-based,’ he has failed to follow through.”
What is perhaps most damning for the NEM is Mr Mallot’s prognosis that Malaysians “will continue to vote with their feet and take their money and talents with them. And foreign investors, concerned about racial instability and the absence of meaningful economic reform, will continue to look elsewhere to do business”.
The Prime Minister himself, has chosen the very same day to hold a “Bumiputera Agenda Supreme Council” meeting and announcing the setting up of “Unit Peneraju Agenda Bumiputera” to drive and co-ordinate bumiputera economic participation. This confirms the criticisms that Najib is placing the race agenda above the original intention of the NEM, which was to steer affirmative action programmes towards the bottom 40% of income earners of the population.
Najib is now proving to be a failed reformer, with his much vaunted “Najibnomics” turning out to be nothing more than an endorsement of the controversial NEP which favours the influential elite and a copycat of Mahathir’s mega-projects and privatisation policies of the 1990s.
The concerns raised in the Government Transformation Programme (GTP) and the NEM Part I on the NEP increasing the income disparity between the rich and poor, the sense of discrimination dissatisfaction between races as well as the resulting brain drain will only worsen as a result. While the major infrastructural spending spree will lead to short term stimulation of the economy as happened in the 1990s, history will only repeat itself as we suffered a decade of real income stagnation and falling competitiveness in the 2000s.
It is most unfortunate that the Prime Minister has chosen to pander to vested political interest of race-based extremists groups such as Perkasa, and forsake his opportunity to make his mark by embarking on genuine reforms on Government policies which will reverse the decline in our economic competitiveness.
Reluctant NEAC member Datuk Dr Zainal Aznam Mohd Yusof argued that Najib’s administration has “insufficient political will” to implement the required reforms, and this has resulted in the canning of proposals such as the “Equal Opportunities Commission (EOC)”.
Similarly, the NEM Part II which was intentionally “watered down” reintroduced the NEP’s 30% bumiputera equity target, which was originally rescinded in NEM Part I. Instead the NEM Part I had proposed the “deliberate shifting of affirmative action towards moving down to the bottom 40 per cent.”
Datuk Dr Zainal also added that the appointment of Tan Sri Mohd Isa Samad as the chairman of FELDA with his “track record of graft had raised alarm bells. It was a sad day when Isa was appointed chairperson of Felda.”
At the same conference, former Tourism, Arts and Culture Minister Datuk Seri Abdul Kadir Sheikh Fadzir also lamented that “if the founding fathers could see what is happening now, they will turn in their graves. Corruption is everywhere, you have to bribe people to get things done. Cronyism is everywhere.”
In a reference to Najib’s plans such as the NEM, GTP, ETP etc., he added that “there are beautiful statements (made), but they do not reflect the real state of affairs.”
Similarly, former ambassador to Malaysia, Mr John Mallot wrote in his Wall Street Journal column that “although Mr Najib held out the hope of change a year ago with his New Economic Model, which promised an ‘inclusive’ affirmative action policy that would be, in Mr. Najib’s words, ‘market friendly, merit-based, transparent and needs-based,’ he has failed to follow through.”
What is perhaps most damning for the NEM is Mr Mallot’s prognosis that Malaysians “will continue to vote with their feet and take their money and talents with them. And foreign investors, concerned about racial instability and the absence of meaningful economic reform, will continue to look elsewhere to do business”.
The Prime Minister himself, has chosen the very same day to hold a “Bumiputera Agenda Supreme Council” meeting and announcing the setting up of “Unit Peneraju Agenda Bumiputera” to drive and co-ordinate bumiputera economic participation. This confirms the criticisms that Najib is placing the race agenda above the original intention of the NEM, which was to steer affirmative action programmes towards the bottom 40% of income earners of the population.
Najib is now proving to be a failed reformer, with his much vaunted “Najibnomics” turning out to be nothing more than an endorsement of the controversial NEP which favours the influential elite and a copycat of Mahathir’s mega-projects and privatisation policies of the 1990s.
The concerns raised in the Government Transformation Programme (GTP) and the NEM Part I on the NEP increasing the income disparity between the rich and poor, the sense of discrimination dissatisfaction between races as well as the resulting brain drain will only worsen as a result. While the major infrastructural spending spree will lead to short term stimulation of the economy as happened in the 1990s, history will only repeat itself as we suffered a decade of real income stagnation and falling competitiveness in the 2000s.
It is most unfortunate that the Prime Minister has chosen to pander to vested political interest of race-based extremists groups such as Perkasa, and forsake his opportunity to make his mark by embarking on genuine reforms on Government policies which will reverse the decline in our economic competitiveness.
Wednesday, January 19, 2011
Another BN Land Swap Scam
BN once again failed to protect the interest of the rakyat by ensuring most "value for money" for government assets and contracts by awarding a RM600 million contract without open tender
In a mirror image of the RM682 million contract to construct Malaysia's largest exhibition and convention centre via direct negotiations by the Ministry of International Trade and Industry in November 2009, the Ministry of Health has awarded a RM600 to 700 million contract to Sentosa Jitra Sdn Bhd, a 50% associate of SP Setia Bhd to build 1National Institute of Health (1NIH).
In both cases, the Government is footing the bill via land swap deals. The Matrade International Convention & Exhibition Centre is paid with a 62.5 acres piece of prime land near Mont Kiara to Naza TTDI Sdn Bhd while the 1NIH project is paid with a 40.22 acres piece of prime land along Jalan Bangsar.
In both cases, the estimated value of the land far exceeds the value of the construction contract. Professional valuers have estimated the Naza TTDI land to be worth between RM350 and RM500 per square feet (psf) i.e., a total value between RM970 million to RM1.5 billion. The proposed project on the land is expected to achieve RM10 billion in gross development value (GDV).
Maybank Investment Bank has also estimated the value of land obtained by SP Setia to be worth RM646 to RM1,050 psf based on recently transacted prices in the area, giving a total land value of up to RM1.8 billion. ECM Libra also estimated a GDV of around RM8 billion.
The nature of these contracts only prove that the lack of transparency and good governance practices continue despite all the talk of reform through the hyped up transformation programmes such as the GTP, ETP and NEM.
Why did the Government choose not to tender the respective construction projects without any tenders, open or restricted to ensure that it gets to build the Matrade Centre or the 1NIH at the lowest possible cost?
Why was there no open auction on the Government land which was bestowed upon these private developers to ensure that the Government maximises the value of its assets?
Government losses from these two deals of up to RM1.28 billion combined would have more than offset the "savings" generated from the most recent round of subsidy cuts on essential goods.
In direct contrast to the award of the 1NIH project, the Pakatan Rakyat Penang state government has also recently awarded a contract via open tender to SP Setia to build the RM300 million subterranean Penang International Convention and Exhibition Centre (sPICE) where the developer will only be paid a total of RM50 million. SP Setia has to recoup its investments from managing and operating sPICE during the 30-year concession.
The Prime Minister, Datuk Seri Najib Razak has promised to stamp out “rent-seeking and patronage” under his “New Economic Model” to ensure value-for-money for government expenditure. He has even promised under the “Economic Transformation Programme” to carry out open tenders for big projects. However, the deals which have been awarded by the Government to date fails to live up to Najib’s lofty promises. These deals continue to heavily benefit the big businesses at the expense of the Government, and ultimately the rakyat.
We call upon Datuk Seri Najib to cancel the above transaction and instead call for an open tender to build the proposed 1NIH and conduct an open auction for the 40.22 acres of prime land in Bangsar to not only ensure that the rakyat’s interest is prioritised, but prevent the GTP, ETP and NEM from becoming for all intents and purposes, dead and buried.
In a mirror image of the RM682 million contract to construct Malaysia's largest exhibition and convention centre via direct negotiations by the Ministry of International Trade and Industry in November 2009, the Ministry of Health has awarded a RM600 to 700 million contract to Sentosa Jitra Sdn Bhd, a 50% associate of SP Setia Bhd to build 1National Institute of Health (1NIH).
In both cases, the Government is footing the bill via land swap deals. The Matrade International Convention & Exhibition Centre is paid with a 62.5 acres piece of prime land near Mont Kiara to Naza TTDI Sdn Bhd while the 1NIH project is paid with a 40.22 acres piece of prime land along Jalan Bangsar.
In both cases, the estimated value of the land far exceeds the value of the construction contract. Professional valuers have estimated the Naza TTDI land to be worth between RM350 and RM500 per square feet (psf) i.e., a total value between RM970 million to RM1.5 billion. The proposed project on the land is expected to achieve RM10 billion in gross development value (GDV).
Maybank Investment Bank has also estimated the value of land obtained by SP Setia to be worth RM646 to RM1,050 psf based on recently transacted prices in the area, giving a total land value of up to RM1.8 billion. ECM Libra also estimated a GDV of around RM8 billion.
The nature of these contracts only prove that the lack of transparency and good governance practices continue despite all the talk of reform through the hyped up transformation programmes such as the GTP, ETP and NEM.
Why did the Government choose not to tender the respective construction projects without any tenders, open or restricted to ensure that it gets to build the Matrade Centre or the 1NIH at the lowest possible cost?
Why was there no open auction on the Government land which was bestowed upon these private developers to ensure that the Government maximises the value of its assets?
Government losses from these two deals of up to RM1.28 billion combined would have more than offset the "savings" generated from the most recent round of subsidy cuts on essential goods.
In direct contrast to the award of the 1NIH project, the Pakatan Rakyat Penang state government has also recently awarded a contract via open tender to SP Setia to build the RM300 million subterranean Penang International Convention and Exhibition Centre (sPICE) where the developer will only be paid a total of RM50 million. SP Setia has to recoup its investments from managing and operating sPICE during the 30-year concession.
The Prime Minister, Datuk Seri Najib Razak has promised to stamp out “rent-seeking and patronage” under his “New Economic Model” to ensure value-for-money for government expenditure. He has even promised under the “Economic Transformation Programme” to carry out open tenders for big projects. However, the deals which have been awarded by the Government to date fails to live up to Najib’s lofty promises. These deals continue to heavily benefit the big businesses at the expense of the Government, and ultimately the rakyat.
We call upon Datuk Seri Najib to cancel the above transaction and instead call for an open tender to build the proposed 1NIH and conduct an open auction for the 40.22 acres of prime land in Bangsar to not only ensure that the rakyat’s interest is prioritised, but prevent the GTP, ETP and NEM from becoming for all intents and purposes, dead and buried.
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