Tuesday, November 24, 2009

Crony Piratisation Returns

The Minister and Deputy Minister of Ministry of International Trade and Industry
launches the construction of Malaysia's largest convention centre.

The Prime Minister, Datuk Seri Najib Abdul Razak has announced in his inaugural budget speech on 23 October, “a second wave of privatisation” on the pretext of reducing government expenditure. There was then an immediate fear of a return to the glorious days of old where billions of privatisation projects were dished out to people who were connected, or who were acting on behalf of the country's political elite.

It took no more than a month for the fears to come true as among the first of these privatisation projects by the Government was the construction of Malaysia's largest convention centre by the Ministry of International Trade and Industry (MITI) with a gross development value (GDV) of RM15 billion. This project was awarded to Naza TTDI Sdn Bhd via direct negotiations, and in exchange, the company was 2.8 million sq ft of prime land near Mont Kiara worth some RM628 million.

Naza TTDI made RM86 million in profits last year on revenue of RM239 million. Formerly known as TTDI Development Sdn Bhd, it had to be bailed out by Danaharta in 2001 before it got acquired by the late Tan Sri Nasimuddin Amin, the founder of the Naza Group famous for its automotive trading business. The question is, on what basis was Naza awarded this new mega-project, especially given the fact that there are many other equally, if not bigger and more competent and experienced contruction companies and property developers in the Malaysian market?

The late Tan Sri Nasimuddin Amin was infamous for being one of the 4 “AP Kings” who monopolised the issuance of “approved permits” from MITI to import foreign cars into Malaysia and made hundreds of millions, if as a result when the scandal was first exposed in 2005. It appears that today his sons who has taken over the Group has continued the cozy relationship with MITI to be awarded the mega “Matrade Convention Centre” without any competitive tender.

This award flies in the face of what Datuk Seri Najib has promised us first, when he was newly appointed the Finance Minister in November 2008, and confirmed again, after he became the Prime Minister in April 2009 a commitment to the “open tender” system.

It was reported in The Star, 5 November 2008:
Open tenders to ensure transparency and value for money as well as to generate more income will be the way forward for the Government. Deputy Prime Minister Datuk Seri Najib Tun Razak said the Government would ensure that a large portion of government procurement would be via open and restricted tenders... Najib said that the Government planned to maximise income on all its existing assets, including on parcels of land that have not been developed, via open tender.
It was reported in The Star, 21 April 2009:
[Najib] said this method [direct negotiations] of awarding contracts should be replaced with open or restricted tenders. “Opting for the tender system will curb corruption and bring back the people’s confidence in the Government.”
When I posed the above questions to the Deputy Finance Minister, Datuk Seri Awang Adek on Thursday last week during the committee stage debate on the Ministry of Finance, on why this project was not awarded via open tender, he could only reply that he's not aware of the project as this is a “privatisation exercise” which falls under the office of the Prime Minister, and directed that I enquire with the PM's Department instead.

We have also been informed via reliable sources that the next similar privatisation project will involve 6.5 million sq ft (150 acres) of land at Jalan Cochrane to an MRCB joint venture with an estimated GDV of RM15 billion.

Hence it appears that the Prime Minister has failed to heed his own advice in the privatisation of the above mega-projects, directly failing his own “key performance index” (KPI) in promoting integrity and curbing corruption. This is also the likely reason why there was a total silence of the concept of “open tender” in the Budget 2010 announcement despite its critical role in bring about better governance in Malaysia.

We call upon Datuk Seri Najib to re-tender the above projects to select the best contractor or developer who could provide the highest level of services at the lowest possible price in the shortest possible time to ensure that the interest of the Government is fully protected. Failing which, we demand that all ministerial papers relating to the above projects be declassified and tabled in parliament to proof that all necessary due diligence has been conducted with no inflated cost to the government or inflated profits to the concessionaire.

We must prevent another episode of the Port Klang Free Zone (PKFZ) which was a privatisation project via direct negotiations mired with incompetence, abuse of power and wanton recklessness, resulting not only in the Government purchasing land worth RM10 per sq ft at RM42 psf, and the project cost escalating from an initial RM1.8 billion to a potential RM12.5 billion all within 7 years.

If the Prime Minister cannot even commit to his own promises to the people on a straightforward issue of open tenders to uphold integrity and transparency, then it'll certainly be harder for him to fulfil his other promises to the people under the slogan of “people first, performance now”.


Anonymous said...

First PKFZ

Then Auditor-General's Report

Now Matrade deal

Let the scandals go on and on....

I will know who to vote in GE13.

Anonymous said...


Under 1Malaysia there's only 1Tender system and that is one tender from one party. It's for the mega projects.

The mini projects are for open tenders. Let the small boys fight tooth and nails to win them.

As for them they just laugh their ways to the bank and enjoy the luxury of life stolen from the poors and the majority are the Malays in the kampungs eating salted rotten fishes only and die of cancer cause by the carcinogenic salted fish.

I wonder will they house all the poors in the largest convention centres.

It only makes me puke!

Anonymous said...

Look at who are smiling and who are not in the picture...a sign of where the $$$ are going???

Talk is cheap, we need real action - if not, M'sians will end up...

Anonymous said...

The question is, on what basis was Naza awarded this new mega-project, especially given the fact that there are many other equally, if not bigger and more competent and experienced contruction companies and property developers in the Malaysian market?

Can you please share the names of the construction companies other than NAZA? I'm interested to know for my better understanding.

Anonymous said...

How NAZA-TTDI going to finance this RM15Bil project?Is the govt going to provide some soft loan? Inthat case,why not go for open tender?The piece of exchange land,why not also tender to highest bidder to get value for money?What course of action can be taken against NAZA-TTDI if they failed to deliver and the land already alienated to them?Remember the MATRADE Bldg project where govt got to fork out so much extra fund to get it delivered.Remember the PKFZ scandal?

Anonymous said...

The pirate of Malaysia aka BN/UMNO will continue to do as they like as though this country just belong to them.
Say what you like YB, The pirate will strategize their daylight robbery of the nation's wealth and who cares!!!
Just wait and see many more robberies will take place if PAKATAN do not make noise in parliament and mobilize the rakyat.

Anonymous said...

They are going to plunder the country dry. Arrogantly they don't even care one bit if anyone is going to shout till their lungs comes out.
Now we always read people commenting, cursing and screaming over the blog about how bloody unfair these umno goons are.
Is that gonna help. I suggest if people feel about umno's plundering ways, they should step out and be counted. Get your family, friends reg. as voters, make sure who they vote. Make list of umno/bn "crimes", eg The Judiciary, PKFZ, MACC,Musa Hassan, Perak fiasco and so on. These things can't continue to go on. If you are not doing it for youself, do it for your children.The RAKYAT must stop them.

Anonymous said...

At least malaysia is number one in
'blowing water'.
All is 'NATO',no action talk only

Anonymous said...

Well! What do you expect. This PM is making hay while the sun shines, before Altantuya and Bala buries him!
All those talk about 1Malaysia, people first, performance now is to placate those believeing fools that we call ourselves, the rakyat!

Christopher Yap said...

The question all of us should be asking is "Why on earth do we need so many convention centres in the Klang Valley???"

Paramount view said...

Yes, this surely impact us as malaysians bcoz we pay our tax and yet there r all this corruption from mega projects. But what about purchasers of Paramount View Condominium located under the Selangor state government? The project is impacted because the politicians took control of the MBPJ Councilors to get political interest for their ownselves. If Najib failed to maintain his KPI, then u are not anywhere efficient in keeping your slogan as in Serving the Rakyat. We purchasers of Paramount View ( http://paramountview.blogspot.com ) is suffering from all this.

Anonymous said...

Classic. First 'Some Animals are more equal to others'. Then 'Some Pigs are more Equal than other pigs'. George Orwell could not have imagined that Malaysia would be a shining example of his work...

kl_boy said...

Sorry Tony but I think Pakatan's chances of getting to the Putrajaya is a long way to go. If you notice, most of those posting comments on blogs are from the urban areas with multiple news source to check information. The rural folks are normally not bothered about this MATRADE, PKFZ issue as their pockets are not involved here. Notice how happy they are whenever there is an election in town as this is way they can get their 'goodies' (which is very basic) like RM300, new roads, more kebajikan schemes from BN.
Also, many of them tend to vote based on their emotions then and not this 'orang bandar' issue. That's why you will see that most senior BN members stand in rural areas as it is very easy for them to gain the necessary votes and therefore maintain their grip on the gravy train. How many ministers have you seen that comes from an urban area like PJ, Subang etc and stay in Parliament as long as those dinosaurs. Until the day when there is no 'sweets' to give ppl will then the rural folks eyes be open (that is if they have not been brain-washed from our screwed up education system)

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