Wednesday, June 30, 2010

Trip To Australia

Hi all, I'm in the midst of planning a trip to Australia, more specifically the cities of Adelaide, Melbourne and Sydney for about 8-9 days starting 18 September.

If there are Malaysians, university students or working professionals who would like to help organise a gathering/forum cum a mini-fundraiser in these cities, please do contact me so that I can make the necessary arrangements. I can be reached at

It will be my first trip to these cities. See you at the Land Down Under! ;-)

The Perfect Scam?

Will Kuala Dimensi Sdn Bhd (KDSB) get away scot free for not paying RM328 million in outstanding taxes?

The Port Klang Authority (PKA) is due to pay the next instalments amounting to RM772 million in 2010 to various bondholders on behalf of Kuala Dimensi Sdn Bhd (KDSB). The latter which is owned by Barisan Nasional Backbencher's Chairman in parliament, Datuk Seri Tiong King Sing, is the main contractor for the controversial Port Klang Free Zone (PKFZ) white-elephant project which may cost the government up to RM12.5 billion.

Despite the fact that PKA has sued KDSB for up to RM1.4 billion for fraudulent and excess claims last year, the former was instructed by the Ministry of Finance to make an instalment payment of RM660 million in 2009 due to the fact that the former Minister of Transport, Tan Sri Chan Kong Choy, having provided a guarantee to the bonds raised by KDSB.

However, it has now been discovered that KDSB has outstanding taxes due to Inland Revenue Board (IRB) amounting to RM328.4 million. The IRB has in its letter dated 23 June 2010 to PKA instructed that any payments due to KDSB must have the unpaid taxes deducted, and made payable to IRB. The IRB is empowered to do so under the Section 67(4) and 68(1) of the Income Tax Act 1967.

PKA has accordingly informed the various KDSB bondholders of its intent to withhold 2 payments – RM230 million due on 30 June 2010 and RM120 million due in July 2010 – for the purposes of settling the outstanding income taxes of KDSB.

The KDSB bondholders are understandably upset with the development as there is a likelihood tha they may not be paid for the loans extended to KDSB. However, based on the previous action taken by the Ministry of Finance, they will once again insist that PKA make full payments amounting to RM772 million to the bondholders to fulfil the “guarantee” which has been provided by the Government by virtue of the letters of guarantee signed by Tan Sri Chan Kong Choy.

In such eventuality, the result will then be the “perfect scam” of the century where the IRB gets to collect its taxes, the bondholders get to recover their “investment” with interest, while KDSB escapes from all its obligations without having to fork out a single sen of tax.

Since PKA has paid IRB on KDSB's behalf from the payments due to the bondholders, IRB will not need to sue Datuk Seri Tiong King Sing and KDSB to recover the outstanding taxes. At the same time, since the Ministry of Finance feels obliged to honour the dubious letters of guarantee issued by Tan Sri Chan Kong Choy despite a RM1.4 billion pending legal suit by PKA against KDSB, the bondholders will get paid their dues. Hence there will be no need for the lenders to sue Datuk Seri Tiong King Sing and KDSB to recover their outstanding loans.

The complete burden amounting to billions of ringgit is shifted to the hapless and helpless rakyat who are forced pay for the follies of the Barisan Nasional government, enriching KDSB and its shareholders while those possibly guilty of criminal breach of trust such as Tan Sri Chan Kong Choy gets away scot free. This is the perfect exemplification of a “people first” government.

Tuesday, June 29, 2010

CyberCafe Virtual Casinos: Local Councils or Police?

This was the press conference yesterday with MP for Rasah, Anthony Loke rebutting the snide remarks made by MCA Vice-President, Senator Gan Ping Sieu who said it was a "shame" that the Government has backtracked on its decision to issue the sports betting license to Vincent Tan's company, Ascot Sports Sdn Bhd. He then hit out at Pakatan state government local councils for not doing enough to curb illegal gambling at cybercafes, as if there are no illegal gambling sites in Johor, Negeri Sembilan or Perak.

It's the police's role to fight illegal gambling and charge the criminals, and not the local councils, who only have jurisdiction over business licenses. But of course, Senator Gan will have no courage to hit out at Datuk Seri Hishamuddin's Home Affairs Ministry.

For the full report on the press conference, see Malaysiakini or FreeMalaysiaToday.

Land Public Transport Commission Marginalised?

Land Public Transport Commission (SPAD) hamstrung even before its task of revamping and regulating Malaysia's public transport system can commence

The Land Public Transport Commission (SPAD) was first announced by our previous Prime Minister Datuk Seri Abdullah Ahmad Badawi in June 2008. Unfortunately as of today, nearly 2 years later, although the structure of SPAD has been more or less finalised, it's still unable to proceed with its urgent task of revamping, restructuring and regulating our public transport system due to legislative issues.

As the newly appointed Chief Operating Officer, Shahril Mokhtar admitted last Thursday, “we don't have the power just yet”.

What is however most damaging for SPAD, while exposing the Government's lack of coherent policies and actions on public transport is the separate and independent announcement the latter has made on the proposed Mass Rapid Transit (MRT) system for Klang Valley.

While SPAD has been given the vital role to co-ordinate, integrate and regulate all public transport systems in the country, it is left completely in the cold in the development of probably Malaysia's biggest public transport investment, estimated at nearly RM50 billion for the next decade.

During the same press conference on Thursday, SPAD admitted that it has not been briefed on the MRT plans, and could only issue a face-saving statement that its officials “will study the MRT proposals and incorporate all of that if possible into its own public transport masterplan for the Klang Valley.”

However, at the same time, it appears that the MRT proposals already coming to fruition with Gamuda's “unsolicited” proposal making significant headways with the Prime Minister's Department.

Gamuda had briefed local research houses that feedback so far on its proposal to build the MRT was “positive”. In fact a report by OSK Research said that the Gamuda management, along with its joint venture partner MMC, feel that they have a 80-85 per cent chance of winning the job and work could commence as early as early 2011.

So confident are they with winning the project that an AmResearch report had said that Gamuda has already commenced soil investigation and survey works to prepare the groundwork for the project.

Gamuda’s management was also able to reveal that the funding for the project would likely be backed by the Federal Government under a deferred payment scheme that may take between 10 to 30 years, implying AAA-rating for any papers to be issued.

In addition, Gamuda has already submitted a legal opinion to the Attorney-General’s office to amend existing legislation to expedite land acquisition!

It cannot be overstated that the Government is putting the cart before the horses, and its rushing headlong as it did in the 1990s when it privatised the various public transport systems – 2 LRT systems, 1 monorail as well as the consolidation of private and public bus companies. The result in the 1990s was disastrous both financially to the government as it had to bail out all of these companies to the tune of nearly RM9 billion, as well as for the complete lack of integration between the different rail lines and bus operations.

It is imperative for SPAD to first design and develop the public transport masterplan for the Klang Valley (as well as other cities) after thorough consultation with state governments, stake holders and public transport experts to ensure an integrated public transport network plan is in place. It is only after such a plan has been developed and endorsed, that action can be taken to execute the plans.

As an example, while Gamuda may have considered the integration of its MRT lines to the existing LRT networks, are they going to be integrated based on optimal public transport connectivity or are they going to be integrated based on Gamuda's own commercial considerations? Are the MRT stations going to be built in areas where bus terminals can be set up adjoined to the stations to ensure an integrated feeder bus network system?

These are questions which only SPAD can resolve and impose on any public transport operator. However, in the Government's eagerness to award the MRT contract to the Gamuda-MMC joint venture, it appears that public interest, especially to create the desperately needed fully integrated public transport system has already taken a back seat.

SPAD must immediately insist to the Prime Minister that any plans to award contracts for a MRT system must only come after it has developed the masterplan, and its plan for execution. Otherwise, the SPAD will just become like most other government agencies, loud with its goals but muted with its execution.

Thursday, June 24, 2010

Petaling Jaya Over-Developed?

The Star did a story on the dilemma faced by developers and residents in the future development on Petaling Jaya. It's a pretty long story which you can read here. My comments were sought and most were included at the end of the story.

The full text of my email interview is as follows:

1. How do you think Petaling Jaya should improve further? But can the saturated city sustain such changes?

Frankly speaking, "saturation" is a relative term. Compared to major cities in the world such as London, Tokyo or even Singapore, the population and built up space in Petaling Jaya is still relatively moderate and there's clearly room for additional growth.

However, such densities can only be achieved if there is matching infrastructure and behavioural changes accompanying the growth of the city in terms of development. At this point of time, the city of Petaling Jaya is "saturated" because the level of service from public transportation is far below the required levels of comparable cities. As a result, without the accompanying "people-movers" via the public transport system, Petaling Jaya has hit its growth bottleneck.

The problems faced by Petaling Jaya residents are part of a larger endemic problem facing Klang Valley constituents.

As an example, the city of Singapore has nearly 3,500 buses serving a population of less than 5 million and the size of 700sq km, while in the Klang Valley, RapidKL has less than 1,000 buses service an area of 2,900 sq km, and a population of nearly 6 million.

2. What are the matters to take note of in carrying out these improvements?

There's a major problem when dealing with public transportation issues, not only in Petaling Jaya but the entire country. Currently, the local councils which are agencies which are best placed to develop and design public transport routes and hubs in their respective zones are completely left out of the planning picture by the federal agencies. It runs contrary to international established practices of delegating transport management powers to local government authorities, instead of attempting to plan transport routes for all cities in the country from a highly centralised government.

It makes a complete mockery of the system when local councils decide where bus stops are built, but it's the federal government and agencies which design bus routes, and decides the who, the how and the frequency of operations for each route.

The recent set up of the Public Transport Commission attempted to unite the disparate federal agencies dealing with public transport which currently falls under 4-5 different ministries, but it fails to decentralise the planning, design and running of local public transport systems to the rightful authorities. For example, in the 10th Malaysia Plan, all responsibilities of increasing and improving bus services in various cities are placed with RapidKL or its parent, Syarikat Prasarana Bhd. It will become a recipe for failure as 1 company will not be able to cope with the demands of every city, and the lack of competition will only encourage falling productivity and efficiency.


I would call for a thorough transformation of how public transportation is managed in Malaysia which is critical to unclog the development bottleneck in our cities such as Petaling Jaya. Car ownership rates in the Klang Valley is more than 1:1, meaning that every baby born already "owns" a car. This ownership ratio must be reduced by as much as half before traffic congestion issues ease substantially for the next phase of urban growth. And this goal can only be achieved by inject an element of competition in public transport, decentralise decision making to local authories and making public transport requirements an integral part of all development orders approved by the local council.

Works Minister Tolerates Ali-Baba Projects

Shah Alam Hospital saga takes an 'Ali Baba' twist
WED, 23 JUN 2010 15:46
By Rahmah Ghazali

KUALA LUMPUR: The Shah Alam Hospital saga has taken an “Ali Baba” twist with revelation that the main contractor for the RM482 million project did not do any work at all and yet had made a handsome profit.

Opposition MP Tony Pua (DAP-PJ Utara) said the Malaysian Anti-Corruption Commission (MACC) should look into this matter.

Speaking at press conference at Parliament today, Pua produced two documents which clearly showed that the whole project was being carried out by the sub-contractor, GM Healthcare Sdn Bhd, and not the main contractor, Sunshine Fleet Sdn Bhd.

One document stated that a letter of award was given to a sub-contractor, Isyoda (M) Sdn Bhd, a company which eventually had to opt out after it was delisted from Bursa Malaysia.

The project was subsequently given to GM Healthcare.

“In the letter of award, it was stated that RM451 million would be given to Isyoda while Sunshine Fleet (the main contractor) would receive RM482 million from the government.

“So the main contractor gets a net profit of RM31 million… this is a clear ‘Ali Baba’ project. The PWD needs to take action against Sunshine Fleet...,” he said.

Pua said the fact that Sunshine Fleet is making a net profit without doing any work (since the whole project is handled by the sub-contractor) contradicts the terms of the contract awarded by the ministry.

Pua also said that a second letter by Isyoda to Sunshine Fleet showed that the former had promised a payment of RM46 million to the Sunshine Fleet chairman personally, and not through the main contractor.

'Unconditional payment'

The unconditional payment, according to the letter, was in consideration of Sunshine Fleet’s “efforts to procure the letter of award to be issued to us in further consideration of your future contribution and cooperation to ensure the smooth operation and success of the project”.

It also said that the RM46 million would be paid by instalments. From this amount, said Pua, Isyoda promised to pay 9.5% progressive interim payments to the Sunshine Fleet chairman totalling RM77 million.

“This is seen as a commission for this contract. But is it really a commission or a bribe? We have given this to the MACC for further investigation,” he said.

Shah Alam Hospital is reportedly bogged down in a legal tussle between Sunshine Fleet and GM Healthcare, giving rise to fears that the project will not be completed on time.

But Works Minister Shaziman Abu Mansor dismissed such fears, saying that the project is on track.

Besides, he told Parliament today that the government is only responsible to the main contractor and has no authority over payments to the sub-contractor.

It has been reported that GM Healthcare has filed a petition to wind up Sunshine Fleet over a RM10 million debt.

Sunshine was served the notice on April 1 this year after it failed to pay the RM10 million owed to GM Healthcare. The RM10 million is the bond GM Healthcare had placed with the Public Works Department (PWD) on behalf of Sunshine Fleet for the design, construction, equipping, commissioning and maintenance of the Shah Alam Hospital.

'No action against Sunshine Fleet'

In reply to Pua, Shaziman said that as long as the project is on schedule, the PWD will not take action against Sunshine Fleet.

However, he said that a new law, Construction Industry Payment and Adjudication Act, will be introduced to ensure sub-contractors are paid on time.

“This will help protect sub-contractors who do not get any payment from the main contractor,” he said.

Shaziman also said that the PWD has not detected any breach of contract allegedly committed by Sunshine Fleet.

“In view of this, the question of the project being delayed or the contract being terminated does not arise. This is because the project is on track and (the parties) have observed the terms of the contract agreed to by the government,” he said.

The hospital, which was slated to be completed in November this year, will be ready by June next year.

Opposition MPs have repeatedly raised the issue, alleging that there were discrepancies in the contract PWD awarded to Sunshine Fleet through direct negotiation in 2007.

The situation took a turn for the worse when the board of directors of Sunshine Fleet, many of are related to the Sultan of Selangor, became involved in the legal squabble.

Tuesday, June 22, 2010

Wise to Scrap Examinations?

I spoke earlier today to caution the Government against a hasty move to scrap the UPSR and PMR examinations.

You can view the Free Malaysia Today and Malaysiakini news reports.

NEP's Time Is Over

Pakatan, BN MPs back Nazir’s NEP remarks
By Shazwan Mustafa Kamal June 21, 2010

Nazir yesterday called for a review of the NEP, saying that the policy has been unfair to the majority of Malays.

KUALA LUMPUR, June 21 — Lawmakers from the opposition and ruling coalition were in rare unison today, agreeing with CIMB chief Datuk Seri Nazir Razak’s assessment that the New Economic Policy (NEP) had only benefited a minority of Malays, and providing the prime minister backing for his reform agenda.

Members from both sides of the political spectrum argued that the inclusiveness of the New Economic Model (NEM) was the only solution to the NEP’s shortcomings, while pointing out that Datuk Seri Najib Razak’s concessions to conservative critics contained in his Tenth Malaysia Plan (10MP) speech recently was a step backwards.

“They took a step forward with NEM, but are taking two steps back with 10MP. Disappointing move. Corporate figures like Nazir have seen it and he was disappointed.

“Being a top banker in the country he must have received plenty of feedback from the financial and corporate community on what they thought of 10MP.

“He was voicing out the fact that he has received negative feedback about 10MP, the disappointment in business community leaders in winding back proposed reforms in NEM,” said Petaling Jaya Utara MP Tony Pua.

Pua argued that the 10MP had abandoned the ideals of the NEM, and only reinforced the NEP.

“I think Najib should ironically do another flip-flop, re-emphasise that the government is fully behind NEM... (They) should not fall back on 10MP,” Pua told The Malaysian Insider.

Click here for the full article.

Najib's Doublespeak on Betting License

Above is my press conference yesterday on the Prime Minister and Finance Minister, Datuk Seri Najib Abdul Razak's doublespeak on the granting and approval of a sports betting license to Ascot Sports, owned by Tan Sri Vincent Tan.

The press reports are available at Malaysiakini and The Malaysian Insider.

Tuesday, June 15, 2010

UCSI 10th Malaysia Plan Forum

UCSI 10th Malaysian Plan Forum

Title: 10th Malaysian Plan: Responses from our Young Leaders
Date: 17th June, 2010
Time: 6-8pm
(Light refreshments will be provided after the talk)

The purpose of the forum:

In the context of global financial volatility and uncertainty, rising budget deficits and increasing competition in the export markets, Malaysia’s citizens should and in fact, must be, concerned about the economic direction the country will take in the next five years. The 10th Malaysia Plan forms a crucial anchor in the debate on how economic decisions by the Government of Malaysia will be made.

Various stakeholders have been consulted, sufficient data has been collected and a great deal of internal debate has been conducted to produce this plan. The focus, in this next couple of weeks, will be on content in the 10th Malaysia Plan.

Key questions include: To what extent does the 10th MP factor into account the key ideas expressed by the New Economic Model (NEM) especially in regard to replacing the New Economic Policy (NEP) with a means tested approach in economic policy making? What areas will bear the brunt of the expected cuts in government expenditure as part of the move to reduce the budget deficit? To what extent will the drive to reduce government subsidies be reflected in the 10th MP? All these important questions are of great interest to policy makers and especially to our young people who are in the process of inheriting the economic, political and social legacy of our current leaders. As such, we are honored to have three such young and distinguished panelists to discuss the content of the 10th MP and how it will affect our young people today and tomorrow.


Khairy Jamaluddin, Chairman Barisan National Youth, UMNO Youth Chief and MP for Rembau
Tony Pua, DAP National Publicity Secretary and MP for Petaling Jaya Utara
Wan Saiful Wan Jan, Founding Chief Executive, Institute of Democracy and Economic Affairs (IDEAS)


Dr. Ong Kian Ming, Lecturer, Faculty of Economics and Policy Sciences, UCSI University


Blue Ocean Strategy Lecture Hall,
UCSI North Wring
98-130 Jalan Choo Lip Kung
Taman Taynton View
56000 Kuala Lumpur
Wilayah Persekutuan, Kuala Lumpur
Tel: 03-9101-8880

Sunday, June 13, 2010

A "Tired" 10th Malaysia Plan

10MP fails to impress economists
SAT, 12 JUN 2010 12:28

By Stephanie Sta Maria

KUALA LUMPUR: The 10th Malaysia Plan (10MP) yesterday came under scrutiny of three economists who lauded its acknowledgment of the country's stumbling blocks but lamented its initiatives to tackle them.

At a dialogue jointly organised by the Malaysian Economic Association and the Faculty of Economics and Administration, Universiti Malaya, the trio cited a few initiatives that have set off alarm bells in their heads.

DAP chief economist, Tony Pua, called the plan “tired” and noted that it contains many similarities to past plans. His main concern, however, lay with the “shadow” of the New Economic Policy (NEP) which he said is cast over the 10MP.

“The NEP characteristic in the 10MP is the 30% Bumiputera quota, which, in fact, was left out of the New Economic Model (NEM),” he said. “The problem is not the quota itself but the danger that such a quota would prevent this community from moving ahead because it doesn't distinguish between the rich and poor Bumiputera.”

“If a needs-basis is used instead, then all poor Bumiputera are assured of assistance. But when you dilute it with a specific quota for one race, the better-off of the race (Bumiputeras) are able to get a larger chunk of government benefits."

The PJ Utara MP noted that this contradiction also extends to the NEM in terms of the government's move to increase competitiveness, meritocracy, transparency and getting value for money from government projects.

He questioned whether a project will now be awarded based on the above-mentioned criteria or on fulfilling the 30% Bumiputera quota.

“This is a major dilemma that will play out throughout the next five years and affect out economic performance,” he said. “I see the 10MP mirroring the model of the late 1980s where many mega projects were launched which ultimately had to be bailed out by the government.”

“If we repeat the same cycle without implementing measures to ensure we get the best value for money from these projects, then we may face another crisis and this time the government may not have enough funds for a bailout. I've seen many mega projects and subsidies being awarded to big corporations this year and I don't see the change that the NEM is calling for. ”

“Our problem now is two-pronged. The first is implementing everything in the 10MP and the second is having the political will to enforce those changes. At this point, I'm worried that the latter is missing and I hope to be proven wrong for Malaysia's sake.”

Click here for full article.

Saturday, June 12, 2010

Of Deficits & Bureaucracies

Cut deficit by reducing bureaucracy, says DAP

OPPOSITION MPs questioned whether the Government could reduce fiscal deficit to 3% of the Gross Domestic Product by 2015, saying it would be a “very challenging target.”

DAP national publicity secretary Tony Pua said this was only achievable if the Government changed the way it worked and the world economy was strong for the next five years.

The DAP PJ Utara MP said the easiest way to reduce deficit was to tax the people and cut subsidies.

“But what really needs to be done is for the Government to transform the way its machinery works. At present, it is a huge bureaucracy,” he told reporters at the Parliament lobby after the tabling of the 10th Malaysian Plan.

Pua said the Government’s operating expenditure, which takes up more than 70% of the Budget, was too high.

“And this is despite the huge increases in revenue over the past two years. In the next few years, there will be a decline in revenue from the oil and gas sector but operating expenses will maintain, causing stress to the deficit,” he said.

He also said the 10MP was a “rehashed”version of the previous Malaysia Plan, pointing out that the public-private partnership, high speed broadband and transportation plans had been part of the Ninth Malaysian Plan.

For the full article in The Star, click here.

Thursday, June 10, 2010

10MP v NEM

In the Prime Minister Datuk Seri Najib's speech today announcing the 10th Malaysia Plan (10MP), he said that "the 10MP has been formulated with various new approaches towards becoming a high income and high productivity economy, in line with the New Economic Model (NEM)."

However, there are many elements within the 10MP which are clearly either directly contradicts the principles of NEM or fails to take the principles into account. I haven't had time to write down my thoughts yet, both The Malaysian Insider and Malaysiakini have jotted down my comments earlier.

DAP claims 10MP contradicts NEM
By Adib ZalkapliJune 10, 2010

KUALA LUMPUR, June 10 — DAP lawmakers criticised today the Najib administration's 10th Malaysia Plan (10MP) blueprint for failing to reflect the prime minister's New Economic Model (NEM) framework unveiled in March.

“The most obvious contradiction is the fact that in the New Economic Model, it is clearly mentioned that everything is based on merit, competition and need whereas the 10MP very clearly inserted a chapter that says Bumis are to achieve and continue to target 30 per cent corporate equity and wealth as well as in property, jobs and so on,” said DAP publicity chief Tony Pua.

The NEM aims to transform the country into a high-income nation and is one of the Najib administration’s major agenda.

It was drawn up by the National Economic Action Council (NEAC), chaired by Tan Sri Amirsham A. Aziz.

When tabling the 10MP today, Najib had announced the formation of a high-level council to be chaired by him to plan, co-ordinate and monitor the implementation of the Bumiputera development agenda.

He also unveiled efforts to improve Bumiputera property ownership through Pelaburan Hartanah Bhd and redevelopment plans of Kampung Baru in the city centre to enable landowners to unlock the value of the property.

Pua told reporters that the announcement of mega projects with no emphasis on open tender also did not help in achieving NEM targets.

“In NEM, it has been expressly stated that there will be no tolerance for patronage, rent seeking and we'll be looking at the best proposals, best value for money, open tenders and so on but what we've seen so far is that projects are awarded on a direct basis to specific companies, cronies or otherwise,” said Pua.

“There is a big contradiction between what they say they want to do with the NEM and what is actually carried out with regards to the implementation of the 10MP,” he added.

Public Transport: Back To Square One

Letter from TRANSIT on Malaysian Public Transport, by Moaz Ahmad:

I have been actively following public transport in Malaysia for more than 5 years. Some of my friends and those in the industry have been involved for decades and have shared detailed stories about where public transport was in the past and how far (in some but not most cases) it has moved forwards.

We cannot argue that there has been no change in public transport. In these short 5 years I have seen 4 announcements of LRT extensions, 3 Minister's of Transport, 2 Prime Ministers and of course, 1Malaysia.

To my eyes the biggest action with the potential for the greatest change comes from the creation of Malaysia's Land Public Transport Commission, SPAD, with Syed Hamid Albar as Chair and Prime Minister Najib Razak as Minister-in-Charge. Thankfully, the Prime Minister has taken the advice of the public and taken on the responsibility of SPAD for himself, showing the nation that he is clear in his goals to improve public transport in Malaysia.

The interesting this is that this week, while the Prime Minister was announcing the creation of SPAD and the assignment of Syed Hamid Albar as Chair, other people were making unsolicited proposals for an MRT network in the Klang Valley and reviving the proposal for a High Speed Rail link between KL and Singapore.

The proposals which have a collective value of RM30-50 billion are even more amazing because those who have provided these unsolicited proposals (MMC-Gamuda and an unnamed "BN component party with a power-base in Johor") will protect themselves and reap all the benefits while the government (and ultimately, the Rakyat) are expected to take on the risks.

Even more interesting is that these proposals are not new. Look in the archives of the Malaysian newspapers over the past 5 years and you will see dozens of announcements for mega public transport projects - in 2005 there was the 4 monorail lines. In 2006 there was to be LRT extensions worth RM10 billion. In 2007 there was to be a new LRT line from Kota Damansara to Cheras. In 2008 the money saved from the reduced petrol subsidy was promised to public transport. In 2009 we heard of the LRT extensions again, along with the new LRT line again. So in 5 years not much has really happened - just more announcements and projects that appear to be ready to start at any time - but overall, no real change to the industry.
In this time when it has become clear to us that subsidies are unsustainable and that many countries are now looking at cutting down on mega projects and debts, some people really want to see more massive investments without careful planning and economic study.

Unfortunately, few of these people are really interested in solving the institutional and regulatory problems that are plaguing the public transport industry. Nor are they interested in any kind of "people first" planning. Instead, they want to build more rail lines with the primary hope of making money and achieving economic benefits - for themselves first.

Frankly, before we can build more LRT lines or MRT lines, we have to solve existing problems in the industry - like the poor treatment of public transport workers (who do not receive regular salaries or benefits), the flouting of rules, the dismal safety record, and above all, the ineffective and costly "entrepreneurial" model for public transport that has done little for the industry beyond enriching permit owners.

I expect Najib Razak, Syed Hamid Albar, and SPAD CEO Mohd Nor Ismail Nor Kamal to take charge and resolve these problems first. Then, they can look at creating Local Public Transport Organizing Authorities to plan, organize and manage public transport in the 6 largest cities and economic regions of Malaysia - the Klang Valley, Johor Baru, Penang, Kuching, Kota Kinabalu and Ipoh.

Once the bus and taxi services have been stabilized by these local Organizing Authorities, the government can provide an investment of RM1billion for each region as an inducement to build a complete and cost-effective rapid transit network. This money would be an initial investment from the 10th Malaysia Plan.

Imagine that with only RM6 billion, some minor changes in regulation, and a lot of strong leadership, we would be able to see reliable, effective and complete public transport networks in the 6 largest cities in Malaysia!

RM6 billion may not seem like a lot of money but it can work wonders if it is spent in a careful, cost-effective way. On the other hand, RM30-50 billion spent carelessly can leave us worse than we were when we started.

If we really want to see public transport change over the next 5 years we need a real vision for service-based public transport that puts people first, and focuses on performance - not mega projects that put companies and profits first and end up performing below expectations.


Moaz Yusuf Ahmad
Petaling Jaya

Najib Lied in Parliament?

DAP wants Najib cited over Ascot deal
UPDATED @ 03:29:36 PM 08-06-2010By Asrul Hadi Abdullah Sani June 08, 2010

KUALA LUMPUR, June 8 — The DAP demanded today that Finance Minister and Prime Minister Datuk Seri Najib Razak be referred to the Rights and Privileges Committee for allegedly misleading Parliament over a sports betting licence purportedly issued to a company controlled by tycoon Tan Sri Vincent Tan.

Its Petaling Jaya Utara MP Tony Pua claimed that the Finance Ministry had misled Parliament when in its written reply to a question it denied awarding a sports betting licence to Tan’s Ascot Sports Sdn Bhd.

Pua pointed out that Berjaya Corporation, a public-listed company controlled by Tan, had confirmed that the Finance Minister has awarded the license to Ascot in a filing last month to Bursa Malaysia about its acquisition of Ascot Sports Sdn Bhd.

“The Minister of Finance has given its approval for the re-issuance to Ascot of the license to carry out sports betting operations upon certain terms and conditions,” Berjaya Corporation said in its filing.

Pua said that the Ministry of Finance reply was in direct contradiction to Berjaya’s filing.

“This is in direct contradiction to what the finance minister had announced yesterday. It is a clear and direct contradiction. One of the terms announced by the Finance Minister yesterday was that public feedback was required.

“If public feedback was required I think Berjaya Group would have put that necessary announcement. However, they made no reference to that,” he said.

He also urged Najib to clarify the status of the betting license.

“We want the Finance Minister Datuk Seri Najib to clarify and state clearly if they have actually issued an approval and what are the conditions. The conditions could not have included public feedback.

“If he has then it is a serious breach of parliamentary privileges and I think there is no reason why he should not be referred to the Rights and Privileges Committee for this particular error,” he said.


Pua said that the confusion over the license would affect investor confidence.

“On the 12 of May when the announcement was made, Berjaya Corporation shares traded at its highest volume for the year. It traded at 44,680,000 shares. Highest for the year and that day the shares hit a high of RM1.72. Today after the Finance Minister’s announcement, the price is RM1.39. It has dropped by 19 per cent, who will bear the cost?” he asked.

Rasah MP Anthony Loke questioned why the government has chosen to remain silent.

“Why is there not a single official from the finance ministry to come out and deny that the license had not been given. The impression given to the whole world is that the license has been given and this has confused the members of the public especially the investor community.

“If the license has not been given, why is the prime minister so afraid in denying it? He has not once answered over this issue and remains mum on this issue.”

Click here for full article.

Wednesday, June 09, 2010

Did Berjaya Mislead Investors?

Bursa mum whether Vincent Tan did wrong
UPDATED @ 06:04:45 PM 08-06-2010By Yow Hong Chieh June 08, 2010

KUALA LUMPUR, June 8 — Bursa Malaysia today refused comment over the status of tycoon Tan Sri Vincent Tan's listed Berjaya Corporation's claim in a filing last month with the exchange that Ascot Sports Sdn Bhd had been issued a sports betting licence by the Finance Ministry, which the ministry denied yesterday.


DAP national publicity secretary Tony Pua said he doubted Tan had jumped the gun by making the announcement, as some have claimed.

“I believe Vincent Tan being an experienced corporate player backed by investment bankers would not have been so careless as to have made the announcement that he received approval for the sports betting licence from the Ministry of Finance if he hasn’t actually received it,” he told The Malaysian Insider.

“The investment bankers would not have prepared the announcement document and prepared to raise funds had such written confirmation not been received.”

The Petaling Jaya Utara MP had earlier demanded in Parliament that Finance Minister and Prime Minister Datuk Seri Najib Razak be referred to the Rights and Privileges Committee for allegedly misleading Parliament over the issuance of the Ascot sports betting licence.

Click here for full article.

Monday, June 07, 2010

Vincent Tan So Generous

Pakatan flays Vincent Tan’s ‘charity’ move
By Neville Spykerman and Yow Hong Chieh June 06, 2010

KUALA LUMPUR, June 6 — Pakatan Rakyat (PR) leaders scoffed at Tan Sri Vincent Tan’s gesture to donate RM525 million profit from selling part of his sports betting company and justification for legalising that business.

The tycoon announced yesterday that the entire payout from selling 70 per cent of Ascot Sports Sdn Bhd to his listed Berjaya Corp Bhd will be donated to his Better Malaysia Foundation.

“If he is really sincere, he should return the sports betting licence and allow the government to have an open tender for it,” DAP publicity chief Tony Pua told The Malaysian Insider.

The Najib administration last month had re-issued the licence to Tan after the original licence was cancelled by the previous Abdullah administration. The tycoon’s son — Datuk Robin Tan Yeong Ching — will retain his 30 per cent stake in the company.

Pua pointed out that Yeong Ching stood to make RM225 million “without lifting a finger”.

Tan yesterday criticised the Opposition, particularly those educated in Oxford, in reference to Pua for objecting the legalisation of sports betting.

He pointed out the government was losing billions in revenue to illegal bookies — who thrive despite the best efforts of the police.

However the Petaling Jaya Utara MP hit back by pointing out that his objection was why the government was letting Tan benefit personally from the award of the licence.

“I can even understand if the licence went to Berjaya Sports Toto but not to a company with no track record owned by Tan and son,” he said.

He added that Tan’s gesture to donate to his own charity did not justify anything.

“The issue is why should the money go to him, not what he does with it,” he said.

Pua also challenged Tan to prove his claim that the government had given him “a first right of refusal” to get the sports betting licensed reissued to him.

Tan had first obtained the licence in 1987 but had “asked the government to take it back” when the venture was unsuccessful. But he has now obtained the right to get the licence back and was exercising it.

“He should show us the contract,” said Pua.

(For the rest of the article, read it here)

Tuesday, June 01, 2010

Asas Serba's RM50 Billion Dream

It is outrageous that the RM50 billion offer to acquire all tolled highways in Malaysia by a company with absolutely zero track record in managing or operating highways has been able to maintain a perception that their proposal is being considered by the government to the extent that it seems able to present their proposal directly to the cabinet as reported by The Malaysian Insider.

If true, then it clearly shows that “patronage” is alive and kicking for vested interest parties continues to have improper access to the Cabinet or key decision makers of the government.

The Cabinet must on Wednesday reject outright the proposal by Asas Serba as there is no basis for it to be even considered or entertained in the first place.

Should the Cabinet decide that they intend to consider any offer to restructure all tolled highways in Malaysia, then a policy decision must be made to explore the possibility as the way forward and the opportunity to bid for all the tolled highways must be opened to all competent parties. It is only through such an open, transparent and competitive system can the Government obtain the best offer for both the Government and the rakyat.

The entire premise of economic policy reform as highlighted in the Prime Minister's New Economic Model is the fact that the Government does not know best, as well as the critical need to promote competition and transparency. For the Cabinet to specifically consdier the unsolicited proposal by Asas Serba will fly in the face of the “New Economic Model”.

As it stands the New Economic Model is already failing its credibility test with the Barisan Nasional government continuing to award projects, contracts and concession without any form tender or competition. Government land such as the Sungai Besi Air Base, the Rubber Research Institute land in Sungai Buloh and a 62.5 acres piece of prime land off Jalan Duta has been awarded directly without any form of tender. Projects such as the RM682 million Matrade Exhibition and Convention Centre and the RM8 billion purchase of armoured-wheeled vehicles continue to be awarded directly without competition. And most recently, Tan Sri Vincent Tan's personal vehicle, Ascot Sports was given the sports betting license in a most opaque fashion allowing Tan Sri Vincent Tan to immediately benefit RM525 million upon the sale of his shares to Berjaya Group.

Should the Asas Serba proposal receive any form of backing from the Cabinet, whether tacit or otherwise, the it'll only serve to prove beyond doubt that the New Economic Model which Datuk Seri Najib Abdul Razak is promoting is nothing but a sham.

We continue to call upon the Government to study DAP's proposal to buy-back the key tolled highways such as PLUS Expressways and Lebuhraya Damansara-Puchong (LDP) which are making astronomical profits should these concessions be unwilling to substantially reduce their toll rates. We have made the necessary calculations that even at current toll rates, if maintained for a period of 5 to 8 years after the buy-back will pay off the purchase cost. Hence the Government must seriously consider this option as it will not cost the Government a single cent while there will be tremendous benefits to the rakyat who are suffering from paying the high cost of toll over an extended period of time.

Economic Crisis Prediction

I've done a fair bit of writing even before I was elected into office in March 2008. I was just reminded about some of the things which I wrote and said by a friend, and it looks like 3 years later, my worries and concerns are becoming the reality.

I wrote about our Oil & Gas Windfall: Malaysia's Boon or Bane? (Part I and Part II) in July 2007 but The New Straits Times rejected its publication. It was subsequently published in Aliran's September issue that year. I wrote about how the Malaysian government has become addicted to rising oil revenues, failing to put in place expenditure safeguards and neglecting the other sectors of the economy, resulting in stagnant productivity. I also wrote about "political dutch disease" infecting our economic and governing institutions, how "easy-money" from oil revenues create and entrench rent-seeking behaviours.

Well, we see the result today. We have rapidly rising debt levels from RM240 billion in 2004 to RM363 billion in 2009, accounting for 53% of our GDP. Based on projections by the Government itself, we are faced with potential bankruptcy in 2019.

I've also made some predictions then as to how Barisan Nasional will fall within a decade, and the cause of its fall. On partial hindsight, I believe that the perfect storm is brewing for the ultimate fall.

I had in my presentation in September 2007 "After 50 years of Independence: What is the Road Ahead?" concluded with the hypothesis that the BN government will fall after an impending economic crisis which I had predicted to occur within 5-8 years. That will mean between 2012 to 2015. The economic crisis is caused by the fact that Petronas contribution to the Government will ultimately fall due to falling prices or depleting oil reserves, and our BN government's big spending habits will be difficult and painful to curtail.

The outcome is a civil service upheaval due to stagnating income, lack of bonus exacerbated by its bloated size due to the government's policy of being the employer of the last resort for unemployed graduates. The 1 million civil service vote will no longer be a fixed deposit for the BN government.

There will be a major crisis in UMNO which is held together by a intricate system of patronage, rent-seeking behaviour and money politics. But when the Government treasury dries up, and the largesse stops flowing, the glue disappears and UMNO will fall apart.

The failure of the economy will be the ultimate cause for a new government to take over from Barisan Nasional. Nearly 3 years after I've made the presentation, we see the relevant events unfolding right before our eyes.  It will happen, be it during the 13th or 14th General Elections. Watch this space.