Saturday, December 23, 2017

Speaker Tan Sri Pandikar Amin must defend Parliament's honour and dignity by reprimanding the Election Commission for treating the highest legislative institution of the land with utter contempt

During the objection hearings to the new voters being transferred to Segamat’s still unbuilt army camp, an Election Commission (EC) registrar had rejected the Parliament Hansard as evidence saying that it “cannot be believed”.

The objections are being raised in regards to the inclusion of 1079 new army voters in the Segamat constituency as list in the EC’s third quarter supplementary electoral roll. The ongoing issue had been raised by Kluang MP Liew Chin Tong because the new army camp in Segamat is not even complete but the army personnel and their spouses have already been added to the electoral roll in that constituency.

During the Budget debate in Parliament on November 27, Seremban MP Anthony Loke had asked for confirmation if the army camp was still under construction or if it had been completed.

In response the Deputy Minister of Defence, Datuk Johari Baharum said that the camp was still under construction and when question further, said that the camp was not complete. As recorded on page 136 of the Hansard, the Deputy Minister said “belum siap” when asked to confirm the status of the army camp.

Yet, the registrar chose to reject the Hansard as evidence.  This is a clear case of contempt against the Parliament.

The Parliament Hansard is the official record of Parliamentary proceedings. Even in court, Parliamentary proceedings are admissible as evidence. Section 78 (1b) of the Evidence Act 1950, which states the proof required for official documents, states that
…the proceedings of Parliament or of any of the federal legislatures that existed in Malaysia before Parliament was constituted or of the legislature of any State— by the minutes of the body or by the published Acts of Parliament, Ordinances, Enactments or abstracts or by copies purporting to be printed by the authority of the Government concerned.

The Act clearly says that Parliamentary proceedings are proved by the minutes of the session, which takes the form of the Parliamentary Hansard and nothing else.

If the judiciary accepts the Hansard as hard evidence, who is the EC to reject the official Parliamentary document?  For the EC registrar to say that the Hansard cannot be believed, they are saying that Parliament proceedings themselves cannot be believed.

We call upon the Speaker Tan Sri Pandikar Amin to reprimand the Election Commission for the latter’s contempt and we call upon the EC to reprimand the responsible Registrar above and immediately act to rectify the injustice by reopening the objection proceedings in Segamat.

The failure of the EC to do the above would only further prove that the EC is not the independent institution conceived by our Constitution.  Instead, it is merely a paw of Barisan Nasional.

Friday, December 22, 2017

Malaysian Aviation Commission (MAVCOM) claim that it is ‘unsustainable’ for the Passenger Service Charge (PSC) to be kept at LCCT levels confirms that the fees are hiked to rescue Malaysia Airports Holdings Bhd (MAHB)

MAVCOM told The Malaysian Insight[1] two days ago that
…when klia2 began operations, it had the same PSC rates as the LCCT, despite having far superior services and facilities.  This environment is non-sustainable, given that the costs of operating and maintaining a larger and more advanced airport are higher.
Indeed, we have long criticised and warned the Government on the inflated costs and questionable decisions made by MAHB in the construction of KLIA2 which will inevitably result in subtantially higher operating costs.  The higher cost however, isn’t quite due to MAVCOM’s description of a “more advanced airport”.

Firstly, it is due to more than RM5 billion worth of borrowings MAHB took to finance the airport which today incurs more than RM250 million in interest per annum.

Secondly, it is due to MAHB incompetence and questionable decisions which have resulted in substantially higher than expected maintenance cost.  Despite KLIA2 commencing operations since 2013, the airport is still plagued with soil settlement or sinking problems causing constant operational inconvenience and a state of perpetual repair.

For example, in August this year, urgent repairs had to be carried out at the KLIA2 runway due to soil settlement problems, forcing dozens of outbound and inbound flight delays.  In October last year, a ruptured fuel pipeline – not the first time – was estimated to have taken one and a half months to rectify.

Most obviously, and the biggest complaint by both Air Asia as well as passengers is the unnecessary grandeur in the sheer size and scale of the airport.  This has resulted in extra-long walking distances for airline workers and passengers.  As a result, MAHB was forced to retrofit poorly designed walkalators all around the terminal to ease the inconvenience.  Hence perhaps in this particular instance, MAVCOM is indeed correct to point out that the larger airport is indeed more costly to maintain.

Regardless, the admission by MAVCOM confirms that a key reason for the hike in PSC, also known as the airport tax, is to bailout MAHB which is suffering from losses in its KLIA2 operations.  It should be remembered that the Chief Financial Officer of MAHB, has assured the Public Accounts Committee that MAHB does not need to raise the PSC above and beyond the prescribed inflation rates to ensure operational profitability.  That has clearly turned out to be a lie.

We will not object to a hike in PSC if it is pegged to the annual inflation rates.  However, a hike amounting to 46% to RM73 per international passenger is unacceptable, especially since it is to make the rakyat pay for the follies of MAHB.

It is worse when Malaysians see how biased MAVCOM is, when the latter is prepared to even revise history to justify the above hike.

MAVCOM reiterated to The Malaysian Insight that “KLIA2 was never designed as a low-cost carrier terminal and was not a “hybrid airport” as some claimed”.  There cannot be a greater lie coming from the airline industry regulator which was born only a few years after KLIA2 commenced operations.

KLIA2 was conceived and intended to service the low-cost carrier airlines.  Even the official brochure on KLIA2[2] on the MAHB website site still clearly states so.  And when the cost of the airport ballooned to RM4 billion from the original budget of RM1.7 billion, it was the Deputy Transport Minister, Datuk Aziz Kaprawi who told both the media and the Parliament in 2013 that KLIA2 was not merely a ‘low-cost carrier terminal’ but a ‘hybrid airport’.

Is MAVCOM telling us that both MAHB and the Transport Minister had lied about the nature of KLIA2?

Let me advise the MAVCOM to download a copy of the Public Accounts Committee Report on KLIA2[3] for its commissioners to read and better understand the shenanigans which have taken place during the design, award and construction of KLIA2.  Only then perhaps, Malaysians can hope that MAVCOM will stop punishing tax-payers to save MAHB’s skin.

Thursday, December 21, 2017

International Civil Aviation Organisation (ICAO) policy clearly states that “in general, aircraft operators and other airport users, including end-users, should not be charged for facilities and services they do not use”

Malaysia Airports Holdings Bhd (MAHB) has been quick to often cite the International Civil Aviation Organisation’s (ICAO) ‘principle of non-discriminatory pricing of passenger service charges’ when responding to criticisms against the equalisation of the fees between KLIA and KLIA2.

Earlier this month, it was announced that the Passenger Service Charge (PSC) for international flights, excluding ASEAN, operating at KLIA2 would be increased from RM50 to RM73 per passenger. The move by the Malaysian Aviation Commission (Mavcom) has drawn the ire of users of KLIA2, including the airport’s main airline AirAsia.  The PSC increase which comes into effect on January 1 2018, will likely lead to an increase in airfares for flights using the supposedly low-cost terminal.

However, MAHB is only being selective in using the above non-discriminatory principle as an excuse to raise the PSC for KLIA2.

If one were to refer to the ICAO’s Policies on Charges for Airports and Air Navigation Service (attached), MAHB conveniently forgets to mention that the same policy still allows for differential pricing systems.

ICAO specifically says that “in general, aircraft operators and other airport users, including end-users, should not be charged for facilities and services they do not use”.

Hence MAHB is clearly violating this guideline when it increases the PSC at KLIA2.

This is very simply because the facilities and services provided at KLIA2 are vastly inferior to KLIA.  And that in turn is because KLIA2 was never intended, designed or built as an extended “second permanent terminal for KLIA”.  KLIA2 was conceived and always intended as an international hub for low-cost carriers, and was built to cope with the growth of AirAsia as the region’s fastest growing low-cost airline.

Because of the massive cost overruns as a result from MAHB incompetence, as concluded by the Parliamentary Public Accounts Committee (PAC), KLIA2 was relabelled as a ‘hybrid terminal’ in 2013.  Even so, that relabelling still confirmed that after its opening in 2013, KLIA2 was unique and distinct from KLIA.

Therefore the latest claim by MAHB that KLIA2 is merely a “second permanent terminal for KLIA” to justify the hike in PSC is wholly untenable.

Hence, we call upon both MAHB and the Malaysian Aviation Commission (MAVCOM) to retract the decision to 46% hike the PSC charges at KLIA2 to equal that charged in KLIA.  ICAO clearly allows for fee differentiation between airports and terminals based on the availability and quality of services offered.

If MAHB and MAVCOM insist on hiking the fees at KLIA2, then they must prove how KLIA2 is an equal to KLIA to the angry Malaysians out there.  If they fail to do so, then it cannot be clearer that the entir fee hike exercise is to make more profits for MAHB, particularly since MAHB has taken billions of ringgit of debt to fund its RM4 billion KLIA2 misadventure.

Monday, December 18, 2017

Dato’ Seri Rahman Dahlan should answer why inflated ECRL contract was a direct negotiation with a China company, and not whether it was foreign or locally owned.

Yesterday, Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan once again tried to deflect questions and criticisms of the RM55 billion ECRL project by painting it as “a domestic investment with foreign funding”.

This was in response to the statement issued by former Finance Minister, Tun Daim Zainuddin  who responded to questions from the media last weekend on whether the country should be worried over foreign investments from China.

“How much investment did they bring in? Like Forest City? Does the train project (ECRL) bring in money?,” he asked

“If it is a loan, that means we have to pay (it) back. If you have to pay (it) back, does that mean it is an investment? If you were an investor, what would you say? Its not (an investment). It’s a loan,” Tun Daim explained.

Dato’ Seri Rahman Dahlan then retorted in his statement, “Would Daim and Bersatu be happier if foreigners own and operate the ECRL instead?”

The Minister who is in-charge of the Economic Planning Unit (EPU) is trying to be disingeneuous in his response.

While the fact of the matter is that ECRL is indeed an infrastructure project which funded with foreign debt, the Prime Minister Dato’ Seri Najib Razak himself, together with many other Cabinet Ministers have often used the project as a successful example of Malaysia’s ability to attract sizeable investments from China.

For example, earlier in January this year, Dato’ Seri Najib Razak defended “investments” from China, stating that “This is unfair, because investments from China benefits the nation including us in Pahang, not only large investments like ECRL but the price of palm oil also go up, to simultaneously profit smallholders and settlers,” he said said this at ‘An Evening With the Chinese Community In Pekan’ programme.[1]

Hence Tun Daim is merely trying to correct the ‘managed’ perception that these large infrastructure projects are not ‘investments’ from China, but are effectively huge debts which have to be repaid by Malaysians in the future.

The question isn’t where former Prime Minister, Tun Dr Mahathir Mohammad or Tun Daim or any Malaysian for that matter, “be happier if foreigners own and operate the ECRL instead”.

Instead, Malaysians would “be happier” if the ECRL project was tendered openly and competitively so that our tax-payers will receive best value for our ringgit.  Why was a infrastructure project of this magnitude awarded directly without any competitive tender?  Hence, it begs the question - who will really profit from this contract?

It has already been exposed that the Government’s own appointed engineering consultants, HSS Integrated (HSSI) has estimated in December 2015 the project's value was RM29 billion (RM53.2 million per km), whereas China-owned China Communications Construction Company (CCCC) was awarded the contract at RM55 billion (RM91.7 million per km).

We have demanded for the HSSI to be publicly disclosed and Transport Minister, Dato’ Seri Liow Tiong Lai has promised in Parliament in November 2016 to “publish” the feasibility study when it is “finalised”[2].  However, the HSSI report remains a secret document with the BN Government.

The question which remains unanswered to date – if ECRL were to cost RM30 billion or less, why was CCCC awarded the contract via direct negotiation for RM55 billion, even if there so-called favourable financing terms?  Where would the excess RM25 billion go to?  Would it be used to pay-off some of 1MDB’s debts as speculated so as to cover up the Najib administration’s largest international financial scandal?

Is KLIA2 a “low-cost terminal”, a “hybrid airport” or a mere “extension” of the main KLIA terminal?

Yesterday, Malaysia Airports Holdings Bhd (MAHB) issued a statement in response to my criticisms against the impending Passenger Services Charge (PSC) increase in 2018.

MAHB insisted that “KLIA2 is not a low-cost airport terminal”. It said “together with the government, we had made the strategic decision to build a second permanent terminal for KLIA that will accommodate increased capacity requirements, or in other words, future growth”.

So not only is KLIA2 not a “low-cost terminal”, it also appears that MAHB is now ditching its own much-ridiculed “hybrid airport” moniker.  Deputy Minister of Transport Datuk Abdul Aziz Kaprawi had announced in July 2013 that “KLIA2 will no longer be a low-cost terminal, but Malaysia’s first hybrid airport with upgraded business-class services alongside total international passenger segregation”.  The announcement was made partly to justify the astronomical increase in the cost of the terminal from RM1.7 billion to more than RM4 billion.

Malaysians are rightly confused with the shifting terminologies and inconsistent definitions of what exactly is the purpose and intent of KLIA2.

If you were to download the brochure from MAHB’s own website, “KLIA2 – The Rise of the New Titan”[1], it clearly states

…KLIA2 is positioned to be the biggest terminal for Low Cost Carriers (LCC) in the world, serving as a global benchmark for future terminals of its kind…

With these world-class features, KLIA2 will be the largest purpose built terminal for low-cost travel in the world with a capacity of up to 45 million passengers per annum…

So which is right?  The marketing brochure on MAHB’s website or the latest statement to deflect blame from the massive hike for Passenger Service Charge (PSC) at KLIA2?

However, regardless of whether MAHB wants to call KLIA2 a “hybrid airport” as it did earlier in 2013, or a “second permanent terminal for KLIA” as it did yesterday, the fact remains that KLIA2 has at all times since its approval by the Cabinet, been intended specifically to serve as a new “low cost carrier terminal” to replace the old makeshift LCCT.

The fact of the matter is, MAHB had only decided in 2013 to re-label KLIA2 as a “hybrid airport” in order to justify the massive unbudgeted cost overruns and delays.  Now, MAHB is redefining KLIA2 as merely a “second permanent terminal of KLIA”, implying no differentiated service quality between KLIA and KLIA2, purely to justify the equal PSC to be imposed both terminals.

It is ironical that MAHB claimed that it has already explained the above to the Public Accounts Committee (PAC), of which I am a member.  MAHB said in its statement yesterday

We have also explained numerous times to YB Tony Pua along with the other members during the PAC sessions that after numerous engagement sessions with key stakeholders, klia2 development had undergone significant scope increase due to changing requirements by the key stakeholders, including the government agencies and AirAsia.

MAHB seems to have forgotten that the damning PAC Report on MAHB concluded that the excuses given by the top management of MAHB were misleading, untenable and unjustifiable.

The then PAC chairman, Datuk Nur Jazlan Mohamed said MAHB was “not being customer-centric” when “MAHB should be building airports for people to use and not determine what people should use”.  The PAC had strongly criticised MAHB’s arrogance for intentionally abstaining from engagement with its key customers like Air Asia when designing and constructing the airport.

The PAC Report had concluded that “Malaysia has lost a golden opportunity to develop the most competitive low-cost carrier hub in the Asia Pacific region.”  Today, Malaysians have to pay for the follies of MAHB with a massive 46% hike in Passenger Service Charges.

So now MCA President Dato’ Seri Liow Tiong Lai and PAS President Dato’ Seri Hadi Awang sings the same desperate broken racist tune to fish for votes?

Just when you think that MCA could not sink any lower, MCA President Dato’ Seri Liow Tiong Lai beats all expectations by jumping on the bandwagon to demonise Lim Kit Siang as a potential Prime Minister.

His statement recycles the same fake news that is being peddled by UMNO and PAS that Lim Kit Siang will become Prime Minister if the Opposition wins the next election. Kit Siang has already said time and time again that he has no intention of becoming Prime Minister, yet the government seems to have run out of ideas to promote itself that it is relying on its tired propaganda of portraying him and the DAP as the only party in the Opposition.

It has long been the weapon of UMNO President, Dato’ Seri Najib Razak and his merrymen to threaten the Malays with losing power.  During the ruling party's Annual General Meeting earlier this month, Wanita Umno Chief Dato’ Seri Shahrizat Abdul Jalil warned that voting for Pakatan Harapan would lead to rule by “Emperor Lim”.

It is a weapon to diminish the importance the Malay voters will place on the outrageous scandals and misdeeds which have been carried out against Malaysians.  These would include tens of billions of ringgit worth of shennanigans in government ministries and state-owned enterprises like 1MDB, FEDLA, MARA and Tabung Haji.  The diversionary lie is also to distract voters from feeling the pain of rising prices, the Goods & Services Tax (GST), weak ringgit and a stagnant economy.

Most uncannily, Liow Tiong Lai’s statement comes right after PAS President Abdul Hadi Awang took a similar position to support UMNO last weekend.

“In fact, for DAP leaders to become the prime minister if the opposition front wins the 14th general election (GE14) goes against the reality in Malaysia, where the concept of an Islamic country means Islam must be in power. This is important. We want to maintain the leadership of Muslims in this country,” Hadi was reported telling Berita Harian in an interview.

Perhaps it should not have come at a surprise that MCA is now so desperate that it felt the need to peddle the same fear mongering rhetoric as PAS. Liow Tiong Lai also said that Lim Kit Siang was clever at sowing racial discord. In echoing the PAS President’s calls, has is Liow now admitting that there should never be a Malaysia for all Malaysians?

The MCA President must have finally realised that it has no hopes of recovering support from the non-Malay community. He is now hoping that by demonstrating subservience to UMNO and PAS, it can receive higher Malay support.  This will ensure that MCA might be able to hold on the the handful of remaining seats it possess – such as his own in Bentong where he won with a wafer thin 379-vote majority.

There could not be a greater irony than a political party founded on the need to protect the interest of the Chinese community is now parroting the racially-tainted lies and propaganda espoused by the ‘Ketuanan Melayu’ extremists in UMNO and PAS.

Friday, December 15, 2017

Malaysians are now paying the cost of an incompetent Malaysia Airports Holdings Bhd (MAHB) who built a defective ‘low-cost’ KLIA2 at more than RM4 billion

Earlier this month, it was announced that the Passenger Service Charge (PSC) for international flights, excluding ASEAN, operating at KLIA2 would be increased from RM50 to RM73 per passenger. The move by the Malaysian Aviation Commission (Mavcom) has drawn the ire of users of KLIA2, including the airport’s main airline AirAsia.

The PSC increase which comes into effect on January 1 2018, will likely lead to an increase in airfares for flights using the supposedly low-cost terminal. Mavcom’s rationale for the increase is to equalise the PSC between KLIA and KLIA2 because they view the two airports as providing a similar quality of service.

However, anyone who’s used the two airports would know that the level of service provided at the two airports is far from the same. For passengers, this includes the long distances that need to be covered by foot when using KLIA2. The check-in area at KLIA also has more space and counters compared to the newer KLIA2, even though the latter was designed for a higher passenger capacity of 45 million people per year compared to KLIA’s 30 million people per year.

Airline operators also face similar inconveniences including a greater distance to the KLAS Cargo and catering building, which are now 10km away in KLIA. The construction of KLIA2 was already controversial with problems such as sinking soil which has caused alarming depressions on the aprons and runway, while damaging fuel supplies at the airport.

With all these problems plaguing KLIA2, it is boggles the mind how Mavcom has decided to treat the airport as an equal to KLIA, and in doing so make passengers at the lesser airport bear a greater cost.

The real reason for the increase in PSC lie in the astronomical cost over-runs that came with KLIA2. The airport which was built and is operated by Malaysia Airports Berhad (MAHB) started off with a budget of RM1.7 billion in 2007 and wound up costing well-above RM4 billion.  Worse, the ‘low-cost’ terminal was completed more than 2 years later than scheduled.

Back in 2012, when I raised this issue in Parliament, the then Deputy Transport Minister said that the increased costs would not be borne by the Government but would instead be fully borne by MAHB through their issuance of sukuk bonds.  MAHB had borrowed RM5.6 billion through various bond issuances to fund the airport.

In 2014, I protested that MAHB’s borrowing spree to fund these increased costs had lead to the company facing increased financing costs. An analyst report on MAHB at the time had suggested that without a price hike to the PSC at KLIA2, MAHB would not be able to meet its debt obligations which kick in in 2023.

The Chief Financial Officer of MAHB then had assured the Public Accounts Committee (PAC) who was investigating the KLIA2 project then that MAHB does not deed to raise the PSC to meet its debt obligations.  However, it is clear today that the senior management of MAHB had lied to the PAC to absolve themselves of responsibilities towards to drastic increase in the cost of construction of the new terminal.

The government may not have lied when it said that government funds would not be used to bear the extra costs of KLIA2, but it did conveniently hide the fact that passengers would be picking up the tab through its increased PSC.

It is clear now that the PSC hike announced by Mavcom could be coming in to ensure that the Government does not have to bailout MAHB if it fails to meet its debt obligation. Worse, the massive hike of the PSC at KLIA2 will significantly jeopardise Malaysia’s strategic competitiveness as the hub for the growing low cost airlines.  This will in turn hurt our tourist arrivals and economy.

Therefore, we call upon the Government to review the decision to penalise KLIA2 passengers with higher fees without any corresponding increase in the quality of facilities and service.

Wednesday, December 13, 2017

DBKL's in-your-face defiance to Cabinet directive freezing all high-end property developments above RM1 million per unit proves that BN Government has lost total control of its limbs

Following a meeting with DBKL Mayor Tan Sri Mohamad Amin Nordin, my colleagues from Parliament revealed yesterday that DBKL would not be enacting the announced freeze on high-rise property developments above RM1 million. According to Segambut MP Lim Lip Eng, DBKL Mayor said that the ban would not be implemented in the Golden Triangle as it would infeasible.

City Hall’s response confirms two glaring flaws in the government’s ‘hare-brained’ solution to the oversupply of luxury properties in the country. Firstly, as I’ve stated before, it shows how ill-thought out and impractical the ban actually is.

Secondly and more importantly, DBKL’s defiance of a Cabinet directive demonstrates just how toothless Putrajaya’s is.  Ironically the BNM report specifically highlighted that in Kuala Lumpur and the Klang Valley alone, the report found that office vacancy rates had increased from 20.9% in Q1 2015 to 23.6% in Q1 2017. The situation is only set to get worse with an incoming supply of additional 38 million square feet of office space.

The property freeze was first announced on November 17 by Second Finance Minister Datuk Johari Abdul Ghani following the release of Bank Negara’s (BNM) report on the severe supply and demand imbalance in the country’s property market. The freeze was supposedly a nationwide blanket ban which would freeze approvals on condominium, office and shopping mall developments valued above RM1 million per unit.

The announcement quickly became a farce when the Works Minister Datuk Fadillah Yusof contradicted his cabinet colleague by saying the ‘blanket ban’ would actually be applied on a case by case basis. The Federal Territories Minister Dato’ Seri Tengku Adnan Tengku Mansor then added that 1MDB-linked projects - Tun Razak Exchange and Bandar Malaysia would be exempted from the ban because they were ‘pre-approved’.

Finally, cabinet made a full u-turn last week when it said that developers could appeal the ban to a Ministerial committee comprising the Second Finance Minister, the Works Minister, Urban Wellbeing and Local Government Minister Tan Sri Noh Omar, and Minister in the Prime Minister’s Department Datuk Abdul Rahman Dahlan.

However, yesterday’s revelation by the DBKL Mayor proved that all these acrobatics are unnecessary since any decision by the Cabinet is utterly futile. If DBKL can do it, then there’s no reason why all other local councils in the country would comply with the directive.

The above further showed why we have reached such a state of severe “demand and supply imbalance” in the first place despite warnings from BNM since 2015.  It is precisely because of the Cabinet’s impotence, that whatever policy that has been decided upon – good or bad, are completely diulted, if not ignored altogether like the above, by the its implementation agencies.

Beyond the major policy decisions Putrajaya needs to make to remedy the increasingly severe property sector problems which will have far-reaching consequences for our economy, there is a clear need to overhaul the Government bureaucracy to ensure policies made are carried out to the letter.  Otherwise, you may have the world’s best policy-makers and the highest paid consultants, but all would be wasted with a Government effectively run by politically entrenched warlords and little Napoleons.

Sunday, December 10, 2017

The Police must stop abusing irrelevant and oppressive laws to investigate and persecute Senai state assemblywoman for merely questioning if the Johor Menteri Besar was involved in an act of corruption

On 27 November, DAP Senai elected representative, Wong Shu Qi had asked in the Johor State Assembly whether it was true that Khaled had received RM12 million from a developer to change the Bumiputera status of a residential plot of land to non-Bumiputera.  Wong said the allegations against Khaled had surfaced in March and were based on witness statements in an investigation by the Malaysian Anti-Corruption Commission (MACC).

As a result of her question, she has not only been thrown out of the state assembly and is in the process of being referred to the Rights and Privileges Committee, the Police have commenced investigation against what she asked.

Firstly, the investigation by the Police demonstrates a clear abuse of power on its part by failing to respect the sanctity of the Johor state assembly.

The Federal Constitution, the highest law of our land, clearly states that assemblymen are immune from things said in state legislative proceedings.  Clause 72(2) of the Constitution states that:

No person shall be liable to any proceedings in any court in respect of anything said or any vote given by him when taking part in proceedings of the Legislative Assembly of any State or of any committee thereof.

The reason for this protection needs no explanation – but for the benefit of our law enforcers – elected representatives must be empowered to state and ask without fear or favour regardless of how scandalous and sensitive the subject matter might be. This process exists to ensure transparency and accountability in national and state administration.

If one can’t even ask questions of our leader’s in the state assembly, then where else can we ask to ensure the righteousness and integrity of our Government?

Are the Police of the opinion that the Menteri Besar of Johor is above the law, to the extent that even questioning his alleged involvement in a corruption case is criminal?

Worse, the Police are clearly clutching at straws to investigate and persecute Wong.  Wong has purportedly committed an offence under Section 203A of the Penal Code provides that anyone who discloses purportedly leaked information to any other person shall be punished with fine of not more than one million ringgit, or with imprisonment for a term which may extend to one year, or with both.

The problem here is what leaked information is illegal?  When fraudulent contracts signed by 1MDB with Petrosaudi International and Aabar Investment PJS Limited involving billions of dollars were exposed, does it mean that every person who had written about it – from analysts to politicians to both online and off-line media are all guilty of the above crime?

That would only result in the complete collapse of Malaysia’s natural justice system where the whistleblowers are persecuted while those involved in crimes against the tax-payers get away scot free.

Wong is also investigated under Section 233 of the Communications and Multimedia Act, which refers to “improper use of network facilities or network service, etc.”

The fact that a leaked witness statement relating to the corruption allegations against Datuk Seri Mohamed Khaled Nordin might amount to ‘communication which is obscene, indecent, false, menacing or offensive in character with intent to annoy, abuse, threaten or harass another person’ is clearly an outrageous abuse of the law.

My question to the Police and the Malaysian Anti-Corruption Commission remains the same – have they initiated and commenced investigations against Dato’ Seri Khaled Nordin based on the very witness statement which is being used to charge another member of the Johor administration for corrupt practices?

If the Johor Menteri Besar is indeed innocent, let the investigations prove that to be the case and clear Dato’ Seri Khalid’s name.  However, the fact that no investigations have been carried out against the Menteri Besar, but those who had the courage to question the case even within the protect confines of the state assembly are persecuted, only serve to confirm the suspicions in the minds of the rakyat as to Dato’ Seri Khalid’s guilt or innocence.

Friday, December 08, 2017

Why is the Cabinet adamant in ignoring Bank Negara's policy prescriptions on the property market imbalance?

Putrajaya’s constant u-turns over its announced luxury property ban are yet another example of the government’s absurd tendency to ignore expert policy advice in favour of ill thought out knee-jerk reactions.

Bank Negara (BNM) had reported last month on the substantial supply and demand imbalance within the country’s property market. The report found that new property launches were skewed towards the high-end sector of the market priced above RM250,000.

The government then immediately issued a poorly thought out directive halting approvals for all new high-end property developments priced above RM1 million per unit.

When the blanket freeze was first announced on November 17, I had already warned that the ban was not going to resolve any of the issues highlighted by Bank Negara. Sure enough, the government has now made a near-complete U-turn its ban in less than a month.

Based on the latest announcements by the Housing and Local Government Minister, Dato’ Seri Noh Omar and the Second Finance Minister, Dato' Seri Johari Abdul Ghani, earlier this week, property developers can now appeal to Ministers for high-end project approvals on a case-by-case basis.  Basically, the Ministers have now granted themselves full discretionary powers to approve projects for developers who can sweet talk way to win the hearts of the Ministers.

The arbitrary nature of this new policy with have serious consequences to short and longer term investments by both foreign and domestic investors in Malaysia.

The thing is, BNM’s report had outlined six different policy recommendations to dealing with specific issues in the property market.   Hence, why doesn’t the government just adopt the advice already given to them by BNM?

To address the high level of unsold residential properties, the report suggested increasing encouragement for the rental market. On affordable housing, it was recommended that the government increase its efficiency in providing and allocating affordable homes. These policies are targeted and are designed to address the specific issues in the residential market.

The government’s halting of new approvals for high-rise residential developments over RM1 million does nothing to address these issues. According to the Edge Weekly’s in-depth report published last weekend, units at that price point and high-rise residences only make up 12.06% and 11.48% of unsold properties respectively.

BNM also suggested better management to address the large incoming supply of commercial properties. This includes ensuring the commercial viability of the project is thoroughly assessed and for developers to be cognisant of demand conditions. However, the government’s blanket ban lacked any mechanism that would allow an objective assessment of each development.

In addition, to alleviate the problem of high office vacancy rates and low rental rates in existing buildings, the report recommended the repurposing of vacant commercial buildings as well as increasing demand for existing space through either rental rebates or greater efforts to attract foreign business.

Unlike these policies, the government’s knee-jerk ban would only halt the approvals for future high-end developments without managing the already severe level of oversupply. It is difficult to understand why the government has chosen to ignore Bank Negara’s relatively sound advice to address these problems.

We call upon the government to take heed of Bank Negara’s recommendations immediately.  It should also conduct a thorough study with all stakeholders and think-tanks to design and implement consistent, constructive and incentivised policies to ensure continued growth and sustainability for the property sector and correspondingly, our economy.

Thursday, December 07, 2017

Our Cabinet has some of the best back-flip acrobats in the world with the unbelievable twists and turns over high-end property development freeze

Second Finance Minister Datuk Seri Johari Abdul Ghani announced on November 17 that the government had sent a directive to halt all approvals for high-end residences, shopping complexes and office buildings priced over RM1 million.

The freeze came after Bank Negara’s report on the substantial supply and demand imbalance within the country’s property market. The report found that new property launches were skewed towards the high-end sector of the market.

The Second Finance Minister subsequently reaffirmed the blanket ban after his fellow Cabinet colleague, Works Minister Datuk Fadillah Yusof said that developments would be reviewed on a case by case basis.

The ‘blanket ban’ had smacked of being a ‘hare-brained’ policy prescription as the Government started granting exemptions to projects which the Government had a vested interested.  In particular, the Minister of Federal Territories, Dato’ Seri Tengku Adnan Tengku Mansor said the 1MDB-linked projects – Tun Razak Exchange and Bandar Malaysia were “pre-approved”, and are hence exempted.

The fact that Bandar Malaysia has not even found a developer with a plan appears immaterial to the ban exemption.

The biased exemption of such projects by Government-linked companies (GLCs) created an uproar among the private sector, who then lobbied hard to ease the ban.

Yesterday, the Government did another double-twist somersault on its ‘blanket ban’. Two statements by Urban Wellbeing and Local Government Minister Tan Sri Noh Omar and Datuk Seri Johari, suggested that the Government will now allow developers to appeal the ban on a case by case basis.

For luxury residential properties, Tan Sri Noh Omar announced that a four-minister committee to review the project applications comprising of Datuk Seri Johari, Datuk Fadillah, Minister in the Prime Minister’s Department Datuk Abdul Rahman Dahlan and himself. The committee would apparently subject its approvals to criteria including the existing housing condition, the number of houses in that location and those priced above RM1 million, as well as the number of unsold houses.

Separately, Datuk Johari said that developers of office spaces and shopping malls could appeal to the relevant ministers if they find locations that lack those properties and can justify their developments. He even went on to say that “anyone can build an office provided you know how to market it”.

Does the Minister actually think that developers are going to build an office block or a mall that they are not confident in selling?

I was among the first who had criticised that the blanket ban would not do much to remedy the property market imbalance.  However, now the Ministers have granted themselves full discretionary powers to grant approval to any developers who can sweet talk way to win the hearts of the Ministers.

Have we now become a communist regime where the Government dictates how many left shoes to manufacture?  Two big mistakes here certainly don’t make a right.

The multiple twists and turns worthy of a world-class acrobatic act only goes to prove that the Najib administration is completely clueless in policy-making.  How does the above, for example, even address the main issue of the lack of affordable housing in the country and the largest oversupply of residential properties were reported at the RM500 000 to RM1 million segment?

The worst type of Government for any investor, foreign or domestic, is the absolutely lack of predictability and consistency in its policies.  The current fiasco will certainly have major short to long term negative implications for Malaysia’s economy.  The Cabinet must remedy its knee-jerk policy-making mechanism and instead, conduct a thorough study with all stakeholders, Bank Negara and think-tanks to design a consistent, constructive and incentivised policies to ensure continued growth and sustainability for the property sector and our economy.

Wednesday, December 06, 2017

In the National Art Gallery and the Police's attempt to censor works purportedly portraying ‘elements of communism’, they act precisely like the communists they so zealously despise

Last month, the Malaysian art community made headlines again when 7 artists withdrew themselves from the inaugural KL Biennale after pieces from their installation titled, “Under Construction” were purportedly confiscated by the police the day before the official launch of the exhibition.  The KL Biennale is a biennial contemporary art exhibition jointly organised by the National Art Gallery and the Ministry of Tourism and Culture (MOTAC). Modelled after the famous Venice Biennale, the KL version was heavily promoted as it featured 103 local artists and 11 international artists.

While Malaysians may understand a degree of censorship with regards to certain taboo issues such as art works insulting religion, the basis of censorship for the so-called prestigious event above has made Malaysia an international laughing stock.

The artists, comprising of 5 Malaysians and 2 Indonesians, said that police were called in to inspect their work and had said that the works presented “elements of communism”.  The parts removed by the authorities, included the word “Rasuahahahahaha” and some books.

According to the group’s spokesperson, Aisyah Baharuddin, the art installation was meant to depict the human mind, culture and community, which were always changing and developing.

To add salt to wound, the artists were even forbidden to touch their own art work pending police investigations.

“We felt that they have violated our artwork by removing things that were part of the whole project. We were not allowed to go near it or even touch it. That was why we finally decided to cover it up with the black net as a sign of protest,” Aisyah said.

What was most disgraceful is the utter lack of professionalism and competence among the organisers and the authorities.

The show’s curator told the artists that the police confiscated pieces from their installation. However, the police said they only advised the gallery to remove the artwork and return it to the artists.  More than a week after the controversy, no one is none the wiser.

As Aisyah rightly asked, “the National Art Gallery and the police have given conflicting accounts. Who is telling the truth? What actually happened?”

The irony of the entire fiasco is the fact that the Malaysian authorities are acting precisely like the purported “communisim” elements which the artist were accused of portraying.  Are we now like a Stalinist totalitarian regime where the police and other relevant authorities will act like the Big Brother controlling how and what its citizens think?

The blatant attempts at censorship here clearly epitomises the ‘advise’ provided by the recently retired Inspector-General of Police (IGP) Tan Sri Khalid Abu Bakar to cartoonist Zunar to stick to “drawing Donald Duck”.

This totalitarian mindset of the National Art Gallery and the Police will destroy any hopes of achieving the Biennale’s main objectives, which was to position KL as a must visit city on the global art map and to position Malaysia as a country that is persistent in developing a competitive creative economic sector.

The government had proudly launched the Cultural Economy Development Agency (CENDANA) with a RM20 million allocation in this year’s budget to boost the country’s cultural economy. Previously, the government launched MyCreative Ventures in 2012 as an investment arm with a RM200 million allocation to invest in viable creative businesses in the country. Both CENDANA and MyCreative Ventures are listed as co-supporters of the KL Biennale.

However, all the above well-intended funding allocations however will be completely wasted if the trend of arbitrary and increasingly intolerant censorship continues.

Earlier this year, Sabahan art collective Pangrok Sulap also made headlines when the withdrew themselves from the ongoing ESCAPE from SEA, exhibition after their piece titled “Sabah Tanah Air-Ku” was removed from the exhibition in Bangsar. Their piece was reported removed after a complaint was made that was later escalated to the Prime Minister’s Office. The piece explicitly highlights major Sabahan issues including Project IC, illegal logging, flooding and corruption.

If the government is sincere about making Malaysia a global cultural hub and to develop her local creative industries, it must stop with these frivolous acts of censorship and allow creative expression to thrive.

Dato’ Seri Najib Razak must summon the US Ambassador and file an official protest to his golf buddy, President Donald Trump against the US Attorney-General Jeff Sessions for disparaging and destroying Malaysia’s international reputation

US Attorney-General Jeff Sessions called the Malaysian 1MDB scandal “kleptocracy at its worst” at the Global Forum on Asset Recovery hosted by the World Bank and the United Nations Office on Drugs and Crime. He informed the international audience that half of the US$3.5 billion in assets seized by the Department of Justice’s Kleptocracy Asset Recovery Initiative was related to its suits on 1MDB.

He said that allegedly corrupt officials and their associates had reportedly used the 1MDB funds for a “lavish spending spree” such as US$200 million for real estate in South California and New York, US$130 million in artwork, US$100 million in an American music label and a US$265 million yacht.

1MDB officials allegedly laundered more than US$4.5 billion in total, he said, through a complex web of opaque transactions and shell companies with bank accounts in various countries such as Switzerland, Singapore, Luxembourg and the US.

These allegations, while not new, have taken a more serious turn as the United States Attorney-General has now made these allegations at the World Bank international conference.

The question now is whether our Prime Minister Dato’ Seri Najib Razak will just let a foreign country disparage and destroy Malaysia’s international reputation and credibility?  Is he not going to speak out to defend Malaysian’s honour?  Does he think that the US Attorney-General’s speech will have no impact Malaysia’s attractiveness as a destination for tourism and investment?

We call upon the Prime Minister, Dato’ Seri Najib Razak to summon the United States Ambassador to express in the harshest possible terms our protest towards all the allegations made by the US Attorney-General.  In fact, he should immediately file an official complaint with his golf-buddy, President Donald Trump and demand an apology from the United States government.

This week Dato’ Seri Najib is scheduled to address the UMNO General. There could not be a better opportunity for the Prime Minister to boast to his faithful that he has taken the firmest possible action against foreign powers bent on sabotaging Malaysia’s economy and progress.

Hence why is Dato’ Seri Najib Razak remaining quiet as a mouse?  Is it because Jeff Sessions has merely stated what is the inconvenient truth for him and his administration?

In fact, the Government’s continued silence to the disparaging of Malaysia’s reputation and credibility by top Government leader overseas only serves to confirm that Dato’ Seri Najib Razak and his Government is guilty as charged – billions of dollars have been laundered by “corrupt officials and their associates”.

In that case, Dato’ Seri Najib Razak must answer to every Malaysian as to why not a single person relating to the 1MDB scandal has been investigated and charged for these heinous crimes in Malaysia.

Tuesday, December 05, 2017

Sedangkan Menteri Besar Johor Dato’ Seri Khaled Nordin tidak mengaku salah, SPRM mesti menjalankan siasatan penuh untuk membersihkan nama beliau

Semalam, Menteri Besar Johor Datuk Seri Mohamed Khaled Nordin telah menafikan dakwaan yang beliau terlibat dalam rasuah berkaitan hartanah di negeri itu.

"Saya menafikan sekeras-kerasnya tuduhan tak berasas tersebut. Ia adalah fitnah, tidak benar dan tidak bersangkutan dengan saya.

"Pentadbiran saya tidak menerima apa-apa suapan, tidak akan menerima apa-apa suapan dan akan menentang segala usaha untuk memberi apa jua bentuk suapan kepada saya dan pentadbiran saya," katanya.

Minggu lalu, saya telah menyoal Suruhanjaya Pencegah Rasuah Malaysia (SPRM) kenapa tidak menjalankan siasatan ke atas Menteri Besar Johor berdasarkan dokumen kenyataan saksi SPRM, Amir Shariffuddin Abd Raub, yang bocor di internet.

Datuk Seri Mohamed Khaled dituduh menerima sebanyak RM12 juta daripada Amir pada tarikh-tarikh yang tertentu, berkaitan dengan kes rasuah bekas exco kerajaan negeri Datuk Abdul Latif Bandi awal tahun ini.

SPRM kemudian mengesahkan kebocoran dokumen tersebut, walaupun Amir mendakwa kenyataannya dalam dokumen yang tersebar itu tidak lengkap dan telah membuat laporan polis.

Kami menyambut baik penafian keras daripada Menteri Besar Johor.  Kenyataan yang telah dibuat di dalam Dewan Undangan Negeri tersebut adalah jauh berbanding dengan sikap Perdana Menteri Dato’ Seri Najib Razak yang sehingga hari ini, masih enggan membuat sebarang kenyataan kepada Dewan Rakyat mengenai jumlah wang melebih RM2.6 bilion yang masuk ke dalam akaun peribadinya.

Akan tetapi, jika Menteri Besar benar-benar tidak bersalah, kenapa SPRM langsung tidak menjalankan sebarang siasat terhadapnya supaya kebenaran dapat ditetapkan dan kes ini boleh ditutup?

Apatah lagi, jika kenyataan saksi Amir Shariffuddin digunakan untuk mendakwa kes Datuk Abdul Latif, bukankan ianya penting bahawa kenyataan beliau adalah benar dan boleh dipercayai (“credible”) pada keseluruhannya?

Maksudnya jika kenyataan Amir di mana beliau telah menyerahkan sebanyak RM12 juta kepada Dato’ Seri Khaled adalah tidak benar, ia bermakna bahawa kenyataan Amir tidak boleh sama sekali digunakan terhadap Datuk Abdul Latif.  Akan tetapi, jika kenyataan Amir boleh dipercayai dan berasas kukuh untuk digunakan mendakwa Datuk Abdul Latif, maka bahagian-bahagian yang melibatkan Menteri Besar Johor juga mesti disiasat.

Oleh itu, kami menyeru supaya Dato’ Seri Khaled meminta SPRM membuka siasatan terhadapnya secara terbuka supaya SPRM dapat mengesahkan penafiannya.  Ini adalah penting untuk menyakinkan rakyat jelata bahawa tuduhan tersebut adalah benar-benar tidak berasas dan nama baik Menteri Besar Johor dapat dipulihkan.

Pada masa yang sama, kami terus menyeru SPRM menyiasat tuduhan rasuah terhadap Menteri Besar Johor supaya institusi SPRM menjalankan tugas mereka dengan penuh integriti, dan tidak dilihat berat sebelah.

Ia juga akan memastikan supaya kes Datuk Abdul Latif yang bergantung antaranya kepada kenyataan Amir tidak akan terjejas akibat perkara ini.  Pada masa yang sama, jikalau kenyataan saksi Amir adalah tidak benar, SPRM mesti menambahkan dakwaan terhadap beliau kerana memberi kenyataan palsu.

Saturday, December 02, 2017

Datin Paduka Chew Mei Fun should look into the mirror before false making accusations of “unrestrained land sale” in Penang

In a statement on Thursday, the MCA Vice-President, Datin Paduka Chew Mei Fun accused Penang of being “unrestrained in its sale of land”. She referred to the 2016 Auditor-General’s (AG) report to show that a substantial portion of the state’s income came from the sale of land and land transfer fees.

Chew could not be more wrong in her baseless accusations.  In fact, exactly the reverse is true.

Despite the current Pakatan government’s ‘restrained’ sale of land, we have managed to receive income which far exceeds that received under the previous BN government’s policy of ‘unrestrained land sale’.  The statistics could not be more blatantly clear.

BN’s rule over Penang saw the sale of 3,661 acres of state land in the 15 years before 2008. Under Pakatan leadership, only 106.1 acres of state land was sold over the past 10 years.  If Chew didn’t fail her mathematics, she should have figured that Pakatan has barely sold 3% of what BN sold!

More pertinently, Penang lead by Pakatan received RM1.11 billion for its sale of 106.1 acres whereas the BN state government only raised RM1.06 billion from 3,661 acres of land.   In other words, the Penang state government today collected more money despite selling only a tiny fraction of the land sold by BN.  This was achieved simply because the Pakatan government carried out open tenders for its sale.

By the very fact that we have successfully sold these land for very substantially higher prices than the BN government, of course it would naturally result in a higher contribution from land revenue to the state coffers, as reported by the AG.

In addition, figures from the BN’s era from 2002 to 2007 AG’s report also showed the sale and transfer of state land was a key contributor to state. Hence, the only difference was Pakatan received much more despite selling much less.

What amazes me however, is the cheek Chew Mei Fun has to actually criticise Penang on the alleged ‘unrestrained land sale’.

As exposed earlier, even when Chew was the Member of Parliament for my current constituency, her party MCA acquired an acre of prime land from the then BN state government for a measly RM1 per square feet (psf) in 2007.  Today, the land is worth as much as RM400psf. Despite her refusal to take responsibility for the transaction, she admitted to being fully aware of it.  And this is just one of the hundreds and perhaps thousands of land which MCA has benefited from BN state governments across the country.

So the question for Chew is, what moral standing does she have to chide the Penang state government over land sale conducted via open tenders, when her own party has effectively abused its position in power to profit themselves and betray the trust the voters had placed in them?

Thursday, November 30, 2017

Why hasn’t the Malaysian Anti-Corruption Commission investigated Johor MB, Datuk Seri Khaled Nordin?

The whole of Malaysia have now seen the MACC investigation documents which have been leaked this week, implicating corruption by the Johor Menteri Besar (MB), Datuk Seri Khaled Nordin.  The documents comprised of the witness statement taken by MACC during its investigation into Johor state executive councillor Datuk Abdul Latif Bandi. The documents come from the Commission’s interview with Amir Shariffuddin bin Abdul Raub, who was also charged with Datuk Latif in April this year.

MACC had investigated the two in relation to a land graft scandal, where the two had received multiple bribes amounting to RM30 million from developers in return for their assistance in changing the status of bumiputera lots as well as reducing the 7.5% charge levied upon developers.

As shocking as the initial news of their investigation was, the biggest shocker is found in the witness statement (relevant pages attached), where Amir admitted to delivering nearly RM12 million in cash to the Menteri Besar in return for the MB’s help in the necessary land changes.

The MACC has effectively confirmed the authenticity of these documents when Deputy MACC commissioner Dato’ Sri Azam Baki’s said yesterday that the documents were sent to the lawyers of one of the defendants in the case.

Now that the MACC has acknowledged the documents, they will have to explain their failure to investigate the MB, who is similarly implicated according to the witness statement.

The first account given by Amir was for an alleged transfer of RM4 million in September 2013. That kickback would come from the developer MB Land, which had solicited Amir’s help in converting the land status and waiving the charge.

Following that successful deal, Amir says he was approached by other developers for similar favours. Each of these deals would also include multiple alleged kickbacks to the Mentri Besar. For a deal by IJM Group, Amir stated that he instructed his lawyer Zul Azam to cash in a cheque worth RM1 million. He then handed over the money in a backpack as instructed by Datuk Khaled. That was done on 14 November 2013.

Subsequently, Amir also admitted to paying the MB, a total of RM9.7 million in cash over 10 transactions between 16 April 2014 and 4 May 2016. Those payments were for facilitating a land deal for Scientex Sdn. Bhd. The report specifically highlighted 5 of those transactions made on 16 April 2014, 1 October 2014, 20 October 2014, 2 December 2014 and 17 June 2015.

With such concrete evidence in front of their own noses, why hasn’t the MACC investigated Datuk Seri Khaled Nordin?

Worse, the MACC has decided it was more appropriate to ‘kill the messenger’ by filing a police report over the purported leaks.  In turn, the Johor state assembly (DUN) disgraced itself by acting in cahoots in its attempt to silence the issue by throwing out Senai state assemblywoman Wong Shu Qi in the DUN.

In fact, all the companies which have paid the alleged bribes must be investigated, and if guilty, charged and punished as well.  After all, the MACC has often opined that the giver of bribes is as guilty as those who receive.

The question is, is the Johor MB immune to investigations and prosecution just like Dato’ Seri Najib Razak is, in the case of the multi-billion ringgit scandal, 1MDB?  While the MACC abdicated from its responsibility to investigate the Prime Minister by shoving the responsibility to the Police, what is MACC’s excuse this time?

Where is the ‘all hands on the deck’ haste and urgency in the MACC just like the way it dealt with alleged and even trumped up corruption charges against opposition figures?  Or will this remove, once and for all, the façade that the MACC is an independent investigating institution which will act without fear or favour; and that it is merely an extended paw of UMNO to oppress the opposition while protecting its political masters?

Whose head should roll when East Coast Rail Link’s outrageous claims of profitability fail to materialise?

The East Coast Rail Link (ECRL) project which was awarded without any tender to China Communications and Construction Company (CCCC) has been criticised for being overly expensive at RM55 billion and potentially soaring to RM70 billion according to some reports. The government’s own consultants had estimated the cost to be only RM29 billion.

 Yet despite the heavy price tag, the Deputy Finance Minister Datuk Othman Aziz told Parliament on 28 November that the project was expected to “break even from the operational aspect”, after just 8 years of operation in 2032.

The Deputy Minister’s statement is wildly ambitious on many counts.

Firstly, we have to assume that the Deputy Minister meant that “break even from the operational aspect” meant that it does not cover the enormous cost of constructing the ECRL, which is covered entirely by debt.

So far, the government has said that 85% of the project will be financed by China’s Export-Import Bank (EXIM), with a soft loan carrying an interest rate of 3.25% per annum repaid over 20 years with a 7-year moratorium. The remainder 15% will be financed via a sukuk issuance.

Therefore, the annual repayment of the ECRL borrowings will amount to an estimated whopping RM3.7 billion.  This simply means that even if the ECRL is to “break even from the operational aspect” after 8 years, it will still be suffering cashflow losses of some RM3.7 billion annually!

However, even Datuk Othman Aziz’s claim of “break even from the operational aspect” is preposterous to begin with.

Datuk Othman claimed that the government was projecting a revenue of RM2.9 billion to be recorded in 2024.  But this amount is more than 4 times the current revenue of KTM Berhad today!

The ridiculous revenue projection is achieved with a fantastical projection of cargo the ECRL will transport. As raised by economist KS Jomo, the ECRL is expecting to carry 60 million tonnes of freight yearly by 2032 even though KTM’s existing freight haulage is only 6 million tonnes across the entirety of its existing rail network from Padang Besar to Johor Bahru.

How exactly is the ECRL expecting to see 10 times the amount of freight currently being transported on the matured and industrialised west coast of Peninsula Malaysia?

The BN Government must stop trying to mislead the people with fanciful daydreams and start providing data, analysis and studies to back up its wild and preposterous claims.  Who will also take responsibility if the ECRL fails achieve any where close to the projections above?  Will the Deputy Minister take responsibility by resigning from his position?  Or will it be the Prime and Finance Minister, Dato’ Seri Najib Razak who owns the ECRL brainchild and awarded to contract to CCCC?

The rakyat has the right to know the details because it will be our children and grandchildren who will have to bear the reckless debt burden of the current government should the project fail to meet its lofty targets.

Wednesday, November 29, 2017

Treasurer-General Tan Sri Irwan Serigar’s continued stalling over decision to appoint Bandar Malaysia master developer exposes that Ministry of Finance has not received any firm bids for the project

Ministry of Finance (MOF) Treasurer-General and Bandar Malaysia chairman Tan Sri Irwan Serigar continued to ask Malaysians to wait and see for the outcome of Bandar Malaysia’s call for a new master developer. When launching online radio station eFM yesterday, Irwan told reporters to “wait, the time will come,” when asked about the status of Bandar Malaysia’s call.

The call for a master developer followed the collapse of the RM7.41 billion deal with a consortium led by Iskandar Waterfront Holdings (IWH) to acquire a 60% stake in Bandar Malaysia. Following that collapse, Bandar Malaysia Sdn. Bhd., the wholly-owned MOF Inc. company and former 1MDB subsidiary, announced that it was going to be opening a tender for a master developer for the Bandar Malaysia project.

The new tender was going to include more stringent criteria including that the developer needed to be an affiliate of a Fortune 500 company and needed to have cumulatively generated RM50 billion in revenue in the last 3 consecutive years.

When the RFP was first announced in May, the new Bandar Malaysia chairman and MoF Secretary-General Irwan Serigar Abdullah said that the RFP deadline would close on June 30 and the final decision would be made by July 14.

On August 23, Tan Sri Irwan said that 6 companies had ‘expressed interest’ and had visited the site. “We took them for a site visit and they need to submit their proposal by the end of this month,” he said.

The Malaysian Reserve then reported on October 31 that Tan Sri Irwan said the announcement for the master developer would be “coming soon, coming soon”.

On November 8, I had asked the Minister of Finance to state how many companies had submitted finalised proposals for the re-tender of the Bandar Malaysia project, how many of those companies were Fortune 500 companies and when the tender decision would be announced.

He again merely responded that 8 companies which had met the criteria had “expressed their interest” in becoming the master developer.

It has now become quite obvious that since June this year, the only progress we have made is purportedly 6 to 8 companies have “expressed interest” in Bandar Malaysia despite a decision which was to be “made by July 14”.

We call upon Tan Sri Irwan Serigar to confirm if in fact, there have been no firm bids tabled by any so-called Fortune 500 company to acquire and develop Bandar Malaysia, especially not at the astronomical price demanded by the Ministry of Finance.

Tuesday, November 28, 2017

The biggest culprits to the supply-demand imbalances in the property market in Malaysia are none other than Government-linked Companies

The Cabinet has imposed a “temporary ban” approvals for shopping complexes, offices, serviced apartments and luxury condominiums priced over RM1 million effective November 1.

The freeze came after Bank Negara’s report on the substantial supply and demand imbalance within the country’s property market. Bank Negara stated that the oversupply of properties in the country has been persistent over the past few years. Bank Negara themselves had raised the issue in their 2015 annual report.

In the Klang Valley, the report found that office vacancy rates had increased from 20.9% in Q1 2015 to 23.6% in Q1 2017. The situation is only set to get worse as there is an incoming supply of 38 million square feet of office space.

However, what Bank Negara and the Cabinet did not say was that among the biggest culprits causing the supply-demand imbalances in the property market are the Government-linked Companies (GLCs) and Government-linked Investment Companies (GLICs).

A report by The Star on April 6 this year highlighted the increasing involvement of GLICs in the property both directly and indirectly. EPF has been directly involved developing the new Kwasa Damansara township, which has a massive size of 2,300 acres and RM50 billion in gross development value (GDV).

Pemodalan Nasional Bhd (PNB) on the other hand, is developing the 118-storey Menara Warisan project next to the historic Stadium Merdeka. It will offer 4.3 million square feet of residential, hotel and commercial space.

PNB is also the single biggest shareholder of S P Setia, one of the largest, if not the largest property developer in Malaysia.  S P Setia is renown for some of the biggest luxury developments in the Klang Valley, including a 25-acres KL Eco-City, Setia Sky Seputeh and many others.

In addition, EPF and PNB jointly owns 63% of Sime Darby Bhd, whose property arm is another one of the largest property developers in the country.  The company has only recently launched its RM8 billion GDV AYLA Kuala Lumpur project which covers an area of 360 acres.

There is also the Bukit Bintang City Centre (BBCC) which sprawls over 19.4 acres with a GDV of RM8.7 billion. The project is spearheaded by UDA, a wholly-owned subsidiary of the Ministry of Finance.

No listing of high-end property projects in Kuala Lumpur will be complete without also mentioning the 76-acres RM20 billion GDV KL Metropolis project.  While on paper, it is developed by a private company, Naza TTDI, the project is in effect a controversial land-for-building deal with the Ministry of International Trade and Industry (MITI).

Elsewhere, Khazanah-owned UEM Sunrise also specialises in the high-end residential market in prestige locations such as Mont Kiara. In Johor, which was highlighted as having the largest share or 27% of all unsold properties in the country, UEM Land is developing 14 new projects which are all listed as high-end developments.

All of the above do not yet include the two mega-property developments linked to the scandalised 1Malaysia Development Bhd (1MDB) – the 70-acre Tun Razak Exchange (TRX) and the 486-acre Bandar Malaysia.

The issue here is two-fold. First, it is clear that GLCs contribute overwhelmingly to the glut which is threatening our property space in the country today.  No policy prescription without recognising and reviewing the role of the government, GLCs and GLICs has played in our “imbalanced” property development sector will be effective or successful.

The second more important economic question is, will the Government also be granting ‘ban’ exemptions to all these GLCs’ projects as it has done for TRX and Bandar Malaysia?  What then, will be the implication for the private sector in Malaysia?  Should they all just pack they bags and take their money to other countries to invest?

Sunday, November 26, 2017

The longer UMNO stays in power, the more UMNO will reconstruct Malaysia’s Constitution to erase the freedom and rights of Muslims and non-Muslims

After more than 60 years of the UMNO-led Barisan Nasional reign in Malaysia, there is now an undeniably increasing constriction of religious rights and freedom of all Malaysians.

Among Muslims, there is increasing control of what is deemed the sole interpretation of the scriptures, with no room for debate or discourse, academic or otherwise in the country.  We have seen various internationally renown Muslim scholars and thought leaders banned by the Malaysian authorities.

In 2014, Islamic scholar Ulil-Abshar Abdalla was banned from entering the country to speak at a forum on the threat posed by religious fundamentalism.  Ironically, the forum was being held at the headquarters of the Global Movement of Moderates established by Prime Minister Dato’ Seri Najib Razak himself.

More recently, Mustafa Aykol, renowned Turkish author and New York Times journalist attached to Wellesley College, Boston was arrested and detained for 18 hours in Malaysia for having purportedly given a “religious talk” without license.  The only problem to that charge is that he was merely participating in a roundtable intellectual discussion on the question, “does freedom of conscience open the floodgate to apostasy?”

His books were subsequently also banned by the Home Ministry as a “threat to national security”.  Not only foreign scholars have been targeted, progressive young Malaysian scholars such as Wan Ji Wan Hussin has also been arrested recently while his book, “Ulama Bukan Pewaris Nabi” was also banned.

On the other hand, conservative and controversial clerics such as Zamihan Mat Zin who, among other things, defended a Muslim-only laundrette was praised as an “asset” by the Home Minister, Dato’ Seri Zahid Hamidi.

The increasingly narrow interpretation of what Islam is and the outright condemnation of those who disagree, has also been matched over the past decade with the increasing attempt to demonise other religions, in particular, Christianity.

We have seen the confiscation of bibles, seditious and incendiary talks to incite hate against Christianity by renown fraudulent ‘scholars’ such as Irene Handono, as well as banning the use of the term “Allah” by other religions.

Christians are the convenient bogeymen for the UMNO politcal elites to continue to strike fear among their core Malay-Muslim supporters to ensure that all other transgressions by the Party, such as brazen corruption and outrageous scandals, will be set aside to face a concocted Christian threat head on.

However last week, the open attack in Parliament by Deputy Minister in the Prime Minister’s Department, Datuk Asyraf Wajdi that atheism is unconstitutional opens a whole new chapter in diminishing the religious rights of ordinary Malaysians.

He claimed that atheism should be outlawed because it will incite people to leave their religion or to profess no religion. As such, it violates Article 11(4) of the Constitution, which allows state laws and federal laws to control and restrict the propagation of any religious doctrines or beliefs among Muslims. He even said that “anyone who tries to spread ideologies and doctrines that promote atheism and similar beliefs, which tarnish the sanctity of other religions, can be charged under the Sedition Act.”

The Deputy Minister who apparently possess a Doctorate on Islamic Banking and Finance is talking utter rubbish.

Firstly, the Constitution clearly states “every person has the right to profess and practise his religion…”  How in the world did Datuk Asyraf interpret someone having “the right to profess” to everyone “must profess” in a religion?

When the Constitution says under Article 10, “every person has the right to freedom of speech” and “every person has the right to assemble peacefully without arms”, would the Deputy Minister with a Doctorate also interpret it as “everyone must speak (and hence cannot remain silent)” and that “everyone cannot refuse to participate in peaceful assembly”?

Of course not.  When someone “has the right to profess… his religion”, it clearly means that he has the freedom of choice to believe in a religion.  But it does not at any point compells him or her to adopt a religion!

In addition, an atheist or a free-thinker, by not believing in any religion or participating in any religious activities, does not make him or her, by default, run afoul of Article 11(4) which prohibits propagating other beliefs to Muslims.  That would be sheer illogical nonsense.

Unfortunately, propagating illogical nonsense isn’t illegal in Malaysia.  Hence such illegal nonsense is being abused by ruling political elite to strengthen their grip by striking fear into the hearts and minds of Muslims – to focus on the purported threat of Christianity, and now atheism; and of non-Muslims, by taking away their freedom, one bit at a time.

Friday, November 24, 2017

Ku Nan demonstrates “Malaysia Boleh” spirit by declaring Bandar Malaysia plans ‘approved’ even before master developer selection, to circumvent Cabinet luxury development ban.

Federal Territories Minister Datuk Seri Tengku Adnan Mansor has confirmed yesterday that the 1MDB-linked Bandar Malaysia and TRX would not be affected by the freeze on property approvals for condominiums, serviced apartments, offices and shopping complexes price above RM1 million.

He was responding to a question by PJ Selatan MP, Hee Loy Sian, when he said that the two projects had already received approval ‘in principle’ and could not be stopped from developing.

It is quite clear here that the government’s only principle here is to protect the interests of 1MDB. TRX and Bandar Malaysia are two of 1MDB’s largest assets that need to be developed if the fund wants any chance of staying afloat. They are also two of the biggest slated development projects in KL.

The amazing thing is, the Ministry of Finance has not even declared a winner to the tender for the master developer of Bandar Malaysia. The latest response from the Ministry of Finance last week is that there are 8 companies which have “expressed interest” in developing the massive 486-acres project. DBKL Mayor Tan Sri Mohd Amin had himself told Malaysiakini that they had yet to receive an application from Bandar Malaysia.

If exemptions from the freeze can be given just because of approvals had been given ‘in principle’, what worth is the freeze at all? Does this mean that other ‘planned’ high-end developments, which have yet to submit their planning applications, will also get exemptions?

These exemptions raise two worrying questions about the government’s planned freeze on high-end developments.

Firstly, it would mean that the effectiveness of the supposed ban on high-end project would be severely diluted.  Bank Negara’s report showed just how grave the supply and demand imbalance was, projecting 1-in-3 office spaces being vacant in the Klang Valley by 2021, if measures aren’t taken to control it. If this freeze on high-end developments is to be taken seriously at all, the government has to make sure it is fairly enforced across the board.

And secondly, 1MDB gets the special treatment which discriminates against all private businesses.

As per my previous statements on this issue, I reiterate that the purported ‘blanket ban’ against high-end projects with unit values above RM1 million is a hare-brained knee-jerk reaction which is faulty due to the unfair and substantial exemptions granted above.  In addition, the policy itself will not only fail to achieve its objectives because it is not properly targeted, it will create greater distortions in the market as well as turn away both domestic and foreign investors.

Thursday, November 23, 2017

Why are 1MDB-related projects given special exemptions despite Cabinet blanket ban on luxury property projects above RM1 million in unit values?

Last week, Dato’ Seri Johari Abdul Ghani announced the Cabinet decision on a “temporary ban” approvals for shopping complexes, offices, serviced apartments and luxury condominiums priced over RM1 million effective November 1.

The freeze came after Bank Negara’s report on the substantial supply and demand imbalance within the country’s property market. The report found that new property launches were skewed towards the high-end sector of the market.

Particularly in the Klang Valley, the report found that office vacancy rates had increased from 20.9% in Q1 2015 to 23.6% in Q1 2017. The situation is only set to get worse as there is an incoming supply of 38 million square feet of office space.

It has also been confirmed in various news reports that the Kuala Lumpur City Hall (DBKL) has received the above directive.

However, we are not sure if we should be shocked that the Mayor, Tan Sri Mohd Amin Nordin Abd Aziz announced yesterday that the prospective single largest high-end property development project ever in Malaysia – Bandar Malaysia is exempted from the ban.

Malaysiakini reported that although the Kuala Lumpur City Hall (DBKL) had yet to receive any application regarding the project, Mohd Amin said the freeze on approvals for condominiums, serviced apartments, offices and shopping complexes priced at RM1 million and above is not a blanket ban.

“We haven’t received any application from Bandar Malaysia. No, because it is not a blanket (ban). On certain developments, it can be approved,” he told Malaysiakini.

At the same time, it was announced yesterday that IJM would be building a new RM500 million office tower at Tun Razak Exchange after acquiring TRX City subsidiary Fairview Valley Sdn Bhd. Will this new tower, which will have a gross floor area of 560,000 square feet also be exempted from the ban?

Due to the size of these 1MDB-related projects, they will certainly exacerbate the property over-supply situation in the Klang Valley and effectively blunt the effectiveness of the Cabinet decision to ban high-end development projects.

More critically, if the 486 acres Bandar Malaysia and the 70 acres Tun Razak Exchange projects receive automatic exemptions from the ban – how is that fair to the rest of the property development industry in the country?

Clearly the “temporary ban” is a hare-brained which will fail to actually solve the “supply-demand imbalances” in our property sector. Worse, the investment and business community will only see the inconsistency and unfair policies imposed by the Government.  Can they be blamed if both the domestic and foreign investors take their money and invest in other countries?

Wednesday, November 22, 2017

Is the high-end property ‘freeze’ a case of a hare-brained attempt to hose down a fire which has already burnt to ashes, or worse, cause a flood and further add to the woes?

On 17 November, Bank Negara Malaysia (BNM) produced a report highlighting the mismatch in supply and demand of property developments in Malaysia.

The BNM Governor, Tan Sri Muhammad Ibrahim pointed out that the supply-demand imbalances in the property market has increased since 2015, pointing to the decade-high of unsold residential properties. There were 130,690 unsold units at the end of March this year, with 83% priced at above RM250,000.

The knee-jerk reaction to the alarming report was the announcement two days later by Second Finance Minister, Datuk Johari Abdul Ghani that the government had issued a directive temporarily stopping developments of shopping malls, commercial complexes and condominiums valued about RM1 million from November 1.

One can tell that it was a hare-brained policy attempt because the day after, the Works Minister, Datuk Fadillah Yusof said that the directive was not a blanket freeze and that approvals would be evaluated on a case by case basis.

Datuk Johari then added, on November 21, that the freeze would only affect projects that had not been approved and the length of the freeze would depend on a continued assessment of the situation.

The question is, how did the Government allow the situation to develop to such a state of gross mismatch in the first place?

Actually, the issue of imbalances in the property market was already highlighted by BNM in its 2015 annual report. And the oversupply in the housing market has since then almost doubled between 2015 and 2017.  In fact, Bank Negara’s figures for the property supply and demand come from the National Property Information Centre (NAPIC) located under the Ministry of Finance (MoF).

As the BNM Governor opined, “we have raised these issues for more than a year. Exposure of financial sector within this area is within a comfortable level. But if we're not careful, the oversupply could have a negative impact on the economy.”

Hence the question now is, given the fact that the milk is already spilled, will the seemingly drastic knee-jerk ban on luxury condominiums, shopping malls and commercial complexes solve the problem or trigger even more problems?

Investors, both domestic and foreign, will tell you that what they fear and hate more than bad policies are inconsistent, uncertain and ad-hoc policy-making.  The latter results in constant unanticipated changes and frequent policy U-turns which makes it impossible for business to plan their investments and measure their expected returns.

In this case, there are so many unanswered questions based on the Cabinet's hasty policy decision.

Has MoF asked the real estate sector – why is it that despite the excess supply of “luxury condominium”, developers continue to build them at that price?  Are Malaysian developers really that stupid to invest in projects which cannot sell?

Has MoF conducted a study to determine if a ban on the “luxury” sector will reallocate investments into the “affordable” property sector?  If it doesn’t, will the ban merely stop property and construction activities and consequently trigger an economic slowdown and lower employment opportunities?

One of the biggest questions that needs to be asked is, what is considered a “luxury” project?  The Bank Negara report used RM250,000 as the benchmark.  However, the Government’s own affordable housing agency PR1MA have properties priced between RM100,000 and RM400,000, although prices tend to be skewed more to the higher-end.  On the other hand, the latest MoF ban appears to apply to only properties priced above RM1 million.  Hence, are we prescribing medication to the wrong patient?

Worst, the blanket ban does not take into account of regional factors and imbalances.  The BNM Governor clearly stated that Johor is poised to have the highest number of unsold residential properties and potentially the largest excess supply of retail space. Hence is a nationwide ban of any kind the right prescription or will it instead cause economic distortions in other states and regions?

We call upon the Minister of Finance to provide not only clarity to the hare-brained “temporary ban” decision but also to justify how such a ban will actually solve the “supply-demand imbalances” in our property sector.  He should also take in cognizance of the fact that BNM’s 6-policy prescription to resolving the problem did not involve an outright ban on types of development.  Otherwise, the unintended consequences of such a crude policy prescription would worsen the effects on our already fragile economy.

Tuesday, November 21, 2017

The Minister of Finance should stop telling lies and giving excuses, and admit that Malaysians will never get to see any more audited financial statements for 1MDB and SRC International

Former Deputy Prime Minister, Tan Sri Muhyiddin Yassin had asked the Minister of Finance for the status of the much delayed financial statements for 1MDB.

In a parliamentary reply dated 16 November, the Minister of Finance responded that “on July 8, 2015, the police seized various original documents from 1MDB’s office.  1MDB’s management has contacted the police regarding the return of the company’s documents, but till today, the original documents haven’t been returned to the company”.

Therefore, since the last financial statement prepared by Deloitte Malaysia for the period ending March 2014, there has been no official audits conducted for the scandal-ridden company.  Worse, last year, Deloitte Malaysia has withdrawn its endorsement for the March 2013 and March 2014 financial statements.

This means that 1MDB has since March 2012, or more than 5 years ago, 1MDB has not filed any financial statements which have been endorsed by an external auditor.

This unprecedented delay was despite repeated deadline extensions granted to 1MDB by the Companies Commission of Malaysian (SSM) to file its annual reports.  And now the Minister of Finance tells us that it has completely given up and said that it cannot even provide a deadline.

If the Minister of Finance is indeed serious about 1MDB completing its audit process, why hasn’t he, who is also the Prime Minister ‘discuss’ this matter with the Royal Malaysian Police to work out an arrangement for the audit to be carried out?

Surely it cannot be too hard for investigators to allow the auditors to, at the very least, sight the documents needed? Moreover, the police have said that their investigation in 1MDB is now concluded and that they have returned their investigation papers to the Attorney-General’s Chambers. So why exactly are investigators still holding to these documents if it is necessary for the proper auditing of the company?

We are not asking for the Police to return, relinquish or destroy possible evidence in its hands.  We are merely asking for the Police to allow the statutory audit of 1MDB to be carried out.  The audit is of great urgency and importance as it will confirm if the allegations of billions of ringgit being misappropriated to fictitious investment accounts in various overseas institutions from Singapore to the British Virgin Islands and a little-known island-state of Curacao in South America.

It should be noted that even when the Auditor-General and the Public Accounts Committee was investigating 1MDB prior to 2016, 1MDB refused to even supply its management accounts, despite being requested to do so.

The Finance Minister’s complete lackadaisical attitude towards the audit of a state-owned company with nearly RM40 billion in debts shows that it is a cover up to prevent the truth from being discovered.

The fact that 1MDB cannot produce any audited financial statements since March 2012 further rubbishes Dato’ Seri Najib Razak’s pre-budget defence and praise of 1MDB, and the audacious claim that 1MDB will soon “return to profitability”.  It can’t even produce its accounts, what profit is the Prime Minister talking about?

A month after millions of private and confidential data were hacked and stolen, and all the Deputy Minister of MCMC can tell us is to change our passwords regularly?

Yesterday, Deputy Minister of Communications and Multimedia Datuk Seri Jailani Johari told Malaysians to change passwords regularly and to not reveal personal information over the internet in order to protect themselves against cyberattacks.

Sebagai pengguna, seharusnya memastikan, seboleh-bolehnya, jangan kongsikan apa sahaja maklumat mengenai kita di dalam media sosial yang kita punya. 
Sebaik-baiknya, sekurang-kurangnya tiga bulan sekali, kita tukar kata laluan. Dan kalau boleh kita gunakan alphanumeric numbers.  Dan kita juga jangan sewenang-wenangnya memaut mana-mana pautan yang kita rasakan tidak sesuai kerana ia akan memberikan kesan kepada kita.

The Deputy Minister said this in Parliament in response to a question on the steps taken by the Government in the cases which involved leakage of confidential personal data.

Datuk Seri Jailani’s comment is dangerously simplistic and avoids the government’s role in ensuring our cyber security.

For example, the recent sale of millions of breached personal data shows just how vulnerable Malaysians are to having our information stolen – and it has absolutely nothing to do with the need for users to change passwords regularly.

The Ministry’s response to this critical issue has also revealed not only how misplaced their priorities are, it also revealed that the Government is utterly clueless as to what to do to address the problems.

Rather than assuring people of an investigation, the MCMC’s first move was to take down the initial news report of the sale. Last week, it blocked the website which allowed users to key in their IC numbers to check if their details had been found in the data breached from Malaysian telco companies.

The question that keeps re-emerging is who the Government is really protecting with these measures. It appears that they are more inclined to protect the reputation of the huge corporations which were entrusted with our confidential data by covering up the scandal, instead of taking the bull by the horns to protect everyday Malaysians.

Taking those precautionary measures, as advised by the Deputy Minister, would have nothing to protect Malaysians from having their personal data being sold.

What’s worrying is that Malaysia was revealed last year, in a survey done by global cyber-security firm Kaspersky Labs, as having the most compromised servers in Southeast Asia.

Rather than constantly telling consumers to be more careful, the government needs to be urging data holders including themselves to improve their own standards instead of passively monitoring and not acting on these severe breaches.

Sunday, November 19, 2017

Dato’ Seri Najib Razak should explain why he insists on changing MRT3 project delivery model despite singing praises of the purported MRT1 “success story”

In his speech at the 2017 SME Annual Conference last week, Najib said that the MRT costs were kept “below budget” because of the “high quality of local companies” that were chosen through its “rigid and transparent tender exercise”.

If that’s the case, then why are we seeing a tender exercise for MRT3 with questionable transparency, thin on project specifications and with financing requirements that would disqualify all of the “high quality local companies” that Najib has praised?

MRT Corp announced last week that the MRT3 project would be awarded as a turnkey contract rather than the project delivery partner (PDP) model used for MRT1 and 2. This means that the tender process for MRT3 consists of a single tender estimated to be worth between RM40 - 50 billion.

By comparison, the tender process for MRT1 and 2 was made up of multiple tenders for different parts of the project led by a “Project Delivery Partner”. For MRT3, these smaller packages will all be subcontracted by the main turnkey developer.

In addition, the MRT3 tender requires any tenderer to provide financing for the project of no less than 90% with a repayment period of no less than 30 years on top of an 8 year moratorium. If the project costs RM50 billion, that means the tendering company or consortiums would need to provide at least RM45 billion in financing.

Dato’ Seri Najib Razak have argued that MRT3 may save on financing cost.  However, what is the point of lower financing cost, if the actual cost of the project becomes substantially higher resulting in much higher cost of project despite the lower financing cost?

There is no question there are no companies in Malaysia who are able to provide that scale of financing despite having all the necessary qualities and technical skill-sets to complete the project. Financing for MRT1 and 2 was undertaken by MRT Corp through DanaInfra, which freed bidding companies from having to provide their own financing options.

Worse, the tender period itself is a ridiculously short 45 days for a massive RM50 billion project.  In fact, even the MRT alignment of the line has yet to be announced by MRT Corp.

This raises a further question – is the entire MRT3 tender exercise skewed in favour of particular parties?  Why is Dato’ Seri Najib Razak going out of his way to contradict himself?

As I’ve stated previously, all the above questions only go to prove that there’s more than it meets the eye with the latest ‘mysterious’ decision to switch the project model from the much ‘praised’ PDP to the turnkey cum financing model.

Friday, November 17, 2017

The Government should call ERL’s bluff and allow ticket prices to hike instead of bailing out the company with a 30-year extension

The Deputy Minister of Transport, Aziz Kaprawi, told Parliament this week that the Government was extending the concession period for the ERL service by 30 years. This will double the concession period for the ERL, which was meant to expire in 2029. The concession for the ERL is held by Expressrail Link Sdn. Bhd (ERL) and was signed in 1997.

The Deputy Minister has stated that concession extension is the Government’s compensation to ERL for rejecting its last three scheduled fare hikes. The ERL Express service is currently priced at RM55 but should be priced at RM74 according to its initial concession agreement. It is meant to increase again in 2019 to RM97 and another increase was due in 2024 bringing the fare up to an astonishing RM126.

ERL had previously demanded RM2.9 billion in compensation from the government due to its inability to raise fares based on its initial schedule. However, the Auditor-General’s report found that ERL’s revenue was between 11.5% and 13.7% of its projected revenues.  Hence why should tax-payers compensate ERL for revenues which were outrageously inflated anyway?

On the contrary, instead of trying to stop the fare hikes, we call upon the Government should “approve” the fare hike per the concession agreement, should ERL chooses to implement them.

This is because should ERL chooses to hike the fares further, their ridership will fall even further than its already low levels today.  The Deputy Transport Minister in his parliamentary reply on 15 November confirmed that when the ERL increased its fares from RM35 to the current RM55 fare on 1 January 2016, the number of passengers dropped by 19% to 8.9 million. 

Any ordinary person with a sound mind would be able to tell you that should ERL choose to increase its fares further per the above schedule, the number of riders will drop even more drastically. And by Datuk Aziz Kaprawi’s own admission, ERL had suffered 6 continuous years of post-tax losses from 2009 to 2014.

The reason is simple, there’s now ample competition in transport service availability to both KLIA and KLIA2.  The same journey using GrabCar or Uber ride service will cost RM65 and approximately RM75 respectively.  If the rides are shared, then the fares are significantly cheaper than ERL.

Hence the Government should call ERL’s bluff and allow them to proceed to raise its fares.  If ERL does so, and collapse financially due to the lack of passengers, the Government has the right under the concession agreement to take back its service.

However, if ERL chooses not to hike its fares despite being allowed to do so by the Government, then the tax-payers will be absolved of any obligations to compensate ERL!

The question hence for the Government is, is its rejection of fare hikes an honest attempt to protect the rakyat, or its really a masked attempt to bail out ERL and save a crony-linked company?

The ERL concession was awarded in 1999 through a direct negotiation with the ERLSB, whose largest shareholder is the YTL Group. By choosing to extend ERLSB’s concession, the Government is helping ensure that those lopsided terms continue.

The ERL has taken a business risk with seemingly lucrative terms – including a fee of RM5 and RM1 to be paid for every international and domestic traveller respectively using KLIA or KLIA2, regardless of whether they use the ERL.  Since 2002, this has amounted to RM741 million.

However, now that business apparently isn’t so good, why should tax-payers step in now to bail out the company shareholders?

Thursday, November 16, 2017

Why is Malaysia the most “man man” (slowly, slowly) in the world when the rest of the world have been very “kuai kuai” (quickly, quickly) in persecuting those who have been complicit in stealing billions of dollars from Malaysian tax-payers?

Deputy Minister in the Prime Minister's Department Razali Ibrahim urged patience with regard to the ongoing investigation into 1MDB, even using words in Chinese to stress his point.

"In Chinese, we say man man lah, man man (slowly lah, slowly).  We will wait for the (outcome of the) matter, which is under investigation by the relevant authorities. God willing, the truth will be revealed," Razali told the Dewan Rakyat on Tuesday, 14 November.

The government treating 1MDB as a joke just shows how ridiculously selective investigations in Malaysia are.   It is obnoxious to expect Malaysians to wait even longer for a decision on a case involving multi-billion dollars that’s already been ongoing for years.

Worse, other countries have already investigated, charged and even jailed perpetrators involved in the 1MDB, while Malaysian authorities continue to drag their feet on the matter.

How much slower does the Deputy Minister expect investigations to slow down to?

His statement lays bare the sheer double standards of the government and authorities when it comes to investigating politically-linked scandals. If it’s an Opposition or parties critical of the Government, the authorities act with lightning speed. However, when the tables are turned, authorities are suddenly asked to go through things slowly.

The first police reports filed against 1MDB were done in 2014. In June 2015, the Home Minister said in Parliament that investigation papers had been referred to the Attorney- General in March. That was over two years ago, and the Attorney-General and the police are still passing the investigation papers between each other.

By comparison, the investigation into Penang Chief Minister Lim Guan Eng, started with a report to MACC on March 18 2016. Investigation papers were submitted to the AG in May and an arrest by MACC was made in June. It took MACC just two months to investigate and the AG just one month to decide on prosecution despite Lim Guan Eng having presented evidence to the contrary of the charges.

Why don’t we see this level of efficiency when it comes to scandals involving tens of billions of ringgit which implicated even the Prime Minister and his family?

Dismissive comments such as in the Deputy Minister’s speech prove just how little the government cares about upholding justice and protecting the interest of ordinary Malaysians. With billions of Malaysian public funds gone and allegedly funding the lavish lifestyles of others, we need to ask who the government are really defending – the people or crooks who are in power?