During a forum on Budget 2018 earlier this week, Najib said that tolls should be abolished, adding that wherever possible he would look into unraveling the legacy problems caused by toll concession agreements.
Malaysians shouldn’t fall the empty promises of the Prime Minister whose track record has proven that he has zero commitment in abolishing these tolls.
It isn’t the first time Dato’ Seri Najib Razak promised to abolish tolls or lower toll rates. In Barisan Nasional’s manifesto for the 13th General Election, Najib promised the gradual reduction of intracity tolls within 5 years. Yet, 5 years on, not only has this promise failed to be delivered, he delivered the exact opposite.
In October 2015, 18 tolls operated by 11 concessionaires were allowed to increase their fares with some even going up RM2.30 overnight. These included toll routes such as the LDP, SMART Tunnel, MEX, AKLEH and NPE in the Klang Valley as well as the Senai-Desaru Highway in Johor and the Butterworth Outer Ring Road (BORR) in Penang.
In response to this, Najib turned around and said the the government had no choice but to allow the toll fares to increase because preventing it would require massive compensation payments. The Prime Minister went on to threaten Malaysians that taxes would have to be increased if the government were to abolish tolls.
The Prime Minister’s threats have proven true because when the government did remove certain tolls, they paid exhorbitant compensation equivalent to the amount of toll these concessionaires would have collected anyway!
When the Batu Tiga, Sg Rasau, Bukit Kayu Hitam and Eastern Dispersal Link (EDL) tolls were removed last year, the government will be paying RM2.2 billion for the first 3 tolls. For the EDL, the government will reportedly be paying a yearly compensation of RM70 million.
The above means, Najib “abolish tolls” or not, the BN government would always profit the concessionaires. Malaysians would either have to pay for the tolls directly, or pay for them via taxes paid to the Government.
Most hypocritically, the Prime Minister had only recent on 3rd December criticised Pakatan Harapan’s plan to eliminate highway tolls and reintroduce petrol subsidies will increase air pollution in the country. So did Najib temporarily change his mind to fish for votes in the impending General Election, just as he did in 2013?
Pakatan Harapan believes in the rule of law and the sanctity of the contract signed between the Government and the toll concessionaires. The provisions of the contracts allow for the Government to expropriate or buy back the concessions at cost, subject to a minimum return for the concessionaires for the past years of operations.
Barring exceptions, the agreements do not at any point in time require the Government to compensate these concessionaires for future profits. Why is the BN Government so adamant in ensuring these toll concessionaires are paid their future profits at the expense of Malaysian tax-payers?
All this is proof that Najib’s ‘promise’ to abolish tolls is just another empty promise by a Prime Minister and government desperate to hold on to power. Malaysians should not fall for these empty promises and should not forget the government’s own inability to deliver on the same pledge that it had made 5 years ago.
Showing posts with label Transportation. Show all posts
Showing posts with label Transportation. Show all posts
Saturday, February 24, 2018
Thursday, February 08, 2018
Will Dato’ Seri Azalina Othman take action against Berita Harian for publishing fake news on falling car prices?
This Sunday’s cover story in UMNO-owned newspaper Berita Harian (BH) proudly declared, “harga kereta turun” (car prices decrease), reporting that car prices had dropped 13.1% as a result of the government’s automotive policies as well as the strengthening ringgit.
To further drive home the point, the accompanying full-page reports in the paper carried the headline “Menepati Janji Manifesto BN” (fulfilling the promises of the BN Manifesto. It was accompanied by an infographic comparing prices between 2013 and 2018 for different models of cars owned by Malaysians. The graphic suggested that prices for the various local, Japanese and European cars had decreased significantly between 2.25% and 20.77% since 2013.
However, a lengthy report on specialist automotive blog paultan.org showed just how misleading the report by Berita Harian was. They noted that the comparisons made by Berita Harian compared different variants for the same model and used inaccurate pricing information.
For example, the BH article had compared the 2013 Perodua Alza’s 1.6 SE Manual model with the 2018 Standard model to show a 14.18% reduction in price.
For the Proton Exora, the newspaper had even used an inflated price for its 2013 comparison to further exaggerate the decrease. Instead of using the original price at 2013, it used the 2016 price, which came after price increase across the range. Worse, the report even included insurance for its ‘2013’ price whereas the current price stated does not include insurance.
The comparisons provided were at best between apples and oranges, and at worst, comparing fake apples with real oranges.
In the last elections, one of Barisan Nasional’s key manifesto points was that car prices would decrease 20-30%. The Berita Harian report was unabashly singing praises of the BN Government’s purportedly successful delivery of this promise.
However, the findings by paultan.org proved the complete opposite.
Here’s a simple question for the Minister in the Prime Minister’s Department, Datuk Seri Azalina Othman who has been given the responsibility to table an anti-fake news bill in the next parliamentary sitting – will she instruct MCMC or even the Home Ministry to take action against BH for publishing the outrageous fake news? If she doesn’t, then it is clear that she is not sincere in ensuring an anti-fake news bill which is fair, and which will not be abused by the BN government to punish opposition critics and whistleblowers.
To further drive home the point, the accompanying full-page reports in the paper carried the headline “Menepati Janji Manifesto BN” (fulfilling the promises of the BN Manifesto. It was accompanied by an infographic comparing prices between 2013 and 2018 for different models of cars owned by Malaysians. The graphic suggested that prices for the various local, Japanese and European cars had decreased significantly between 2.25% and 20.77% since 2013.
However, a lengthy report on specialist automotive blog paultan.org showed just how misleading the report by Berita Harian was. They noted that the comparisons made by Berita Harian compared different variants for the same model and used inaccurate pricing information.
For example, the BH article had compared the 2013 Perodua Alza’s 1.6 SE Manual model with the 2018 Standard model to show a 14.18% reduction in price.
For the Proton Exora, the newspaper had even used an inflated price for its 2013 comparison to further exaggerate the decrease. Instead of using the original price at 2013, it used the 2016 price, which came after price increase across the range. Worse, the report even included insurance for its ‘2013’ price whereas the current price stated does not include insurance.
The comparisons provided were at best between apples and oranges, and at worst, comparing fake apples with real oranges.
In the last elections, one of Barisan Nasional’s key manifesto points was that car prices would decrease 20-30%. The Berita Harian report was unabashly singing praises of the BN Government’s purportedly successful delivery of this promise.
However, the findings by paultan.org proved the complete opposite.
Here’s a simple question for the Minister in the Prime Minister’s Department, Datuk Seri Azalina Othman who has been given the responsibility to table an anti-fake news bill in the next parliamentary sitting – will she instruct MCMC or even the Home Ministry to take action against BH for publishing the outrageous fake news? If she doesn’t, then it is clear that she is not sincere in ensuring an anti-fake news bill which is fair, and which will not be abused by the BN government to punish opposition critics and whistleblowers.
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
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.
…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.
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
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
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.
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.
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.
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.
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.
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?
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?
Wednesday, November 08, 2017
Is a switch from “Project Delivery Partner” to “Turnkey” model really to save on financing cost, or is there more than it meets the eye?
MRT Corp has recently announced its tender for the third phase of MRT project. The big changes to the tender conditions compared to the MRT 1 and 2 projects come as a big surprise to the infrastructure players and investment community.
The biggest change comes in the project delivery structure which has gone from a project delivery partner (PDP) model to a turnkey model. The PDP model used in the MRT 1 and 2 projects saw the participation of local companies who were to ensure the on-time delivery the project.
Under the turnkey model, however, a single contract is awarded for the entirety of the project, which is estimated to worth between RM40-50 billion. This model has similarly been used for the ECRL which has the China Communications Construction Company Ltd. (CCCC) as its turnkey developer. The CCCC is now responsible for building and financing of the entire project, which includes the hiring of subcontracts for different packages of the development.
The first question that needs to be asked is why the sudden switch to a turnkey model over the existing PDP model? The government has previously praised the delivery of MRT for being done ahead of schedule and purportedly under budget.
Under the revised scheme, MRT3 requires the winning bidder to provide at least 90% financing with an 8-year moratorium whereby no repayments on the principal and interest of the financing will be paid to the government. On top of that, it requires the repayment period to be no less than 30 years.
MRT Corp has said that the turnkey financing model is aimed at attracting foreign companies who may provide better financing options for the line. Dato’ Seri Shahril Mokhtar claimed that “if we utilise funds from say, DanaInfra… with an interest rate of about 5.1%... the borrowing cost will kill us… if foreign parties can give us 3% then why not, its good for us”.
Perhaps MRT Corp is trying to be disingenuous with their arguments. How come the financing cost of DanaInfra didn't "kill" MRT1, MRT2 and LRT3? While financing costs is indeed important, what is more important is the actual project cost. If the actual project cost is say, 20% higher, then a 2% lower financing cost will still cost MRT Corp more in the end.
It is the same point we have raised for the ECRL project – what is the point of awarding the RM55 billion contract directly to CCCC without any open tender merely for 1% lower in financing cost, when the Government’s own consultants estimated the project to cost less than RM30 billion?
What’s more, the unprecedented stringent financing requirements seem intentionally designed to disqualify locally experience major infrastructure builders like Gamuda Bhd or MRCB. Analysts interviewed by The Edge Financial Daily have cited the heavy financing burden as a huge barrier preventing the participation of Malaysian firms in the tender.
Unlike the MRT 1 and 2 projects that saw the participation of Malaysian at all levels of the project, it now seems much less likely for local firms to participate in MRT3, unless they form consortiums or are hired as subcontractors by the turnkey developer. Why is the Government so intent on hiring foreign contractors when we already have all the expertise locally?
What is even more suspicious is the fact that MRT2 is only due for completion in 2022, and yet the Prime Minister has brought forward the completion date for MRT3 to 2025 from 2027. Why the sudden rush to award these contracts?
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. The cost of the switch might just end up a whole lot more for the Malaysian tax-payers at the end of the day – what is the purpose and who are the real beneficiaries?
The biggest change comes in the project delivery structure which has gone from a project delivery partner (PDP) model to a turnkey model. The PDP model used in the MRT 1 and 2 projects saw the participation of local companies who were to ensure the on-time delivery the project.
Under the turnkey model, however, a single contract is awarded for the entirety of the project, which is estimated to worth between RM40-50 billion. This model has similarly been used for the ECRL which has the China Communications Construction Company Ltd. (CCCC) as its turnkey developer. The CCCC is now responsible for building and financing of the entire project, which includes the hiring of subcontracts for different packages of the development.
The first question that needs to be asked is why the sudden switch to a turnkey model over the existing PDP model? The government has previously praised the delivery of MRT for being done ahead of schedule and purportedly under budget.
Under the revised scheme, MRT3 requires the winning bidder to provide at least 90% financing with an 8-year moratorium whereby no repayments on the principal and interest of the financing will be paid to the government. On top of that, it requires the repayment period to be no less than 30 years.
MRT Corp has said that the turnkey financing model is aimed at attracting foreign companies who may provide better financing options for the line. Dato’ Seri Shahril Mokhtar claimed that “if we utilise funds from say, DanaInfra… with an interest rate of about 5.1%... the borrowing cost will kill us… if foreign parties can give us 3% then why not, its good for us”.
Perhaps MRT Corp is trying to be disingenuous with their arguments. How come the financing cost of DanaInfra didn't "kill" MRT1, MRT2 and LRT3? While financing costs is indeed important, what is more important is the actual project cost. If the actual project cost is say, 20% higher, then a 2% lower financing cost will still cost MRT Corp more in the end.
It is the same point we have raised for the ECRL project – what is the point of awarding the RM55 billion contract directly to CCCC without any open tender merely for 1% lower in financing cost, when the Government’s own consultants estimated the project to cost less than RM30 billion?
What’s more, the unprecedented stringent financing requirements seem intentionally designed to disqualify locally experience major infrastructure builders like Gamuda Bhd or MRCB. Analysts interviewed by The Edge Financial Daily have cited the heavy financing burden as a huge barrier preventing the participation of Malaysian firms in the tender.
Unlike the MRT 1 and 2 projects that saw the participation of Malaysian at all levels of the project, it now seems much less likely for local firms to participate in MRT3, unless they form consortiums or are hired as subcontractors by the turnkey developer. Why is the Government so intent on hiring foreign contractors when we already have all the expertise locally?
What is even more suspicious is the fact that MRT2 is only due for completion in 2022, and yet the Prime Minister has brought forward the completion date for MRT3 to 2025 from 2027. Why the sudden rush to award these contracts?
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. The cost of the switch might just end up a whole lot more for the Malaysian tax-payers at the end of the day – what is the purpose and who are the real beneficiaries?
Friday, November 03, 2017
Najib’s toll ‘freebie’ election goodie to cost Malaysians billions of ringgit
In an interview with TV3 Nightline, Second Finance Minister Datuk Johari Abdul Ghani said that PLUS would have to be compensated to the tune of RM102 million per year for abolishing the Batu Tiga and Sungai Rasau tolls and RM8 million for the Bukit Kayu Hitam toll. That’s a total of RM110 million per year just to PLUS. The compensation for the Eastern Dispersal Link (EDL) was said to be RM8 million, going to current concessionaire MRCB.
The above will cost the government RM118 million per year just to abolish these four tolls.
The concessions for all four tolls expire in 2038. Assuming if the compensation doesn’t increase over time, it will still cost a whopping RM2.36 billion. However, this compensation amount will be even higher when the compensation is calculated based on forecast toll usage in the future.
Whether the compensation is given out in cash or through extensions of the concessions, the person footing the bill will still be the rakyat. That’s RM2.36 billion that could be used to benefit all Malaysians and not just help BN win over voters in the 3 states of Selangor, Kedah and Johor.
Let’s not forget that the government has already compensated toll concessionaires before when they have announced halting toll rate hikes in past Budget speeches. Each one of these populist moves only ends up costing the government and Malaysians more and more. The Prime Minister’s toll ‘freebie’ is no freebie at all.
If the Government is serious about making tolls more affordable for Malaysians, they’d take Pakatan Harapan’s advice. The Pakatan Harapan manifesto has called for the abolition of highway toll in stages via the restructuring and renegotiation of the toll agreements with the concessionaires.
Nearly all of these agreements contain clauses which allows the Government to expropriate these highways based on agreed formulas. And in many circumstances, compensating toll concessionaires based on loss revenue as what the BN government is doing, costs a whole load more than just expropriating the highways outright.
For example, between 1990 to 2015, the compensation for Lebuhraya Damansara Puchong (LDP) already amounts to RM1.05 billion even though the actual cost of constructing the highway, including interest amounts to only RM1.3 billion. And there’s 13 more years to the concession period for compensation to be paid and for the concessionaire to make outrageous profits.
We call upon the Najib administration to stop fleecing Malaysians with not-at-all-free “free” tolls and concessionaires who continue to make astronomical profits at the expense of the rakyat.
The above will cost the government RM118 million per year just to abolish these four tolls.
The concessions for all four tolls expire in 2038. Assuming if the compensation doesn’t increase over time, it will still cost a whopping RM2.36 billion. However, this compensation amount will be even higher when the compensation is calculated based on forecast toll usage in the future.
Whether the compensation is given out in cash or through extensions of the concessions, the person footing the bill will still be the rakyat. That’s RM2.36 billion that could be used to benefit all Malaysians and not just help BN win over voters in the 3 states of Selangor, Kedah and Johor.
Let’s not forget that the government has already compensated toll concessionaires before when they have announced halting toll rate hikes in past Budget speeches. Each one of these populist moves only ends up costing the government and Malaysians more and more. The Prime Minister’s toll ‘freebie’ is no freebie at all.
If the Government is serious about making tolls more affordable for Malaysians, they’d take Pakatan Harapan’s advice. The Pakatan Harapan manifesto has called for the abolition of highway toll in stages via the restructuring and renegotiation of the toll agreements with the concessionaires.
Nearly all of these agreements contain clauses which allows the Government to expropriate these highways based on agreed formulas. And in many circumstances, compensating toll concessionaires based on loss revenue as what the BN government is doing, costs a whole load more than just expropriating the highways outright.
For example, between 1990 to 2015, the compensation for Lebuhraya Damansara Puchong (LDP) already amounts to RM1.05 billion even though the actual cost of constructing the highway, including interest amounts to only RM1.3 billion. And there’s 13 more years to the concession period for compensation to be paid and for the concessionaire to make outrageous profits.
We call upon the Najib administration to stop fleecing Malaysians with not-at-all-free “free” tolls and concessionaires who continue to make astronomical profits at the expense of the rakyat.
Tuesday, October 31, 2017
Najib’s toll freebie meant to entice Harapan supporters will only going to cost BN voters more
In Friday’s 2018 Budget speech, one of the big “goodies” that the Prime Minister announced was the abolishment of 4 tolls at Sg Rasau, Batu Tiga, Bukit Kayu Hitam and on the Eastern Dispersal Link (EDL).
On the surface, it looks like the Najib administration is hard pressed to replicate the Pakatan Harapan Alternative Budget which promised abolishing all highway tolls over time.
However, before Malaysians decides to rejoice, the first question that arises is how the government intends to compensate the existing toll concessionaires for their loss of revenue.
The Second Finance Minister, Datuk Johari Abdul Ghani very quickly burst the balloons by admitting that the government is looking at increasing the concession period for other tolls belonging to concessionaires as compensation.
This simply means that Malaysians will end paying toll fares for longer periods.
More specifically however, the tolls abolished were located in Selangor, a state which Dato’ Seri Najib Razak is only too eager to regain; and in Kedah as well as Johor, where BN is at the risk of losing with the twin threats of Tun Dr Mahathir Mohamad and Tan Sri Muhyiddin Yassin.
The 3 tolls at Sg Rasau, Batu Tiga and Bukit Kayu Hitam are owned by PLUS Malaysia Bhd. As a result, compensation for abolishing just three tolls will see the extension of its concession on any other highway under its management including the North-South Expressway, Seremban-Port Dickson Highway, Butterworth-Kulim Expressway, Malaysia-Singapore Second Link.
Very simply, the burden of the political move by Dato’ Seri Najib Razak to “free” the tolls in Selangor, Kedah and Johor will be “shared” by BN supporters in other parts of the country. It appears to make a lot more sense to demonstrate support Pakatan Harapan because then, the BN government will actually show more love for you.
That however, isn’t the whole story.
The EDL is currently owned by MRCB, who just so happens is desperately looking to sell the loss-making highway. MRCB also doesn’t own any other highway assets.
Hence the only way for the EDL toll to be abolished is for the Federal Government to fork out multi-billion ringgit compensation for MRCB. Therefore, Dato’ Seri Najib Razak must come clean as to how much tax-payers must fork out to pay for the EDL and how the compensation is calculated.
The rakyat’s biggest fear is the Najib administration bailing out highway concessionaires, further proving that BN’s intrinsic economic policy is to “privatise profits and socialize losses”.
On the surface, it looks like the Najib administration is hard pressed to replicate the Pakatan Harapan Alternative Budget which promised abolishing all highway tolls over time.
However, before Malaysians decides to rejoice, the first question that arises is how the government intends to compensate the existing toll concessionaires for their loss of revenue.
The Second Finance Minister, Datuk Johari Abdul Ghani very quickly burst the balloons by admitting that the government is looking at increasing the concession period for other tolls belonging to concessionaires as compensation.
This simply means that Malaysians will end paying toll fares for longer periods.
More specifically however, the tolls abolished were located in Selangor, a state which Dato’ Seri Najib Razak is only too eager to regain; and in Kedah as well as Johor, where BN is at the risk of losing with the twin threats of Tun Dr Mahathir Mohamad and Tan Sri Muhyiddin Yassin.
The 3 tolls at Sg Rasau, Batu Tiga and Bukit Kayu Hitam are owned by PLUS Malaysia Bhd. As a result, compensation for abolishing just three tolls will see the extension of its concession on any other highway under its management including the North-South Expressway, Seremban-Port Dickson Highway, Butterworth-Kulim Expressway, Malaysia-Singapore Second Link.
Very simply, the burden of the political move by Dato’ Seri Najib Razak to “free” the tolls in Selangor, Kedah and Johor will be “shared” by BN supporters in other parts of the country. It appears to make a lot more sense to demonstrate support Pakatan Harapan because then, the BN government will actually show more love for you.
That however, isn’t the whole story.
The EDL is currently owned by MRCB, who just so happens is desperately looking to sell the loss-making highway. MRCB also doesn’t own any other highway assets.
Hence the only way for the EDL toll to be abolished is for the Federal Government to fork out multi-billion ringgit compensation for MRCB. Therefore, Dato’ Seri Najib Razak must come clean as to how much tax-payers must fork out to pay for the EDL and how the compensation is calculated.
The rakyat’s biggest fear is the Najib administration bailing out highway concessionaires, further proving that BN’s intrinsic economic policy is to “privatise profits and socialize losses”.
Thursday, March 30, 2017
Is our national interest now subjected to foreign terms and conditions?
Last week, I had asked the Finance Minister to justify the award of the RM55 billion East Coast Rail Link project to China Communications and Construction Company (CCCC) and why Malaysian companies were not given the opportunity to tender for the project.
In the Finance Ministry’s reply, it said "to qualify for this financing offered by China Exim Bank, the project had to be executed by CCCC".
The Minister said that the Export Import Bank of China (China Exim Bank) offered a soft loan to Malaysia for the project at low interest rates. He added that the loan, for a period of 20 years, also allows for a grace period of seven years where the government does not need to repay the principal.
In addition, "the government has, in principle, agreed at least 30 percent of the infrastructure work will involve local companies and contractors".
If studied carefully, the reply carried very sinister undertones.
Malaysia now appears so desperate for foreign financing for its so-called national interest projects that it is willing to subject itself to terms and conditions of foreign powers.
Just because somebody is willing to lend you the money at seemingly favourable terms does not mean that you should accept the condition to select the product that will cost nearly double the estimated price.
This is no different from unscrupulous retailers to duped Malaysian shoppers into “zero-interest” financing schemes on products costing significantly higher than if you have paid for it in cash. Any financial consultant will educate you that the real cost of financing is already built into the jacked-up price of the product.
Worse, the real cost of funds for the project is now opaque because we do not know the real cost of the project as it was awarded without any open and competitive tender. We do know however, that the Government’s own appointed consultants, HSS Integrated has estimated that the cost of the 600km railway project will cost less than RM30 billion.
Therefore, to pay for the project at RM55 billion just because China Exim Bank offered an “attractive financing package” is absolutely scandalous!
Worse, only 30% of the project will involve local companies and contractors, despite an abundance of experience and expertise which are already widely available in Malaysia. We have now got many companies who have built double tracking railway projects, dug award-winning tunnels systems and constructed the MRT. And yet, the Government is awarding a standard rail link project at substantially higher cost to a foreign company with minimal local participation.
The irony is, the Finance Ministry has advised or even instructed our Government-Link Companies to halt their investments abroad and repartriate its foreign funds from overseas to check the drastic decline of the ringgit. Bank Negara even put in harsh measures to force private companies to convert their foreign currency receipts into ringgit. However, the Government clearly doesn’t practise what it preaches because the overwhelming bulk of the inflated RM55 billion cost will be paid to China despite available local options.
There can be no better example of the English saying, “penny wise but pound foolish”. What boggles the mind is, the Finance Ministry doesn’t comprise of idiots – they should know that we are paying well above what is a fair price for the project. What is the ‘real’ reason why the project has been awarded to CCCC – is the real ‘quid pro quo’ the fact that CCCC will help launder part of the astronomical profits to pay off 1MDB debts as widely speculated?
Sunday, February 12, 2017
Move to allow petrol companies and kiosks to compete will benefit consumers and is long overdue
Bernama reported last week that the Second Finance Minister, Dato’ Seri Johari Abdul Ghani said the government is studying the option of setting a ceiling price for petrol in view of the escalating cost of fuel.
He added that "It is up to the government to set a ceiling which is deemed fair for all. When the government has decided on the ceiling price, whether they (O&G industry players) want to sell the oil at lower prices for promotional purposes, we leave it to them.”
We fully welcome the above move as it is long overdue. Malaysians do not understand why petrol companies in Malaysia are not allowed to sell petrol prices at lower prices when they could see how kiosks in Thailand or Singapore can compete and lower pump prices.
When I asked the above question in Parliament several times, the only response I had once in 2009 from the then Deputy Minister of Domestic Trade and Industry, Datuk Tan Lian Hoe was that allowing petrol stations to compete with different prices “would confuse consumers”. It appears that Malaysians consumers are much more easily confused compared to our overseas counterparts.
We can understand if the Government sets a maximum price these companies can sell petrol so that Malaysians will not be unfairly over-charged. But we don't see the logic of not allowing the companies to compete and transfer their cost efficiencies to us via lower fuel prices. This is especially since the Government has already abolished fuel subsidy more than a year ago.
The only reason we could think of was that the Government is merely trying to protect the weaker players at the expense of the consumers.
As publicly discussed over the past weeks over the fuel price hikes, the petrol price is calculated based on the average monthly price of refined fuel as measured by Means of Platt Singapore (MOPS). However, petrol companies don't purchase their fuel at these “average” prices. They will all try, with varying degrees of success to acquire their supply of petrol at the lowest possible price during the month or even the year.
In addition, some petrol companies are obviously more efficient than others and have lower operating and investment costs.
Therefore, why shouldn't these companies who purchase their stock at cheaper prices and are more cost-efficient be allowed to pass on some of their savings to long-suffering Malaysians?
Hence we call upon Dato' Seri Johari Abdul Ghani to free up the competition as soon as possible and not wait until petrol prices go up further in the coming months.
In fact, under the new regime, the competition between petrol companies and kiosks must be regulated under the Competition Act by the Competition Commission of Malaysia. This is to ensure that there will be a level playing field and the petrol companies and kiosks will not collude to fix prices at the expense of ordinary consumers.
He added that "It is up to the government to set a ceiling which is deemed fair for all. When the government has decided on the ceiling price, whether they (O&G industry players) want to sell the oil at lower prices for promotional purposes, we leave it to them.”
We fully welcome the above move as it is long overdue. Malaysians do not understand why petrol companies in Malaysia are not allowed to sell petrol prices at lower prices when they could see how kiosks in Thailand or Singapore can compete and lower pump prices.
When I asked the above question in Parliament several times, the only response I had once in 2009 from the then Deputy Minister of Domestic Trade and Industry, Datuk Tan Lian Hoe was that allowing petrol stations to compete with different prices “would confuse consumers”. It appears that Malaysians consumers are much more easily confused compared to our overseas counterparts.
We can understand if the Government sets a maximum price these companies can sell petrol so that Malaysians will not be unfairly over-charged. But we don't see the logic of not allowing the companies to compete and transfer their cost efficiencies to us via lower fuel prices. This is especially since the Government has already abolished fuel subsidy more than a year ago.
The only reason we could think of was that the Government is merely trying to protect the weaker players at the expense of the consumers.
As publicly discussed over the past weeks over the fuel price hikes, the petrol price is calculated based on the average monthly price of refined fuel as measured by Means of Platt Singapore (MOPS). However, petrol companies don't purchase their fuel at these “average” prices. They will all try, with varying degrees of success to acquire their supply of petrol at the lowest possible price during the month or even the year.
In addition, some petrol companies are obviously more efficient than others and have lower operating and investment costs.
Therefore, why shouldn't these companies who purchase their stock at cheaper prices and are more cost-efficient be allowed to pass on some of their savings to long-suffering Malaysians?
Hence we call upon Dato' Seri Johari Abdul Ghani to free up the competition as soon as possible and not wait until petrol prices go up further in the coming months.
In fact, under the new regime, the competition between petrol companies and kiosks must be regulated under the Competition Act by the Competition Commission of Malaysia. This is to ensure that there will be a level playing field and the petrol companies and kiosks will not collude to fix prices at the expense of ordinary consumers.
Wednesday, November 16, 2016
Transport Minister Datuk Seri Liow Tiong Lai’s attempts to justify increase in ECRL price from RM29 bil. to RM55 bil. raises many more questions than answers
Finally, after more than a week of denying that the proposed East Coast Rail Link (ECRL) would cost a whopping RM55 billion, the hapless Transport Minister, Datuk Seri Liow Tiong Lai finally conceded that the project would indeed cost RM55 billion or RM91.7 million per kilometer.
This admission came after slamming me on 8 November last week in The Star that I was making assumptions of the cost of the ECRL when it was still not finalised yet. “We have to go into negotiation on every kilometre so where did he get the cost?” he had then asked.
The Transport Minister’s admission in Parliament yesterday came after the Pakatan Harapan law-makers exposed the existence of an extensive feasibility study by HSS Engineers Bhd which had estimated that the cost of the 545km project to be only RM29 billion or RM53.2 million per kilometer.
He then tried to defend the staggering increase in cost by arguing that:
The project has been extended from 545km to 600km to include the Gombak-Port Klang link – a fact which we have never disputed.
The HSS feasibility study is based on RM3.2 to the US Dollar in 2009-2010.
There is a new alignment resulting in an increase in tunnel length from 30km to 50km, which also results in additional viaducts.
Datuk Seri Liow Tiong Lai’s appears to be desperately making up responses to questions as they arise, as his answers raises far too many more questions on the highly questionable RM55 billion project.
The HSS feasibility study which cost the Government RM8.7 million was carried out over a 6-year period, starting in December 2009 and completing only in December 2015 before concluding on the cost of RM29 billion.
Is the Transport Minister telling us that HSS consultants, who have completed many mega-infrastructure projects in the country, are so stupid as to use the 2009-2010 exchange rates to calculate the cost of the project, even though they finalised the report only in December 2015 when the exchange rate was already RM4 to the Dollar by then?
Since the comprehensive HSS report had to take 6 years to complete and was finalised only in December 2015, how did the Government decide to suddenly alter the alignment within 6 months or so? Was a new engineering consultant actually appointed to carry out a new study which could be completed in such a time-frame?
I would agree with Dato’ Seri Liow that if there is an increase in tunnel length through the Titiwangsa range from 30km to 50km, it would certainly increase the cost of construction. However, it begs the question, why take a 50km tunnel route across Titiwangsa range if indeed HSS recommended the much shorter 30km route?
The Transport Minister had told the Parliament that “we have nothing to hide. We are a responsible, accountable and transparent government.”
If he really has nothing to hide, Datuk Seri Liow should immediately order that both the HSS feasibility study and the subsequent study which changed the scope of the HSS study be released to the public.
That way, if what Datuk Seri Liow said is right, then the Pakatan Harapan critics would have no choice but to shut up immediately. Otherwise, the Transport Minister, who is also the MCA President has no right to accuse us of trying to “gain political mileage” when what we clearly want to ensure is not another project where tens of billions of ringgit are embezzled by the powers that be. Instead it would be Datuk Seri Liow who is playing politics to cover up for another multi-billion ringgit mega-scandal.
This admission came after slamming me on 8 November last week in The Star that I was making assumptions of the cost of the ECRL when it was still not finalised yet. “We have to go into negotiation on every kilometre so where did he get the cost?” he had then asked.
The Transport Minister’s admission in Parliament yesterday came after the Pakatan Harapan law-makers exposed the existence of an extensive feasibility study by HSS Engineers Bhd which had estimated that the cost of the 545km project to be only RM29 billion or RM53.2 million per kilometer.
He then tried to defend the staggering increase in cost by arguing that:
The project has been extended from 545km to 600km to include the Gombak-Port Klang link – a fact which we have never disputed.
The HSS feasibility study is based on RM3.2 to the US Dollar in 2009-2010.
There is a new alignment resulting in an increase in tunnel length from 30km to 50km, which also results in additional viaducts.
Datuk Seri Liow Tiong Lai’s appears to be desperately making up responses to questions as they arise, as his answers raises far too many more questions on the highly questionable RM55 billion project.
The HSS feasibility study which cost the Government RM8.7 million was carried out over a 6-year period, starting in December 2009 and completing only in December 2015 before concluding on the cost of RM29 billion.
Is the Transport Minister telling us that HSS consultants, who have completed many mega-infrastructure projects in the country, are so stupid as to use the 2009-2010 exchange rates to calculate the cost of the project, even though they finalised the report only in December 2015 when the exchange rate was already RM4 to the Dollar by then?
Since the comprehensive HSS report had to take 6 years to complete and was finalised only in December 2015, how did the Government decide to suddenly alter the alignment within 6 months or so? Was a new engineering consultant actually appointed to carry out a new study which could be completed in such a time-frame?
I would agree with Dato’ Seri Liow that if there is an increase in tunnel length through the Titiwangsa range from 30km to 50km, it would certainly increase the cost of construction. However, it begs the question, why take a 50km tunnel route across Titiwangsa range if indeed HSS recommended the much shorter 30km route?
The Transport Minister had told the Parliament that “we have nothing to hide. We are a responsible, accountable and transparent government.”
If he really has nothing to hide, Datuk Seri Liow should immediately order that both the HSS feasibility study and the subsequent study which changed the scope of the HSS study be released to the public.
That way, if what Datuk Seri Liow said is right, then the Pakatan Harapan critics would have no choice but to shut up immediately. Otherwise, the Transport Minister, who is also the MCA President has no right to accuse us of trying to “gain political mileage” when what we clearly want to ensure is not another project where tens of billions of ringgit are embezzled by the powers that be. Instead it would be Datuk Seri Liow who is playing politics to cover up for another multi-billion ringgit mega-scandal.
Saturday, November 12, 2016
Minister in Prime Minister’s Department, Dato’ Seri Abdul Rahman Dahlan tried to pull a fast one by comparing the exorbitant cost of the East Coast Rail Link with complex High Speed Rail in Europe
Three days ago, Dato’ Seri Abdul Rahman Dahlan, the Minister in-charge of Economic Planning Unit (EPU) responsible for the East Coast Rail Link (ECRL) tried to deflect the allegations that the cost of ECRL was the most expensive in the world.
Unlike his fellow Cabinet Minister, Datuk Seri Liow Tiong Lai who denied that the ECRL was to cost RM55 billion or approximately RM91.7 million per kilometer, the EPU Minister pretty much confirmed the cost of the project. Instead he argued that it was not the most expensive in the world.
Dato’ Seri Rahman Dahlan gave the examples of a 57km rail project in Switzerland costing US$11.9 billion (RM50bn) or US$209 million (RM860 mil) per km to build; a 177km rail line in Madrid-Valladolid, Spain, costing US$5.48 billion (RM22.46bn) or about US$30 million (RM123 mil) a km; and a 48km rail project in Barcelona costing about US$8.12 billion (RM33.3bn) or US$170 million (RM697 mil) per km.
It is disastrous for Malaysia that the EPU Minister actually cited these projects as comparison to our own proposed ECRL.
Dato’ Seri Rahman Dahlan perhaps didn’t realise that the 57km Swiss Golthard rail project costing a whopping RM50 billion actually involved the building of the world’s longest tunnel as deep as 2.3km below the surface! The neighbouring 56km Brenner rail project which is currently under construction costing just a shade less than Golthard, will be the second longest tunnel in the world when it’s completed in 2025.
Is the Minister telling us that the 600km ECRL link from Port Klang to Kota Bahru via Kuantan will be, if not completely, substantially underground to compare with the Swiss rail lines underneath the Alps?
Similarly, the Barcelona line costing US$8.12 billion has a length of 47.8 km, of which 43.71 km is underground and 4.9 km is on viaducts.
At the same time, the 177km Madrid-Valladoid line was only the first phase of the two-phase Madrid-Leon 342km rail line costing a total of US$6.34 billion. That actually works out to only US$18.54 million (RM76 mil) per kilometer which is cheaper than the ECRL’s RM91.7 million per kilometer!
Most of all, all of the examples cited by Dato’ Seri Rahman Dahlan are not only tunnel-intensive, they are all High Speed Rail (HSR) projects which, as we know cost significantly more than conventional rail projects like ECRL. These European HSRs travels up to a top speed of 300km per hour compared to the ECRL project proposed at 170km per hour.
Hence what the ignorant Dato’ Seri Rahman Dahlan attempted to do, intentionally or otherwise, is to try to sell Malaysians a ATP turboprop at the price of a Boeing 747. Unfortunately for him, Malaysians are not that stupid.
The EPU Minister shouldn’t have to go around to world to try justifying the exorbitant cost of the ECRL project. After all, this isn’t our first and only rail project. He should very well know that the 329km Ipoh-Padang Besar and 179km Gemas-Johor Bahru double-tracking link cost RM44.0 million and RM39.8 million per kilometre respectively. Amazingly, these projects such as the Ipoh-Padang Besar and Rawang-Ipoh links were all completed by local engineering and construction companies!
We challenge Dato’ Seri Rahman Dahlan to show proof that a conventional railway project would cost anything more than the above or that there are no local companies with the necessary expertise who are able to complete the ECRL project for far less than the RM55 billion awarded to China Communications Construction Company.
Rafizi Ramli
MP Pandan
Tony Pua
MP Petaling Jaya Utara
Dr Hatta Ramli
MP Kuala Krai
Unlike his fellow Cabinet Minister, Datuk Seri Liow Tiong Lai who denied that the ECRL was to cost RM55 billion or approximately RM91.7 million per kilometer, the EPU Minister pretty much confirmed the cost of the project. Instead he argued that it was not the most expensive in the world.
Dato’ Seri Rahman Dahlan gave the examples of a 57km rail project in Switzerland costing US$11.9 billion (RM50bn) or US$209 million (RM860 mil) per km to build; a 177km rail line in Madrid-Valladolid, Spain, costing US$5.48 billion (RM22.46bn) or about US$30 million (RM123 mil) a km; and a 48km rail project in Barcelona costing about US$8.12 billion (RM33.3bn) or US$170 million (RM697 mil) per km.
It is disastrous for Malaysia that the EPU Minister actually cited these projects as comparison to our own proposed ECRL.
Dato’ Seri Rahman Dahlan perhaps didn’t realise that the 57km Swiss Golthard rail project costing a whopping RM50 billion actually involved the building of the world’s longest tunnel as deep as 2.3km below the surface! The neighbouring 56km Brenner rail project which is currently under construction costing just a shade less than Golthard, will be the second longest tunnel in the world when it’s completed in 2025.
Is the Minister telling us that the 600km ECRL link from Port Klang to Kota Bahru via Kuantan will be, if not completely, substantially underground to compare with the Swiss rail lines underneath the Alps?
Similarly, the Barcelona line costing US$8.12 billion has a length of 47.8 km, of which 43.71 km is underground and 4.9 km is on viaducts.
At the same time, the 177km Madrid-Valladoid line was only the first phase of the two-phase Madrid-Leon 342km rail line costing a total of US$6.34 billion. That actually works out to only US$18.54 million (RM76 mil) per kilometer which is cheaper than the ECRL’s RM91.7 million per kilometer!
Most of all, all of the examples cited by Dato’ Seri Rahman Dahlan are not only tunnel-intensive, they are all High Speed Rail (HSR) projects which, as we know cost significantly more than conventional rail projects like ECRL. These European HSRs travels up to a top speed of 300km per hour compared to the ECRL project proposed at 170km per hour.
Hence what the ignorant Dato’ Seri Rahman Dahlan attempted to do, intentionally or otherwise, is to try to sell Malaysians a ATP turboprop at the price of a Boeing 747. Unfortunately for him, Malaysians are not that stupid.
The EPU Minister shouldn’t have to go around to world to try justifying the exorbitant cost of the ECRL project. After all, this isn’t our first and only rail project. He should very well know that the 329km Ipoh-Padang Besar and 179km Gemas-Johor Bahru double-tracking link cost RM44.0 million and RM39.8 million per kilometre respectively. Amazingly, these projects such as the Ipoh-Padang Besar and Rawang-Ipoh links were all completed by local engineering and construction companies!
We challenge Dato’ Seri Rahman Dahlan to show proof that a conventional railway project would cost anything more than the above or that there are no local companies with the necessary expertise who are able to complete the ECRL project for far less than the RM55 billion awarded to China Communications Construction Company.
Rafizi Ramli
MP Pandan
Tony Pua
MP Petaling Jaya Utara
Dr Hatta Ramli
MP Kuala Krai
Monday, November 07, 2016
Does Transport Minister Datuk Seri Liow Tiong Lai really know what he is talking about when he said the East Coast Rail Link (ECRL) doesn’t cost RM55 billion?
The Edge Financial Weekly quoted an executive from a construction outfit who said that at RM55 billion, the East Coast Rail Link (ECRL) “could be the most expensive rail infrastructure project in the world in its class... it’s a good project but not at this ridiculous price.”
The Edge cited the examples of the 215km Padma rail line in Bangladesh and 120km Mombasa rail link in Kenya which were being constructed by China Rail Construction Corp for RM68.1 million and RM61.4 million per kilometer respectively.
For another project in Ethiopia awarded to Turkish contractor, Yapi Merkezi, the 375km Awash-Weldia railway line of which more than 40% is built on challenging terrain, the cost was only US$1.7 billion or RM18.1 million per kilometer.
The question hence arises as to why is the Malaysian government awarding the 600km ECRL project to China Communications Construction Company (CCCC) at RM55 billion or RM91.7 million per kilometer without any open competitive tender exercise?
The Minister of Transport, Datuk Seri Liow Tiong Lai tried to allay the concerns of the Malaysian public by claiming that the RM55 billion is not the cost of construction. Instead he claims that it is merely the value of the Financing Framework Agreement.
We have no idea whether the Transport Minister knows what he is talking about or whether he has even seen or read the above agreements given that his Deputy told the Parliament that he could not answer ECRL queries because it was not under the purview of the Transport Ministry but is instead under the Prime Minister’s Department control.
The question hence arises as to whether Datuk Seri Liow, who is also the MCA President is merely shooting off his hip, especially since the Prime Minister himself disclosed during his Budget 2017 address that “the 600-km rail will connect townships such as Port Klang, ITT Gombak, Bentong, Mentakab, Kuantan, Kemaman, Kerteh, Kuala Terengganu, Kota Bharu and ends in Tumpat, with an estimated cost of RM55 billion.”
Datuk Seri Liow even assured Malaysians that the construction cost of the ECRL was “very transparent” and that industry players were well aware of the cost per kilometre of the rail that would be laid. If so, then why didn’t he reveal the “real” cost of the project then?
Even if Datuk Seri Liow does indeed know better than his Prime Minister, his response further begs the question as to why should Malaysia borrow RM55 billion if the cost of the rail project is significantly less?
Malaysians fear a repeat of the multi-billion dollar 1MDB scandal where the state-owned company borrowed US$3.5 billion and RM6.8 billion, or approximately RM18.3 billion (at the then exchange rate of US$1:RM3.30) to acquire Tanjong Power and Genting Sanyen power plants for RM10.8 billion.
As we know today, the balance of the proceeds from the borrowings, US$1.367 billion were siphoned to a fictitious British Virgin Island incorporated Aabar Investment PJS Limited under the guise of a “collateral” to secure the bond guaranteed by Abu Dhabi’s International Petroleum Investment Corporation (IPIC). Of the misappropriated amount, the United States Department of Justice has alleged that US$30 million was transferred to Dato’ Seri Najib Razak’s personal bank account in Ambank while another US$238 million went to his stepson, Riza Aziz’s company in the United States, Red Granite.
The East Coast Economic Region (ECER) Development Council CEO, Datuk Jebasingam Issac John has previously been quoted by news reports in April 2014 that the ECRL will cost approximately RM30 billion. If the figure cited is indeed true and is the same figure Datuk Seri Liow is referring to, perhaps the Transport Minister should enlighten Malaysians as to where the balance of RM25 billion to be borrowed from China’s Exim Bank for the ECRL project will go to.
Can Datuk Seri Liow or any other Cabinet Minister guarantee Malaysians that the excess borrowings will not be misappropriated, perhaps even to bailout of 1MDB debts which were stolen? Is the Malaysian Government digging a bigger hole for itself in order to cover up the previous holes?
The Edge cited the examples of the 215km Padma rail line in Bangladesh and 120km Mombasa rail link in Kenya which were being constructed by China Rail Construction Corp for RM68.1 million and RM61.4 million per kilometer respectively.
For another project in Ethiopia awarded to Turkish contractor, Yapi Merkezi, the 375km Awash-Weldia railway line of which more than 40% is built on challenging terrain, the cost was only US$1.7 billion or RM18.1 million per kilometer.
The question hence arises as to why is the Malaysian government awarding the 600km ECRL project to China Communications Construction Company (CCCC) at RM55 billion or RM91.7 million per kilometer without any open competitive tender exercise?
The Minister of Transport, Datuk Seri Liow Tiong Lai tried to allay the concerns of the Malaysian public by claiming that the RM55 billion is not the cost of construction. Instead he claims that it is merely the value of the Financing Framework Agreement.
We have no idea whether the Transport Minister knows what he is talking about or whether he has even seen or read the above agreements given that his Deputy told the Parliament that he could not answer ECRL queries because it was not under the purview of the Transport Ministry but is instead under the Prime Minister’s Department control.
The question hence arises as to whether Datuk Seri Liow, who is also the MCA President is merely shooting off his hip, especially since the Prime Minister himself disclosed during his Budget 2017 address that “the 600-km rail will connect townships such as Port Klang, ITT Gombak, Bentong, Mentakab, Kuantan, Kemaman, Kerteh, Kuala Terengganu, Kota Bharu and ends in Tumpat, with an estimated cost of RM55 billion.”
Datuk Seri Liow even assured Malaysians that the construction cost of the ECRL was “very transparent” and that industry players were well aware of the cost per kilometre of the rail that would be laid. If so, then why didn’t he reveal the “real” cost of the project then?
Even if Datuk Seri Liow does indeed know better than his Prime Minister, his response further begs the question as to why should Malaysia borrow RM55 billion if the cost of the rail project is significantly less?
Malaysians fear a repeat of the multi-billion dollar 1MDB scandal where the state-owned company borrowed US$3.5 billion and RM6.8 billion, or approximately RM18.3 billion (at the then exchange rate of US$1:RM3.30) to acquire Tanjong Power and Genting Sanyen power plants for RM10.8 billion.
As we know today, the balance of the proceeds from the borrowings, US$1.367 billion were siphoned to a fictitious British Virgin Island incorporated Aabar Investment PJS Limited under the guise of a “collateral” to secure the bond guaranteed by Abu Dhabi’s International Petroleum Investment Corporation (IPIC). Of the misappropriated amount, the United States Department of Justice has alleged that US$30 million was transferred to Dato’ Seri Najib Razak’s personal bank account in Ambank while another US$238 million went to his stepson, Riza Aziz’s company in the United States, Red Granite.
The East Coast Economic Region (ECER) Development Council CEO, Datuk Jebasingam Issac John has previously been quoted by news reports in April 2014 that the ECRL will cost approximately RM30 billion. If the figure cited is indeed true and is the same figure Datuk Seri Liow is referring to, perhaps the Transport Minister should enlighten Malaysians as to where the balance of RM25 billion to be borrowed from China’s Exim Bank for the ECRL project will go to.
Can Datuk Seri Liow or any other Cabinet Minister guarantee Malaysians that the excess borrowings will not be misappropriated, perhaps even to bailout of 1MDB debts which were stolen? Is the Malaysian Government digging a bigger hole for itself in order to cover up the previous holes?
Sunday, July 31, 2016
A second international money laundering scam designed to cover up the first will cement Malaysia’s notoriety as the kleptocratic capital of the world
The Sarawak Report has exposed an alleged plan to double the price tag of the East Coast Rail Link (ECRL) to RM60 billion. The “extra” RM30 billion is meant to be channelled to a nominated Chinese company to pay off 1MDB’s bad debts channelled via behind the scenes company.
The massively inflated alleged cost of the ECRL to be awarded to China Communications Construction Company (CCCC) lends credence to the Sarawak Report documents which detailed how the “excess” was to bailout the debt-stricken 1MDB.
The nominated company by CCCC will then pay 1MDB the sum of US$850 million (RM3.4bn) for the purposes of repayment for International Petroleum Investment Corporation (IPIC) advances, and assume the debt of 1MDB subsidiaries amounting to US$4.78 billion (RM19.4bn) inclusive of interest which had been guaranteed by IPIC.
These payments are clearly meant to go towards the settlement with IPIC which has taken 1MDB to the London arbitration court for the amount of US$6.5 billion.
I have since demanded that Dato’ Seri Najib Razak confirm or deny the alleged plan. However, the Prime Minister has remained conspicuously silent on the exposé. His silence on the matter will no doubt leave Malaysians believing another bailout is underway. However, this is no ordinary bailout.
When the Parliament approved a special bill to allocate RM6 billion for Khazanah Nasional to rescue Malaysian Airlines System, that was a bailout. When the Ministry of Finance approved a RM4.5 billion soft loan for the Port Klang Free Zone, that was a bailout.
However, in this case, the Najib administration will be attempting a secret bailout of 1MDB via fraud and deceit. If true, the Prime Minister will be engineering another multi-billion-dollar international money laundering exercise to cover up the first one by 1MDB.
Has Najib not learnt his lesson with the first 1MDB money-laundering scam? The purportedly “legal” transactions such as “investment” in an ostensibly legal joint venture like “1MDB-Petrosaudi International Limited” did not in any way legitimise the attempts to siphon money for unrelated purposes.
Hence similarly, a purportedly “legal” ECRL contract does not in any way legitimise the attempt to siphon money out for the purposes of covering up another crime.
Furthermore, as the second “cover up” bailout will once again involve international cross-border transactions, any bank carrying out the multi-billion-dollar money-laundering exercise for them will be risking their reputation and survival.
After all, the previous banks who have facilitated the 1MDB money-laundering scam are now all in hot soup – including UBS Bank, DBS Bank and Standard Chartered Bank. 143-year-old Swiss bank, BSI not only found itself investigated by the Switzerland authorities but had its operating license terminated by the Monetary Authority of Singapore. Even Goldman Sachs who assisted 1MDB in raising US$6.5 billion of bonds is being probed.
Finally, if CCCC were to accept the fraudulently inflated contract to carry out the money laundering on behalf of the Najib administration, then the US$24 billion company listed on the Hong Kong Stock Exchange will itself be party to the money-laundering scam and subjecting itself to prosecution in jurisdictions around the world.
Malaysia does not need another money-laundering scandal investigated by authorities all around the world to further sully our rapidly diminishing reputation while making Malaysia the kleptocratic capital of the world. The Cabinet must put a stop to this RM60 billion ECRL contract immediately so that the long-suffering Malaysian people will not be scammed again for multi-billion dollars to cover up another scam.
The massively inflated alleged cost of the ECRL to be awarded to China Communications Construction Company (CCCC) lends credence to the Sarawak Report documents which detailed how the “excess” was to bailout the debt-stricken 1MDB.
The nominated company by CCCC will then pay 1MDB the sum of US$850 million (RM3.4bn) for the purposes of repayment for International Petroleum Investment Corporation (IPIC) advances, and assume the debt of 1MDB subsidiaries amounting to US$4.78 billion (RM19.4bn) inclusive of interest which had been guaranteed by IPIC.
These payments are clearly meant to go towards the settlement with IPIC which has taken 1MDB to the London arbitration court for the amount of US$6.5 billion.
I have since demanded that Dato’ Seri Najib Razak confirm or deny the alleged plan. However, the Prime Minister has remained conspicuously silent on the exposé. His silence on the matter will no doubt leave Malaysians believing another bailout is underway. However, this is no ordinary bailout.
When the Parliament approved a special bill to allocate RM6 billion for Khazanah Nasional to rescue Malaysian Airlines System, that was a bailout. When the Ministry of Finance approved a RM4.5 billion soft loan for the Port Klang Free Zone, that was a bailout.
However, in this case, the Najib administration will be attempting a secret bailout of 1MDB via fraud and deceit. If true, the Prime Minister will be engineering another multi-billion-dollar international money laundering exercise to cover up the first one by 1MDB.
Has Najib not learnt his lesson with the first 1MDB money-laundering scam? The purportedly “legal” transactions such as “investment” in an ostensibly legal joint venture like “1MDB-Petrosaudi International Limited” did not in any way legitimise the attempts to siphon money for unrelated purposes.
Hence similarly, a purportedly “legal” ECRL contract does not in any way legitimise the attempt to siphon money out for the purposes of covering up another crime.
Furthermore, as the second “cover up” bailout will once again involve international cross-border transactions, any bank carrying out the multi-billion-dollar money-laundering exercise for them will be risking their reputation and survival.
After all, the previous banks who have facilitated the 1MDB money-laundering scam are now all in hot soup – including UBS Bank, DBS Bank and Standard Chartered Bank. 143-year-old Swiss bank, BSI not only found itself investigated by the Switzerland authorities but had its operating license terminated by the Monetary Authority of Singapore. Even Goldman Sachs who assisted 1MDB in raising US$6.5 billion of bonds is being probed.
Finally, if CCCC were to accept the fraudulently inflated contract to carry out the money laundering on behalf of the Najib administration, then the US$24 billion company listed on the Hong Kong Stock Exchange will itself be party to the money-laundering scam and subjecting itself to prosecution in jurisdictions around the world.
Malaysia does not need another money-laundering scandal investigated by authorities all around the world to further sully our rapidly diminishing reputation while making Malaysia the kleptocratic capital of the world. The Cabinet must put a stop to this RM60 billion ECRL contract immediately so that the long-suffering Malaysian people will not be scammed again for multi-billion dollars to cover up another scam.
Sunday, July 21, 2013
"Private Sector Initiative" Not Justification for Direct Negotiations
Earlier this week, I have questioned the award of the RM1 billion Johor commuter train project to Metropolitan Commuter Network (MCN), a subsidiary of Malaysia Steel Works (KL) Bhd (Masteel) by the Malaysian government without open tender.
Masteel has responded via a press statement to say that “other bidders had not been prevented from submitting their bids to the government”. It added that “it was a private sector initiative, as opposed to a government-driven project”.
Let me first make it clear that it is the right for any private company to submit any number of unsolicited bids for any types of projects to the Government. However, the unsolicited bids by these companies do not in themselves justify direct negotiations between the Government and these companies.
The Federal Government, in this case represented by Public-Private Partnership Agency (UKAS) in the Prime Minister’s Department, must still place emphasis on transparency and accountability in the award of any contracts. And the best mechanism to ensure that the interest of the public are fully protected especially in projects such as this, is via open, transparent and competitive tenders.
What is more, this RM1 billion project involves the provision of a 20-year RM700 million soft loan to the concessionaire. The question that needs to be asked to the Prime Minister’s Department is, if the Government has to fund 70% of the project, why bother privatising it in the first place to a 37-year concession?
As admitted by Masteel CEO, Datuk Seri Tai Hean Leng himself, MCN will take “12 to 13 years to recover its costs”, which means that the concessionaire will have the remaining 24 to 25 years to make lucrative returns for their project.
Masteel has also defended itself in our claim that the company is mainly involved in steel manufacturing, and has no prior experience in train services. The company argued that it has “experience in complex mechanical and electrical hardware and automation” which gives them “the relevant experience in operating trains are trains are relatively simple mechanical system compared to steel mills”.
It is not my place to judge the competence of Masteel and whether it will be able to manage rail systems despite having no prior experience in such projects. However, based on the company’s own reply that “experience in complex mechanical and electrical hardware and automation” is sufficient, then I am certain that scores of other companies would be equal to the job. Certainly in this case, there would then be little justification for a direct negotiation because the project apparently requires very little specialised expertiese as “trains are relatively simple mechanical systems”.
Therefore given Masteel feedback, the direct negotiations must stop immediately and the Prime Minister, Dato’ Seri Najib Razak himself must insist that the project be tendered openly and competitively.
Despite news articles being posted on Masteel on website entitled “Masteel Gets Nod for Iskandar-Singapore Rail Link”, the company has now clarified that “at the time of writing, MCN is still undergoing the process of obtaining the necessary approvals fro various ministries and has not been granted full approval to undertake the project.”
This clarification is welcome as we can now call upon the Government to ensure that this RM1 billion project which has yet to be awarded, be tendered openly instead of being directly negotiated. It is only by ensuring that all projects awarded by the Government are at the best value, can the interest of the commuters and Malaysians be protected – e.g., the commuter fares will be at the lowest possible.
In the open tender exercise, we would strongly encourage the Government to invite Masteel to take part in the tender to prove that it is the most competent party offering the lowest prices to implement the project.
Thursday, July 18, 2013
KTMB's RM85m Automated Fare Collection Failure: Heads Must Roll
On 18 January 2011, I had issued a press statement seeking the then Transport Minister, Datuk Seri Kong Cho Ha to explain why a RM85 million Automated Fare Collection (AFC) System for KTM Berhad (KTMB) was awarded to a company without the necessary track record.
In fact it was then confirmed by both the Transport Minister as well as KTMB officials that KTMB is facing investigations by the Malaysian Anti-Corruption Commission over irregularities over the award of the RM85 million “Design, manufacture, supply, installation, testing and commissioning of automatic fare collection (AFC) system for KTMB's Commuter Stations”.
KTMB was being investigated for alleged fraud in rigging the tender evaluation process to award the contract to Hopetech Sdn Bhd, despite being 18% more expensive than 2 other bidders.
However, instead of suspending the project pending investigations, the Transport Minister, who is also the MCA Secretary-General, Datuk Seri Kong Cho Ha had immediately decreed that the project must proceed with the awarded contractor without delay.
The project was supposed to have been completed in April 2012 but the deadline has been extended multiple times at the request of Hopetech Sdn Bhd. The last “go-live” date was in January 2013 this year but the AFC system is no where near completion. I have received reliable information that the situation is so bad that hardware that was procured for the project have since been damaged, stolen or lost as a result of neglect and prolonged extension.
The new Transport Minister, Datuk Seri Hishamuddin Hussein must immediately take action and bring those responsible for the above fiasco to book. This is especially since the Ministry has been specifically warned on the competence of Hopetech, as well as the irregularities in the contract award highlighted.
In fact, I had pointed out more than 2 years ago that the Directors of Hopetech had terrible track records and were in major financial trouble. The CEO and Executive Director, Mohamed Zafril bin Mohamed Zabdin and the Managing Director, Hairul Ridza Hayata bin Hayata Elias are both directors of other companies which are either facing winding up petitions or have been wound up on orders by the court.
Despite the above warnings, Datuk Seri Kong and his team at the Transport Ministry persisted with the award, without any further action from MACC. The outcome is a disaster and tax-payers’ monies are burnt. The questions which need to be answered today are:
- Why is the Ministry of Transport persisting with the existing contractor instead of terminating the contract based on non-performance?
- Why hasn’t the Ministry of Transport imposed “Liquidated Ascertained Damages” on Hopetech for the severe delays caused?
- Why was there no action by the MACC despite all the evidence presented on the irregularities of the award?
All the above proves the complete failure by the Government to tackle and enforce transparency and integrity, and the failure of the MACC to serve as an effective institution to fight corruption. While in this case, “nasi sudah jadi bubur”, it will serve as a good platform to demonstrate the government’s commitment to fight incompetence and corruption by punishing the responsible officials for the project.
It will then serve as a warning to other officers to ensure that no waste of tax-payers’ monies will be tolerated, and the Najib administration has the necessary political will to institutionalise transparency and accountability. The move will also go a long way towards redeeming the severely tarnish image of the Government as reflected in the latest results of the Global Corruption Barometer where Malaysian’s perception of corruption has plunged from 49% to 31%.
Wednesday, July 17, 2013
Sistem Rel Iskandar RM1 billion Diswastakan Secara Rundingan Terus
Perdana Menteri Dato’ Seri Najib Razak telah berjanji untuk menjalankan sistem tender terbuka dalam semua perolehan kerajaan untuk meningkatkan ketelusan dan mengurangkan rasuah. Akan tetapi kontrak kerajaan bernilai berbilion-bilion ringgit masih ditawarkan secara rundingan terus tanpa sebarang tender terbuka selepas pilihanraya umum ke-13.
Syarikat Malaysian Steel Works (Masteel) Bhd telah mengumumkan pada 31hb Mei 2013 melalui Bursa Malaysia bahawa mereka telah menghadiri satu mesyuarat dengan Jawatan Kerjasama Awam Swasta (UKAS) yang dipengerusi oleh Menteri Kewangan Kedua, Dato’ Ahmad Husni Hussain.
Dalam mesyuarat tersebut, anak syarikat Masteel iaitu Metropolitan Commuter Network (MCN) telah diberikan kebenaran untuk memuktamadan struktur pinjaman mudah sebanyak RM700 juta daripada pihak kerajaan untuk membina satu sistem rail yang baru di Iskandar Malaysia. Sistem rel ini akan melingkungi 20 stesyen termasuk Kulai, Gelang Patah, Nusajaya, Johor Baru dan Masai.
MCN merupakan satu syarikat usahasama di mana Masteel memiliki 60%, manakala syarikat KUB Bhd di mana UMNO mempunyai kepentingan, memiliki 40%.
Dalam satu temuramah dengan The Edge Malaysia bertarikh Jun 17, CEO Masteel, Dtauk Seri Tai Hean Leng telah menjelaskan bahawa MCN akan melabur sebanyak RM300 juta untuk melaksanakan projek ini dengan pinjaman “soft loan” RM700 juta daripada kerajaan. Mereka akan diberikan konsesi untuk menjalankan sistem komuter ini selama 37 tahun walaupun MCN akan dapat “break even” selepas 12 tahun.
Sebahagian daripada konsesi tersebut termasak sekeping tanah sebesar 14.3ha di Kempas, Johor yang akan diberikan kepada MCN untuk bukan sahaja membina depot, tetapi juga untuk membina bangunan komersil. Mengikut kata Datuk Seri Tai, “tanah ini adalah tanah pilihan kerana ia bersebelahan dengan Setia Tropicana”.
Kami ingin mempersoalkan asas pihak kerajaan telah memilih syarikat Masteel untuk projek rel ini secara rundingan terus. Mengapa pihak kerajaan tidak menjalankan tender terbuka untuk projek sebegini? Soalan juga tertimbul di mana apakah keperluan untuk menswastakan projek ini jika kerajaan perlu membiayai 70% daripada kos pembinaan melalui pemberian pinjaman mudah?
Tambahan lagi, syarikat Masteel bukan merupakan syarikat yang berpengalaman dalam bidang rel. Aktiviti utama Masteel adalah pembuatan dan pembekalan pelbagai jenis keluli di Malaysia. Syarikat tersebut yang hanya memperolehi keuntungan bersih RM24 juta pada tahun 2012 tidak pernah terlibat dalam kerja-kerja pembinaan dan pengoperasian rel. Adakah syarikat Masteel merupakan syarikat yang terbaik untuk melaksanakan projek RM1 bilion ini dengan bantuan kerajaan sebanyak RM700 juta?
Pihak kerajaan perlu menjelaskan rasional untuk meneruskan tawaran projek secara rundingan terus, terutamanya bila ia kerap-kali ditawarkan kepada syarikat-syarikat yang tiada berpengalaman dan tidak mempunyai dana kewangan yang mencukupi. Apatah lagi pihak kerajaan perlu memperuntukkan pinjaman yang cukup besar walaupun pihak konsesi akan dapat menerima pulangan modal dalam jangka masa singkat.
Pihak PEMANDU telah mengemukakan Pelan Transformasi Kerajaan (GTP) pada tahun 2009 untuk mempertingkatkan ketelusan dan akauntabiliti dalam segala perolehan kerajaan, demi mengurangkan pembaziran dan rasuah. Akan tetapi sampai hari ini, kita dapat melihat bahawa kerajaan hanya cakap tak serupa bikin.
Pada masa yang sama, Perdana Menteri Dato’ Seri Najib Razak sendiri telah berjanji supaya “reformasi” akan diteruskan jika BN dipilih semula sebagai kerajaan. Adakah kesemua ini merupakan janji-janji kosong di mana pihak kroni BN akan diberikan kepentingan dan kekayaan.
Syarikat Malaysian Steel Works (Masteel) Bhd telah mengumumkan pada 31hb Mei 2013 melalui Bursa Malaysia bahawa mereka telah menghadiri satu mesyuarat dengan Jawatan Kerjasama Awam Swasta (UKAS) yang dipengerusi oleh Menteri Kewangan Kedua, Dato’ Ahmad Husni Hussain.
Dalam mesyuarat tersebut, anak syarikat Masteel iaitu Metropolitan Commuter Network (MCN) telah diberikan kebenaran untuk memuktamadan struktur pinjaman mudah sebanyak RM700 juta daripada pihak kerajaan untuk membina satu sistem rail yang baru di Iskandar Malaysia. Sistem rel ini akan melingkungi 20 stesyen termasuk Kulai, Gelang Patah, Nusajaya, Johor Baru dan Masai.
MCN merupakan satu syarikat usahasama di mana Masteel memiliki 60%, manakala syarikat KUB Bhd di mana UMNO mempunyai kepentingan, memiliki 40%.
Dalam satu temuramah dengan The Edge Malaysia bertarikh Jun 17, CEO Masteel, Dtauk Seri Tai Hean Leng telah menjelaskan bahawa MCN akan melabur sebanyak RM300 juta untuk melaksanakan projek ini dengan pinjaman “soft loan” RM700 juta daripada kerajaan. Mereka akan diberikan konsesi untuk menjalankan sistem komuter ini selama 37 tahun walaupun MCN akan dapat “break even” selepas 12 tahun.
Sebahagian daripada konsesi tersebut termasak sekeping tanah sebesar 14.3ha di Kempas, Johor yang akan diberikan kepada MCN untuk bukan sahaja membina depot, tetapi juga untuk membina bangunan komersil. Mengikut kata Datuk Seri Tai, “tanah ini adalah tanah pilihan kerana ia bersebelahan dengan Setia Tropicana”.
Kami ingin mempersoalkan asas pihak kerajaan telah memilih syarikat Masteel untuk projek rel ini secara rundingan terus. Mengapa pihak kerajaan tidak menjalankan tender terbuka untuk projek sebegini? Soalan juga tertimbul di mana apakah keperluan untuk menswastakan projek ini jika kerajaan perlu membiayai 70% daripada kos pembinaan melalui pemberian pinjaman mudah?
Tambahan lagi, syarikat Masteel bukan merupakan syarikat yang berpengalaman dalam bidang rel. Aktiviti utama Masteel adalah pembuatan dan pembekalan pelbagai jenis keluli di Malaysia. Syarikat tersebut yang hanya memperolehi keuntungan bersih RM24 juta pada tahun 2012 tidak pernah terlibat dalam kerja-kerja pembinaan dan pengoperasian rel. Adakah syarikat Masteel merupakan syarikat yang terbaik untuk melaksanakan projek RM1 bilion ini dengan bantuan kerajaan sebanyak RM700 juta?
Pihak kerajaan perlu menjelaskan rasional untuk meneruskan tawaran projek secara rundingan terus, terutamanya bila ia kerap-kali ditawarkan kepada syarikat-syarikat yang tiada berpengalaman dan tidak mempunyai dana kewangan yang mencukupi. Apatah lagi pihak kerajaan perlu memperuntukkan pinjaman yang cukup besar walaupun pihak konsesi akan dapat menerima pulangan modal dalam jangka masa singkat.
Pihak PEMANDU telah mengemukakan Pelan Transformasi Kerajaan (GTP) pada tahun 2009 untuk mempertingkatkan ketelusan dan akauntabiliti dalam segala perolehan kerajaan, demi mengurangkan pembaziran dan rasuah. Akan tetapi sampai hari ini, kita dapat melihat bahawa kerajaan hanya cakap tak serupa bikin.
Pada masa yang sama, Perdana Menteri Dato’ Seri Najib Razak sendiri telah berjanji supaya “reformasi” akan diteruskan jika BN dipilih semula sebagai kerajaan. Adakah kesemua ini merupakan janji-janji kosong di mana pihak kroni BN akan diberikan kepentingan dan kekayaan.
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