Sabtu, 11 Ogos 2012

Philosophy Politics Economics

Philosophy Politics Economics


George Kent LRT Award: Prasarana Must Disclose All

Posted: 06 Aug 2012 06:26 AM PDT

Syarikat Prasarana Negara must immediately declassify all tender documents and minutes of evalution meetings to prove that the George Kent-Lion Pacific consortium is the most worthy bid for the Ampang LRT Extension, both technically and financially

Pakatan Rakyat leaders and the Malaysian public have heavily criticised the award of the RM1.18 billion Ampang LRT extension project to the George Kent-Lion Pacific consortium, despite the multiple revelations by PKR Strategy Director Rafizi Ramli on the fact that the George Kent consortium had failed the technical evaluation conducted by Halcrow Consultants.  In fact, in the leaked report by Halcrow, it was noted that the consortium was allowed to proceed to the next stage upon "instruction" from Prasarana.

Hence it comes as a complete surprise, and more than a little amusing that George Kent was the party to deliver the public statement to "strongly refute the baseless allegations that GKLP-JV failed the full technical and commercial evaluations".

The statement had to add that George Kent has good track record in the construction industry and has delivered in many other "complex" projects. It said "we have successfully delivered large projects on time and on budget, such as the construction and design of the new Kuala Lipis Hospital valued at RM100 million…"

No one is questioning the ability of George Kent to deliver a RM100 million hospital.  Neither is anyone question the competence of the company to manufacture and supply "control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers", as well as "fibre glass reinforced polyester (FRP) panel tanks for bulk water storage".  In fact, whether the George Kent consortium may even be able to successfully deliver the Ampang LRT project.

The issue is, was George Kent the best consortium in terms of technical expertise and experience in rail projects with the best price to deliver the LRT project for Prasarana, among the various parties who bid for the project.

The only party who can answer this question is Prasarana, as well as the Ministry of Finance Committee headed by the Prime Minister, Datuk Seri Najib Razak himself.  No one from George Kent has the locus standi to tell Malaysians that they are the best company with the lowest price to deliver the project.

In fact, given the exposés to date which made available various government documents which showed that the George Kent consortium was far from the best bidder in terms of technical expertise and compliance, as well as in terms of price, the onus is on the Government to prove that that there was absolutely no abuse of power, and the controversial award to the George Kent consortium is entirely above board.

The best way for the Government to banish all accusations of cronyism and favouritism is by declassifying all related documents to the award of the project – from tender documents and submissions made for the project, to evaluation papers conducted by Prasarana and its panel of consultants as well as the minutes of meetings on decisions made by the Ministry of Finance in relation to the award of the project.

Such declassification of documents is completely in line with the Prime Minister's Government Transformation programme led by PEMANDU, which called for full transparency and accountability in government procurement processes.  In fact, it will be the only way to improve the outcome of the study conducted by PEMANDU where 71% of corporates claim "no transparency and openness" in the award of government contracts. (GTP Roadmap 2010 pg 134)

We hereby challenge Datuk Seri Najib Razak to convince us with physical proof that the manufacturer of water pipes and meters, George Kent is indeed the best choice to build the LRT system over other companies with complete track record in rail projects, despite the former being priced significantly higher than the latter.

Will Chua Tee Yong Ensure NFC's RM250 Million Is Recovered?

Posted: 04 Aug 2012 06:31 AM PDT

I concede that Deputy Agriculture Minister, Datuk Chua Tee Yong has been most exasperating in his crusade against the Selangor state government over the RM392 million debt recovery exercise from Talam Corporation Bhd.

Datuk Chua Tee Yong has made the serious allegation of the Selangor government under Pakatan Rakyat bailing out Talam to the tune of RM1 billion.  According to Datuk Chua Tee Yong, the Selangor state has not only "paid" Talam RM392 million, we had help them settle nearly RM300 million in debt in order to rescue Talam from financial distress.  It was because of the Selangor RM1 billion bailout, Talam was able to regularise its accounts and get out of its Practice Note 17 (PN17) status on Bursa Malaysia.

It has since been proven beyond doubt that Datuk Chua Tee Yong got his facts completely wrong, and made highly laughable accounting assumptions to come up with the above allegations.  Instead of a bailout, the Selangor government was able to collect back from Talam the full amount of RM392 million from Talam in the form of cash and assets.  The RM392 million was legacy debt from the Barisan Nasional administration since the 1990s which were never properly accounted for nor were they collected.

In fact, Talam shareholders must be rueing the day Pakatan Rakyat took over the Selangor government in 2008 because they had to pay up their debts within 2 years, as opposed to under the BN administration which did not make any serious attempts to collect these debts for more than a decade.

What is appalling is the fact that Datuk Chua Tee Yong continued his tirade against the Selangor state government, particularly over the valuation of the assets taken over from Talam with near daily press conferences.  Despite continued embarrassment for getting his facts wrong or incomplete, the Deputy Agriculture Minister is happily touring Selangor visiting lakes and mountains to make all sorts of claims over the valuation of these properties.

Datuk Chua Tee Yong must surely not be so incompetent as not to know that these properties were valued not only by professional certified valuers but also by Jabatan Perkhidmatan dan Penilaian Hartanah (JPPH) (Property Valuation & Services Department), which is under the jurisdiction of the Federal Government's Ministry of Finance.  If both the professional valuers and JPPH were able to arrive at an agreeable valuation on the pieces of land – regardless of whether there's a lake or mountain on it – then who is Datuk Chua Tee Yong to give these pieces of land a different value?

Has Datuk Chua decided that he will make a better property valuer than he will as an accountant?

If Datuk Chua spends as much effort as he does visiting all parts of Selangor to carry out the responsibilities of his Ministry, then perhaps the National Feedlot Corporation (NFCorp) scandal would not have reached the ugly state it is suffering from today.

Let me ask Datuk Chua Tee Yong to state how many times has he visited the National Feedlot Centre (NFC) in the past year to resolve the NFCorp scandal?  Did he even visit the NFC a single time to perhaps count the number of cows being bred in the farm instead of making multiple fishing trips to the scenic Bestari Jaya lakes?

Has Datuk Chua Tee Yong delivered his ministerial responsibilities by finding out why a RM250 million soft loan was extended to NFCorp owned by UMNO Wanita Chief Datuk Shahrizat Jalil's family in 2008, 2 years before a project implementation agreement was even signed between Ministry of Agriculture and NFCorp?

In fact, has Datuk Chua ever took the trouble to find out why NFCorp has not paid a single sen back to the Government despite the RM250 million loan being due for its first repayment installment since January 2012?  Can Datuk Chua provide an assurance to all Malaysians that every sen of the RM250 million will be collected back, whether in the form of cash or assets just as the Selangor government has managed to successfully collect back the RM392 million Talam debts?

If not, then perhaps Datuk Chua could give Malaysians a reason why he is fit to be the Deputy Minister of Agriculture other than to be the errand boy for the Selangor Umno warlord and Minister, Datuk Noh Omar.

George Kent LRT Award: What Says PEMANDU?

Posted: 03 Aug 2012 06:34 AM PDT

What is the point of setting up PEMANDU when the Prime Minister himself tramples on its proposals as he likes, putting to waste hundreds of millions of ringgit in developing, promoting and implementing the Government Transformation Programme (GTP) and the National Key Result Areas (NKRA)

Those who are in the know, would be aware that I have a high degree of respect for Datuk Idris Jala, the Minister in the Prime Minister's Office in-charge of the "high-powered" Performance Management and Delivery Unit (PEMANDU), especially with regards to his sincerity in wanting to make change happen.  I have at various times criticised policy proposals by PEMANDU, but that is directed towards making them better, and not questioning the intent of those who have worked at drafting the policies.

However, I can only see the sheer hopelessness of the efforts put in by Datuk Idris and his team, when some of these key proposals are given only lip service support.  When it comes to the crunch, many of the policies drafted by the PEMANDU team and its highly paid consultants were either completely ignored or are trampled upon at will by the Prime Minister and his Ministers.

As seen recently, Datuk Seri Najib Razak has shown complete contempt of the PEMANDU GTP programme by repeatedly interfering with the award of the projects for the LRT Extension Programme for both the Kelana Jaya and the Ampang lines.

In June 2011, the Finance Ministry committee had ordered Syarikat Prasarana Negara Bhd to award the deal to the Hartasuma Sdn Bhd-Bombardier joint-venture, whose RM890 million bid is nearly 50 per cent higher than the lowest bid from the Prasarana-recommended Ingress Corp Bhd-Balfour Beatty Rail Sdn Bhd, of RM610 million, the lowest.  The decision was subsequently reversed, and awarded to the Colas and CMC Engineering Sdn Bhd joint venture for RM670 million.

More blatantly, the same committee chaired by none other than the Datuk Seri Najib Razak himself, has overturned recommendations by Prasarana to award the Ampang Line project to George Kent-Lion Pacific joint venture this month.  They have secured the contract for RM1.18 billion despite despite the fact that the consortium had failed both the technical and commercial evaluations for the contract.

What is beyond belief is that George Kent is a manufacturer and supplier of "control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers", as well as "the manufacture of fibre glass reinforced polyester (FRP) panel tanks for bulk water storage" can be qualified for a billion ringgit LRT project. George Kent made only net profits of RM19.3 million on revenues of RM152 million for the financial year ended January 31, 2012.

PEMANDU has in its GTP paper clearly stated that "we will reduce leakages of funds allocated for national development and operational expenditure and ensure transparency in the award of contracts" and admitted that "currently the public perceives that there is a lack of transparency in our procurement processes."

PEMANDU also wrote that "it is well established that transparency is crucial for a fair and efficient government procurement process. This is because transparency increases public scrutiny on the procurement process and helps ensure that accountability and well-defined policies, regulations and procedures have been put in place and followed closely."

However, as shown in the above 2 LRT contracts, what PEMANDU proposed mattered little to the Prime Minister, who also holds the position of the Finance Minister.  It is clear that PEMANDU's role in the Najib's administration is to present a façade of reformist credentials for the BN Government and to act as apologists for his failure to implement any tangible reforms.

As at June 2011, PEMANDU has spent RM27.5 million on "communicating" the GTP and ETP to the Malaysian public and another RM36.9 million running dozens of labs led by various consultants.  The above forms only part of the overall NKRA operating budget of RM334 million in 2010.

Instead of spending the money to bring about real transformation by improving transparency, accountability and integrity, hundreds of millions of ringgit are wasted on thousands of pages of plans and presentations, dazzling publicity drives as well as half-hearted implementation efforts to present a semblance of reform to the general public.

If the Prime Minister is in reality going to ignore GTP and award contracts directly to his own preferred vendors regardless of the "open tender" outcomes, then he might as well save the people the hundreds of millions of ringgit spent on the dog-and-pony PEMANDU show.

Najib's Whistleblower Reforms Dead

Posted: 02 Aug 2012 06:39 AM PDT

PKR Strategy Director Rafizi Ramli has been charged in the Shah Alam sessions court this morning for allegedly breaching the Banking and Financial Institution Act when he exposed some of the worst abuses by National Feedlot Corporation (NFC).

Rafizi has led the charge to expose a long list of wrong-doings by the company and its directors, who are the husband and children of Datuk Seri Shahrizat Jalil, the recently resigned Minister of Women, Family and Community Development.  Datuk Seri Shahrizat is still the Chief of UMNO's Women's Wing.

Despite the overwhelming evidence exposed to date, only Datuk Seri Shahrizat's husband, Datuk Seri Mohamad Salleh has been brought to court, and even then only on 2 key charges – for misappropriating RM40 million of NFC's money, and for acquiring 2 units of luxury condominium in One Menerung, Bangsar, Kuala Lumpur for RM13.5 million.

This is despite the fact that based on NFC's last audited accounts, more than RM110 million has been misappropriated by the directors to set up a global chain of companies under their individual names.  In addition, Rafizi has also exposed the fact that Datuk Seri Shahrizat's family has acquired 3 luxury condominiums in Singapore worth some RM45 million, as well as a villa in Kazakhstan.

However, none of these assets have been frozen by the Malaysian authorities and none of the other directors have been charged despite holding various key positions in NFC, including the son, Izran Salleh who is the Chief Executive Officer of NFC.

Instead of pursuing the culprits who have abused the RM250 million government soft loan extended to NFC, the Government has chosen to exact revenge on the whistle-blower Rafizi Ramli who play the integral role in uncovering the lid on the litany of gross abuses by Shahrizat's family.

The act by the Malaysian authorities marks a serious blow to the purported anti-corruption campaign launched by the Prime Minister Datuk Seri Najib Razak himself, under the Anti-Corruption National Key Result Area (NKRA) in the Government Transformation Programme (GTP).  The spirit of the Whistleblower Act which was passed in December 2010 to encourage more to expose corrupt activities is clearly undermined with the persecution of Rafizi.

Only a week ago under the GTP2.0 Open Day, only 7 persons have sought protection under the Whistleblower Act today after more than 18 months, clearly pointing towards a complete lack of confidence in the Barisan Nasional government.  Rafizi's persecution will mark the death knell for the Act as no whistleblower will have any trust in the system to protect their interest.

The complete lack of urgency to bring criminal charges against Datuk Seri Shahrizat's family members, and the speed at which Rafizi is being charged for blowing the lid on the scandal proves that Datuk Seri Najib has no qualms in protecting the powerful in Barisan Nasional, and quashing his political enemies.  Such blatant abuse of power will only confirm in the eyes of the world that Najib's reform agenda is pure hogwash.

We in the DAP will stand firm and together with Rafizi to ensure that truth and justice will prevail.  Our leaders may have been detained without trial, sent to jail on trumped up charges and sued for defamation but we are committed to remain steadfast to our principles and will continue to fearlessly expose all misdeeds and wrongdoings committed by the BN leaders, their associates and cronies.

George Kent LRT Award: Najib Broke All Rules

Posted: 01 Aug 2012 06:44 AM PDT

Datuk Seri Najib Razak shamelessly broke every single rule on transparency, accountability and integrity, making a complete mockery of the Ampang Line LRT "open tender" and exposed his cornerstone "Government Transformation Programme" as nothing more than rhetorical propaganda

After playing hide-and-seek with the Malaysian public for more than a month, Syarikat Prasarana Negara Berhad (Prasarana), the project and asset owner for the LRT Line Extension Project (LEP), said in a statement today that the contract for "Engineering, Procurement, Construction, Testing and Commissioning of System Works" for the Ampang Line Extension Project has been awarded to a George Kent-Lion Pacific joint venture.

The consortium led by George Kent, is at the centre of repeated opposition allegations that it received preferential treatment from the government is understood to have secured the contract for RM1.18 billion.  This is despite the fact that the consortium had failed both the technical and commercial evaluations for the contract.

PKR Strategy Director Rafizi Ramli has exposed that the MoF's Acquisition Committee, which met this January 25, had originally over-ruled initial lower-priced recommendation from Prasarana decided to award the contract to British engineering firm, Balfour Beatty-Invensys Consortium, which bid RM1.01 billion for the job.

Subsequently it was exposed that the MoF Acquisition Committee headed by none other than the Prime Minister himself, reversed the earlier decision to awarded an even higher priced contract to the George Kent consortium.

What is completely beyond belief in the sheer abuse of power by the Prime Minister himself is that George Kent a manufacturer and supplier of "control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers", as well as "the manufacture of fibre glass reinforced polyester (FRP) panel tanks for bulk water storage" can be qualified for a billion ringgit LRT project.

What is worse is the fact that George Kent made only net profits of RM19.3 million on revenues of RM152 million for the financial year ended January 31, 2012.  What justification can be given by Datuk Seri Najib Razak that a company with only RM152 million in revenue could be awarded a RM1.18 billion ringgit contract, despite having been disqualified technically from the project?

The Ampang LRT project isn't the first to suffer from abuse and controversy.  In June 2011, the Finance Ministry committee had ordered Syarikat Prasarana Negara Bhd to award the deal to the Hartasuma Sdn Bhd-Bombardier joint-venture, whose RM890 million bid is nearly 50 per cent higher than the lowest bid from the Prasarana-recommended Ingress Corp Bhd-Balfour Beatty Rail Sdn Bhd, of RM610 million, the lowest.  The decision was subsequently reversed, and awarded to the Colas and CMC Engineering Sdn Bhd joint venture for RM670 million.

The decision to proceed with the award proves beyond doubt that Datuk Seri Najib Razak is willing to shamelessly break every single rule on transparency, accountability and integrity, despite the scandal having been exposed.  The decision and announcement makes a complete mockery of the Ampang Line LRT "open tender" which does not play by the book and will severely dent the confidence of Malaysians in the multi-billion ringgit projects to be similarly awarded via "open tender" such as the RM53 billion MRT and RM8.7 billion Langat 2 water treatment plant.
The blatant crony award of the RM1.18 billion contract above also confirms that the Prime Minister's cornerstone "Government Transformation Programme" (GTP) to improve transparency and reduce corruption is nothing more than rhetorical propaganda.  This is because none other than Datuk Seri Najib Razak himself has chosen to dismiss the policies proposed with the GTP.

Malaysians are expressing both outrage and disappointment with the Prime Minister who has promised so much with his "transformation" agenda but delivered so little.  Despite all the promises and pledges, Datuk Seri Najib Razak has chosen to continue the crony capitalism practices carried out by his predecessors at the expense of good government and the rakyat's interest.

KLIFD: A Glossy Government Sponsored Real Estate Project

Posted: 31 Jul 2012 06:45 AM PDT

The vamped-up Kuala Lumpur International Financial District (KLIFD) launch yesterday serves only to confirm that the project is another glossy government-sponsored real-estate project

After the KLIFD project was announced more than a year ago, the Prime Minister, Datuk Seri Najib Razak launched the rebranded financial district, "Tun Razak Exchange" (TRX).  The mega property development project is expected to have a gross development value of RM26 billion.

Datuk Seri Najib said that "what has began as an idea for KLIFD has evolved into something larger and more inclusive".  However, nothing in his speech indicated how the mega-project has become anything more inclusive.  Instead, he hinted at how the project will become even more exclusive with more promised incentives to those intending to participate in th e project.

KLIFD's exclusivity was already established when the Prime Minister who also holds the portfolio of the Finance Minister introduced a 10-year 100% tax exemption for qualified companies located within the KLIFD as well as a slew of other benefits such as stamp duty exemption on loan and service agreements, industrial building allowance and acelerated capital allowance for companies in his Budget speech last year.

In fact, property developers within KLIFD gets exceptional treatment with 70% income tax exemption for 5 years.

Such incentives, especially that for property developers are unheard of and it only goes to show how the KLIFD project is difficult to get off the ground because of a less than viable concept.  And it appears that such lucrative incentives are insufficient as Datuk Seri Najib promised further incentives through "a comprehensive review of business regulations in support of TRX".

We fear that the KLIFD will suffer a similar fate as previous mega-property based "themed development" projects launched by the BN government. The entire KLIFD concept is founded on the assumption that financial institutions and related professional services needs to be sited a stone's throw away from one another.

However, such an assumption is completely flawed as telecommunications technology, video-conferencing facilities as well as secure and instantaneous electronic transactions obliterates the need for physical proximity. There is little or no added synergy for example, for the Maybank headquarters to be shifted to the KLIFD compared to its current venue, with the exception of potential tax benefits.

Hence, instead of actually promoting the financial services industry in the country directly, the Government, having already provided the prime land to 1MDB without any open bidding, is further providing unfair crutches for the latter to succeed in the KLIFD real estate play. Such incentives however, given the experience with the Multimedia Super Corridor (MSC), Bio-Valley and E-Village however, may not be sufficient to ensure its success.

The Government has described the role of KLIFD is to turn Kuala Lumpur into a "new icon for the financial world", "the global financial city of choice" and "bring together world-class names to operate closely in a physical location." Similarly, the Bio-Valley, E-Village and MSC were all sold to Malaysians as transformative projects in their respective sectors and launched with much fanfare.
The Government must learn from its failures of the past. The decision of global financial institutions to site their offices in Malaysia will not be based on short term benefits as a result of the choice of real estate. It will instead be based on the demand for its services and funds, the sophistication of the market instruments and the openness of the economy.

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