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Posted by Admin Direktori Blog | Posted on 9:10 PTG

Philosophy Politics Economics


"Private Sector Initiative" Not Justification for Direct Negotiations

Posted: 20 Jul 2013 06:01 PM PDT


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.

How Many Deaths Before IPCMC?

Posted: 20 Jul 2013 01:59 AM PDT


On Wednesday, Member of Parliament for Batu Gajah, V Sivakumar highlighted another death in custody under the police on Tuesday 16 July 2013.  This is the the 11th reported case this year involving a 26-year-old Chew Siang Giap, who was detained for 60 days at the Kangar district police headquarters, was sent to the Batu Gajah rehabilitation centre on July 12.

According to the police report made by the son's father, "when identifying the body at the Batu Gajah Hospital, he found bruises on the victim's body. Upon confirming that the victim was his son, the father said there were black patches that looked like bruises on the victim's ear, shoulder and thigh".

The question that needs to be asked now is whether the Najib administration is so completely heartless as to see Malaysians die in custody, that no urgent and drastic actions need to be taken to remedy the situation.  Malaysians are certainly beginning to think so as the authorities have shown a complete lack of remorse in these deaths where there have been substantial evidence of the victims being tortured.

The frequency of deaths under police custody is increasing at such a pace that it is imperative for the Federal Government to establish the Independent Police Complaints and Misconduct Commission (IPCMC) immediately to check on police professionalism.

The Home Minister who was responding in Parliament on the 10th July continued to insist that the proposed IPCMC is unconstitutional and that the existing Enforcement Agencies Integrity Commission (EAIC) is sufficient to resolve the above tragedies.

If the EAIC which was set up since 2011 is indeed effective in improving police professionalism, then surely we would not have seen the number of unnatural deaths under police custody today.  In fact since 2011, none of the deaths under police custody have been investigated by the EAIC.  It is of course not helped by the fact that the Government has never been serious about EAIC in the first place, leaving the agency severely understaffed and under-budget.

Most importantly however, the EAIC is not seen as a threat or deterrent to the rogue police officers.  The EAIC for example, can only refer complaints to disciplinary authorities of the relevant agency.  It has no prosecution powers and has to refer findings on criminal prosecution to the public prosecutor.

On the other hand, the proposed IPCMC has inherent powers to act on officers found guilty of misconduct.  The IPCMC is empowered to mete out caution, discharge, deprive good conduct badges and allowances, stop increment, demote, severely reprimand, transfer or dismiss.  The IPCMC also has the power to institute, conduct or discontinue any proceedings for an offence commenced by the commission.

In other words, the IPCMC has teeth to enforce discipline, while the EAIC basically has its hands tied behind its back.  The Government has rejected the IPCMC in 2006 essentially due to an open revolt by the Police against its implementation.

What's more, the argument by the Home Minister that the IPCMC is "unconstitutional" and was "against the concept of justice" are just flimsy excuses.  Even the former Chief Justice, Tun Mohamed Dzaiddin Abdullah who chaired the Royal Commission Inquiry on the Royal Malaysia Police which first recommended the IPCMC has refuted the Home Minister's argument that the IPCMC is "unconstitutional".

He referred to Article 140 which "provides that Parliament may, by law, provide for the exercise of Police Force Commission's disciplinary control over members of the police force in such manner and such authority as may be provided in that law".

He further added that the establishment of an external oversight body "has been adopted by many modern policing systems whose experience has been that internal mechanisms alone are inadequate, unreliable and frequently ineffective."

Therefore it is important for the Najib administration to demonstrate that it is truly a "transformative" government seeking to reform injustices in the system by setting up the IPCMC.  The issue isn't just one of increasing the number of investigating officers in the EAIC (although it will certainly help), but one which is about giving teeth to the relevant Commission.  The Government is free to rename the IPCMC as the EAIC, and expand the Commission to include as many agencies as it wants.  However, if the Commission doesn't have teeth, then it is certainly designed to fail.

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