Risen Jayaseelan and Sharidan M. Ali, The Star 

After some dithering, the construction of Malaysia's My Rapid Transit (MRT) project is moving into higher gear.

What's to come is more telling. By April, MRT Co, the overseer and project owner of the country's largest ever infrastructure project, would have awarded a total of around 90 or so projects. The figure of these contracts run into billions and would clearly be a major boost to the construction and related sectors.

The multiplier effect on the economy will soon be felt.

“We have been waiting for this, as these projects have already been earmarked by the government before. The industry and the country need these projects to spur economic growth, in light of the gloomy global scene. The multiplier effects are well spelt out,” says Master Builders Association Malaysia (MBAM) president Kwan Foh-Kwai.

While research houses have yet to make an outright bullish call on the construction and related sectors, there are hints that a re-rating is in the offing. Among the larger contracts that are being dished out are for elevated civil works that entail the building of viaduct guideways and other associated works. There are eight of these packages, each averaging 500 million ringgit (US$166 million), according to MRT Co.

However, the two that have already been awarded recently to IJM Corp Bhd and Ahmad Zaki Resources Bhd were for 974 million ringgit ($323 million) and 764 million ringgit ($253 million) respectively, indicating that the 500 million ringgit figure could be on the low side.

There are also contracts for stations and depots. And the single biggest one will be for tunnelling works for the 9.5km underground portion of the Sungai Buloh-Kajang MRT line.

The bill for this is estimated at 40 per cent of the total project cost, which is estimated at 30 billion ringgit ($9.9 billion). The first line stretches 51km.

"The positive news from MRT Co reinforces our positive view on the construction sector as we expect a lot of sizeable projects to be awarded this year,” wrote MIDF Research in a recent note.

OSK Research said that if it did turn positive on the Malaysia market, construction would be one of the sectors it would be bullish about.

Its research head Chris Eng says: “If global markets hold up, the improved risk-taking sentiment will provide a boost to construction stocks, given that the MRT awards will happen this year.”

But are the contracts being farmed out too hurriedly? And what assurance is there that the right parties are winning the awards?

These are valid concerns, considering that Malaysia has a questionable track record when it comes to the building of large infrastructure projects in terms of contractors' ability to deliver the goods in time and within budget. In the past, a massive amount of money had been spent by the Government in bailing out the two light rapid transit (LRT) operators and the monorail project.

Federation of Malaysian Consumers Associations secretary-general Muhammad Sha'ani Abdullah says:“Caution should be taken to ensure that the best and deserving companies are awarded the deals. We don't want situations where companies chosen later fail to carry out the projects within budget and time. And these companies then end up getting bailed out by the Government, as had happened in other infrastructure projects in this country.”

But MRT Co CEO Datuk Azhar Abdul Hamid explains that the plan to get these contracts awarded by April is to ensure that the MRT (since renamed Klang Valley MY Rapid Transit or KVMRT) isn't delayed."“We are already about six months behind schedule and also want to make sure we can deliver the project ahead of the expected completion time in July 2017. There is nothing wrong to speed things up as we do not rely on one company to do the work and that's why we are spreading it out. The most important thing is coordination and supervision,” he says.

Rigorous selection process

Azhar explains that a rigorous process is involved in deciding which companies are awarded with the contracts. In fact, the selection process dates back to even before Azhar, the former head of Sime Darby's plantation division, was made chief executive of MRT Co last August.

Syarikat Prasarana Negara Bhd (Prasarana) which was first tasked with managing the KVMRT project, had earlier called for parties to express their interest in participating in the works for the KVMRT. That was back in 2010 and by September 2011, Prasarana had decided on the “pre-qualification” list for all the different packages involved in building the KVMRT.

According to Azhar, the bids which are then submitted by the pre-qualified contractors are first evaluated by a working committee chaired by both MRT Co and the Project Delivery Partner (PDP) to gauge applicants' technical and financial capabilities. One unique feature of the KVMRT project is the presence of the PDP. In late 2010, a Gamuda-MMC consortium, who had first pitched a plan of the MRT to the Government in the early part of that year, had been appointed as PDP consultants for the MRT project.

The PDP bear certain management risks in this project and are therefore key stakeholders in the KVMRT. Hence it has a say in the decision-making process of contract awards.

From there, the applications go on to a one-stop technical committee chaired by Azhar.

"Finally, we will present the outcome of these evaluations to the one-stop procurement committee to be chaired by three different persons depending on the contract value.”

The chairpersons include Finance Ministry secretary-general for contracts up to 50 million ringgit ($16 million); the Second Finance Minister (up to 300 million ringgit or $99.6 million) and the Prime Minister for contracts worth more than 300 million ringgit.

Checks and balance

Additionally, the KVMRT project has two very notable checks and balances in place to minimise the government having to provide additional funding in the event contractors can't deliver. First is the role of the PDP. Explains Azhar: “Under the PDP environment there's a step-in clause where if the contractors fail to undertake and continue doing the jobs, the PDP is obliged to come in and get the job done.”

Azhar adds that in cases where there are cost overruns, it is only to be expected that the PDP will also be penalised for that. “In the case of variation orders, we will only look at very exceptional cases,” Azhar says.

Aside from the PDP, there's also the role of the independent consulting engineer or ICE. It has been reported that Prasarana had already issued a letter of intent to engineering firm HSS Integrated Sdn Bhd in a JV with SNC Lavalin (of Canada) to take on the role of ICE.

HSSI was previously involved in the design, construction and supervision of the KL International Airport, the Light Rail Transit System 2, the North-South Expressway, Maju Expressway and the Express Rail Link.

Azhar says the role of the ICE is crucial as it will monitor the progress of the project and its input is needed before contractors are paid. It is also tasked with safety aspects of the project.

Still on the issue of the PDP, recall that the appointment of Gamuda-MMC as the PDP for the KVMRT project had caused some controversy, considering that they are also bidding for the tunnelling portion, which is single biggest contract in building the MRT.

Azhar explains that it is Gamuda and MMC who has first come up with the MRT proposal to the Government and they have from the start indicated their keenness to be involved in the tunnelling portion of the project.

"To ensure proper due diligence and that the government is getting the right pricing for the tunnelling portion, that's the basis of having the Swiss Challenge method for picking the tunnelling contractor,” Azhar says.

To date, five groups of companies, including the Gamuda-MMC JV, have been shortlisted for the tunnelling job. If Gamuda-MMC wins the tunnelling job, it would step out of the PDP role relating to that part of the project. Under the Swiss Challenge system, MMC-Gamuda will have the first right of refusal to do the job at the lowest bid plus a small 2.5 per cent to 7.5 per cent margin. Curiously, this has not stopped other parties from making a bid.

“Take note that the other bidders for the tunneling job are made up of two Chinese, one South Korean and one Japanese company. Aren't they also able to have advantages of economies of scale and possibly government funding on their part?” Azhar notes.

Crucial issue of funding

As the KVMRT goes into high speed, many are still questioning if the country can really afford a project as ambitious as this. It is estimated that the first line of the KVMRT would cost around RM30bil. But he says: “The government will finance the entire line 1 (Sungai Buloh-Kajang) via bond issuances. That will be done very soon. In the mean time, if we need money, we can used short-term financing from financial institutions which can then be converted into bonds later on. We expect good response for the bonds as there is a lot of liquidity in the market as well as investors are looking at Asia now as the situation the West is not quite healthy.”

Azhar says that it will be Dana Infra that will be raising the bonds.

It has been reported that a special unit of the Finance Ministry called Dana Infra Nasional Bhd (Dana Infra) has been set up to issue bonds to raise the financing for the MRT building cost. Checks with Government sources reveal that Dana Infra is headed by Fazlur Rahman Ebrahim, who is the current managing director of Prokhas Sdn Bhd, itself a unit of MoF that was set up in 2006 to manage the residual assets of Danaharta.

Fazlur has yet to respond to queries from StarBizWeek on the planned bond issuance. Sources, however, have indicated that these bonds would be fully government-backed.

The government has stated in the past that the rationale for the KVMRT being government-funded is on the basis of the multiplier effects it would have on economic growth in the country and the competitive advantage that the Klang Valley would have once the MRT was up and running

It had also been reported that while the MRT was not going to be profitable, there would be a strong focus to reduce its cost and this was where a “rail plus property” plan had been cited before, where some level of real estate development would be emarked on to recoup some of the losses from the MRT. Another non-fair revenues would be sought such as from advertising.

StarBizWeek had previously quoted economist Dr Yeah Kim Leng of RAM Holdings, who opined that assuming 30 billion ringgit is raised by the Government via bonds to the fund the MRT, it will raise the Government debt-to-GDP ratio by 3.9 percentage points to 57 per cent based on the 2010 gross domestic product (GDP) figure.

He said when compared with the debt situation of many advanced economies where the debt levels are either close to or above 100 per cent of GDP, the government does have the borrowing capacity. He had also said that the bond issuance of 30 billion ringgit would raise the fiscal deficit by an estimated 0.2 per cent  of GDP which “may necessitate either a cut-back in spending on other areas or raising revenue through means such as asset sales or tax increases, in order to achieve the fiscal deficit target of less than 3 per cent of GDP by 2015,” he reportedly said.

On a positive note, Yeah had added that the MRT project would “boost the economy by adding jobs and crowding-in investment which would have the desired effect of enlarging the GDP, thereby contributing to either stabilising or lowering the debt-to-GDP ratio”.

Those following the KVMRT saga would also be aware of the problems Azhar and his team faced when securing the allignment in some parts of the city centre. There were quarters who opposed the development of the KVMRT. Azhar is confident that the problems would eventually be ironed out. His message has been consistent: that MRT Co isn't interested in taking land in places like Chinatown, except for the station. “We just need the time for them to vacate the area with compensation for six months for us to do the tunnelling works underground.”

But Azhar goes on to say:”Some people just refuse to understand.”

The KVMRT though, is going ahead and Azhar is winning the battle with the majority of land owners having inked agreements to facilitate the MRT allignment. “A lot of efforts are being made on our part to do this correctly. We will get there,” he ethuses and is hopeful that the July 2017 target for the first line of the KVMRT would be achieved.

Tun Dr Mahathir Mohamad, Malaysia's former prime minister, comments on Proton Holdings Bhd after billionaire Syed Mokhtar Al-Bukhary's DRB-HICOM Holdings Bhd agreed to buy a controlling stake from the government. Mahathir, who helped found Proton and remains an adviser, also comments on whether DRB should sell Proton's UK sports-car arm Group Lotus International Ltd. The former premier made these comments in an interview in Kuala Lumpur yesterday.

BLOOMBERG

On selling Lotus

"It is a viable option and I think the new owners of Proton might consider that. But, Lotus is not just a sports-car company. It is an engineering and technology company. It's selling engineering skills to China and helping people going into the industry."

Segambut MP Lim Lip Eng says the posters found in Petaling Jaya this morning only makes the people hate the perpetrators more.

There are no clear literary sources from which to trace the origin of the red envelope tradition. In China, during the Qin Dynasty, the elderly would thread coins with a red string. The money was called yāsuì qiánmeaning "money warding off evil spirits", and was believed to protect the elderly from sickness and death. The yāsuì qián was replaced by red envelopes when printing presses became more common. Red envelopes are also referred to as yāsuì qián.

Other similar traditions also exist in other countries in Asia. In Vietnam, red envelopes are called lì xì (similar to the Cantonese pronunciation "li see") or, in some cases, phong bao mừng tuổi (happy new age envelope). In Thailand, they are known as ang pow (the pronunciation of the Chinese characters for "red envelope" in the Teochew dialect) or tae ea among the Chinese-Thai. In Myanmar (Burma), the Burmese Chinese refer to them as an-pao (Burmese: ), and South Korea's envelopes, which are white, not red, are called "sae bae don".

In Japan, a monetary gift called otoshidama is given to children by their relatives during the New Year period. However, white envelopes are used instead, with the name of the receiver written on its obverse. A similar practice is observed for Japanese weddings, but the envelope is folded rather than sealed, and decorated with an elaborate bow.

In the Philippines, Chinese Filipinos exchange ang pao (from the Hokkien pronunciation, as most Chinese in the Philippines are of Hokkien descent) during the Chinese New Year. For non-Chinese Filipinos, ang pao is an easily recognizable symbol of the Lunar New Year holiday and in some places, the envelopes are also appropriated by non-Chinese in giving monetary gifts on other occasions such as Christmas and birthdays.

READ MORE HERE

The BN poster boy wants to bring out the good side of the ruling coalition.

From the need for public declaration of assets to the involvement of students in politics, the Oxford graduate was said to have shocked students who were mostly anticipating right-wing arguments from someone who was known for his hawkish tendencies in the past.

Syed Jaymal Zahiid, Free Malaysia Today

Barisan Nasional and Umno Youth chief Khairy Jamaluddin is on a quest in the United Kingdom.

As the ruling coalition is anxiously preparing for a key general election, the BN poster boy is on a tough mission to pull his party, now perceived to be far right, to the centre.

The busy programmes arranged for him in London is testament to his new-found direction.

Speaking to Malaysian students there, Khairy took on opposition figures in a bid to portray himself as a progressive and his aides claimed the youth are finding his ideas increasingly appealing – a positive sign that the stigma attached to BN is slowly wearing off.

From the need for public declaration of assets to the involvement of students in politics, the Oxford graduate was said to have shocked students who were mostly anticipating right-wing arguments from someone who was known for his hawkish tendencies in the past.

“At many junctures he criticised the government and unlike in the past, he didn’t try to defend every single government policy or action.

“This new KJ (Khairy Jamaluddin) is beginning to emerge – someone comfortable in his own skin and able to argue his corner primarily from a policy standpoint, and not from a partisan position,” said one of his political aides.

Whether Prime Minister Najib Tun Razak knows it or not, he needs leaders like Khairy. In the face of stiff internal opposition to his bold political and economic reforms, a forward-thinking figure like Khairy is an asset.

New kingmakers

And he is proving to be a valuable asset to young voters who are the new kingmakers. And Malaysia’s young now, tech-savvy and well-informed, are no easy lot to impress.

This new generation of voters are highly critical and are hungry for something fresh, which explains why a majority of them are leaning towards Pakatan Rakyat and its “new politics” – a dangerous trend that could lead to the ousting of the ruling coalition.

However, BN can consider itself fortunate that it remains a difficult task to convince this new generation to register to vote. A recent study done by the Election Commission showed a huge chunk of Malaysia’s youth remained unregistered.

READ MORE HERE

There were no insults or personal attacks, just facts and light-hearted banter, and it's incredulous that older politicians are averse to such healthy exchanges on Malaysian soil.

The two contenders presented their arguments at the first event of 2012 organised by the United Kingdom and Eire Council for Malaysian Students (UKEC). Their topic was “Public Policy: Vision 2020: Is Malaysia Moving Towards the Right Direction?”

Mariam Mokhtar, Free Malaysia Today

The most enduring words uttered by Rafizi Rahim, the Pakatan strategic director in his debate with Umno Youth chief Khairy Jamaluddin Abu Bakar in London last Sunday, were his closing remarks to the assembled students.

“All of you, when you go back to Malaysia, it does not really matter which side you take. Whether BN, or Pakatan. Please participate…

“The worse tragedy is having so many bright people, learning from the best of the best universities, only to go back and withdraw into your own little world, not really knowing what happens outside.

“Go back and make a difference, no matter what you choose to do. Make sure you make a difference to society.”

His words were echoed by the equally magnanimous Khairy, who told the students to make informed decisions making use of all sources of media, both alternative and mainstream.

Khairy informed the audience that “Malaysia had moved on” and that open debates should be the future of the nation.

The two contenders presented their arguments at the first event of 2012 organised by the United Kingdom and Eire Council for Malaysian Students (UKEC). Their topic was “Public Policy: Vision 2020: Is Malaysia Moving Towards the Right Direction?”

In this lighthearted, medium-paced banter between the two young leaders, both of whom studied at British universities, there was wit and humour, plus application of facts tempered with personal experience.

‘Poke-eye’ clothes

There were agreements and disagreements on issues, which ranged from the economy, the taxation system, subsidies, free media access to the racial perspective, the teaching fraternity, Sabah and Sarawak, the Public Assembly Bill (PAB), and racial unity.

The enthusiasm showed by about 350 Malaysian students from all over the UK and the Irish Republic was no less pleasing to watch.

The more conservative of them, judging by their mode of dress, mingled freely with the long-legged girls in high heels, hot pants and ultra mini-skirts. To quote the Ministry of Defence’s English website which has since been removed, there were quite a few Malay girls even wearing “poke-eye” clothes.

One wonders what would have happened if this event had been in Malaysia, where women in short-sleeved blouses have been refused entry to government departments. Nevertheless, it was healthy to note our youth fully exercising their rights to freedom of expression and choice.

Elsewhere in the conference hall, the old freely chatted with the young, and the straight had no qualms about exchanging notes with those who were undoubtedly from the LGBT crowd.

The two stars of the day, Khairy and Rafizi, looked as though they enjoyed themselves debating with one another.

With the interest generated and the civility showed, it is incredulous that our older politicians are averse to similar useful exchanges on Malaysian soil. As the Sunday event showed, there was no trading of insults and no personal attacks. Just facts, figures and the occasional playful tease.

This exchange was in stark contrast to the July 2008 debate between Anwar Ibrahim, when he was the special adviser to PKR and Ahmad Shabery Cheek, the former BN Information Minister, which was broadcast on TV3 and ASTRO.

READ MORE HERE