New mega project: Mega question mark over procurement

Written by Koon Yew Yin, CPI   

I refer to the article ‘Transparency in MRT Planning’ by Risen Jayaseelan which appeared in a major newspaper recently on Oct 5. The purpose of my writing this piece is to forewarn the public and the government that the way this proposed project is being considered by the government is basically wrong and may well end up with taxpayers having to pay a much higher toll rate than justifiable.

This warning is not only for the MRT project but for all 131 projects that are being envisaged under the Economic Transformation Programme (ETP) which is supposed to transform Malaysia into a high-income nation.

Basically I see no change at all in the current procurement procedure which has been used before in large concessions. The results of the evaluation and bidding procedure for mega projects such as the current MRT, the power provided by IPPs, toll roads, and the Selangor water supply have seen the consumers being forced to pay unreasonable rates because the bidding and tender process has been riddled with opportunities for rent-seeking, corruption and wastage.

Besides, cheaper and more efficient alternatives have not been fully considered by the Government.

I was shocked to read that the chairman of Land Public Transport Commission, Syed Hamid Albar, has said that the technical study of the proposal submitted by Gamuda and MMC would be completed by the end of the month and that following it, LPTC would submit their report to the government for approval.

I would like to ask how in the first place can the LPTC know that this proposal is the best in terms of technology and costing? It is impossible for LPTC to do an honest job if they have only one proposal to study and they do not have at least several other proposals to compare with.

As we know, the cost of this MRT project will be several billion ringgit. Negotiating with only one consortium, Gamuda and MMC, is likely to encourage corruption and waste, and is against all elementary principles of good economic governance. The price can be 10, 11 or 12 billion ringgit. Who is there to decide whether a costing of 10 billion ringgit is in the best public interest and will provide full value for Malaysians and not the project developers?

The sum provided by the only bidder is like taking a figure out of a hat. We are talking about billions of ringgit involved. Are there saints in the evaluation committee or project developers who do not like big money? The amount of money involved is so enormous that even saints will surely be tempted.

The public must demand that the government stops this method of award. It is the height of economic foolishness to award a concession or monopoly on a first-come first-served basis. Mega project awards should not be given out on the basis of service that is dished out in restaurants. If we do that, we will end up with a lethal case of economic poisoning of the Malaysian consumer.