EPISODE 26: The invisible web (of deceit) – part 2

The story would be incomplete without explaining that the Chairman of the Cabinet Committee on Infrastructure at that time was, coincidentally, Najib himself. Najib endorsed the revival of the project not just because Pak Lah was already happy that his son, Kamaluddin, had a share in the pie, but also because Syed Mokhtar had agreed for Najib’s brothers to also take a cut in various parts of this revived project.


Raja Petra Kamarudin

Read EPISODE 25: The invisible web (of deceit) – part 1 here (http://malaysia-today.net/mtcolumns/48640-episode-25-the-invisible-web-of-deceit-part-1)

Tun Dr Mahathir Mohamad awarded the Double Tracking Project to MMC-Gamuda on 21st October 2003, just nine days before he stepped down as Prime Minister. On 1st November 2003, Tun Abdullah Ahmad Badawi, fondly known as Pak Lah, took over as Prime Minister.

Now, it must be remember that Dr Mahathir had actually officially resigned as Prime Minister in the middle of 2002 during the Umno general assembly. Halfway through his address, Dr Mahathir shocked the entire world by breaking down and announcing his resignation.

Rafidah Aziz reacted almost immediately by breaking her shoe in her rush to get to Dr Mahathir to ask the most important question: what is going to happen to all of us? It took a few minutes for Pak Lah to grasp what was going on though. When it finally dawned on him as to what had happened, Pak Lah broke into a smile rather than broke his shoe; the most politically incorrect thing to do.

The first thing that Pak Lah did when he took over as Prime Minister was to cancel Dr Mahathir’s pet projects. The Crooked Bridge to Singapore was one and the Double Tracking Project was the other, which Pak Lah shelved the following month in December 2003.

The Crooked Bridge to Singapore

The electrified double-track project

Dr Mahathir was furious, to put it mildly. He had spent more than a year from mid-2002 to late 2003 discussing with Pak Lah as to what he can and cannot do once he took over as Prime Minister. Whether Pak Lah just forgot or whether he did a dirty on Dr Mahathir is not too clear. But the long and short of it, Pak Lah did everything he promised he would not do and did not do everything he promised he would do. And cancelling Dr Mahathir’s pet projects was clearly one of the do-not-does. 

Actually, Pak Lah had a great dislike for Syed Mokhtar Al-Bukhary who had shunned him when he was the Deputy Prime Minister. I really can’t blame him though. Dr Mahathir had appointed and discarded three Deputy Prime Minister’s before that. So what would the chances be for Pak Lah actually taking over as Prime Minister in the end? Most people put their money on Najib Tun Razak rather than Pak Lah taking over as Prime Minister.

Hence, within just a month of taking over as Prime Minister, Pak Lah did the unthinkable. He cancelled the Double Tracking Project, the Crooked Bridge Project, and all those other projects that Dr Mahathir had given to his cronies. Did anyone not bother to tell Pak Lah that one just does not slaughter sacred cows, in particular Dr Mahathir’s sacred cows? 

Pak Lah explained that the government’s ‘poor finances’ did not permit such grandiose projects — hence the need to cancel them. This caused Dr Mahathir to flip. It gave the impression that Dr Mahathir’s mismanagement has bled the country’s finances dry — hence there is no more money. It also gave the impression that Dr Mahathir’s projects are a total waste of money — hence the need to cancel them. 

In short, Dr Mahathir is a bungling idiot, according to Pak Lah in not so many words.

Try as he may, Syed Mokhtar could not get Pak Lah to agree to revive the Double Tracking Project. By 2006, Syed Mokhtar became very desperate. To get the project, he had already paid out ‘commission’ and under-table-money to various parties during Dr Mahathir’s time. Syed Mokhtar realised that the only way to get this project back on track would be to work through the gatekeepers and toll-collectors. It can only be sorted out through the back door.

Syed Mokhtar asked the CEO of Gamuda, Dato Lin Yun Ling, to approach Seow Lun Hoo to mastermind the penetration of Pak Lah’s inner circle. That was how Seow first involved Khairy Jamaludin, Pak Lah’s son-in-law, and later Shah Hakim, the close associate of Kamaluddin, Pak Lah’s son.

And by a wave of the magical wand of Shah Hakim and Kamaluddin Badawi, the project began to be revived.

All these facts have now been revealed in court when Seow and Shah Hakim admitted that they “provided technical expertise and networking capabilities to help revive the once-shelved RM12.4 billion double-tracking railway project….It was through our efforts that the project was revived.” 

The ‘networking capabilities’ and revival efforts included opening doors for Lin to present the revival ideas to then Minister-in-Charge of the Economic Planning Unit (EPU), Effendi Norwawi.

Effendi Norwawi with new wife, actress Tiara Jacquelina

Effendi initially told Lin that given Pak Lah’s grim description of the country’s finances it would be difficult for the government to be seen as reviving it from government funding. Effendi, the Sarawak financial wizard, then coined this fanciful term for Lin to use when presenting the proposal to the government as a way in getting the project revived — Private Finance Initiatives (PFI).

The idea was: the private sector can include all their additional financial costs and risks into the PFI proposal to make the project costs higher. Effendi also advised that after approval has been obtained, the PFI project could then revert to a design-and-build project fully shouldered by the government.

And that was exactly how MMC-Gamuda conned the Malaysian public into believing that the PFI projects were fully funded by the private sector whereas in the end the taxpayers would be footing the bill. 

Tiara as the mythical princess, Puteri Gunung Ledang

For his wonderful advice and support, Effendi also asked Lin to sponsor his new wife’s hobby in extravagant stage productions. That explained how Effendi’s wife, Tiara Jacqueline, could have the finances to mount the most glamorous and expensive Malay stage play to date — Puteri Gunung Ledang. Lin and Syed Mokhtar were also made to sponsor Pak Lah’s wife’s pet project in the Pride Foundation and the Datin Paduka Seri Endon Award for Performing Arts Excellence scholarship fund.

You see, Pak Lah, his family, and his friends in the cabinet, wanted to teach Syed Mokhtar and his sidekick, Lin, a good lesson for shunning them during Dr Mahathir’s time. So they were going to make MMC-Gamuda pay for every single one of their whimsical pleasures.

In truth, what Pak Lah did was not new. The same thing had been done during Dr Mahathir’s time by appeasing Dr Siti Hasmah. And now, all the corporate giants in the country are outdoing each other to appease Prime Minister Najib Tun Razak’s wife, Rosmah Mansor. The mainstream media will give prominence to the generous donations by these corporate giants to Rosmah’s pet project, Permata. What is unseen is that they also donate more generously to Rosmah’s fetish for Hermes Birkin handbags and jewellery.

The story would be incomplete without explaining that the Chairman of the Cabinet Committee on Infrastructure at that time was, coincidentally, Najib himself. Najib endorsed the revival of the project not just because Pak Lah was already happy that his son, Kamaluddin, had a share in the pie, but also because Syed Mokhtar had agreed for Najib’s brothers to also take a cut in various parts of this revived project.

Nazim Razak (Jim) was the architect who will design the various railway stations, Nazir Razak (Jay) of CIMB will be the merchant banker for the PFI, Nizam Razak will be providing financial and share advisory, while Najib’s job is to approve its revival.

That is why the Plaintiff’s company is called NR Sistem, which are the initials of the Razak band of brothers.

So why the quarrel now if everyone in Umno and the Umno cronies were going to benefit?

Shah Hakim had a deep distrust for Syed Mokhtar. So he had convinced Effendi that the project should be divided into two parts – the Infrastructure Works to be awarded directly to MGJV for RM10 billion and the Systems Work for RM2.38 billion which will be given to a contractor of the government’s choice. The Systems Work was supposed to be sub-contracted by MGJV to NR Sistem. 

When Syed Mokhtar realised that the 30% margin that the Shah Hakim group was going to make from the RM2.38 billion System Work contract amounted to RM600 million, Syed Mokhtar got upset. He complained to Dr Mahathir about how Pak Lah had cancelled the project and forced him to use the services of Shah Hakim who will now make RM600 million ‘atas angin’. Dr Mahathir advised Syed Mokhtar to stall signing any contract with NR Sistem for the Systems Work.

At that time, Najib decided to play the neutral game in the open confrontation between Dr Mahathir and Pak Lah. As far as Najib was concerned, he had already secured all the contracts for his brothers. Dr Mahathir was still very powerful and his attacks could damage Najib’s political career. On the other hand, if Dr Mahathir’s vicious attacks against Pak Lah succeeded, Najib could unseat Pak Lah as the PM without having to challenge him as Umno President.

That was why, in 2007, Dr Mahathir mounted vicious attacks against Pak Lah and mocked him about being Mr Clean. Dr Mahathir now had concrete proof of the exorbitant profit margins that would be made by Pak Lah’s son from this contract alone – an astounding RM600 million. Meantime, Syed Mokhtar directed Lin to force Seow and Shah Hakim to accept a reduced profit margin RM360 million instead of RM600 million.

This infuriated Shah Hakim and Kamaluddin because they thought they had already agreed to the 30% margin, which was equivalent to RM600 million. That money was needed not just for them personally but also to partly fund Pak Lah’s 2008 elections campaign. Syed Mokhtar held back the money and refused to give Pak Lah what he needed for the 12th general election campaign. Dr Mahathir had advised Syed Mokhtar to hang on and not to commit to any figure as Dr Mahathir was convinced that Pak Lah would perform badly in the election and would subsequently be ousted.

Without enough funds, Dr Mahathir’s prediction came true. BN and Umno fared poorly in the March 2008 GE — which was regarded as Pak Lah losing not just the elections but also losing face as well when Bumiputera businessmen whom had benefitted from Umno’s patronage dare renege on their promise of providing funding.

This was worrisome to the Umno inner circle. The March 2008 GE was regarded as Pak Lah’s personal defeat and Dr Mahathir unleashed the Umno warlords to cry for Pak Lah’s blood.      

Post-March 2008, it was imminent that Pak Lah would have to give way to Najib. Syed Mokhtar, being the shrewd businessman that he is, then directed Lin not to sign anything with Shah Hakim’s NR Sistem — even for the agreed price of RM360 million — as Pak Lah could no longer pose any threat to the project. Syed Mokhtar’s mentor, Dr Mahathir, also wanted to ridicule Pak Lah’s son, Kamaludidn, and his son-in-law, Khairy Jamaludin (that they are nothing without Abdullah Badawi in power). Syed Mokhtar also wanted Kamaludin and Shah Hakim to beg him for the RM360 million that Lin had promised them.

Syed Mokhtar never intended to pay Kamaluddin and Shah Hakim the RM600 million nor the 33% or RM3.3 billion from the RM10 billion Infrastructure Works. All in all, Syed Mokhtar would make RM3.7 billion from the combined value of RM12.4 billion for the Double Tracking Rail Project.

Now that Scomi has been sidelined from most government businesses and projects, Kamaluddin Badawi and Shah Hakim were forced to go for broke by suing MGJV and expose in court that this is how BN/Umno raise funds for the elections. This explains Najib’s Economic Transformation Plan where the government will again undertake gargantuan projects on the pretext of injecting a revival of the economy.

In truth, it is just further acts of plundering the nation.

As an illustration, just imagine how much money Syed Mokhtar will make from the MRT Project, which is valued at RM50 billion. If the margin that these Umno cronies expect to make is 30%, that would be a cool RM15 billion! Now, add that to the recent KIDEX project awarded to companies owned by Umno Lawyer, Hafarizam Harun, and former Chief Justice, Tun Zaki Tun Azmi. Consider also the sale of the 26 kilometre Kuala Lumpur-Putrajaya Highway, better known as the Maju Expressway (MEX), to EP Manufacturing Berhad for RM 1.7 billion — where the original construction cost of RM976.6 million was by way of a government grant, i.e. taxpayers’ money. Include the NFC scandal and the 1Malaysia Development Berhad’s suspicious purchase of tycoon Ananda Krishan’s power business at RM8 billion. One can see the frantic pace at which the Umno big guns are raising funds for the election as well as plundering the nation in a big way one last time.

You see: that is how Umno operates. It is Umno culture. They will milk the country until its tits runs dry. So, whichever prime minister you have, it will still be the same until you get rid of this Umno culture. But what is also untold is that all these will have to be paid by hiking the project costs many-folds and it is the country and the public that will pay for such highly inflated costs.

This is what makes this NR Sistem matter a most interesting case study — because for the first time the manner in which the Umno scions do business is exposed in a court trial. Projects are awarded, then shelved, then revived at a much higher cost, then given a new name or rebranded, and then passed back to the government to shoulder. It also reveals the huge profit margins that are made to line the pockets of the Umno scions and cronies.

Yes, Malaysia Today focuses on the untold stories and the behind-the scenes political intrigue of those who walk in the corridors of power. So let the criminals from both sides of the political divide beware.