Sunday, November 14, 2004

PMC puncanya, bukan JKR

"Dari tahun 1979 saya jadi menteri tidak pernah jadi macam ini''


Utusan Online, 14th November 2004.

Datuk Seri Samy Vellu finally had finally the guts to come out in the open to bare all the viruses and worms that had plague the projects and had infected and infiltrated the whole Kitchen Cabinet.

Who was responsible for all the fiascos of project failures?

According to Samy Vellu, it is none other than the KSU, the Secretary general of the Finance Ministry who is the most powerful person in regards to decisions on project award.

This is what Samy says:

"Tetapi orang yang bertanggungjawab itu ialah Ketua Setiausaha kementeriannya. Ketua Setiausaha saja yang memberi arahan dan dia selalu tidak boleh menerima pandangan lain. Dalam satu-satu mesyuarat kalau ada para pegawai dari JKR untuk menjaga kepentingan teknikal, dia selalu malukan mereka. Dia kata, kalau tidak tahu tutup mulut."

"Beliau sedar bahawa semua masalah itu hanya muncul setelah perkhidmatan Perunding Pengurusan Projek (PMC) diperkenalkan oleh Kementerian Kewangan pada tahun 1990-an."


This is what Samy says:

"Ia ditubuhkan oleh Kementerian Kewangan pada tahun 1990-an. Peranannya ialah untuk memansuhkan projek-projek JKR. Ada kepercayaan bahawa sekiranya projek-projek itu diberikan kepada PMC ia boleh disiapkan dengan lebih awal, lebih cantik dan macam-macam lagi. Malah projek yang mereka siapkan itu sebenarnya lebih mahal."

According to Samy, In the early 1990s, Mahathir's Govt had decided to engage the service of a Project Management Consultant (PMC) which are a composite cartel with faces and looks that resemble a contractor, may look like consultant and had shown interest as property developers and that entity is registered with the Ministry of Finance. The set up of PMC was meant to hijack all JKR's mega projects. It was claimed by the PMC that they are more efficient, more cost effective and can do a better job than JKR. The results speaks of itself: - Computer lab projects, Matrade Building, Hospital Sultan Ismail di Pandan, Johor, Kangar Hospital, Cameron Hospital, Langkawi School projects, et al; all these projects are now reverted back to JKR for reorganization and restructuring - to mitigate the damages done, and the multi million loses incurred; all tax-payers money.

As revealed by Samy, the PMC is a private entity who had only 2 officers manning the company - a managing director and a deputy managing director, and NO others. The Government, via the Ministry of Finance had entrusted and delegated the power to this PMC to appoint and select any contractors, design engineers, consultants, and nominated sub-contractors for all projects parked within their jurisdiction or those within the jurisdiction of the Ministry of Finance.

Snip from the interview:

Q: "Sebenarnya apabila Kementerian Kewangan sudah memberikan sesuatu projek itu kepada sesebuah kontraktor, tanggungjawab saya sebagai menteri hanyalah mengarahkan JKR supaya melantik kontraktor itu. Saya memberikan kuasa kepada Ketua Pengarah JKR untuk melantik kontraktor itu untuk harga yang telah ditentukan. Itu saja.

Ini bermakna Kementerian Kewangan mempunyai kuasa yang lebih besar walaupun Kementerian Kerja Raya mempunyai pakar yang boleh memberikan nasihat?"


Q: Siapakah yang memeriksa PMC?

SAMY: TIADA SIAPA. (believe it? NObody manages or control or audit the PMC!!!)

Q: Kerajaan ada JKR tetapi kenapakah kerajaan memilih untuk memberi kepercayaan kepada badan swasta mengendalikan projek yang bernilai berjuta-juta ringgit? Apakah rasionalnya?

SAMY: Ada satu jawapan saja kepada soalan ini. Kata mereka, kerja-kerja itu boleh disiapkan dalam jangka masa yang cepat.

Q: Tanpa mempedulikan soal kos?

SAMY: Ya, tanpa mempedulikan kos. Apabila JKR membuka tawaran bagi setiap bilik darjah dengan harga RM55,000, ada juga pemaju yang bersedia menyiapkannya. Tetapi sebuah bilik darjah yang ditawarkan melalui PMC ada yang berharga RM95,000 dan ada juga yang mencecah sehingga RM120,000.

Kosnya sekarang sudah jadi berganda. Apabila kita tanya kenapa harganya jadi begitu tinggi mereka nanti akan beri berbagai-bagai penjelasan.

Sekolah-sekolah yang dibina dengan harga yang tinggi itu memang cantik-cantik. Tetapi siapa yang hilang wang? Kerajaan.

Q: Adakah pemaju-pemaju itu dapat menyiapkan projek-projek berkenaan dengan cepat seperti yang dijanjikan?

SAMY: Tidak juga. Ada sekali itu JKR telah diminta supaya mengeluarkan satu tawaran untuk pembinaan 500 buah sekolah dan kita sudah memilih lebih daripada 200 pemaju untuk melaksanakannya.

Tetapi apabila sampai masa kita hendak mengeluarkan surat niat, JKR telah diminta supaya menarik balik semua tawaran itu dan menyerahkannya kepada PMC. Semudah itu saja.

Q: Apa yang istimewanya tentang PMC ini?


Believe what you hear from Samy? PMC is stronger than Ministry of Works?

Is this the Government we had? That even the MINISTRY can be overruled by a PMC?

How is it that this can happen?
How is it that the Government had developed a dinosaur from a lizard within such a short span of a few years that is capable to destroy the Works Ministry and billions of dollars of project?
Who is behind the PMC?
Who's the GODFATHER behind it?
It cannot be the Jews?
Only UNMO can answer it; TRUST me!

Thursday, November 11, 2004

PWD instructed to manage Matrade Building to Completion



On problems affecting the Malaysian External Trade and development Authority building in Jalan Duta, Samy Vellu said the contract was not awarded by the PWD. The contract had been given to Syarikat Perangsang International Sdn Bhd and it had been refusing to allow PWD officials into the project since the first day.

Now, the Public Accounts Committee (PAC) has directed PWD to complete and handover the building within 21 months from the date of receiving the funds from the Government. Why? It took 10 years for the Ministry of Finance to get the project to its current state of affairs and PWD is only given 21 months to finished up the mess? I believe, it must had been a promised made by the Director-General of PWD Tan Sri Zaini who had requested RM32 million from the Treasury for PWD to complete the project. Is 21 months & RM32 million sufficient to get the project completed? I hope it does; if not, Zaini will have to burn his ass to answer for it.

During the meeting attended by PAC, the Board of Architects and the PWD represented by Tan Sri Zaini, PWD promised to take legal action against the errant contractor and recover some of the losses. What???? PWD to take legal action? Samy Vellu said the contract is not awarded by PWD; how then can they take legal action against the errant contractor? Is Samy Vellu and Zaini talking about the same subject and same contract? According to Samy, Matrade was not awarded by PWD; then how can PWD take legal contractual action? Are our Ministers and D-G going NUTs? or, are they misleading us??? Please clarify!!!!!! My God, Please sent Tan Sri Zaini back to law school!!!!!

Thursday, November 04, 2004

Is Privatising PUAS Viable?

PUAS Dilemma

Urgent Need to solve water woes in Selangor

Refering to the NST article posted by AS Toh & LCC in the Letter to the Editor on November 4, 2004 pertaining to the problems besetting PUAS and the Selangor water woes, it had been suggested by the author that as a temporary solution, the Government should:

1) Continue to put on hold water supply privatization deals;
2) Federal Government to provide soft loans or grants to the Selangor State Government to tide over the difficult period until a permanent solution is found; &
3) Increase immediately tariff not by 2 to 4 sen but by 20% to 40% as required.

The proposal was meant to be temporary until a permanent solution is found; according to the author.

The Poser is:

What is temporary? When will the permanent solution be found?

The problems of PUAS was known and discussed within the government for more than 10 years and many solutions were forwarded and implemented including the increase of water tariff. Did the solution solve the problem - NAYs! Why??? Because the problem of financial losses and debts was not the root of the problem. Then, what was the root of the problem?

Firstly, the problem arises due to water shortages. This was a direct result of the failure to plan for the need of the State in the blueprint. 20 years ago, there had already been a proposal to built the pipeline to deliver water from Pahang to Selangor. The proposed project to be funded by the Japanese was put on hold primarily for reason of financial constraint and priority. But we spent billions to built Twin-Tower, KLIA, Putrajaya, Cyberjaya, and many highways around the country which would had been construed to be more important than the water project. PUAS CEO Datuk Mohd Sinon Mudzakir had repeated mourn publicly that "The Inter-State Water Transfer Scheme needs to be realised urgently or Malaysians will face a water crisis in 4 years. A system allowing water to be delivered to States lacking in the resource needs to be in place. There will be a crisis by 2008 if it is not implemented quickly,” Did anyone in the Cabinet respond to his SOS call? The respond by Dr Lim Keng Yaik was blinker-focussed on the privatization of the whole water management services but will never address the supply-side which ultimately will surface soon, maybe in 3-4 years time, as projected by PUAS CEO. Looking at the perspective of solution-making, the Government will not solve the water problem until the long-term needs of water for the State was addressed with a long term solution; but the State Government had implemented many other solutions. They privatized the treatment of water to various companies and the contract price was a fortune to the consortium as acknowledged by PUAS. Apart from the pricing, the methodology of billing and metering the quantities of treated water was far too advantages to the consortium. What it meant is that the consortium will be paid for all the water that leaves the treatment plant but PUAS will receive revenue for what was actually delivered and consumed by household and industry. The pilferage and wastages in-between the 2-point of measurement is borned solely by PUAS. And, if you (Consortium) bill me (PUAS) 1 gallon of water at treatment plant out-point valve and meter, how do I check and confirm that it was actually 1 gallon - i.e. what is the Control System and how do we audit? Are you sure the current system is adequate and sufficient to ensure nobody can abuse the current recording system of delivery?

Apart from that, who is responsible for the pipeline and the leakages? We privatized the meat but left the bones for PUAS to chew and expect them to survive? PUAS didn't and so the next course of action is: THE PROPOSAL TO INCREASE THE WATER TARIFF TO COMPENSATE OR TO OFF-SET THE LOSSES. So, who was made to pay? The Rakyat!

The water tariff in Selangor is $0.57 for domestic and $1.80 for commercial. For domestic water tariff, Johor is $0.38, Perak is $0.30, Pahang is $0.37, Kedah is $0.40 and Penang is $0.22. For commercial tariff, Selangor is $1.80, Johor is $2.22, Perak is $1.20, Pahang is $0.92, Kedah is $1.20 and Penang is $0.52. And Penang JBA is making a sound profit. From figures above, Selangor is non-competitive and the question arises should be - WHY??? Is it due to poor management, high cost of poor quality, wastages, inefficiencies, ineffective policies, poor or no proper control system, poor maintenance management system, high cost of overhead, et al. Had the Government start pondering the above questions SINCERELY & TRUTHFULLY? There are many things known but not spoken publicly and those comments come from the sources within the system itself. Kleptorism was within but the issue was : It was actually desired!


Withholding privatization is not the answer. Privatization is a certainty but the National Water Commission must be setup and are fully equipped and operational to Man & Manage the system, i.e to PLAN, EXECUTE & MONITOR AND CONTROL the complete water supply and delivery services and includes the maintenance and repair management framework and that the system had considered the needs for the next few decades; otherwise, the solution to the problem begets new and more deadly problems.


Increase of water tariff by 20 to 40% will burden the rakyat and the consequences had to be considered thoroughly and wisely. The Hypothesis issue is: The consumer is made to pay for systemic failure, cost of poor quality, inefficiency and kleptorism.


Providing soft loans to PUAS is not the answer. It's is TINKERING with the problem. Give them $2 billion today and in 6 months time they will be broke again, and shall need another $2 billion injection.

Khazanah owns so many corporations, are cash rich, and were supposedly great and efficient managers. Why doesn't the Government consider a test on the management of Khazanah by privatizing the system (without tariff increase at least for the next 5-years) as a whole to Khazanah and find out how good the management are? Are they afraid to take the challenge and prefer to invest in safe and secured investments?

Petronas, another super-tycoon and had investments in so many sectors such as energy, should be considered to accept the responsibility of water management, which is also ENERGY BUSINESS. Their success is gains from raping Mother Nature, and water is Mother Nature too. Why are they allowed to suck black gold and not white gold? Even if they had to subsidies water from the gains from black gold, both assets of Mother Nature, isn't it fair?

The paradox is: Profitable business, I manage, complex, less profitable and high probability of loss business, you manage - that's what GLCs are about. And they claim they are great managers - MY FOOT!

Another PARADOXICAL THESIS: Since Penang water management had proven to be successful and efficient, why not bring the team of managers including their CEO to PUAS and let them turnaround the organization? I'm certain, they will succeed!

Policy-makers, planners and implementers would be wise to take heed of the recommendations contained in the National Water Resources Study (NWRS) plan which was submitted and accepted by the Government. The Government cannot plead innocence any more, if somehow, somewhere, the rakyat suffer from water shortages. A lot is at stake.

POS SLIM Highway is Dangerous



The Simpang Pulai-Cameron Highlands stretch of the East-West Highway will be closed daily after sunset until further notice. The closure was ordered by the Cabinet today after engineers recently found that the stretch was too dangerous for motorists. It was earlier reported that water had seeped into the slopes along the highway and some movement had been detected, especially between Pos Slim and Kampung Raja. Samy Vellu had also said that there was some movement of between 0.3m and 0.45m.

On the 4th Feb 2004, The Star reported that the 282mil highway from Pos Slim to Kampung Raja in Cameron Highlands is completed but PWD has refused to issue a safety certification for the road. The PWD feels that it’s dangerous for use as km22.5 and 25.5 is too steep and prone to landslides. The slope gradient was not constructed in accordance to the PWD standard. The PWD is of the opinion that the construction has not met its requirement.

On 17th October 2004, The Star again reported a statement from the State Director of Perak PWD, Datuk Dorairaju. “We know the road was not really completed when we opened it in February. It was opened after pressure from the people in Cameron Highlands who were affected by a landslide near Ringlet,” commented Datuk Dorairajoo.

According to Samy Vellu, the Works Ministry was considering closing the highway in order to facilitate the construction of a proposed new tunnel which will be 1.5km long. The tunnel is expected to cost between $30-50million.


Why was the tunnel not designed and built by the earlier Turnkey Contractor?

Is it a question of design omission, or a failure of the PMC & design consultants to take into consideration the fundamental requirements during the earlier contract?

Is there a Failure of Duty of Care, Professional Negligence and can TORT actions be taken? Or, did the Turnkey contractor failed to comply to the requirements stipulated in the Need Statement of the contract?

The project was a Design-Built-Lump Sum contract from point A to point B (as per the need statement from PWD).

How could it be that we now say we will need a tunnel when the designers had not deemed necessary at the point of the contract been made?

Was the designer over-ruled?

Did the contractor short-change the Government?

PWD and Works Ministry had to answer it point blank and not hide behind the maxim of Act-of-God again. Infact, ACA should be as pro-active as they had been with the Karak Highway investigation, by investigating this problem.

Coincidently, both the problematic highway (Simpang Pulai- Kampung Raja and Karak Highway) were constructed TURNKEYED by MTD Capital.

The problem that have surfaced now and more to come in the future was predictable and known-knowns. It is just that our Ministers choose to side-step the issues that were raised before it happen (before the contract formation), and hope it doesn't happen (after the contract completion). JKR Perak knew of the problem. They couldn't talk out loud as they may lose their job and income.

Well, Murphy's Law again: If you think it can happen, It will happen! & The solution to a problem breeds new and more virulent problems. Problem begets problem. Inefficiency breeds inefficiency.

Datuk Seri Samy should admit his delinquency and work towards an effective solutions, even if it has to be painful to vindicate himself. He should not be shielding incompetencies and the incompetent contractors. He must wake up, and for once, solve those problems he had allowed to happen when he concurred on those decisions with his fello cabinet ministers, of which he shall have to accept responsibility and the consequences for the last 20 years of folly and political patronage.

Tuesday, November 02, 2004

16 School & 5 Colleges Defective

16 Schools & 5 Colleges Defective - All built by same contractor

16 Schools and 5 Community Colleges constructed by Project Management Consultant (PMC) a construction company appointed by the Finance Ministry have serious structural defects and PM had directed PWD to take over the buildings and prepare a complete report on the matter.

“Now we have to find out who is the contractor, who is PMC and who is the consulting engineer,” says Datuk Seri Samy Vellu.

How could it happen? Isn't the contractor a registered PKK Class 'A' entity accredited by the relevant authority presumably based on their qualification and competency and that the selection process had taken into consideration the fundamental requirements of a competent contractor? Or, is the selection based on political intention with the necessary mens rea?

Murphy's Law has always been proven right. What you think can happen, would happen.
To most of the industry players and project management professionals, it was known-knowns and it's a matter of time for these failures to unfold; the only regret is that it is the tax-payers money that was dumped into the incinerator.

Which Ministry is responsible? Who would be made accountable?

For me, the nostalgia is that the company chose a name PMC which should reflect their true project management competency and ability but sad to note, it brought injustice to the project management fratenity.

The most shameful part is that the MOF, MOE and probably, PWD are made to look as if they don't even understand what is project management and what is construction management.

Worst off is, Pusat Khidmat Kontraktor (PKK) who are delegated by legislature to accredit and rank those contractors (by meritocracy) don't even have the basic knowledge and competencies of engineering and construction technology to evaluate the skills and competencies required of a contractor. This goes the same for CIDB. I wonder when the PM would start taking a look at CIDB and see the worms roaming around in India and Sri Lanka, performing the role of a contractor instead of the role of promoting and developing the construction industry, and regulating and monitoring the industry's performance and key indices. When will we do the right thing and when will it happen? Where is the institution that will do the right job? How is the hundreds of millions collected by CIDB been utilized? Will there be transparency and accountability? Who cares and who is going to care? Will Pak-Lah wake up?

Monday, November 01, 2004

$500,000 TOILET that Nobody shit

Toilet built at $500,000 & now a ghost home

A Thai-style public toilet sited at the Manjalera Lake Garden in Kepong, KL was designed to be so lavish that it would cost RM500,000.

The toilet had been furbished with imported ceramics tiles, marble-top basins and amenities normally linked with 5-star hotels. It include imported decorative lights from Spain.

A staff member at the contractor’s office said the facility was almost complete but had yet to be handed over to the Park Management as the fixing of the decorative lights from Spain had not yet done because of short supply.

The toilet is now more than 2 years under construction and has become a living quarter for some illegal foreign workers.

The RM98 million hospital project in Cameron Highland was a 2-year project and was now 5 months delayed with expectations that it will need another 6 months to complete. The Works Ministry had terminated the contractor's contract.

"But the toilet project is also 2-years (worth only $500,000) and they are not being terminated yet," Mercu Jaya cried foul. The RM 176 million Matrade project is 10-years since, and they are not terminated? The Simpang Pulai- Ayer Raja highway was completed in more than 7 years and they were not terminated? Does the Ministry had a standard criteria for termination or they do it as they deemed fit. It looks like you had to be a political crony to stay in business.