When the Auditor-General's 2009 report was released early this week, it highlighted the incompetencies and leakages of taxpayers' funds that had somehow seeped through the bureaucratic system.
While Malaysians sat up and read the reports in horror, the Audit Report has also grabbed the attention of the Public Accounts Committee members, who have recently announced that they will be investigating nine cases from it.
They are:
1) The Economic Stimulus Package
Announced in November 2008, it was meant to kick-start the country's economy by “spending to generate money” after the US sub-prime scandal which had escalated into a global financial crisis.
With RM7 billion allocated to it, the auditor-general discovered that part of the funds have been misused, some for luxury items.
RM250 million in funds were allocated to the Defence Ministry for maintenance in military camps and quarters. However, some of it went to buying a home theatre system, a RM10,000 chandelier and two sofa sets amounting to RM26,000.
The construction work from the allocations of the stimulus package were of such poor quality that RM1.27 million worth of projects needed another RM812,828 to rectify or repair.
2) Batu Maung tuna port
The RM243 million project to build and privatise a fully integrated fisheries port specialising in tuna, was agreed upon in 2004.
The Fisheries Development Authority of Malaysia (LKIM) and a company called Blindforce Sdn Bhd had formed MITP Sdn Bhd, a 40:60 joint venture company to build the tuna port with RM240 million in bonds, secured through letters of support from the Agriculture Ministry in 2006.
However, the auditor-general reported that LKIM had formed another special purpose vehicle company and then requested MITP to transfer 40 percent of their equity to this other company, breaking the concession agreement.
The Audit Report also uncovered there was a letter of undertaking by LKIM to ensure that MTIP repays almost all of the bonds, going against the concession agreement that the federal government is not obligated to bail out private companies.
3) Penang Port Sdn Bhd (PPSB)
In this project wholly-owned by the Ministry of Finance Incorporated (MFI), the Audit Report had uncovered that a firm, Rayston Consortium Sdn Bhd - appointed through direct negotiation – was way behind schedule in their work, but was not fired, and that resulted in a RM6.71 million increment in costs.
At the same time, the PPSB readjusted their cost projection of the third phase of construction from RM414.3 million in 2007 to a whopping RM641.13 million in 2008, an increment of 54.8 percent.
The audit team could not verify whether the detailed explanation of the jump was provided by the PPSB board of directors.
Despite that, contractors Konsortium Jamil Ghani Construction Sdn Bhd and Pembinaan Anas Maju Sdn Bhd - appointed through direct negotiation - offered to do the job at RM724.98 million before “compromising” with PPSB at RM682 million.
The auditor-general also reported that there were no comprehensive black and whites to support the project cost.
4) PTPTN loans
The National Higher Education Fund Corporation, aimed at giving out loans to needy students for their higher education at low interest rates, have found themselves in a RM46 billion deficit, with the major contributing factor being defaulters.
The Audit Report also uncovered that RM23 million in loans were disbursed in 2009 to 16,013 students who did not apply for it.
At the same time, more than half of the 103,525 forms received in 2008 and all of the 124,070 forms received in 2009 have not been processed.
5) Health Ministry's haemodialysis programme
In the 2009 Audit Report, the auditor-general found that the Health Ministry's haemodialysis (a process to filter blood especially for those whose kidneys have failed) programme was severely ridden with weaknesses.
“Among the weaknesses found were the patients' long waiting period; equipment and medicines that have been paid for but not received; the lack of enforcement on procurement contracts, resulting in fines not paid; poor management of income and revenue; overpaying NGOs in treatment subsidies; overpaying NGOs for their haemodialysis equipment or paying them even before they start operations as well as paying NGOs not licenced to conduct haemodialysis,” said the report.
Among the irregularities found by the auditor-general were giving out RM296,000 to the Klang Haemodialysis Society for their second premises.
Checks by the audit team have shown that it has not even started operations and that they are not licenced by the Health Ministry.
6) Additional Food Programme for schoolchildren
The recent auditor-general's report has uncovered that food suppliers for the schoolchildren's Additional Food Programme (RMT) have been giving out food that costs a lot less than what has been contracted.
The programme, formed to give poor schoolchildren food to supplement their daily meals, had also seen examples such as kids being fed with only white bread and margarine when they were supposed to get sardine sandwiches, fruits and a drink.
In a straw poll by the audit team to children who are under the RMT programme, it was also shown that nearly 60 percent of them come from families who live in double-storey houses, with cars, satellite TV or cell phones, raising doubt to whether it is the hardcore poor who are benefiting from the programme.
7) Skudai army camp
In 1997, the Defence Ministry had entered into an agreement with Kausar Corporation Sdn Bhd Consortium (KCSB) - a joint venture between Kausar Corporation Sdn and Syarikat Koperasi Angkatan Tentera Malaysia Sdn Bhd - to build a RM256 million “7th Brigade Complex” on government land in Skudai.
In exchange as well, the government had signed a land swap deal to give two plots of government land in Tebrau and Plentong to KCSB to develop as commercial land.
The projected date of completion was 2001, but the construction of the complex project has stalled at 18.3 percent completion since 2002 to this day.
The two plots of land that were been signed off to KCSB have also been sold off to another company, with the government facing a risk of heavy financial losses.
8) The Muadzam Shah Polytechnic Institute in Pahang
The project has changed hands three times since it first started construction in September 2001 with a contract value of RM219 million when each contractor could not deliver the project without delays.
Although slated for completion in September 2003, the project is still not complete to this day and the government has spent RM294.74 million on it, a 34.6 percent increment from the original estimate. This does not include the RM10.55 million in consultancy bills the government has to foot.
On top of that, the government had to spend a total of RM130,000 in rental of space for students since the polytechnic is not ready.
And while the institute was expected to take in 5,000 students annually, the intake is now limited to between 64 and 347 annually.
9) Railway Asset Corporation
Formed in 1992 after Keretapi Tanah Melayu Berhad was privatised, the Railway Asset Corporation (PAK) was meant to take over all rail assets including plots of land.
But since then, the auditor-general reported that only 30 percent of land has had its ownership transferred to PAK. Before PAK could take ownership of their rightful land, some of which are sitting on prime real estate, the audit team also noted that KTMB had sold off five lots to private developers, causing PAK to lose RM335.32 million (according to 1995 estimates). As a result of the delay in transferring of land titles to PAK, other government agencies have also assumed ownership of the land, building their own facilities without paying rental to PAK.
Friday, October 29, 2010
Thursday, October 28, 2010
Najib Ignores Anti-tower Protest Warn
Analysts have warned that dismissing the growing opposition to the proposed 100-storey Warisan Merdeka project on Facebook can erode Barisan Nasional’s (BN) support among the youth in the general election. Nearly 200,000 Malaysians have registered their protest against the RM5 billion Permodalan Nasional Berhad (PNB) skyscraper project on the social networking website amid wide speculation that Prime Minister Datuk Seri Najib Razak may call for snap polls within the next six months.
The number of fans on the “1M Malaysians Reject 100-storey Mega Tower” page is growing at a breakneck pace — estimated at 1,000 an hour — since it was created anonymously hours after the prime minister announced the new PNB building during his 2011 Budget speech.
“Najib can ignore it but it is to his peril that he ignores the opposition,” political analyst James Chin told The Malaysian Insider.
“It will cost BN votes among the younger ones,” he said, adding that Facebook users tended to be young people.
To date, there are 8,679,160 Facebook users in Malaysia who make up a 33.18 per cent penetration of the country’s population, according to a Facebook statistics website called Facebakers.com. The 18-24 year age group comprises 38 per cent and the 25-34 year age group comprises 33 per cent, totalling 71 per cent of the Malaysian Facebook population. With more than four million eligible but still unregistered Malaysian voters, political parties are racing to get them on the electoral rolls.
Last year, Umno registered the highest number of new voters at 24,818, followed by DAP with 17,756 and PAS with 16,987, according to the Election Commission (EC). The EC has also stated that there are currently 11,381,193 registered voters nation-wide, with 191,970 new voters registered during the second quarter of the year. Chin, a Monash University professor, pointed out that writing off the online protest would cast a bad light on Najib’s image as the prime minister has asked Malaysians for ideas on various matters.
“It’ll look bad like he’s a hypocrite because he asks people for suggestions but doesn’t listen,” he said, noting that Najib also used Facebook to reach out to voters.
On August 24, the prime minister had posted a message on his Facebook page titled “Najib Razak” calling all Malaysians to contribute ideas for the 2011 Budget.
He also claimed on his Facebook page, which has 450,112 fans at last count, that there was a keen online interest in the Warisan Merdeka tower.
“Seeing strong online interest in the proposed Warisan Merdeka. The building will bring great economic benefits to us all. #budget2011,” said Najib on October 20.
Most fans of the anti-Warisan Merdeka page, however, have derided the project as a wasteful initiative, among other things, with some using digital placards from the page’s 165-image collection as their profile pictures. Many “placards” feature messages written on cardboard images calling for alternative uses of RM5 billion, such as: “RM5 billion to help stop child abuse”; “RM5 billion. Improve facilities for the disabled”; “No mega tower! We want world class public transport system!”; and “RM5 billion untuk rakyat di pedalaman (RM5 billion for the rural people)”.
Political analyst Dr Sivamurugan Pandian echoed Chin’s views and said that the government’s failure to further explain the goals of the PNB building project would cost BN at the ballot box.
“If no explanation is given, I think the people would punish them in the next election,” said Sivamurugan, referring to the next general election.
“With the RM5 billion, how will it benefit the masses? It (the government) needs to give further explanation on how the building functions, its use towards physical infrastructure, and whether it will be a tourist attraction,” he added. In his Budget 2011 speech, Najib said the Warisan Merdeka tower was set to be the country’s tallest tower upon its completion in 2015, surpassing even the Petronas Twin Towers.
He also said that the rationale for the skyscraper was similar to that of the iconic Petronas Twin Towers, in that it would serve as a symbol of a modern and developed Malaysia. The prime minister also pointed out that the project would have a “multiplier effect” on the economy and help drive it forward, in addition to providing an attractive commercial centre for Bumiputera and non-Bumiputera businesses alike. Sivamurugan, a Universiti Sains Malaysia political science lecturer, further warned that ignoring the Malaysian online demonstration would cause a dip in the government’s popularity.
“If they ignore the 176,000 fans on Facebook, it will become a very unpopular government,” he said.
Political analyst Dr Lim Teck Ghee also told the Najib administration not to take the Facebook protest lightly, pointing out that the page’s ability to garner thousands of fans in a short time indicated the extent of public opposition to the tower.
“If the government thinks that this is a small number, it is badly mistaken. The number of Facebook users in the country is really not that large, and to be able to mobilise so many so quickly says a lot about the extent of opposition to the project,” said Lim.
“The government should regard this as an informal referendum on the issue and can only ignore it at its own peril,” he added.
Despite the Najib administration’s repeated explanations that the project undertaken by government-linked investment corporation PNB would not use government funds, Malaysians on the anti-Warisan Merdeka page have remained sceptical. Umno leaders, however, have downplayed the online protest and stuck to their guns over the planned construction of the tower. Minister in the Prime Minister’s Department Datuk Seri Nazri Aziz dismissed opposition to the Warisan Merdeka skyscraper as “presumptuous”.
“Remember when Tun Dr Mahathir Mohamad was prime minister and he had mooted the construction of the Penang Bridge? Back then Anwar was Umno Youth chief, he said no to the bridge and even called it a project mewah (expensive) but today, right now we are looking at building another bridge,” Nazri told The Malaysian Insider.
Nazri said the government would not back down from the construction of the 100-storey tower, claiming that the area around the intended Warisan Merdeka landmark was “underutilised”.
“That area now is underutilised. Right now Kuala Lumpur is short of space... the landmark where Warisan Merdeka will be built is a new area for us to look at. If you look at the areas near KLCC (Kuala Lumpur City Centre), they weren’t touched before, but now the area is expanding. We need the space, the area near Merdeka stadium should not be left undeveloped,” said Nazri.
The minister was confident that once the project was completed it would dispel any “non-believers,” in reference to the growing number of Facebook users who are against the building of the tower.
“If anything happens the government will be responsible. What the PM is doing is correct, we have to spin our economy. Whatever reasons we give now, in 10 years’ time it will not be valid anymore. Malaysia’s economy is growing... what you see today as something wasteful that is if you are only talking about an economy that is not growing. But I can tell you in 10 years’ time, Kuala Lumpur will grow so much, that you will be grateful to say, thank God we thought about Warisan Merdeka,” added Nazri.
Another Umno MP, Datuk Nur Jazlan Mohamed, echoed Nazri’s remarks, saying that the rising number of the anti-Warisan Merdeka Facebook fans did not mean that the reasons for their opposition were “justified”.
“They are voicing their own opinions here but does that mean they are collectively right? If people have a problem with Warisan Merdeka, they should ask PNB who are building it, we are not using government funds. The reason why it was announced during Budget 2011 was because the PM was excited about it and wanted to talk about it,” said Nur Jazlan.
He downplayed public outrage towards the project, saying that it was “normal” to receive flak for any big-scale project at the preliminary stages.
“But in property development if you have deep pockets and if you wait out the cycle, eventually the market prices will catch up. Where else can you develop land in Kuala Lumpur besides Warisan Merdeka? Development is now moving out of Bukit Bintang towards Brickfields, it’s a part of the natural progression of KL city — from KLCC, Pavillion, Bukit Bintang towards Warisan Merdeka,” said the Pulai MP.
Pakatan Rakyat leaders have derided the grandiose skyscraper project as wasteful and accused Najib of trying to “out-Mahathir” former premier Dr Mahathir, who embarked on a massive development spree after he took power in 1981 by building highways, the Penang Bridge, opening new industrial estates and overseeing the construction of the Petronas Twin Towers, the KL International Airport, the Sepang International Circuit, intra-city train lines, several ports, and the new administrative capital Putrajaya and its neighbouring Cyberjaya, which was central to the Multimedia Super Corridor (MSC) project.
The 19-acre development area of the Warisan Merdeka mega project — which includes a condominium and a shopping mall — is sited on the car park and land adjacent to Stadium Negara and Stadium Merdeka.
The number of fans on the “1M Malaysians Reject 100-storey Mega Tower” page is growing at a breakneck pace — estimated at 1,000 an hour — since it was created anonymously hours after the prime minister announced the new PNB building during his 2011 Budget speech.
“Najib can ignore it but it is to his peril that he ignores the opposition,” political analyst James Chin told The Malaysian Insider.
“It will cost BN votes among the younger ones,” he said, adding that Facebook users tended to be young people.
To date, there are 8,679,160 Facebook users in Malaysia who make up a 33.18 per cent penetration of the country’s population, according to a Facebook statistics website called Facebakers.com. The 18-24 year age group comprises 38 per cent and the 25-34 year age group comprises 33 per cent, totalling 71 per cent of the Malaysian Facebook population. With more than four million eligible but still unregistered Malaysian voters, political parties are racing to get them on the electoral rolls.
Last year, Umno registered the highest number of new voters at 24,818, followed by DAP with 17,756 and PAS with 16,987, according to the Election Commission (EC). The EC has also stated that there are currently 11,381,193 registered voters nation-wide, with 191,970 new voters registered during the second quarter of the year. Chin, a Monash University professor, pointed out that writing off the online protest would cast a bad light on Najib’s image as the prime minister has asked Malaysians for ideas on various matters.
“It’ll look bad like he’s a hypocrite because he asks people for suggestions but doesn’t listen,” he said, noting that Najib also used Facebook to reach out to voters.
On August 24, the prime minister had posted a message on his Facebook page titled “Najib Razak” calling all Malaysians to contribute ideas for the 2011 Budget.
He also claimed on his Facebook page, which has 450,112 fans at last count, that there was a keen online interest in the Warisan Merdeka tower.
“Seeing strong online interest in the proposed Warisan Merdeka. The building will bring great economic benefits to us all. #budget2011,” said Najib on October 20.
Most fans of the anti-Warisan Merdeka page, however, have derided the project as a wasteful initiative, among other things, with some using digital placards from the page’s 165-image collection as their profile pictures. Many “placards” feature messages written on cardboard images calling for alternative uses of RM5 billion, such as: “RM5 billion to help stop child abuse”; “RM5 billion. Improve facilities for the disabled”; “No mega tower! We want world class public transport system!”; and “RM5 billion untuk rakyat di pedalaman (RM5 billion for the rural people)”.
Political analyst Dr Sivamurugan Pandian echoed Chin’s views and said that the government’s failure to further explain the goals of the PNB building project would cost BN at the ballot box.
“If no explanation is given, I think the people would punish them in the next election,” said Sivamurugan, referring to the next general election.
“With the RM5 billion, how will it benefit the masses? It (the government) needs to give further explanation on how the building functions, its use towards physical infrastructure, and whether it will be a tourist attraction,” he added. In his Budget 2011 speech, Najib said the Warisan Merdeka tower was set to be the country’s tallest tower upon its completion in 2015, surpassing even the Petronas Twin Towers.
He also said that the rationale for the skyscraper was similar to that of the iconic Petronas Twin Towers, in that it would serve as a symbol of a modern and developed Malaysia. The prime minister also pointed out that the project would have a “multiplier effect” on the economy and help drive it forward, in addition to providing an attractive commercial centre for Bumiputera and non-Bumiputera businesses alike. Sivamurugan, a Universiti Sains Malaysia political science lecturer, further warned that ignoring the Malaysian online demonstration would cause a dip in the government’s popularity.
“If they ignore the 176,000 fans on Facebook, it will become a very unpopular government,” he said.
Political analyst Dr Lim Teck Ghee also told the Najib administration not to take the Facebook protest lightly, pointing out that the page’s ability to garner thousands of fans in a short time indicated the extent of public opposition to the tower.
“If the government thinks that this is a small number, it is badly mistaken. The number of Facebook users in the country is really not that large, and to be able to mobilise so many so quickly says a lot about the extent of opposition to the project,” said Lim.
“The government should regard this as an informal referendum on the issue and can only ignore it at its own peril,” he added.
Despite the Najib administration’s repeated explanations that the project undertaken by government-linked investment corporation PNB would not use government funds, Malaysians on the anti-Warisan Merdeka page have remained sceptical. Umno leaders, however, have downplayed the online protest and stuck to their guns over the planned construction of the tower. Minister in the Prime Minister’s Department Datuk Seri Nazri Aziz dismissed opposition to the Warisan Merdeka skyscraper as “presumptuous”.
“Remember when Tun Dr Mahathir Mohamad was prime minister and he had mooted the construction of the Penang Bridge? Back then Anwar was Umno Youth chief, he said no to the bridge and even called it a project mewah (expensive) but today, right now we are looking at building another bridge,” Nazri told The Malaysian Insider.
Nazri said the government would not back down from the construction of the 100-storey tower, claiming that the area around the intended Warisan Merdeka landmark was “underutilised”.
“That area now is underutilised. Right now Kuala Lumpur is short of space... the landmark where Warisan Merdeka will be built is a new area for us to look at. If you look at the areas near KLCC (Kuala Lumpur City Centre), they weren’t touched before, but now the area is expanding. We need the space, the area near Merdeka stadium should not be left undeveloped,” said Nazri.
The minister was confident that once the project was completed it would dispel any “non-believers,” in reference to the growing number of Facebook users who are against the building of the tower.
“If anything happens the government will be responsible. What the PM is doing is correct, we have to spin our economy. Whatever reasons we give now, in 10 years’ time it will not be valid anymore. Malaysia’s economy is growing... what you see today as something wasteful that is if you are only talking about an economy that is not growing. But I can tell you in 10 years’ time, Kuala Lumpur will grow so much, that you will be grateful to say, thank God we thought about Warisan Merdeka,” added Nazri.
Another Umno MP, Datuk Nur Jazlan Mohamed, echoed Nazri’s remarks, saying that the rising number of the anti-Warisan Merdeka Facebook fans did not mean that the reasons for their opposition were “justified”.
“They are voicing their own opinions here but does that mean they are collectively right? If people have a problem with Warisan Merdeka, they should ask PNB who are building it, we are not using government funds. The reason why it was announced during Budget 2011 was because the PM was excited about it and wanted to talk about it,” said Nur Jazlan.
He downplayed public outrage towards the project, saying that it was “normal” to receive flak for any big-scale project at the preliminary stages.
“But in property development if you have deep pockets and if you wait out the cycle, eventually the market prices will catch up. Where else can you develop land in Kuala Lumpur besides Warisan Merdeka? Development is now moving out of Bukit Bintang towards Brickfields, it’s a part of the natural progression of KL city — from KLCC, Pavillion, Bukit Bintang towards Warisan Merdeka,” said the Pulai MP.
Pakatan Rakyat leaders have derided the grandiose skyscraper project as wasteful and accused Najib of trying to “out-Mahathir” former premier Dr Mahathir, who embarked on a massive development spree after he took power in 1981 by building highways, the Penang Bridge, opening new industrial estates and overseeing the construction of the Petronas Twin Towers, the KL International Airport, the Sepang International Circuit, intra-city train lines, several ports, and the new administrative capital Putrajaya and its neighbouring Cyberjaya, which was central to the Multimedia Super Corridor (MSC) project.
The 19-acre development area of the Warisan Merdeka mega project — which includes a condominium and a shopping mall — is sited on the car park and land adjacent to Stadium Negara and Stadium Merdeka.
Wednesday, October 27, 2010
China Will Expand Fleet To Patrol Disputed Seas
China has launched a new inspection vessel to strengthen marine patrols and 36 more will be added to boost China's presence in disputed waters, state media said on Wednesday, Oct 27.
Ties between China and Japan, the two biggest Asian economies, tumbled last month after the detention of a Chinese fishing boat captain by the Japanese coast guard after their boats collided near disputed islands in East China Sea.
"This will be highly significant and useful in strengthening China's maritime inspection equipment capacity," Li Lixin, regional director of South China Sea affairs of China's State Oceanic Administration, said of the new vessels, according to Xinhua news agency.
China has about 260 oceanic surveillance vessels, including 200 small coastguard boats, an official in the national ocean administration told Reuters.
Japan has 421 patrol boats and 13 survey ships, a Japanese Coast Guard spokeswoman said, adding not all of these boats are focused on areas that China also claims.
Along with a long-standing dispute over the disputed islands, Japan is worried that China has started holding back shipments of rare earth metals, vital in making electronic goods and auto parts.
China has denied cutting shipments to Japan for political reasons, and says it restricts overall production and exports of rare earths to avoid depleting its reserves and causing harm to the environment.
Ties between China and Japan, the two biggest Asian economies, tumbled last month after the detention of a Chinese fishing boat captain by the Japanese coast guard after their boats collided near disputed islands in East China Sea.
"This will be highly significant and useful in strengthening China's maritime inspection equipment capacity," Li Lixin, regional director of South China Sea affairs of China's State Oceanic Administration, said of the new vessels, according to Xinhua news agency.
China has about 260 oceanic surveillance vessels, including 200 small coastguard boats, an official in the national ocean administration told Reuters.
Japan has 421 patrol boats and 13 survey ships, a Japanese Coast Guard spokeswoman said, adding not all of these boats are focused on areas that China also claims.
Along with a long-standing dispute over the disputed islands, Japan is worried that China has started holding back shipments of rare earth metals, vital in making electronic goods and auto parts.
China has denied cutting shipments to Japan for political reasons, and says it restricts overall production and exports of rare earths to avoid depleting its reserves and causing harm to the environment.
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