The Prime Minister
Datuk Seri Najib Razak famously declared that “we can no longer
tolerate practices that support the behavior of rent-seeking and
patronage…” when he launched his landmark New Economic Model (NEM) to
replace the New Economic Policy (NEP) on 30 March 2010.
I had openly applauded the statement on intent when it was first
announced, but cautioned then against the sincerity and political will
of the Prime Minister to carry out the necessary reforms to our
distorted economy.
The recent award of the RM1.18 billion Ampang LRT Extension Project to
George Kent Bhd has become just another one of the many nails hammered
tightly into the NEM coffin. The award has proven that not only has
Datuk Seri Najib Razak failed to rent-seeking and patronage in the
Government procurement and tender processes, these behaviours are
becoming increasingly blatant and flourishing in the country.
Over the past weeks, the various exposés have shown firstly that George
Kent won the bid despite being priced RM167 million higher than the
originally recommended bid the project owner Syarikat Prasarana Negara.
Secondly, George Kent was awarded the contract despite failing the
technical criteria which has caused the company to be initially rejected
by the professional evaluation consultants.
Worse, George Kent won the bid over other establish rail players such as
Siemens, Balfour Beatty, Bombardier, Posco and Colas despite having
zero experience in rail projects. The company’s expertise is in the
manufacture and supply “control instrumentation, telemetry, pipes,
valves and fittings, industrial and domestic water meters, boilers”, as
well as “fibre glass reinforced polyester (FRP) panel tanks for bulk
water storage”.
But the industry feedback on the award as reported by the latest issue
of The Edge is most damning on the integrity and credibility of the
high-power Ministry of Finance Committee headed by Datuk Seri Najib
Razak himself.
70 to 80%
An industry executive was quoted saying that “George Kent might have to
subcontract about 70% to 80% of the value of the contract since it is
not the original equipment manufacturer of any of the components that
are needed for the systems work”.
A top executive from Siemens has also confirmed that they have been
approached by George Kent to participate in the project as a
subcontractor. Similarly, another tenderer for the project Balfour
Beatty has also been approached, but executives close to the UK-based
group say it has “spurned” the offer.
A rail-sector project consultant was then quoted to say “subcontracting
more than 30% of the specialised work packages, is questionable since
the main contractor would have been selected for its specific technical
capabilities”. This is as opposed to George Kent being awarded the
contract despite having no such expertise in the industry.
The award shows that Ali-Baba like contractors who survive on their
political connections as well as their expert navigation of the
government procurement processes continue to dominate in Malaysia. At
the same time, the complicity of the Prime Minister, who is also the
Finance Minister in the award process proves full support for these
companies.
We are completely aghast at how Datuk Seri Najib Razak can continue to
talk about the “New Economic Model” and “Economic Transformation” when
Barisan Nasional cronies continue to win lucrative government tenders via rent-seeking and patronage, and not because of competency, quality and price competitiveness.
Tony Pua is the DAP MP for PJ Utara
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