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Sakmongkol ak 47

ariff.sabri@gmail.com

Sunday, 19 December 2010

Our MRT project

Puhleez-don't tell us the people behind Gamuda or MMC are Nobel Prize scientists and physicists. The experience they have in building tunnels in Kuala Lumpur (SMART) and Taiwan is not unique. So surely that is not their unique selling point.
I saw the program on TV about the Smart Tunnel. It was built using foreign expertise which can be secured at the right price. Hence that is not rocket science- that experience can be acquired. The most important determinant is that you get the opportunity to do it.
Gamuda and MMC are given the opportunity to do the project. They will ask the same engineering company to come and build on their behalf and register as another milestone in acquired experience.
Bull! You give it to me, or to anyone, we can go hunt for the engineers to do the lubang. Its korek korek and korek.
YAB Dato Sri- Rakyat marah bila dengar dengan tidak semena mena, MMC-GAMUDA di beri peluang untuk buat kerja menggali terowong. Mula mula gali terowong, but later in the name of continuity and consistency, they will get the other packages too. Then you can ensure quality control.
Patut lah semasa membentangkan ETP dahulu MMC dan Gamuda sejak awal lagi sudah beritahu mereka yakin di beri peluang. Ini confirm apa yang saya pernah tulis dahulu- bahawa ETP tidak lain hanya amalgamation business plans by various private companies invited to submit by Pemandu and McKinsey boys. Idris Jala isn't that smart to come out with such grandiose plans.
Yang rakyat marah lagi ialah seolah olah pengalaman yang di miliki oleh Gamuda ini tidak boleh di perolehi oleh syarikat binaan lain. Perkara ini bukan susah- jika sesiapa dapat peluang membina terowong ini, kita hanya perlu mencari rakan kongsi yang mempunyai kepakaran dalam bidang tersebut. Tidak munasabah untuk menyatakan bahawa orang di belakang Gamuda dan MMC otak mereka tersangat geliga sehingga mamat lain tidak dapat berfikir serupa.
Semua orang tahu Gamuda ialah syarikat yang di miliki oleh orang Cina. Wajah mereka di depani oleh keluarga di raja Perak. You know, we have had enough of this nonsense lah- no one is above making money the easy way-. The ordinary Malay mamat, the china man, the Indian man drinking thali merah and falling by the roadside or the royal family members. The color of money does not discriminate between philistines and Pharisees, pariahs and Brahmins. The color absorbs the same greed.
And so the mainstream media people screamed:
MMC-Gamuda Joint Venture Sdn Bhd, which has been appointed the project delivery partner (PDP) for the Mass Rail Transit (MRT) project, will be allowed to tender for tunneling works.
"The government felt the exception should be made as the PDP is the only local construction company that has experience in major tunneling works such as in the SMART Tunnel project in Kuala Lumpur and the Kaohsiung MRT project in Taiwan," said Prime Minister Najib Razak today.
We are puzzled actually. For all intents and purposes, MMC-Gamuda has this project in the bag. Just say as it is. What is the value of the tunneling portion? Yessiree- the next time, because only Gamuda-MMC has the experience in koreking, let all projects of this nature be given to Gamuda-MMC. I don't know whether it's to lessen our angst or adding salt to injury, the PM has to add:-
However, MCC-Gamuda will not be allowed to tender any of the work packages in the massive project, estimated to be around RM40 billion - the largest infrastructure project in Malaysia's history. Nevertheless, Najib said the PDP would still have to compete for the work package with other companies and the award would be given on the basis of merit.
The mass rapid transit (MRT) project is expected to generate a gross national income (GNI) of between RM3 billion and RM4 billion beginning next year until 2020. The bulk of it will come from passenger load I hope. The PM told us that around 400,000 people will be using the MRT. That's a sizeable portion of KL population made up of Nepalese guards, Bangladeshi studs, Myanmar refugees and so forth. To generate the 3-4 billion of operating income, what's the price of the ticket?
The MRT must carry more than 400,000 people daily if it's to achieve a RM 3-4 billion revenue. PM Najib must have been thinking of the 3-4 billion coming from tickets and not other income from externalities and spinoffs. Because he added that between RM8 billion and RM12 billion was expected to be generated in terms of spinoffs from the construction of the MRT project. "RM21 billion in GNI incremental impact is anticipated to be generated in 2020 from the value appreciation of the project and the increase in productivity rate.
Haven't economists understood the concept of stretching an argument to maximum absurdity? Who is doing the math for the PM in the above case?

 

35 comments:

OneMalaysian,  19 December 2010 at 08:59  

Dear Sakmongkol

“Nevertheless, Najib said the PDP would still have to compete for the work package with other companies and the award would be given on the basis of merit.”

If Gamuda-MMC needs to compete for the other packages other than tunneling, why not ask them to compete for tunneling as well? Why was tunneling the exception? You were right to point out that tunneling is no rocket science – you just need to buy that big digging machine.

This MRT tender follows the template for all sorts of government tenders. Favoured parties are asked to quietly work on it, as Gamuda-MMC did for nearly one year. They actually drew up the whole plan, the routing, the specifications, everything. So how can anyone be in the position to tender with all the advantages stacked in favour of Gamuda-MMC? Some months ago, we heard that this project will be awarded on the basis of a “Swiss Challenge” i.e., other parties may tender based on Gamuda’s design, and if that price is MUCH lower than the Gamuda-MMC price then that other party gets the job. It look like they have even dispensed with such formalities – just give it to Gamuda-MMC, and save the pretense. Why bother when no one can overturn this decision?

I do suspect you would be right too about the other packages, the supply of trains, etc. These too would be given to Gamuda-MMC because it would be “more convenient” and “easier to coordinate”. Well, the PDP would simply buy and add a big margin for doing no work at all.

Given who the controlling shareholders in Gamuda and MMC are, are we surprised by all this? Cronyism is well and alive. The long-suffering public has only one remedy – vote out this government.

Anonymous,  19 December 2010 at 09:05  

Oh my God! Malaysia is sinking faster than I earlier thought. Everything seems to be necessary to be awarded before the next GE lest they may lose the power to rule by not being able to form the next government. So while the 6 MPs are suspended, they will use the two third majority to push through new election boundaries to ensure as many wins as possible. Desperate times call for desperate action.

Anonymous,  19 December 2010 at 09:08  

How does that make us a high income nation with this Mother of all project?

What happens after completion of the project. What is going to employ those employed by this project? .. I mean those highly paid managers (used to qualify high income for this country)

What happens to others depending on non MRT mode of transport? All mati lah. Robbing Paul to Pay Peter and using lots of money to do that.

Yes, transport would be easier in KL but for how much. Can we afford it when the entire world in financial crisis and our exports surely will drop.

Just boggles my mind.

Anonymous,  19 December 2010 at 09:21  

Clearly >>

1.Masterplan Greater KL Transprt ready only Sep 2011
2.The Feasibility for the MRT (Transport Perspective) in 120 days.Previous studies/international standards >> 2 years minimum
3.Project Delivery Partner Concept is not new>>in UK Crossrail awarded a PDP to Bechtel Consortium after competitive bid..PDP does not give license for "direct nego"...the previous PM bastardised PFI to mean direct nego with deferred payment.now Najib wants to do a con job by introducing PDP.Pleaseee...these are contract mechanism NOT award mechanism.No more pulling batik over our eyes please...sakit sakit

http://transitmy.org/2010/06/23/transit-analyses-and-compares-rail-proposals/

http://www.youtube.com/watch?v=219YNG4dKOU

Anonymous,  19 December 2010 at 10:03  

In one breakout session with these pemandu boys and their consultants someone asked how do they come out with all these growth and monetary benefit projections. The answer was ....these figures are aspirational figures . There you go!

Anonymous,  19 December 2010 at 10:11  

Can you explain the implications of all these to the nation's coffers and economy?
Are we heading for bankruptcy?

razif 19 December 2010 at 11:02  

Dato,
Kenape ada Gamuda..trus beri kat MMC jer la..biasanye staf Gamuda 'contract basis'..ambik je mrk2 ni..peluang subcon melayu pun lebih luas..tentng kontraktor melayu yang tidak di beri peluang,bangkang lah melalui persatuan yang dah sedia ada..tapi ingat ramai kontraktor kat luar tu tiada organisasi..just amik komisen je..biasanye kontraktor yang pernah jadi subcon adalah kontraktor yang boleh di percayai..cuma kdg2 tu wang punca kegagalan mrk untuk pergi jauh..salam..

Anonymous,  19 December 2010 at 11:52  

2 million people will use the MRT daily.By using the MRT they each reduce commuting time thus able to be productive for additional 200 hours per annum.This translate to gross additional productivity of 400 mil man hours per annum for Greater KL.As these Greater KL commuters are high level guys with RM 60/hr potential...the additional GNI they can generate is RM 24 billion in direct productivity.The spin off applying a conservative number of 0.6 X...thus total Human Capital Value Add is RM 36 bil per annum.

Apart from that there will be 400 new stations with potential to be new commercial hubs,Applying a conservative valueadd of RM 200 mil per station equates to a once off GDV gain of RM 80 bil over 20 years i.e RM 4 bil per annum.Applying a multiplier i.e commerce ratio of 2.6 times..the annual GNI value add for Commercialisation Leverage Opportunity Development (CLOD) is RM 10 billion.

Thus total projected GNI contribution for the MRT project is RM 36 + RM 10 bil= RM 46 bil/ANNUM.

Its one YEAR PAYBACK...ITS A LUCRATIVE project.Its Pregnant..and not an illegitimate child.It must be delivered before PRU 13.Of course anti Government guys with no ideas and dying brain cells will say its a waste of money.They are just too blind to see..

DSIJ is a saviour..just like he was for MAS,

Anonymous,  19 December 2010 at 12:15  

I read that the first phase of MRT is Kajang to sg Buluh...isn't there an existing double tracked railway between these 2 points.Can't we have additional trainsets and improve the services to 5 mins intervals..and some money to improve local connectivities via bus or trams?

Greenbottle 19 December 2010 at 14:16  

RPK has a very very juicy take on this in malaysia today....

you know what kelantanese says?....MAPUH, MAPUUUUUH KALU LAGU NI WEH....

OneMalaysian,  19 December 2010 at 15:00  

Dear Sakmongkol

I have read the statements from PM Najib in both the Star and NST and I can predict that in a few years from now the public will be filled with rage, if they are not already now, at the mismanagement of public funds.

Najib says that MMC-Gamuda has or will be appointed a project manager – Project Delivery Partner (PDP) – for a fee, but they can also tender for the tunneling work although they would be precluded from tendering for other works or supplies. As PDP, for the fee, they have to guarantee that the project will meet both timeline and costs. What’s wrong with all this?

I have already said earlier that there was no transparency in the selection of MMC-Gamuda for the job. This by itself is bad. Now if they also tender for tunneling (the biggest portion of costs) they will also become a contractor. How can the manager be also the contractor? You cannot supervise and manage yourself – a very serious conflict of interest here.

Second, for a fee – how big we don’t know but it has to be massive – the PDP is supposed to guarantee the timeline and cost? Haven’t we heard about variation orders and how these are abused? If 8 out of the 9 packages are contracted out to others, how can MMC-Gamuda guarantee anything? The escape clause – written in invisible ink – is in the V.Os - V.Os will provide the loopholes. Let’s watch and see how both the timeline will stretch and the costs escalate.

Najib says all 9 packages will be tendered out and awarded to the most competitive offer. We must hold him to this. But if he is sincere about transparency and giving Malaysia the best deal, why not tender out the PDP job as well? If he appoints a crony as manager we must conclude that this crony was selected because it will play ball later to inflate costs through V.Os. This is the sure path to the mismanagement of public finances.

Anonymous,  19 December 2010 at 16:16  

Remarks like "just find a foreign firm at the right price and start korek korek" is typical of umno guys gossiping at Concorde coffee house. Simply a case of a pot calling a kettle black.

Shalela

Anonymous,  19 December 2010 at 16:18  

This is the result of giving out urban transport policy decision making to the private sector ie Gamuda which confirms that the Govt is bankrupt of ideas on how to tackle planning issues. This is also apparent in the other sector such as power water and telecommunication.

Sign of Govt being out of controll???

Anonymous,  19 December 2010 at 16:30  

Let say the MRT generate RM2.5b( conservative figure )per year from ticket sales of commuters as claimed by PM. According to his report the daily commuters can estimated to be around 400,000.( very optimistic ) So the daily income works out to be Rm6.9mil which works out to be RM17.25 per commuter per day. But can we get a passenger load of around 25,000 per hr for 16 hours train running time. The Rm2.5b is the gross income and after taking away all the expenses, what nett profit left is anybody guess. How long will it take to pay back the huge amount invested, not forgetting the interest. By the time 15 years down the road, we need to replace all the train coarches agin.Is that a justification for this outlay of huge amount. Or it is con job again. Holy shit, it is a daylight robbery. The conmen making all the money and leave a big hole for the rakyet to pay for generations. Wake up everyone!!

Anonymous,  19 December 2010 at 16:31  

Applaud the comments by one malaysian >>goes to the core.

1.PDP should be tendered out.Beyond the fees there maybe some form of profit sharing if the final project cost is below the contract value.Thus,the onus is to overprice then value engineer it down except the tunneling portion of course.A higher contract value will also mean higher fees and a bigger buffer against cost over runs.

2.Gamuda is smart enough to stack the tunnel specs/designs to their advantage thus its a no brainer that they will win that portion of the works.

But the biggest and most frightening aspect is>>is the MRT really viable?Was other options considered?Is the routings the best fit with current and future public transport linkages?

SPAD Masterplan will only be ready in September 2011..why can't we wait for that?

Help Help us please.The bail out of the LRT & monorail was only a measly RM 9 bil.Now we are making a big big RM 43 bil bet.

Anonymous,  19 December 2010 at 16:44  

http://en.wikipedia.org/wiki/Delhi_Metro

Delhi Metro cost inclusive of rolling stock is USD 45 mil/km..approximately RM 145 mil/km.
Gamuda's proposal is close to RM 300 mil/km.

Shouldn't the govt at the very least do some benchmarking by engaging the Delhi Metro team?

Btw..a lot of Malaysians was involved in the project.

Anonymous,  19 December 2010 at 18:41  

Hui Kawan-kawan "looting fantasy kick off" lah.

Orang tak dapat buah cakap buah masim.

Felda looting is peanut compare with the current master looting plan's mega projects.

Good luck bodohland and god blast the bodoh and the hodoh.

orang kampong 19 December 2010 at 19:02  

betul laa dtk...macam PM Najib buat ilmu kira kira ni? Tapi dia PM..tak kan dia tak tau kira kira? Agaknya pasai dia tau kira kira lah jadi mcm tu Datuk?

walla 19 December 2010 at 19:20  

Indeed this is all quite bizarre. When the govt first announced the ETPs, it was said that the projects would be funded to the tune of 92 percent by the private sector. The analysts went home with that on their stock recommendations of the likely players to benefit. The MRT project was sized at some rm43 billion.

Now the govt is saying this project, at rm36 billion this round, will instead be govt-owned, and MMC/Gamuda will be the PDP, another new term. The rakyat of Malaysia also note that recently there was mention the feasibility study would be submitted soon to the govt.

The main questions for the network (http://is.gd/j0dwg)then are these:

did MMC/Gamuda complete the study only to find it was commercially unattractive which may explain why the govt is taking up ownership in which case where is the govt to get the money to fund it?

In other words, did the govt announce first something that was not prestudied and said it would be the private sector which would do it, and then when the private sector had done the study and possibly found it not workable, the govt had to come out to save its face using the prospect of public funds, namely rakyat money?

The other matter is award without tender on the grounds of the local being the only one which has experience with large-scale tunneling. Even if so, how does anyone know the locals won't overcharge the works if no other bids will be submitted, especially now that the ownership and thus funding will be from the govt, ergo the rakyat, and especially when the local companies are substantially owned by vested political interests aligned to the present govt?

It is quite unnerving, for instance, to walk by the small quiet and obscure shoplot office along a narrow lane next to the equally quiet Atria in Damansara Jaya, especially when that shoplot office carries a very small signage saying 'MMC/Gamuda JV'. Could this possibly be the home of the biggest infrastructural project contractor for the next ten years in this one-trillion ringgit economy? If they are that good at compactifying working space, maybe they should share their knowhow with Putrajaya Holdings.

These are just questions but that they can be asked reflects how opaque has been the govt's communication of details of this biggest of all the ETP projects whose clarification would be needed to allay the fears of the rakyat who are still reeling from all the megaprojects like tolled highways, f1, putrajaya, bakun dam, klia, proton-lotus-agusta-sauba etc. under the mahathirean regime.

In fact, if this way of ramming through projects is going to be the standard operating procedure for the others, the rakyat will have immense cause for concern because the key question of where the funds to execute are to come from has not even been answered. There seems to be no connect between processes, projects, players and payments. Only the politics.

Extending that, the prospect of bankruptcy may turn out to be a self-fulfilling prophecy.

Anonymous,  19 December 2010 at 19:40  

The way this MRT is handled is a complete flip flop from his statements>

1.Transparency and Open Tenders
2.End of Big Govt
3.EPP funding by Govt of only 8%,rest by private sector
4.SPAD is the main authority on Public Transport
5.No place for rent seekers post the GTP

Can we still rely on the man?Whaats the next surprise he will dump on us?

High speed Train,Kg Baru Devt,Sg Besi Devt and 6 Highways also on direct nego PDP?

We need help..really badly.

Anonymous,  19 December 2010 at 22:58  

Sak,

The initial part of your article was well put until you wrote the part "Semua orang tahu Gamuda ialah syarikat yang di miliki oleh orang Cina." What has this statement got to do with the fact that the MRT project stinks to high heavens regardless of siapa memiliki Gamuda. Your statement reflects that you are still a closet racist even though you write articles criticizing your own party. Are you inferring that if Gamuda is wholly owned by malays, then it is OK for Gamuda-MMC be awarded the tunneling project?

Your article would have been logical and well articulated if you had focused on the fact that the government has its hands in the hanky panky of awarding the tunneling project to Gamuda-MMC using the lame reason of Gamuda-MMC's experience with the SMART tunnel (which is not so smart because floods still occurs in KL).

Come clean with us Sak. If you believe that only non malays are corrupt and are pulling all the strings, admit it so that your readers can really know the real Sakmongkol.

Anonymous,  19 December 2010 at 23:39  

The real truth is...Pemandu is marketting arm for big business.The real projects are the Greater KL,High Speed Train,MRT etc...the others are just to justify the big capex items that govt have to either invest in OR give cheap land away.

Its pregnant and have to be delivered.Its a programme not a plan.The world is watching.The Chinese voters are watching.Failure to deliver is not an option.

What choice is left for our leadership against that onslaught.
Thus the 120 days traffic and viability study for a RM 43 bil investment.Pretty cavalier and heavyhanded approach of public funds expenditure?

But its a program..its pregnant..and the critical FDI,DDI and Chinese votes must be wooed.

ramesh,  20 December 2010 at 01:14  

Good article. But sir,with all due respect, there is no need to describe an Indian such a way.

Anonymous,  20 December 2010 at 03:58  

It is not the prospect of making profit that all these executives in Gamuda-MMC are looking for in securing multi billion rm contracts. It is the share price.

When they release news like this, just check both counters. Guarantee the shares will shoot up. Opportunity for some pple to make quick bucks.

Anonymous,  20 December 2010 at 10:14  

To know how good Gamuda really is, may I suggest that you check out their profitability track record on their overseas projects. I believe this should be quite interesting.

Anonymous,  20 December 2010 at 11:14  

We should not follow London or Hong Kong of Singapore in regard to the LRT/MRT. RM40 billion is a lot of money to invest when the present STAR/PUTRA/MONORAIL/ERL/KTM Komuter ridership is only about 150,000 per day which is way far far far below London Tube, Hong Kong and Singapore MRT ridership. Build something cheaper like Melbourne.

joeawk 20 December 2010 at 11:26  

They are so rich themselves that RM36 billion does not seem much anymore. Or they are so greedy that the the higher the cost of the project, the more they can steal.

There are so many critical areas tghat need funding to take us higher, yet they chose the MRT.

For whom, who will be taking the MRT? Immigrant workers?

We had better get rid of UMNO before they squandered more of our money.

Hold the GE now, get rid of UMNO and cancel the project.

Anonymous,  20 December 2010 at 11:48  

It is simply a waste of money and cronyism stinks to high heaven! The money could be better spend on other states and on other projects. Most states, particularly Sabah and Sarawak cry out for better infrastructure. Like a true fixed deposit to BN, Sabah and Sarawak have been dutifully paying interest to BN withour much to show for. Really, does KL need an underground transport system?

Pak Nyah,  20 December 2010 at 11:54  

That's why PR cannot govern Perak... at all cost!

Lu tolong Gua Tempurung, Gua Tempurung tolong Lu!!!

Anonymous,  20 December 2010 at 12:08  

Sign of Malaysian Citizen being powerless , ...... many comment without any concrete actions ........ as usual ........

Raison D'etre 20 December 2010 at 13:30  

"DSIJ is a saviour..just like he was for MAS".

Wow. And here we have him only as a Pemandu. Maybe He should be 1Malaysia PM, then, eh?

Zulkarnain 20 December 2010 at 13:54  

We are still on drip feed because we are still bleeding from the bail out of the four LRT projects that we have got now. Why want to spend some more and on a bigger scale? The business hinges on ridership and not on grand assumptions? The reality is we don't have the ridership. Why the expansion??

Anonymous,  20 December 2010 at 15:14  

Back in 2008..oil prices was climbing,hitting highs on a daily basis.
DSIJ being the seasoned and experienced oilman predicted that its going for the bleachers.
Through his persuasiveness and negotiating skills he managed to lock in the prices at USD 109 till 2011.A pure act of genius and foresight.
But unfortunately the prices trended down..but he is still convinced thats only an aberration..not the truth as he only knows.So unwinding the hedge and taking a loss is not in his rule book,After all he is the Messiah tasked to save MAS.
But,being a proper guy..he used a very advanced accounting technique and declared a loss benchmarked against the current prices...a loss that is not a loss cos it did not appear in the profit & Loss..only the Balance Sheet.Anyway its not a loss..you are only paying USD 109 as you agreed rather then USD 60 the other airlines are charged.I don;t see any losses..can you?Khazanah didn't see it either..nor PM Najib.In fact PM is so enamoured with this guy..he spent months persuading him to join the government.

Next chapter..he says Msia is going banrupt.Next,next chapter he says the MRT,High Speed Train,Nuclear plant is all pregnant and must be delivered.

Can you doubt the predictions of this guy?He is the special one and you saw what happened when Abromovich messed up with the Special one.

Signed,sealed,delivered...

Doyourealize,  20 December 2010 at 18:20  

Kiss your EPF good bye bros...

unless you vote every SINGLE one them out in GE13.

They just don't care about your children and grandchildren's tomorrow.

Do you realize?

Anonymous,  20 December 2010 at 19:17  

Gamuda has zero experience in tunneling work before the company got the SMART project. Similarly, other giant construction companies can do the job if given the opportunity.

For such a colossal project, other big players should be given the opportunity to submit their bids.

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