MRT Update: Perkasa claims MMC-Gamuda is blocking Bumi companies for MRT project (Update #1)

Update: Prasarana MD Shahril Mokhtar has denied the allegation! from Perkasa!

TRANSIT took note of this very surprising (but not wholly unexpected) statement from Perkasa, a Malay-rights organization headed by MP Ibrahim Ali, claiming that MMC-Gamuda was blocking Bumi companies in the MRT project.

This is in response to complaints mentioned in the Malaysian media recently that some contractors felt “left out” by the scale of the project.

Of course it is one thing to have a massively scaled project that is beyond the reach of some companies – but the allegations of ‘blocking’ constitute a different set of issues – issues that we wish were handled properly.

Is this a systematic ‘blocking’ as alleged by Perkasa, or just good business practices by Prasarana? Or something else entirely? We will have to wait and see the response

But hey, this is an update related to the MRT project – so it might as well be discussed here on Malaysia’s Public Transport Forum.

MMC-Gamuda blocking Bumi companies in MRT project, says Perkasa (The Malaysian Insider)
By Shazwan Mustafa Kamal
April 21, 2011

KUALA LUMPUR, April 21 — There’s an “evil” attempt by MMC-Gamuda Joint Venture Sdn Bhd to deny Bumiputera contractors opportunities in the Klang Valley mass rapid transit (MRT) project, several Malay groups allege.

Perkasa, along with NGOs of Bumiputera entrepreneurs, today accused the project delivery partner (PDP) for the MRT project of enforcing “strict” conditions which disallowed Bumiputera participation and only benefitted “rich Non-bumis.”

“Perkasa along with Bumiputera NGOs feel as though tight conditions are purposely being enforced by MMC-Gamuda JV…is Prasarana also playing a part in this project or not?

“What is Prasarana’s role? What we can see now is that the package for the MRT construction is being looted and monopolised by MMC-Gamuda and Bumiputera contractors have absolutely no chance to take part,” said Perkasa economic director Dr Zubir Harun.

Syarikat Prasarana Negara Bhd (SPNB) a fully-owned subsidiary of the Ministry of Finance Incorporated, was appointed the infrastructure owner of the project while the Land Public Transport Commission was the supervising authority for the project.

Zubir said that Prasarana had on March 30 this year come out with additional criteria for the project, which has since then become the “subject of frustration” of many Bumiputera contractors.

The criteria, according to Zubir were:

  • contractors taking part in the project tender are forbidden from forming joint ventures or consortium;
  • companies of contractors are forbidden from forming any joint ventures with foreign companies in the tender of the project;
  • The formation of a consortium of two or more companies is strictly forbidden;

“The conditions have shut out the chances for Bumiputera companies to take part in the project tender.

“Prasarana also included a condition of bond payment amounting to RM300,000 at the pre-qualification level…how can Bumiputera contractors come up with this figure without forming consortium or joint ventures?” said Zubir.

“MMC-Gamuda itself is a joint venture…most big scale government projects are, why not this?” Zubir added.

He said that the existing requirements were a direct contradiction of Datuk Seri Najib Razak’s New Economic Model (NEM) and urged Najib himself as finance minister to withdraw the conditions immediately.

“A lot of Bumiputera contractors have been thirsty for this project, by doing this it goes against the NEM because Bumis aren’t given equal opportunity.

“We give Prasarana, the government seven days to answer our demands…Najib listens to Perkasa, he understands our concerns. If we do not see any action, we will consider it as a violation of the federal constitution under Article 153 , bumiputera rights,” said Zubir.

[TRANSIT: Oh … my… this is beyond the scope of what we deal with – so much politics, aggressive demands & speculative comments.]

The total project cost for the MRT was estimated at RM36.6 billion for three rail lines through the Klang Valley when it was first proposed two years ago but that projection did not include cost of land and also rolling stock for the MRT.

SPNB had also not finalised the financing and project manager’s fees for the MRT although planning has started for initial civil engineering work to begin in November.

Regulator Land Public Transport Commission (SPAD) had said the Finance Ministry has set up a special purpose vehicle (SPV) to raise funds for the project but had admitted the method has yet to be determined.

The SPNB chief had also said some 100 firms have applied for pre-qualification for the 16 packages in the elevated part of the 51km-long MRT; the deadline for pre-qualification ended on April 13.

The MRT is the country’s biggest infrastructure project and also the largest National Key Economic Area (NKEA) project under Prime Minister Datuk Seri Najib Razak’s New Economic Model (NEM).

The massive project is expected to generate 130,000 jobs during its five-year construction phase. The government hopes that more than half of the population in Greater KL will use the public transport system to prevent traffic congestion.

TRANSIT Says:

What can we say? Well, for anyone who feels TRANSIT is too “political”, take a look at what a political organization really looks like. For those who feel we are too demanding or aggressive, take a look at what was said in the article above.

Ok, let’s put that aside for a moment.

For the sake of being neutral in this matter TRANSIT will say the same thing we always do:

TRANSIT believes that all issues regarding the MRT project would best be handled with more open and transparent sharing of information, reasoning and evidence to justify decisions made.

We also wish to remind the Malaysian Government, MMC-Gamuda, SPAD and all stakeholders that the MRT project must conform to international standards and best practices for public transport projects (no matter the scope).

That way, all complaints of a speculative nature can be addressed and dealt with in a cooperative way – rather than using the media to further various agendas.

OK…

Some people will look at Perkasa’s comments and view them as extreme and made for the sake of media attention. Some people will have their own views on the issue.

Maybe the real facts are that many people are feeling “left out” of the MRT project – due to a lack of public consultation and a ‘briefing’ mentality (shared by some) that does not encourage people to feel that they can participate or that their feedback is welcomed.

Remember, this is a multi-billon RM megaproject with promises of increased economic activity, mobility, jobs, economic & income benefits etc. All stakeholders want to feel that they are a part of the project and are able to benefit from it.

As always, TRANSIT welcomes your feedback on public transport related issue. Please note our expectations for comments – we do not want to deal with politics here. We only want to focus on building a better public transport system for all Malaysians.

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6 thoughts on “MRT Update: Perkasa claims MMC-Gamuda is blocking Bumi companies for MRT project (Update #1)”

  1. To be honest, anyone in the construction industries in Malaysia really know that almost all the Bumi contractors are not competent enough to handle massive projects like MRT and Penang Bridge (new and old) etc. That’s why vast majority of the class A contractors are non-Bumiputeras, they have to admit this FACT and REALITY!!! I believe the quality and the safety of the project are totally 100% cannot be compromised. May it be in the name of assisting any ethnic group in the country to progress or providing them opportunity to learn and participate in order to get experience. SAFETY AND QUALITY OF MRT PROJECTS ARE 100% TOTALLY ABSOLUTELY CANNOT BE COMPROMISED IN WHATSOEVER REASON AND JUSTIFICATION.

    1. Perhaps part of the issue is that the government has been subsidizing & maintaining the operations of small-scale businesses – basically throwing ‘crumbs’ out for smaller companies – just as they subsidize ‘basic necessities’ (like sugar and cooking oil and red chillies & petrol) and provide car loans at 105% of the value of the car (assuming you purchase a national car).

      This creates economic distortion and a beholden-to-government and dependent-on-subsidy mentality that prevents companies and people from finding ways to make themselves more efficient.

      The unfortunate result is that for some people, when something does not go the way they want, the solution is to complain loudly and publicly and make demands. They can even make veiled and not-so-veiled threats.

      Regards, Moaz for TRANSIT

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