'Ali-Baba' partnerships are still rampant in Malaysia, says DAP national publicity secretary Tony Pua, in spite of Prime Minisiter Najib Abdul Razak's promise to eliminate rent-seeking and patronage behaviour.

Pua cited the award of the RM1.18 billion Ampang Line LRT extension project to George Kent (Malaysia) Bhd as clear indication of this, even though the bid was high and George Kent had failed the technical criteria.

“This is a damning indictment of rent-seeking, patronage and cronyism under Najib’s 'transformation' leadership,” he said in a statement today.

azlan Pua recalled that Najib had declared “We can no longer tolerate practices that support the behaviour of rent-seeking and patronage…” when launching the New Economic Model (NEM) on March 30, 2010, to replace the New Economic Policy.

 

“The recent award of the... Ampang LRT extension project to George Kent has become just another one of the many nails hammered tightly into the NEM coffin,” Pua noted.

“The award has proven that not only has Najib failed to stop rent-seeking and patronage in the government procurement and tender processes, (but that such) behaviour is becoming increasingly blatant...

“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 Najib can continue to talk about the NEM and 'Economic Transformation' when BN cronies continue to win lucrative government tenders via rent-seeking and patronage, and not because of competency, quality and price competitiveness.”

‘Subcontracts for bulk of work’

 

The Petaling Jaya Utara MP also cited a report in financial daily The Edge that says George Kent will subcontract most parts of the project to other companies.

NONE The report quotes an industry executive as saying that “George Kent might have to subcontract about 70 to 80 percent 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, one of the defeated bidders, confirmed that the company has been approached by George Kent to participate in the project as a subcontractor.

Another bidder, Balfour Beatty, was similarly approached, according to the report, but executives close to the UK-based group were said to have “spurned” the offer.

A project consultant in the railway sector was quoted as saying “subcontracting more than 30 percent of the specialised work packages is questionable, since the main contractor would have been selected for its specific technical capabilities”.  

Pua reiterated that George Kent's expertise is in the manufacture and supply of “control instrumentation, telemetry, pipes, valves and fittings, industrial and domestic water meters, boilers”, as well as “fibre glass reinforced polyester panel tanks for bulk water storage”.

However, the company won the contract over established rail industry players such as Siemens, Balfour Beatty, Bombardier, Posco and Colas despite having zero experience in rail projects, Pua pointed out.