Frankly speaking: 16 Feb 2009

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Stop the excusesBased on reports, the audit by PricewaterhouseCoopers (PwC) on the RM4.6 billion fiasco in Port Klang Free Zone (PKFZ) would have been completed two months ago.But Transport Minister Datuk Seri Ong Tee Keat is looking increasingly reluctant to release the report to the public, something that he had promised when he was appointed to the ministry last year.Last week, he argued that his ministry was using the report to overcome deficiencies in the project, which is why it is not able to make it public yet. These deficiencies must certainly be huge, to force the minister to delay releasing the report.Really, what has rectifying the shortcomings of PKFZ got to do with releasing the report by the accounting firm?The objective of commissioning PwC to undertake the report was to get to the bottom of the cost overrun of the PKFZ, which ballooned from RM1.85 billion to RM4.6 billion. In the process, the government ended up guaranteeing some of the payments.Was it due to a poor judgement call or bad project management? Did it involve any corrupt practices? How did the government end up guaranteeing payment for the project? Is the project financially viable or can it be sold back to the promoters?These are some of the questions that the people want answered. Ong still commands the respect of the party and the Chinese community at large. To maintain that, he should release without any delay the PwC report on PKFZ. And certainly, he should stop making flimsy excuses.More transparency, pleaseAs Tan Sri Ramon Navaratnam, chairman of the Centre for Public Policy Studies, has rightly commented, it is surprising and utterly embarrassing that Malaysia scored 35 out of 100 points in the Open Budget Index (OBI) for 2008 and is ranked 53rd out of 83 countries, behind Indonesia, Thailand, Pakistan, Bangladesh and Sri Lanka.The OBI is a survey by Washington-based Center on Budget and Policy Priorities (CBPP), which has over 25 years of experience in applied budget and tax analysis. The CBPP is funded by, among others, the Bill and Melinda Gates Foundation, the Ford Foundation and other prominent institutions.The Malaysian government may shrug off the OBI’s finding as shallow and biased, but whatever the government may call it, such a poor ranking will certainly fuel the public’s demand for more transparency and accountability, just when it is going to table the “mini budget” on March 10.The public is often confused by the government’s various economic plans.From the top, there is the allocation for the five-year Ninth Malaysia Plan, followed by the annual budget, the one-off RM7 billion stimulus package that was recently announced, and in addition, an upcoming “mini budget” that will be unveiled soon.There are a lot of “billions” tied to these plans. But thus far, the emphasis seems to be on the size of the budget rather than where the money has gone. Just compare how our budgets and stimulus packages are passed with the process in the US. Any US stimulus package using taxpayers’ monies has to pass a gruelling debate among its lawmakers.Here, not only are the allocations passed quickly, there is also a lack of follow-through to examine whether the money was well spent. If India, which is such a large and diverse emerging country, could score 60 out of 100 points in the OBI, Malaysia can certainly do better than just 35 points.Talking up stocks?In any takeover exercise, sensitive information is handled with utmost confidentiality. It is therefore unsettling to see the Selangor government telling the whole world of its intention to make an offer to the water concessionaires in the state two days in advance.Last Wednesday, the Selangor menteri besar issued a press statement that the state government is ready to make formal takeover offers to the four water concessionaires in the state. The statement said the state executive council (exco) would issue an offer letter within two days to Konsotium ABASS Sdn Bhd, Puncak Niaga (M) Sdn Bhd, Syarikat Pengeluaran Air Selangor Holdings Bhd (Splash) and Syarikat Bekalan Air Selangor (SYABAS).Not surprisingly, stock prices of the one listed company out of the four — Puncak Niaga — as well as those with stakes in the four companies moved up significantly. These companies are Kumpulan Perangsang Selangor Bhd, which has a controlling 55% stake in ABASS and 30% in Splash. Gamuda Bhd owns 40% of Splash.By last Friday, Gamuda, KPS and Puncak Niaga had added 8.2%, 12.2% and 17.3% respectively, from their closing prices the day before the statement.If the Selangor government had been serious in its intention to take over the four water concessionaires, it should not have “talked up” the stocks — simply making it less attractive to minorities as the share prices may have experienced a “run” in expectation of the offer. What should have happened perhaps is to make an outright offer, which would then have compelled the listed takeover targets to seek a suspension of trading of their shares. Isn’t that a more equitable way of taking over the water concessionaires in the bid to consolidate Selangor’s water sector?