President Message March 2012

PRESIDENT WEBSITE MESSAGE – MARCH 2012

4TH MALAYSIAN CONSTRUCTION SUMMIT 2012 (4TH MCS 2012) & MBAM OPEN HOUSE 2012

MBAM in collaboration with CIDB successfully organized  the 4th MCS 2012 on 16th February 2012 at KL Convention Centre in conjunction with the International Construction Week (ICW) 2012,  followed by MBAM Open House 2012 at Impiana KLCC. I would like to thank the Honorable Minister of Works, Yang Berhormat Datuk Seri Shaziman Abu Mansor for accepting our invitation to deliver the keynote address & to officiate the opening ceremony of MCS 2012. We are equally honored to have international delegates from China International Contractors Association (CHINCA) and fellow Members of ASEAN Constructors Federation (ACF) namely,  Cambodia Contractors Association (CCA), Indonesia Contractors Association (ICA), Philippines Constructors Association (PCA), Singapore Contractors Association Limited (SCAL) and Vietnam Association of Construction Contractors (VACC), who  were  present to share knowledge and support our events.

The theme for the  Summit this year “Infrastructure Investment Through Public Private Partnership”, is timely as both the Policy Makers and construction industry players are focusing their attention on the growth and sustainability of the industry in 2012 and beyond, in tandem with Malaysia’s aspiration of attaining the status as a developed nation by the year 2020. The following interesting papers were presented and the summary is appended below:

Speaker:  Dato’ Ahmad Suhali  Idrus, Director for Greater Kuala Lumpur/Klang Valley (GKL/KV) Performance Management and Delivery Unit, Performance Management and Delivery Unit

Topic1: Economic Transformation Programme (ETP)  An Update

The successful implementation of the ETP will result in raising the GNI to USD15, 000 per capital, average growth rate of 6 per cent per annum to achieve USD523B GNI, a creation of 3.3 million  additional jobs ranging from professional to skilled and semi skilled. To ensure success implementation, the Prime Minister or the Deputy Prime Minister in his absence will chair the Economic council on weekly basis to discuss the NKEA steering committee’s monthly report and investment committee’s bi monthly report, after which monthly updates and annual report are published.

The speaker also cited some of the notable NKEAs achievements in the last 8 months as follows: World Bank Doing Business Report 2012 indicated that ease of doing business in Malaysia ranking improved from 23rd position in 2010 to position 18 in 2012, ahead of Germany, Japan, Taiwan, Switzerland, Belgium and France and the Nielsen consumer confidence index showed an index of 110 in year 2011.

Speaker: Prof Sr Dr Khairuddin Abdul Rashid, Dean, Kulliyah Architecture & Environmental  Design,  International  Islamic  University Malaysia (IIUM)
Topic: Paper 2i – Public Private Partnership (PPP):  Concept, Process & Procedure

The speaker started with the evolution of conventional procurement to PPP. Some of the concerns of PPP stated were Government no longer the sole provider of infrastructure and services and Government has collaborated with private sector to deliver public infrastructure and service. In the frame work of PPP, PFI was introduced – a relationship that involves the private sector in provision of funding and expertise. A matrix of PPP with various components of PFI, such as Build Operate and Transfer, joint venture, self sustaining PFI with their level of profitability ranging from High to low and the degree of public sector involvement were explained. Essentially PFI is procurement of an asset via an agreement between a principal(government) and a promoter(private), the promoter to Design, build, finance, operate, maintain (BBFOM) the asset during and the duration of the agreement, then the asset is transferred to the principal. In summing up PPP/PFI is an alternate form of procurement and principally is about service and should be BAS (Build and Stay) and not BAD (Build and Disappear).

Speaker: Mr Massuan Ahamad, Corporate Advisor, PPP Unit, Prime Minister’s Department
Topic: Paper 2ii – Implementation of Infrastructure Investment Through PPP Projects

The main characteristics of PPP which can be summed up as “Innovative Approach to Project Development and Management and is value for money over the asset life cycle”. To spearhead the implementation of PPP a RM20B funds was being allocated as tipping point for private investment for 10th Malaysia Pan, targeting RM150B private investment. To move forward Jawatan Kuasa Awam Swasta (JKAS) under UKAS will act and deliberate recommendation from various subcommittees and make recommendations to the cabinet for approval.  

Topic: Paper 3 – China -ASEAN Investment Cooperation Fund, Funding Application Guidelines  and Project Details
Speaker: Mr Mike Kiang,  Director, China-Asean Investment Cooperation Fund (CAF)

The speaker briefed the participants on the activities of CAF, its objectives, investment criteria and investment target sectors. After the 11th Asean-China summit 2007 and following the summit at Boao Asia Forum in 2009, premier Wen Jiabao announced the formation of CHINA-ASEAN Investment Cooperation Fund (CAF) with China Exim Bank as its principal sponsor. The planned fund size is USD10B of which USD1B is fully funded. The objectives of the fund are to promote economic cooperation between China and Asean countries in the sectors of energy, resources and infrastructure. CAF commenced operation in April 2010 in Hong Kong and as to date has made total investments of 4 projects in the Philippines, Cambodia, Thailand valued in excess of  USD400M. Companies seeking CAF investments must have verifiable good track record, sustainable business model, significant growth and profits, stable cash flow and strong management team.

Topic: Paper 4i – ASEAN Connectivity and ASEAN Infrastructure Fund
Speaker:   Mr Jin Cyhn, Principal Economist, Regional Cooperation & Operations Coordination  Division, Southeast Asia Department (SERC), Asian Development Bank (ADB)

The speaker gave a brief overview from the initial development of Asian Development Bank (ADB) and its role for infrastructure development to the establishment of Asean Infrastructure Fund (AIF) and specifically the role of ADB, AIF and Malaysia. ADB was established in 1966 and its objectives are to free Asia and Pacific from poverty through the development of essential goods, services, and assets. Various operation modalities like sovereign and non sovereign lending, equity investments, guarantees and others are used to achieve the objectives. Target infrastructure sectors are transport, energy and water. Demands for such infrastructure are always high and it was identified in 2009 around USD9T was required in needs for the decade.

AIF was established on 24 September 2011 with 9 Asean members and ADB as the founding members. AIF is domiciled in Malaysia. The role of ADB is investor, co-financier and administrator. The lending ratio is AIF 30 per cent and ADB 70 per cent. ADB and AIF believe the importance to increase private financing for infrastructure development in the Asean region and undertake various roles to support Asean Capital Market Development, Asian Bond market.  

Topic: Paper 4ii – ADB Procurement System and the ASEAN Infrastructure Fund
Speaker: Mr Ahmadou Barry, Senior Procurement Specialist, Southeast Asia Department (SERC), Asian  Development Bank (ADB)

The speaker started off by briefing the participants on the Asian Development Bank’s procurements system, based on several principles such as fairness, transparency, economy and efficiency. ADB procurement guidelines are enforced for ADB administered funds. The advantages of adopting the ADB procurement guidelines are, it is based on best international practices and there is harmonization across countries and projects. To qualify all goods, suppliers must be from a member country. Sanctioned nations by ADB and UN and state owned enterprises are not eligible. Corrupt, fraudulent, collusive and coercive practices are punished with various manners such as barring the firm for ineligible either indefinitely or for a stated period of time; cancellation of loan; revoke award of contract and others.

Topic: Paper 5 – MY Rapid Transit:  Managing A Mega Infrastructure Project
Speaker:Dato’  Azhar Abdul Hamid, Chief Executive Officer, MRT Corporation Sdn Bhd

The 3 new MRT lines for GKL/KV (Greater Kuala Lumpur/Klang Valley) areas are part of the Economic Transformation Programme (ETP). The first MRT line serving Sungai Buloh to Kajang (SBK) has already been approved by the government and the other two lines are still under study. The SBK length is 51km with 41.5km elevated and 9.5 km underground. It comprises 31 stations with 24 elevated and 7 underground. Along the route there are 16 areas for Park and Ride. According to the Master implementation programme the SBK completion date is 31st.July 2017. It is estimated the MRT infrastructure project will produce a construction multiplier effect of 2.5 times which translates to approximately RM213B flowing into the economy.

The MRT has been engaging with the Rakyat, property developers and others affected by land acquisition and continue to be transparent in such dealing. Affected parties can appeal to Special Compensation Committee chaired by Minister of Finance to resolve any compensation matters.

MEETING WITH BANK NEGARA MALAYSIA (BNM)

MBAM had a dialogue meeting with BNM  on 21st February 2012 where the Association commented on the developments and outlook for the construction industry. In order for the industry to achieve the 7.0% growth estimated for the construction industry in 2012, the construction industry must see speedy and implementation of projects under the 10th Malaysia Plan (10MP) and the Entry Point Projects (EPP) under ETP. Comparatively the construction industry growth for 2011 was 3.5%.  MBAM opines  it was better to have sustainable growth for the industry so that construction companies can plan their business  accordingly. Furthermore, a continued conducive environment for doing business in the country, clear guidelines and timelines for approval  processes  and  a level playing field will  definitely help spur  growth and investment in Malaysia.

MASTER   BUILDERS ASSOCIATION MALAYSIA   (MBAM) LAUNCHED   SITE SAFETY SUPERVISOR (SSS) COURSE IN SABAH

Dato’ Ir. Dr. Johari Basri, Director-General, Department of Safety and Health, Malaysia delivered a speech and officially launched the MBAM Site Safety Supervisor (SSS) Course  on 24th February 2012  at Project Site of Angkasa Apartment, Darau, Menggatal in  Kota Kinabalu, Sabah. The course is a 6-days continuous training held from 23rd February 2012 (Thursday) to 28rd February 2012 (Tuesday).

I congratulate the Sabah Builders Association (SBA) for being the first MBAM Affiliated Association to assist in the organization of the SSS Course for its members. The effort to uplift the image of the construction industry should be a continuous and non-stop activity. In this context, I am heartened that SBA is playing an important role in addressing Occupational Safety and Health (OSH) training concerns as well as guiding their members to strengthen their OSH activities by encouraging their members to enroll in this course.  It is hoped that more MBAM Affiliated Associations would consider holding the SSS course for their members.

Thank you.

 

Yours faithfully,
MASTER BUILDERS ASSOCIATION MALAYSIA

 

KWAN FOH KWAI J.M.N.
President