PORR violates international best practices of good urban governance and public integrity  that government support for any privatization project should be defined upfront as a maximum so that the private sector can prepare realistic bids

(Penang,  Sunday):  Recent statements by the Penang State Government on the RM1.02 billion Penang Outer Ring Road (PORR) project to create a handful of multi-millionaires by burdening  the people of Penang with 30 years of escalating toll without providing a medium-term let alone a long-term solution to the traffic congestion nightmare of the Penang Island has only deepened public disquiet and dismay about the transparency,  justice, viability and compatibility with sustainable transport policy of the PORR project. 

Some of these statements, especially those made by the Deputy Chief Minister Datuk Dr. Hilmi Yahaya inside and outside the Penang State Assembly, were:

• That “there is nothing to worry about PORR as the federal and state governments are there to make sure that the project would be completed on time”  (Star 25.5.02) – completely ignoring the eight-year delay in the completion of the Jelutong Expressway (JEWay) from 2000 to 2008!
• That the credibility of PORR concessionaire Peninsular Metroworks Sdn. Bhd (PMWSB)  should not be questioned even though some of its shareholders had previously been declared bankrupt, as “they were relieved of bankruptcy now ….and there were many other capable directors on the company’s board” (Star 25.5.02)  – without identifying who were these “previous” bankrupt shareholders and the “capable” directors, as well as ignoring the long list of failed privatization mega-projects in the country, where taxpayers have to bail out not only these failed projects but also to finance the ostentatious life-styles of the “lucky” individuals who had flopped in  these awards and concessions so that they would not suffer any personal privations.
•   That PMWSB was “the only company which submitted the proposal and was willing to take the risk” (Star 24.5.02)  as if this could  justify why there was no other bid and no open tender for the PORR project  - completely ignoring the fact that nobody knew that the PORR concessionaire would be given the unprecedented bounties of 30-year toll concession, 31 ha of prime State land and 202 ha of reclaimed land off Gurney Drive – estimated to worth some RM5 billion!
•   That the state government was “preparing to surrender vacant possession” of six parcels of land totaling 31 ha at Jalan Peel (2.6 ha), Jalan Grove (6.7 ha), Jalan Scotland (2.8 ha), Jalan Lahat (3.4 ha) and Jalan Sultan Azlan Shah (14.1 ha) (Star 31.5.02) – even though the concession contract with PMWSB has not been signed and the public consultation process to get feedback from the people of Penang had not been completed.
• That PMWSB “can do whatever they want on the land but they must comply to the council’s planning guidelines” (Star 31.5.02) – a complete blank cheque imposing no social obligations on PMWSB, unlike the concessionaire for Jelutong Expressway,  Jelutong Development Sdn. Bhd (JDSB), which was required to build a total of 9,500 housing units to support the government in providing affordable homes, including some 5,500 units in the low and low medium categories to cater to the needs of displaced  Georgetown tenants affected by the Rent Control Act repeal.

In Malaysia, there would be no other government leader, whether federal or state including Cabinet Ministers, who could beat the Penang Chief Minister, Tan Sri Dr. Koh Tsu Koon in having spoken more or officiated at the most number of opening ceremonies of conferences and forums, whether international, regional or local, in his over a decade in office on good urban governance – and he should know better than anyone that the PORR project violates international best practices of good urban governance and public integrity that government support for any privatization project should be defined upfront as a maximum so that the private sector can prepare realistic bids. 

As no one except PMWSB was aware that the Penang State Government was prepared to support the PORR privatization bid  by granting a 30-year  toll concession, 31 ha of prime State land and 202 ha of reclaimed land off Gurney Drive worth cumulatively some RM5 billion, the whole award of the PORR concession is fatally flawed not only by lack of transparency but absence of public integrity as well. 

This is why there is a strong case in the public interest  for the re-bidding of the PORR privatization project to cure the double defects of lack of transparency and integrity in the award of the PORR concession to PMWSB. 

This will be a powerful ground for the convening of an emergency Penang State Assembly meeting to pass an unanimous motion to ask the Federal government to  re-open the bids for the PORR concession to invite the best offers based on two alternative State Government offers, one only with the right to reclaim 500 acres of seafront off Gurney Drive while the other with the added offer of 31 ha of prime state land worth RM200 million, without the right to impose toll in both cases – and I am sure public interests will be better served by adopting such  international best practices of good urban governance and public integrity. 

It is a matter of grave concern that the Penang State Government seems to have  reduced itself into an agent or servant of PMWSB by  “preparing to surrender vacant possession” of six parcels of 31 ha of prime State land even before the signing of the concession, when in the case of Jelutong Expressway, the concessionaire had to bear its own cost of squatter compensation.  Why this special favour for PMWSB? 

In August 1997, the then Penang Ratepayers Association president Datuk Lim Chong Keat lamented that  many  public projects in Penang were considered “overnight” without informing the public of the technical and planning studies involved, including proper environmental impact studies, and he specifically mentioned PORR as one such project. 

He said: “The people want to know whether the proposals are sound…Have the ramifications been fully studied, are the cost benefits convincing and have comparative evaluations been made? 

“Major projects should also be properly tendered in terms of pre-feasibility consultancy…the transparent way is to call for consultants in the country, and not just selected or invited privatisers, for the bidding.” 

Chong Keat’s critique of  PORR and other mega projects in Penang remains as valid today as when he made it five years ago, and for this reason,  the Penang State Government should freeze all preparations to surrender vacant possession of six pieces of prime state land to PMWSB and to ask the Federal Government  for a reconsideration of the PORR project, in the context of providing an efficient public transport system based on sustainable transport policy – including a rebidding of the PORR project in line with international best practices good urban governance and public integrity if PORR is to be proceeded with.   

(2/6/2002)