Can Ong Ka Ting explain the price
difference of RM300 million for the Broga incinerator, following the
latest Ebara's financial scandal?
by Ronnie Liu Tian Khiew
In early July, the Housing and
Local Government Minister Datuk Seri Ong Ka Ting said the government was
probing a series of allegations involving Ebara's business dealings in
Japan's multi-billion dollar waste management sector.
This followed media reports in
Japan alleging that Ebara, a major player in that country's incinerator
industry was in dire financial straits and had a bad track record due to
negligent design and operations.
However, Ong has yet to inform
Malaysians on the probe to date.
Meanwhile, Ebara Corp. is hit
by yet another financial scandal.
On 2003-09-24, the Daily
Yomiuri of Japan reported that Ebara was fined over 300 million yen payoffs
Ebara concealed about 300
million yen in earnings in the two years prior to April 2002 and used the
money as administrative expenses" to urge local subcontractors to withdraw
from bidding for several public works projects, sources said Monday.
Ebara, based in Ota Ward,
Tokyo, reportedly referred to the money paid to the subcontractors as
"expenses for regional measures" and money paid to operators that dropped
their tenders as "co-operation expenses for orders received."
A tax inspection conducted by
the Tokyo Regional Taxation Bureau revealed Ebara failed to declare an
additional 1.2 billion yen in corporate earnings through accounting errors.
However, because Ebara posted a
deficit of about 16 billion yen in its settlement of accounts for the
period, it was ordered to pay only about 5 million yen in additional tax
According to the sources, in
September 2000, Ebara won the bid to construct part of a sludge-processing
facility in Osaka commissioned by the Japan Sewage Works Agency for 2.14
Ebara reportedly paid about 75
million yen in "expenses for regional measures" to local subcontractors for
the project, but reported the expenses under administrative costs as "sales
During fiscal 1999 and 2000,
Ebara reportedly paid "co-operation expenses" to other contractors to urge
them to drop out of the bidding for nine sewage treatment and other
facilities constructed in six prefectures, including Kanagawa, Aichi and
Some of the firms paid to
withdraw their bid were then taken on as subcontractors by Ebara, with the
company adding the "co-operation money" to the construction costs, the
The bureau determined the
company's attempts to include the regional measures and co-operation
expenses, which should have been reported as taxable entertainment and
social expenses, as administrative expenses constituted a concealment of
It recently came to light that
Ebara had a subcontractor, Toyama-based Sato Kogyo Co., pad its bills for
construction of a rubbish incinerator for which the Nagareyama municipal
government in Chiba Prefecture placed an order in September 2001, so that it
could accumulate about 300 million yen in off-the-book funds. The municipal
government and other authorities are investigating the matter.
It's Ong's duty and
responsibility now to inform Malaysians on his investigation on Ebara. It's
also his duty and responsibility not to hire a company with such a bad track
record to build the world's largest incinerator for Malaysians.
Following the latest financial
scandal of Ebara, one of the questions Ong must answer to all Malaysians
now, is the actual cost of the incinerator.
It was reported earlier that
the incinerator was priced at RM1.2 billion when it was supposed to be built
in Kg Bohol. Now, the price for the same incinerator has said to be shot up
to RM1.5 billion in Broga.
Can the minister now explain to
all Malaysian taxpayers about the price difference of RM300 million, which
is not a small amount by any standard?
* Ronnie Liu Tian
Khiew, DAP national publicity secretary and DAP Selangor chairman