Open Tender abuse in RM375 million Phase One pipe-replacement in Selangor/Kuala Lumpur – will Keng Yaik report Syabas to Anti-Corruption Agency?

Media Conference Statement
by Lim Kit Siang

(Parliament, Monday): In Ipoh yesterday, the Minister for Energy, Water and Communications Datuk Seri Dr. Lim Keng Yaik accused me of “fear-mongering” to  confuse and scare the people  about the restructuring of the water services industry, alleged that I have  no sincerity in discussing the issue and announced  that he would not care to respond to me in future to any invitation for a dialogue on water services. (Nanyang, Sin Chew) 

As proof of my “fear-mongering”  and creating confusion among the people about the water services, Keng Yaik said that I had used the words “federalization”, ”privatization” and “nationalization” of the water services at the parliamentary round table (3) on water services last Friday when these were not the government’s intensions or objectives! 

I never used the word “nationalization” to describe the Minister’s efforts to restructure the national water services industry, whether at the parliamentary roundtable last Friday, in my speeches in Parliament or outside, and if Keng Yaik can produce proof that I had done so, I am prepared to publicly tender him an apology.  Keng Yaik should have the humility to publicly apologise to me in the next 48 hours if he cannot substantiate his allegation and was guilty of making  a baseless attack on me for using  the word “nationalization”. 

I do not deny using the words “federalization” and “privatization” to describe the Minister’s current exercise to restructure the national water services industry – as I am only following Keng Yaik’s example, who was the first to talk about the “federalization” and “privatization” of the national water services in the country. 

In his keynote address to the FOMCA public forum on “Is Malaysia Ready for privatization of water resources” in Petaling Jaya on 31st July 2004, Keng Yaik not only did not object to the theme of “water privatization”, but went to great length to explain why “Privatisation can play a vital role in rejuvenating the water industry” despite the many weaknesses of the government’s water privatization policy highlighted by the privatization of water services of some states, mostly through concessions. 

He said:  

“7. Hence, we have to re-examine and evaluate the current privatization of the water industry so as to avoid similar fate suffered by future water privatization projects. The Government has decided to review the existing water privatization model pending its appraisal on how best to improve the performance of the Malaysian water sector that will benefit all parties.  This is because the way privatization of water services were carried in the past does not lead to efficiency improvement of the entire industry and thus not sustainable.” 

After talking about the weaknesses of “current privatization of the water industry so as to avoid similar fate suffered by future water privatization projects”, how can Keng Yaik now turn around and accuse me of “fear-mongering” when I discussed the pros and cons of water privatization? 

The use of the word “federalization” was also started by Keng Yaik himself. In the same speech, he said: 

“10. My Ministry is currently working on formulating a blue print to implement the Government’s decision to federalize the water management, revamping the water services industry structure for it to become more sustainable and the setting up of a National Water Services Commission to act as a regulator.” 

After himself talking about “federalization”, why is Keng Yaik now turning around and accuse me of “fear-mongering’ when I was just following his example to discuss the merits and demerits of federalization of the water management? 

Many MPs and NGOs have been confused and perplexed by Keng Yaik’s recent stance in publicly denying that his Ministry is  proposing a more effective and efficient  “privatization” of the water services industry, which was why I asked at the parliamentary roundtable last Friday whether his Ministry is proposing the privatization of the water services industry without using the word “privatisation’! 

I am actually quite surprised by Keng Yaik’s reaction yesterday, showing his great displeasure at the parliamentary roundtable last Friday on water privatization, for I had publicly commended him twice: 

  • For his positive response to the parliamentary roundtable by sending Teo Yen Hua, his  Ministry’s Deputy Secretary-General II  and Dr. Chin Yoong Kheong, Director, KPMG,  which is the  Ministry consultant on water services; and
  • For his successful intervention with    the Selangor/Federal Territory/Putrajaya water supply privatization concessionaire Syabas from violating the concession agreement by importing water pipes from Indonesia for the RM375 million Phase One pipe replacement programme in the Klang Valley, as reported by Teo to the roundtable.

However, while I was prepared to give praise when praise is due, Keng Yaik must have been peeved by the Eight Questions and other issues  which I raised at the roundtable questioning  his handling of the water portfolio since becoming the Minister in charge, not because they are baseless but because he could not answer them with satisfaction. 

For example, what are the reasons and conditions for the RM2.9 billion Federal Government funding of the Syarikat Bekalan Air Selangor (Syabas) water privatization of Selangor/Kuala Lumpur/Putrajaya  which includes  a RM1.34 billion bailout of Selangor government water debts when the 30-year concession was signed on December 17 last year? 

Keng Yaik has also been  conspicuously silent on the abuse and distortion of the open tender policy enunciated by the Prime Minister, Datuk Seri Abdullah Ahmad Badawi to introduce a new culture of integrity in public life. 

At the roundtable last Friday, I produced documentary proof that there was no open tender in the real sense of the term by Syabas for the RM375 million Phase One of pipe-replacement project in the Klang Valley, as there was manipulation and tampering with the tender process. 

This was because a day before the tender closed on April 26, 2004, Syabas sent to all tenderers the new stipulation designating two companies as obligatory suppliers for pipes and fittings, namely: Laksana Wibawa Sdn. Bhd (for supply of mild steel, ductile iron pipes and fittings) and Musa & Rahman Plastic Industries Sdn. Bhd. (for supply of high density polyethylene [HDPE] pipes and fittings).  

Both these nominated companies are not only relatively unknown, they raise  disturbing questions  about the propriety of such last-minute distortion of the tender process by designating  companies to be the obligatory suppliers, conflict-of-interest  and the background of the designated  companies, as Laksana Wibawa, Puncak Niaga and Syabas are believed to have a common factor in Tan Sri Dr. Rozali Ismail, who is executive chairman of both Syabas and Puncak Niaga.  

Teo  did not show any surprise when I produced the documentary evidence and he said  the Ministry was fully aware of the facts of the case when I offered to give him a copy of the documentary evidence.

But why had Keng Yaik been singularly silent on this abuse and distortion of the open tender process by Syabas, ignoring the call by  the Prime Minister only last month for the eradication of three national “addictions”, one of which is rent-seeking. 

Is Keng Yaik going to lodge a report with the Anti-Corruption Agency (ACA) against Syabas for such distortion and manipulation of the open tender? 

Keng Yaik has repeatedly called for transparency as well as the fullest participation by all stakeholders, whether MPs, private sectors, NGOs and the consumers in  the restructuring of the national water services industry, but he must “walk the talk” and not “cakap ta serupa bikin”. 

He must not just talk about consultation but must have the mindset, commitment and  patience  to make a success of  public participation and consultation  in the restructuring of water services industry and not expect MPs, including from Barisan Nasional, to continue to be mere “rubber stamps” in Parliament  as in the past two decades. 

He should be welcoming more parliamentary roundtables and public forums on the  water supply services in the country  instead of pouring cold water to discourage more public discussions and dialogues, and I hope he could come to the Ipoh water forum organized by the Coalition Against Water Privatisation this Saturday for both of us, together with other panelists, to continue discussion of the  hardly-started public dialogue on his Ministry’s restructuring of water services industry  in the country. 

Whatever my personal likes and dislikes, I am prepared to continue to engage with Keng Yaik on the issue of the future of water services industry, for the interests of the people and nation and future generations are more important than our personal or political differences.



*  Lim Kit Siang, Parliamentary Opposition Leader, MP for Ipoh Timur & DAP Central Policy and Strategic Planning Commission Chairman