• Concession Agreement for the Kepong Incinerator project must be publicly disclosed

    Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang, on the 10th of February, 2017

    Concession Agreement for the Kepong Incinerator project must be publicly disclosed

    It was reported in the Edge Weekly (January 30 to February 5, 2017) that three companies have been shortlisted for the controversial 1000 ton per day solid waste incinerator in Taman Beringin, Kepong. These three companies are Malaysia Resources Corp Bhd (MRCB) in partnership with South Korea’s Hyundai Rotem Co, Cenviro Sbd Bhd (formerly UEM Environment Sdn Bhd) in partnership with Japan’s Mitsubishi Heavy Industries Ltd and DRB-Hicom in partnership with Malakoff Corp Bhd and Japan’s Sumitomo Corp. It was also reported that the concession agreement to build and operate this incinerator will be awarded in March, 2017.

    Concession agreements in Malaysia, from lopsided toll contracts to the Express Rail Link (ERL) contract that allowed for unreasonable price hikes, have almost always favoured the concession holders at the expense of the consumer / user. The nature of many of these lopsided contracts were only discovered after they were signed, usually when the government has had to explain why they had to allow these concession holders to increase the price of tolls or train tickets by large and unreasonable increments.

    This incinerator will be the largest incinerator of any kind in Malaysia. Recall that much smaller scale incinerator projects in Pulau Pangkor, Pulau Langkawi and Cameron Highlands have failed in the past, at great cost to the federal government. The nature by which these contracts were awarded to the company, XCN Technology, was called into question by the Auditor General. If the Kepong Incinerator project fails, the cost to the taxpayer will be far greater than the smaller scale failures in the abovementioned locations. Recall also that this is the second time that the Kepong incinerator project has been tendered out because there was only one company that made a final submission in the first round of tenders.

    In order to avoid the mistakes of the past, I call upon the Minister in charge of the Economic Planning Unit (EPU), Datuk Abdul Rahman Dahlan, to disclose the details of the Kepong incinerator concession agreement including the projected cost of the project, the tipping fee that will be charged to DBKL, the conditions of the waste guarantee to the company, the length of the concession period, the performance indicators and the terms by which the government can take over the project if it fails to deliver.

    In addition, the Minister must convince the raykat the need for the Kepong incinerator given that KL has started the separation of municipal waste which should decrease the overall amount of waste that needs to be disposed.

    Failure to do so will only invite more protests from the residents and the high probability that the taxpayer and the ratepayers in KL will end up footing the bill for another lopsided concession agreement.

    Dr. Ong Kian Ming
    Member of Parliament for Serdang