ETP: Part 3 (iii) — Two dud projects

(Also published on The Malaysian Insider)

Doubtful EPPs; doubtful achievements and due diligence

Some PEMANDU “achievements” are doubtful. The Karambunai Integrated Resort and Tanjong Agas Oil and Gas Park do not appear viable and their private sector developers are financially weak. These two EPPs alone account for 7 per cent of the total investments trumpeted by PEMANDU during the first year of the ETP. Their inclusion weakens the credibility of the headline investments, national income and job accretion that PEMANDU claims to have achieved.

Karambunai IR — expensive and crowded? The investment cost for this project in rural Sabah soared from RM3 billion to nearly RM10 billion in the six short months from its first mention before the ETP was launched to its final incarnation as an EPP. At this price, we estimate it needs 2.8 million visitors per year to break even — more than all the passengers arriving at Kota Kinabalu airport!

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ETP Part 3 (ii) — The hothouse labs probably killed innovation

(Also published on The Malaysian Insider)

The ETP resulted from 12 “labs”. Each lab comprised 30-50 experts who had eight weeks to research best practices and innovations, distil them in intense brainstorming sessions and support them with detailed analysis. The result was 131 Entry-Point Projects (EPPs) across 12 National Key Economic Areas (NKEAs) that would maximise gross national income with minimal public-funding support. Such is the PEMANDU narration.

Truly transformative ideas may have had no chance. Much was made of the private sector participation. But large companies would naturally dominate. Start-up companies, even if invited, cannot afford to release staff for eight weeks. Consider this example: 10 years ago, Microsoft, IBM and HP would have dominated any lab to transform the IT industry. Google was a cash-strapped start-up, Apple was in disarray and Facebook did not even exist. The incumbents would have been free to promote pet projects and stifle their competition.

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ETP: Part 3 (i) — PEMANDU strengthens the ‘know-who’ cancer

(Also published on The Malaysian Insider)

ETP: Part 3 (i) — PEMANDU strengthens the ‘know-who’ cancer
Dr. Ong Kian Ming & Teh Chi-Chang

Very swift progress, but is it due to PEMANDU? In its eight ETP updates so far, PEMANDU has announced multiple new EPPs (Entry-Point Projects) worth billions of ringgit of investment and creating thousands of jobs. One EPP — Johor Premium Outlets (JP Outlets) — is already open. But how much of this rapid execution is due to PEMANDU instead of normal private sector efficiency?

Opportunistic naming of existing projects as EPPs. For example, the JP Outlets and St Regis Hotel projects pre-dated the ETP. Their completion dates were unchanged by their subsequent EPP status, suggesting minimal input by PEMANDU. Naming them as EPPs gives the illusion of quick wins and overstates PEMANDU’s success.

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