Sunday, February 19, 2006

The Housing Board Scam

MALAYSIA TODAY

SPECIAL REPORT ON THE NEP
Raja Petra Kamarudin

The government calls it the New Economic Policy (NEP). Umno calls it Ketuanan Melayu. I call it a get-rich-quick-scheme. Actually, to be honest, it is not a 'policy' as such as it is more an aspiration (hasrat), and it is also not law because the so-called policy violates certain Articles of the Federal Constitution of this country which states that Malaysian citizens are free to pursue their business interests without interference from the government (and there was never any Act of Parliament passed making the NEP law). Therefore, when 'shotgun marriages' are forced upon Chinese businesses to take on 'approved' Malay partners, in most cases those aligned to or members of the family of the powers-that-be, such an Umnoputeras, then the Constitution is violated, grossly and blatantly. (Watch below the postings from bloggers declaring me a traitor to my race. Never mind, even Islam is opposed to racial discrimination, so, while that makes me a bad Malay, it makes me a better Muslim).

Let me state clearly that I am not opposed to the spirit of the NEP -- to eradicate poverty, reduce the gap between the haves and haves-not, and reduce the economic disparity between the various races. What I am opposed to is the manner the NEP has been hijacked, exploited and misused to line the pockets of those in power. The NEP, which is a noble aspiration conjured by our most illustrious Prime Minister and product of the Malay College Kuala Kangsar (MCKK), Tun Abdul Razak, has been transformed into a demon that is despised by the non-Malays as well as a great section of the Malays.

Let us recap on some of our previous reports (links to parts 1 to 4 of this report are listed below).On 22 July 2003, Kumpulan Perangsang Selangor Berhad, previously called Shah Alam Properties, was listed on the KLSE. On 19 July 2004, the government transferred Perangsang International Sdn Bhd to Yap Fook Sang and Chong Sang. On 29 November 2004, Perangsang International Sdn Bhd’s name was changed to Tajuk Construction Sdn Bhd. On 25 October 2005, Soon Fong the liquidator came onboard and on the same day they filed a notice to wind up the company. On 18 January 2006, Tajuk Construction, what used to be Perangsang International, was quietly wound up with no fanfare.

Perangsang International’s losses for 2003 was only RM283,977. In 2002, it made a profit of RM100,292. Its accumulated losses was RM22,248,577 for 2003 against assets of RM9.9 million and liabilities of RM18 million. But its parent was worth hundreds of millions and sitting on a land bank valued at RM8 billion, which it got for a song from the Selangor State Government. Why the need to wind up Perangsang International and make the creditors suffer more than RM10 million in bad debts? Is it because Perangsang International blundered big-time on the Malaysian International Trade Development Corporation (Matrade) building and it is easier to wind up the company rather than having to make good on the defects liability?

Anyway, while we wait for Perangsang to enlighten us on this, let us in the meantime look at another issue, the issue of housing development, which incidentally is also Perangsang’s main business.Singapore has its very successful Housing and Development Board (HDB) that spearheaded the development of this Island State into what it is today. Well, Malaysia, not to be left out, also has its equivalent of Singapore’s HDB called Syarikat Perumahaan Negara Berhad (SPNB) headed by our newly appointed minister, Tengku Adnan Tengku Mansor.

But let us not use the Singapore example to compare how Malaysia conducts its affairs. To do so would only give an impression that the Chinese run Singapore better than the Malays run Malaysia -- and I do not want to turn this report into another Malay-bashing exercise. Furthermore, to solely blame the Malays would probably be unfair as the Chinese businessmen, contractors and developers are equally guilty of ripping off this country. It is, after all, a partnership of Malay political power and Chinese economic might.

This is SPNB's mission and vision statement (note the part that says SPNB comes under the Ministry of Finance) according to its website (Syarikat Perumahan Negara Berhad):Syarikat Perumahan Negara Berhad (SPNB) telah ditubuhkan pada 21 Ogos 1997 sebagai sebuah syarikat milik penuh Menteri Kewangan Diperbadankan (MOF Inc.) yang telah ditubuhkan bertujuan menyediakan rumah mampu milik yang berkualiti kepada setiap keluarga di Malaysia sejajar dengan Polisi Perumahan Negara. Sebagai salah sebuah penyedia perumahan mampu milik berkualiti yang utama di Malaysia dengan pelbagai projek yang diamanahkan oleh Kerajaan, SPNB mempunyai sumber rangkaian yang komprehensif. SPNB bertanggungjawab melaksanakan Skim Rumah Mampu Milik dan Skim Rumah Mesra Rakyat untuk memastikan golongan berpendapatan rendah memiliki kediaman yang mampu dimiliki dan selesa, Pemulihan Projek perumahan yang telah terbengkalai, Kuanters Kerajaan untuk kakitangan awam dan pelbagai Projek Khas yang telah diarahkan oleh Kementerian Kewangan. Selain daripada tanggungjawab utama syarikat, SPNB juga amat dedikasi dalam menyediakan rumah untuk golongan yang kurang bernasib baik dan keluarga miskin di Malaysia dengan menyumbangkan sejumlah daripada keuntungan tahunan syarikat kepada kerja-kerja kebajikan yang juga dikenali sebagai Skim Amal Jariah. Bagi memastikan operasi SPNB berjalan lancar, kini SPNB telah mempunyai 5 cawangan seluruh negara iaitu di Pulau Pinang, Pahang, Johor, Sabah dan Sarawak.

So, there you have it. SPNB has five branches. Let us look at one of these branches, Sabah, as there has been a recent development involving this matter which we will go into later.On 17 January 2005, Malaysia Today said as follows in an article called Sabah Housing Board Scam: On 28 September 1994, the Sabah Housing and Town Development Authority (SHTDA) signed a joint-venture agreement with a private developer, Sri Kepayan Indah Sdn Bhd, to embark on a property development project. This was towards the end of Tun Sakaran Dandai’s tenure as Sabah’s Chief Minister. (Sakaran retired as Chief Minister on 31 December 1994 and was made the Governor or Yang di-Pertua Negeri the following day). The proposed development, the Kepayan Ridge Project Phase 16 & 17, located at Kepayan Ridge beside the new Penampang Bypass, comprised of 41 acres of residential property and 8 acres of commercial property, which included low-cost houses and shop lots. Under the terms of the joint-venture agreement, Sri Kapayan Indah would pay SHTDA RM5 million, which was the value of the land. This project, just like Elite Consortium Sdn Bhd’s ‘underwater city’never got off the ground. In 2000, the joint-venture agreement with Sri Kepayan Indah was terminated as it had failed to commence work plus had failed to pay SHTDA the agreed amount of RM5 million. By then, Datuk Osu Sukam was Sabah’s Chief Minister. The State Ministry of Local Government and Housing then instructed SHTDA to engage a valuer to revalue the land and CH Williams & Talhar came out with a new valuation of RM29 million. SHTDA then tendered out the land and seven bidders made a bid for it. SHTDA decided to accept the offer of the company that bid RM35 million. In mid-2002, SHTDA submitted the name of the selected developer plus all the tender documents to the Ministry. Under the Sabah Local Government Ordinance, the Ministry is required to obtain State Cabinet approval for tenders above RM10 million. After a lapse of more than six months, the State Ministry of Local Government and Housing directed SHTDA to reject the RM35 million tender and instead re-award it to the original developer, Sri Kepayan Indah, whose contract had since been terminated. SHTDA was also asked to revise the terms and conditions of the contract. Under these revised terms and conditions, Sri Kepayan Indah would pay SHTDA RM10 million, not RM35 million, based on a price of RM4.10 per square foot -- that is, less than a third of the price offered by the highest bidder. This was towards the end of Datuk Chong Kah Kiat’s tenure as Chief Minister and just before Datuk Seri Musa Aman took over on 27 March 2003. Now, the questions that beg answers are:

1) Why was Sri Kepayan Indah Sdn Bhd, whose contract had already been terminated, reinstated instead of being fined and blacklisted?

2) Who are those behind Sri Kepayang Indah; the Directors and Shareholders; and how come they have so much clout with the Sabah government?

3) Why did SHTDA select the lower price of RM10 million from a delinquent developer when it could have instead obtained RM35 million?

4) Was the State Cabinet aware of the RM35 million bid recommended by the SHTDA?

5) Who issued the directive to SHTDA to reject the RM35 million bid and reinstate the delinquent developer at the much lower price?

6) Were the tender documents for the RM35 million bid forwarded to the State Cabinet at all?

On 2 May 2005, Malaysia Today published this report called How to build a six million dollar house. In that piece we said as follows:Syarikat Perumahan Negara allocated 30,000 units of low-cost houses to Sabah under the Rumah Mampu Milek scheme for the homeless and to resettle squatters whose houses are to be demolished. The State then formed a housing development company called Supernesa Sdn Bhd to manage the development of these 30,000 units. Now, who is the Chairman of this new state housing development company? Why, Musa Aman confidante and crony, Datuk Haji Musbah Haji Jamli, of course -- the Umno Kota Belud division chief who owns the six million Ringgit house which Malaysia Today featured last week. (Sabah homes of the filthy rich and infamous). Haji Musbah has given a whole new meaning to the term ‘six million dollar man’. Recently, Syarikat Perumahan Negara was asked to sign a Memorandum of Understanding (MoU) with Supernesa Sdn Bhd giving Supernesa the sole rights for the development of the 30,000-unit low cost houses. Tengku Adnan was most displeased with the arrangement so he boycotted the signing ceremony and refused to grace the occasion. And what is the amount of money involved? Roughly one billion Ringgit! What is most disconcerting about the whole thing is the fact that any company that wishes to act as Supernesa’s contractor would have to pay a 13% commission to the state agency. Invariably, this will jack up the development cost of the houses and which Syarikat Perumahan Negara would have to bear. Then there is the mandatory ‘donations’ to Umno that the contractors would have to pay plus the customary ‘under-the-table’ money to Haji Musbah. And the under-the-table money must be large enough to cover the others as well as Haji Musbah cannot hope to ‘eat alone’ but would have to spread it out to the other decision makers as well. Even before the project can get off the ground the contractors are already grumbling. They would have to pay at least 30% in various ‘commissions’ and ‘fees’, official and unofficial, so how could they carry the cost to build houses that would have to meet certain government-controlled prices? If they are not allowed to increase the contract price to cover this extremely large commission, then they would have to absorb the cost from their profits. But there is not much profit in building houses where the prices are controlled by the government.Even Tengku Adnan finds this whole arrangement revolting. These rich Sabah tycoons would resort to anything to fill their pockets already bursting with millions of Ringgit plundered from the state? Last month, Tunku Adnan decided enough was enough and he terminated Supernesa’s contract, much to the horror of Musbah who had already collected his commission on the projects which will now never happen. The official reason for the termination of the contract is that the land is not suitable for the housing project. Actually, Tunku Adnan has received numerous complaints about the commissions the contractors have had to pay both to Umno and Musbah personally.

The contractors are of course up in arms and screaming blue murder. Musbah, however, denies any impropriety. He explained to his architect friend from Sarawak, Justin, that the money was not for himself but for Chief Minister Musa Aman, as well as for Umno, in particular the Umno building fund (which we will talk about in another report later). One contractor named Johnson said he has already paid more than RM1 million and now he is not getting the contract he paid for.

Musbah is now in deep shit. Chinese contractors, unlike Malay businessmen, do not kiss and tell that easily. They are actually quite good at keeping secrets of pay offs, bribes and under-the-table money (mainly because they are scared of going to jail if indicted for corruption). But if you screw them, they will sing, and they are singing a very pretty tune about the Sabah housing fiasco.This is not the first time Musbah screwed up though. Some years back, Supernesa was given 100 acres of Sabah State land near the Customs Complex in Menggatal, Sabah, for purposes of development. Until today that land is still lying idle and it is rumoured that Musbah has actually hived off the land for a large amount of cash -- for his own pockets of course, not for Supernesa.

We have to look into the background of this Musbah to understand the type of people the government appoints to head sensitive and important agencies, such as Supernesa, that is supposed to help achieve the aspirations of the NEP by providing much-needed housing to the homeless. Musbah used to be a singer in his younger days, travelling from village to village entertaining the peasants in the days before TV reached the rural remotes of Sabah. Later on in life he traded in timber. He made his first million six or seven years ago when Osu Haji Sukam became the Sabah Chief Minister; that infamous man who gambled and lost RM300 million in casinos all over the world.

Musbah’s wealth is open for all and sundry to see. He lives in the most expensive house in Sabah that puts even the Istana Negara (National Palace) to shame. And he made his money because Malaysia has something called the New Economic Policy. And that is how to build a six million Ringgit house: from the under-the-table money from building 30,000 houses for the poor and downtrodden. And while he lives in a six million Ringgit house, the homeless do not get their homes promised by the NEP.

http://malaysia-today.net/reports/uploaded_images/musbah_home-732913.jpghttp://malaysia-today.net/reports/uploaded_images/musbah_home-732913.jpg(See more photographs of Musbah Jamli's home here).

If you want to know more about Musbah Jamli and get to understand how he can build the most expensive house in Sabah, then read Malaysia Today’s report of 2 May 2005 entitled How to build a six million dollar house where we said as follow:Well, as I have said earlier, you cannot build a six million Ringgit mansion from your salary alone. You need a substantial amount of under-the-table money to pay for it. And this is just one of the many scams perpetuated by these people in power. But the sad reality of this whole thing is, come next general election, the voters would forget about all this and would still vote into office the government that is robbing them blind in broad daylight. Previous reports:

Part 1: The fallacy of the New Economic Policy
Part 2: PKNS, Indah khabar dari rupa
Part 3: Kumpulan Perangsang Selangor Berhad
Part 4: Taking Ali Baba to new heights