PEMANDU lacks transparency over ‘disappearing’ projects, says think-tank

By Lee Wei Lian
The Malaysian Insider
Jun 07, 2012

KUALA LUMPUR, June 7 — PEMANDU’s insistence on presenting an image of “perfection” and not disclosing issues and problems related to its Economic Transformation Programme (ETP) projects could backfire later, said the Research for Social Advancement (REFSA) think-tank today.

In its latest critique of Putrajaya’s efficiency agency, the opposition-linked think-tank questioned PEMANDU’s alleged failure to be upfront with problems and progress related to three projects — the LFoundry wafer fabrication (wafer fab) plant in Kedah, Damansara City 2 in KL and the Marina Island Pangkor’s Extension.

REFSA pointed out in a report today that LFoundry had declared itself insolvent in Germany and that it was not listed as a tenant in Kulim Hi-Tech Park where the wafer fab was supposed to be built and yet PEMANDU had in its annual report for last year declared the project 100 per cent completed.

The report, which was titled “Dissecting the ETP Annual Report: Part 2 — The mystery of the disappearing entry point projects (EPPs)”, also noted that there was no mention of any progress on Damansara City 2 despite the project being one of the largest related to KL and also no information on progress on the Marina Island Pangkor Extension.

The authors of the report noted that Chris Tan, PEMANDU director for the Electrical & Electronics NKEA (National Key Economic Area), admitted that the German partners for the Kedah wafer fab were forced to pull out but the Malaysian Industrial Development Authority (MIDA) managed to increase wafer fab capacity via a plan B.

“Taking Mr Tan’s comments at face value, PEMANDU’s achievements are even more breathtaking. It surmounted difficulties with the original German partners and managed to find ‘other companies’ and still complete a 200mm wafer fab factory all within 12 months!” said the report. “Or is the truth more prosaic, and the reality is that there is no 200mm 100 per cent completed wafer fab as claimed in the Annual Report?”

REFSA said that if the project was completed as claimed, then PEMANDU should reveal who were the companies that had stepped in and to publish a case study on how the project was salvaged so that other Malaysians could learn from it.

It also said that it was “shocking” that the RM1.9 billion Damansara City 2 project by Guocoland, the largest project in Entry Point Project (EPP) 7, received “no mention at all” in the ETP Annual Report and instead three additional city heritage routes and the upgrading of Masjid Jamek were highlighted.

EPP 7 is supposed to be creating iconic places and attractions in the Greater Kuala Lumpur/Klang Valley NKEA.

The report also asked if the RM600 million Marina Island Pangkor Extension which had been showcased in the 4th ETP Update in March 2011 had been “washed away” as no progress update was given.

REFSA acknowledged that uncertainty and adjustments are part and parcel of business and that it was normal for projects to be varied, postponed or even abandoned.

It added that it would be irrational to expect all the EPPs under the ETP to progress with smooth precision.

“Glossing over and ignoring issues as PEMANDU is wont to do is a terrible approach,” said REFSA. “Plans, assumptions and forecasts must accommodate changing circumstances. Pretending that all is going perfectly to plan merely results in an escalating divergence between reality and delusions of grandeur, and the facade will ultimately come crashing down.”

It also urged PEMANDU must be transparent about the EPPs which are facing difficulties so that their impact on the ETP could be addressed and the projects given special attention.

REFSA said that it rarely detects any “hints of difficulty” in PEMANDU’s “rhapsodic” reports and that by disclosing problems and remedial action, PEMANDU would be helping other Malaysians avoid mistakes.

PEMANDU was established soon after Prime Minister Datuk Seri Najib Razak came into office in 2009 and is tasked with spearheading efforts to reform the economy and government administration under the Government Transformation Programme (GTP) and Economic Transformation Programme (ETP).

It is headed by oil and gas veteran Datuk Seri Idris Jala who also served a stint as CEO of Malaysia Airlines.

Critics have often expressed doubt over whether the ETP and GTP will succeed where attempts by previous administrations have failed and have also sometimes described the ETP as merely serving the five-year plans of the country’s big businesses.

Jala responded that the ETP and GTP are different from older reform attempts as they are specific programmes with actionable goals and deadlines.

He is also known for his optimistic outlook and often urges members of the public to focus on the positives.

PEMANDU holds regular updates where it disseminates information on latest investment figures and new project details.

It also has a large communications team that reaches out via social and conventional media.