pywong
27th November 2008, 10:55 AM
There are a few things we need to understand about this project. Then we will be able to interpret the media spin and appreciate how the media is used to shape and condition the Rats' thinking.
1. This project is technically unnecessary. A better option is rainwater harvesting in Selangor to reduce water demand and replacement of the leaking pipes. But this does not translate into fast money for the Ruling Class aka UMNO and their cronies.
Let's analyse the article below to see how spinning is done.
Japan, Malaysia tussle over water project contractor
KUALA LUMPUR, Nov 27 – The Pahang-Selangor water transfer project hangs in the balance over the question of whether the Malaysian government or Japan has the final say on which consortium is awarded the lucrative contract to bore a 45km tunnel through the Titiwangsa Range.
This is being spun as a sovereignty issue. Nothing make villains look better than to put the cloth of patriotism around them.
At stake also is a RM2.5 billion soft loan from the Japan Bank for International Cooperation (JBIC).
The Malaysian Insider has learnt that the Cabinet and officials from the Ministry of Energy, Water and Communications are resisting attempts by the Japanese International Cooperation Agency to influence the choice of the successful bidder for the contract.
It could also mean that JICA is insisting on a better negotiating strategy to get the best bid.
Government officials have been tight-lipped about the behind-the-scenes wrangling but Datuk Joseph Salang Gandum’s comment in Parliament last week gave a hint of the seriousness of the issue.
When asked to give an update on the soft loan from Japan Bank for International Cooperation (JBIC) and the status of the water transfer project, he remarked: “Malaysia is a sovereign country and will not sell its dignity and name…the government already has plans if the money is not channelled to us due to certain reasons.”
Here the spinning starts. We see code words like "sovereignty", "dignity" cropping up. When Malaysian negotiators get stuck, they resort to such language to justify their dumb actions.
Checks show that three bids for the project were received from: Shimizu-Nishimatsu-UEM-IJM (UMSO crony); Taisei-HRA Teguh (need to check whether this is a crony or not. Can anyone help?) and Kajima Construction.
From the start, the government made it clear that tender for the water transfer project should be a benchmark for open tenders in the country.
The Ministry of Energy, Water and Communications came up with an international competitive bidding scheme to select a international consultants who would scrutinise the bids. It is understood that two of the bidders submitted conditional bids.
Under the international tender process, any company or party that submits a conditional bid should be disqualified. This is because the price quoted in the conditional bid could change substantially.
For example, the lowest bidder for the 45-km tunnel job submitted a conditional bid that was based on a particular rock strength of the tunnel. But independent reports obtained by the government suggest that the rock strength is higher than what the cost estimates are based on.
There are two ways to interpret this.
1. The Govt may be referring to hardness of the rock and the cost associated with blasting through such rock. Generally, the harder the rock, the better it is for a tunneler as it means less shoring costs. In that case, the tender cost should go down, not up.
2. The other way to interpret it is that the tunneling method is by boring, not blasting. Then a high-strength (hard) rock is more expensive to bore. But there is substantial saving in reduced shoring (propping up the tunnel) costs.
Overall, it would seem more advantageous to encounter high-strength rock rather than low-strength rock as there is less risk of tunnel collapse and higher safety. So I don't know what point the Govt is trying to make here.
As such, the government believes that it could be saddled with a variation order of several hundred million ringgit if it awards the contract to the consortium with the lowest bid.
It is in favour of awarding the contract for the project to the company which had submitted the second lowest bid, which was also the only bidder who did not submit a conditional tender.
But JICA is insisting that the contract be awarded to the lowest bidder.
The Malaysian Insider understands that the Cabinet was briefed on the stand off and supports the decision of the Energy, Water and Communications ministry to award the contract to the second bidder.
A government official told The Malaysian Insider: “The terms in the bid documents state clearly that we are not bound to accept the lowest bid but must take into account all factors in the tender. Accepting a conditional bid could be disastrous for the government. Based on our research, there is every chance of a variation order between RM200 million to RM400 million.”
We can put any figure we like here to justify a particular action. After it is over, no one will be any the wiser. So this is just spin.
It is understood that the difference between the lowest and second bid is RM150 million.
JICA has apparently asked the government to negotiate with the party with the lowest tender and get them to remove the “variable component” of the bid.
This is normal practice. The only thing is that the Govt have to extend the same courtesy to the other two bidders to submit clarifications to their bid. Any financier would want to pay the lowest possible cost.
Government officials believe that going down this path could lead to suits by the two other companies that took part in the tender process. The reason: there is a clause which states that no party can alter, correct or withdraw anything from their bid documents once it has been opened and evaluated.
So the standoff continues. But it is learnt that government officials are willing to forego the Japanese loan.
“This is an issue of sovereign rights. Malaysia will be a joke if we have an open tender but don’t follow the rules of the game.”
Malaysia is already a joke. So, what's the difference.
It is unclear how the government plans to raise the RM1.5 billion for the tunnel project if the loan falls through.
We need transparency in tenders. Normally in international tenders, we invite at least 5 pre-qualified tenderers. For tunneling, we would invite the Austrians who are one of the best tunnelers in the world. We would also invite the Chinese because they have enough experience and financing capability to undertake this project.
So... recall tenders with more tenderers involved. Do it transparently.
1. This project is technically unnecessary. A better option is rainwater harvesting in Selangor to reduce water demand and replacement of the leaking pipes. But this does not translate into fast money for the Ruling Class aka UMNO and their cronies.
Let's analyse the article below to see how spinning is done.
Japan, Malaysia tussle over water project contractor
KUALA LUMPUR, Nov 27 – The Pahang-Selangor water transfer project hangs in the balance over the question of whether the Malaysian government or Japan has the final say on which consortium is awarded the lucrative contract to bore a 45km tunnel through the Titiwangsa Range.
This is being spun as a sovereignty issue. Nothing make villains look better than to put the cloth of patriotism around them.
At stake also is a RM2.5 billion soft loan from the Japan Bank for International Cooperation (JBIC).
The Malaysian Insider has learnt that the Cabinet and officials from the Ministry of Energy, Water and Communications are resisting attempts by the Japanese International Cooperation Agency to influence the choice of the successful bidder for the contract.
It could also mean that JICA is insisting on a better negotiating strategy to get the best bid.
Government officials have been tight-lipped about the behind-the-scenes wrangling but Datuk Joseph Salang Gandum’s comment in Parliament last week gave a hint of the seriousness of the issue.
When asked to give an update on the soft loan from Japan Bank for International Cooperation (JBIC) and the status of the water transfer project, he remarked: “Malaysia is a sovereign country and will not sell its dignity and name…the government already has plans if the money is not channelled to us due to certain reasons.”
Here the spinning starts. We see code words like "sovereignty", "dignity" cropping up. When Malaysian negotiators get stuck, they resort to such language to justify their dumb actions.
Checks show that three bids for the project were received from: Shimizu-Nishimatsu-UEM-IJM (UMSO crony); Taisei-HRA Teguh (need to check whether this is a crony or not. Can anyone help?) and Kajima Construction.
From the start, the government made it clear that tender for the water transfer project should be a benchmark for open tenders in the country.
The Ministry of Energy, Water and Communications came up with an international competitive bidding scheme to select a international consultants who would scrutinise the bids. It is understood that two of the bidders submitted conditional bids.
Under the international tender process, any company or party that submits a conditional bid should be disqualified. This is because the price quoted in the conditional bid could change substantially.
For example, the lowest bidder for the 45-km tunnel job submitted a conditional bid that was based on a particular rock strength of the tunnel. But independent reports obtained by the government suggest that the rock strength is higher than what the cost estimates are based on.
There are two ways to interpret this.
1. The Govt may be referring to hardness of the rock and the cost associated with blasting through such rock. Generally, the harder the rock, the better it is for a tunneler as it means less shoring costs. In that case, the tender cost should go down, not up.
2. The other way to interpret it is that the tunneling method is by boring, not blasting. Then a high-strength (hard) rock is more expensive to bore. But there is substantial saving in reduced shoring (propping up the tunnel) costs.
Overall, it would seem more advantageous to encounter high-strength rock rather than low-strength rock as there is less risk of tunnel collapse and higher safety. So I don't know what point the Govt is trying to make here.
As such, the government believes that it could be saddled with a variation order of several hundred million ringgit if it awards the contract to the consortium with the lowest bid.
It is in favour of awarding the contract for the project to the company which had submitted the second lowest bid, which was also the only bidder who did not submit a conditional tender.
But JICA is insisting that the contract be awarded to the lowest bidder.
The Malaysian Insider understands that the Cabinet was briefed on the stand off and supports the decision of the Energy, Water and Communications ministry to award the contract to the second bidder.
A government official told The Malaysian Insider: “The terms in the bid documents state clearly that we are not bound to accept the lowest bid but must take into account all factors in the tender. Accepting a conditional bid could be disastrous for the government. Based on our research, there is every chance of a variation order between RM200 million to RM400 million.”
We can put any figure we like here to justify a particular action. After it is over, no one will be any the wiser. So this is just spin.
It is understood that the difference between the lowest and second bid is RM150 million.
JICA has apparently asked the government to negotiate with the party with the lowest tender and get them to remove the “variable component” of the bid.
This is normal practice. The only thing is that the Govt have to extend the same courtesy to the other two bidders to submit clarifications to their bid. Any financier would want to pay the lowest possible cost.
Government officials believe that going down this path could lead to suits by the two other companies that took part in the tender process. The reason: there is a clause which states that no party can alter, correct or withdraw anything from their bid documents once it has been opened and evaluated.
So the standoff continues. But it is learnt that government officials are willing to forego the Japanese loan.
“This is an issue of sovereign rights. Malaysia will be a joke if we have an open tender but don’t follow the rules of the game.”
Malaysia is already a joke. So, what's the difference.
It is unclear how the government plans to raise the RM1.5 billion for the tunnel project if the loan falls through.
We need transparency in tenders. Normally in international tenders, we invite at least 5 pre-qualified tenderers. For tunneling, we would invite the Austrians who are one of the best tunnelers in the world. We would also invite the Chinese because they have enough experience and financing capability to undertake this project.
So... recall tenders with more tenderers involved. Do it transparently.