Scomi and the “gift” to Penang commuters

In February, newspapers reported that government-owned RapidKL would take over the management of the bus system in Penang, putting an end to Penangites’ public transport woes after years of shoddy bus service. Prime Minister Abdullah Ahmad Badawi said it was the government’s “Chinese New Year gift” to Penang commuters.

The government’s “quick” move rendered obsolete the Penang state government’s move to set up its own firm, Penang State Bus Service (BNPP). At that time, I wondered why the federal government was preempting the BNPP, which had been in the midst of applying for permits from the Commercial Vehicle Licensing Board. The Penang state government for its part had already obtained a RM50 million (US$14.2 million) soft loan to buy new buses.

Fast forward to the present.

The Edge (30 April) reports that government-owned Syarikat Prasana Negara Bhd, which owns public transport infrastructure, recently awarded a RM31 million contract to supply buses for Penang to Scomi Engineering Bhd, a company whose major shareholder is Kamaluddin Abdullah, the prime minister’s son. Of course, Scomi “technically and financially gave good products and pricing,” said the Prasarana CEO in justifying the decision. So, it looks like Scomi is more qualified than any other company to supply buses, huh. Hmm…

That is just the appetiser though. The real prize is the RM20 billion at stake for urban rail projects: RM1.2 billion for the proposed Penang monorail project; RM5-10 billion for the Kota Damansara-Cheras line; and at least RM10 billion for LRT extension in the Klang Valley.

The Edge says that jostling among companies for the various contracts has already started: “But whispers along the corridors of power in Putrajaya allude to only the well-connected getting a slice of the pie, especially the job to provide the rolling stock and designing and implementing the electrification system.”

Those jobs were previously handled by foreign firms but now “local names have surfaced”.

The business weekly lists them as:

• MTrans Technologies Sdn Bhd, a company under – you guessed it – Scomi Engineering;
• MMC Metrail under Syed Mokhtar Al-Bukhary; and
• Doxport Technologies Sdn Bhd, a firm whose chairman is Umno treasurer Azim Zabidi.

The Edge quotes a source as saying, “Many are well aware of the power play behind the scenes and some companies have been subtly told not to waste time in bidding for the job. The lesser names would stay out. Even the foreign companies are likely to tie up with the local names to get a part of the job.”

Come again? This is a “gift” to Penang commuters? Let’s see who Prasarana awards the Penang monorail project – and the rest of the rail projects to – in the end. Watch this closely.

Anyway, this is an earlier article I wrote about how the deregulation and privatisation of the Penang bus service has proven to be disastrous, forcing the government to step in.

PENANG, Malaysia, Mar 12 (IPS) – A state-owned bus company is set to take over public transport in this traffic-clogged northern state after a concerted civil society campaign highlighted the failure of the existing privatised, deregulated bus service.

But public transport campaigners are not about to celebrate. They are wary of a federal-level firm, albeit government-owned, coming in to manage what is essentially a state-level metropolitan bus service. Earlier with the lack of enforcement by a federal-level regulatory board has not inspired confidence that an ‘imported’ solution is best. Full article: State to run city buses as privatisation fails