Time to scrap PDP model in Penang as well

29
375

Tony Pua has just said the project delivery partner (PDP) model for major infrastructure projects is likely to end soon.

Let’s see who else has said that the PDP model for huge infrastructure projects is problematic.

Well, there’s me. I have always maintained that the PDP model presents an inherent conflict of interest, especially if contractors and developers are the project delivery partner and if they get involved in the planning side of things. They can hardly be expected to be independent consultants advising or proposing to the government the most cost-efficient way forward for the rakyat with the least harm to the environment.

Let’s see who else has said the PDP model is not a good idea:

Well, there’s Tony Pua again – back then, as an opposition MP, when he criticised the PDP model for pretty much the same reasons he is doing now. So he has been consistent.

Gamuda founder Koon Yew Yin has said it.

Penang Forum’s Lim Mah Hui and USM academic Ahmad Hilmy have said it.

A Concerned International Banker has said it: “Firstly, a project delivery partner is used only for relatively small (in comparison), well-specified projects with very clear deliverables and timelines when the public contracting authority does not have the technical/financial capacity to implement these projects.”

A RM46bn intergenerational proposal certainly doesn’t fall into that category.

And now Tony Pua, this time as special officer in the Ministry of Finance, has come out strongly against the PDP model once again:

READ MORE:  Penang transport masterplan: Back to the drawing board

The award of big infrastructure developments to project delivery partners (PDPs) by the government is likely to come to an end after incidences of cost overruns affected its budget, said Tony Pua, special officer to the finance minister…

“There are some benefits from PDPs, especially if there are delays and cost overruns and these are borne by them, but instead of pricing cost overruns into their contract, we are paying more for the same thing we would get.

“[In PDP] contracts, they get 6% of the cost of the project. The incentive is for the project manager to inflate the cost of the project because it gets 6% of whatever the cost of the project is. So this structure needs to change,” he said.

Pua was citing the example of the RM21 billion Klang Valley mass rapid transit (MRT) Line 1 consortium, consisting of MMC Corp Bhd and Gamuda Bhd, and one of the first projects to be based on the PDP concept, whereby the cost did not include RM7 billion associated costs for engineering consultancy, system integration works, site investigations and PDP fees.

“I am not the finance minister and there is no official decision but at this point of time, we do not see any big projects going forward being awarded via the PDP mechanism,” he said.

Well, actually there is. Look up north.

The Penang government is adamant about pushing forward with the controversial RM46bn transport proposal using the PDP model with SRS Consortium, made up of Gamuda Bhd (60%) and two Penang-based property developers, Ideal Property Development (20%) and Loh Phoy Yen Holdings (20%). The state government hopes to enter into a PDP agreement with SRS Consortium once federal approvals are obtained.

READ MORE:  The pink diamond: When truth is stranger than fiction

In the first place, where did the Penang government get the idea for the PDP model? Who briefed them on this PDP concept before the request for proposals was called in August 2014? Who briefed them that it was okay for a contractor, rather than an independent consulting firm, to be a project delivery partner? Something doesn’t add up here.

The state should tell us when it first held discussions with Gamuda or the two developers on the PDP model. I think it would be interesting to know the exact date the first discussions were held (in relation to the date the RFP was first called) and the various venues such discussions were held. Transparency, ya.

And what does the state government have to say now in response to Tony Pua’s comments?

And what is the Ministry of Finance’s position on the PDP model in Penang. Shouldn’t the PDP be scrapped in Penang as well?

The PDP model is clearly ill-suited for Penang and we can see that in SRS’ exorbitant reclamation proposal and its short-sighted plan for a massive RM8bn 19.5km six-lane highway (including 10.1km of tunnels) – a highway that will only get congested again by 2030 (as indicated in the EIA report).

Hardly the most visionary plan.

Please help to support this blog if you can.

Read the commenting guidlelines for this blog.

29
Join the conversation

avatar
2000
15 Comment threads
14 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
11 Comment authors
Long XuanglissantiaGeorgeShriekNguyen Ban Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
M Pillay
Guest
M Pillay

Penang Transport Plan to be scrapped ? then Penang Forum should focus on controlling the number of cars on island not to exceed the ceiling limit. Dr Lim MH and Khoo Salma should walk the talk by trading off their vehicles to use RapidP or ride bicycles.

Norman
Guest
Norman

Penang has unveiled the Penang 2030 – an action plan which maps out the state’s development in the next 12 years. Themed “A Family-focused Green and Smart State to Inspire the Nation”, the policy package is the state’s four-prong vision to increase livability to enhance quality of life, upgrade the economy, empower the people to strengthen civic participation an invest in the built environment. The highlight includes a “Made in Penang” approach to boost a niche manufacturing sector, the adaptation of a “sponge city” in future town planning to mitigate flash floods, and reducing reliance on the federal government in… Read more »

bigjoe
Guest
bigjoe

You are asking question you already know the answer and just want to put the onus on the other side. You know why its difficult to get rid of the PDP in PTMP – its a signed deal BEFORE PH took over the govt and even with PH in Putrajaya, Penang is low on the priority for mega funds from a strapped federal govt. You also know you cannot change on a dime on most things govt especially in transport.

So the question is why keep asking question you already know the answer?

tunglang
Guest
tunglang

Nothing is signed with the deadly compensation fine print (a favourite of CAT fear mongering habit on Penangites). Paham kah???

Shriek
Guest
Shriek

Ah pek can tell this to singland over few cents in the water treaty.

Norman
Guest
Norman

Singland charged Bolehland S$15 million over the delay of HSR. Bolehland must insist on new water deal to break even.

looes74
Guest
looes74

So as to create massive public outcry just like Anil Netto’s good friend, ktemoc who resides in Australia

Long Xuan
Guest
Long Xuan

Penang transport system:

Norman
Guest
Norman

Putrajaya has (allegedly) appointed Petron as “one of” the fuel providers for government vehicles and the letter has gone viral.

This is because Prime Minister Dr Mahathir Mohamad’s son Mirzan is (allegedly) a director in Petron’s parent company Petron Corporation.

tunglang
Guest
tunglang

This big brother typhoon reminds me of Penang’s last November little brother storm.
Same ferocity of high speed wind, relentless rain, high sea waves & floods.

Typhoon Jebi hits Japan with heavy winds, pounding rain
https://edition.cnn.com/2018/09/04/asia/japan-typhoon-jebi-intl/index.html

Shriek
Guest
Shriek

Ah pek, why don’t ask japs to stop expanding their islands like pg cutting down hills and reclaim more lands from sea. Perhaps ask japs to reconsider what 1941 expanding overseas

tunglang
Guest
tunglang

6 Cities Highways’ Removals That Changed Their Cities Forever 别人都在拆,那我们还需要高架路吗?高架路越修交通越堵 韩国欧洲早已放弃修高架 https://www.change.org/p/13396084/u/23225715?utm_medium=email&utm_source=petition_update&utm_campaign=417552&sfmc_tk=Ly7IMnj0ygpR1Y6zdDR7kvWoofn7DtivkY8LueFKr3xjQmjc0soOVto8yoog1N7x&j=417552&sfmc_sub=370859553&l=32_HTML&u=65280102&mid=7259882&jb=4 Many freeway/highway systems were overbuilt in an auto-obsessed era. It was decades later that cities realized they were actually healthier, greener, and safer without them. Okay, you’re thinking, but where do all the cars go? It turns out that when you take out a high-occupancy freeway it doesn’t turn the surface streets into the equivalent of the Autobahn. A theory called “induced demand” proves that if you make streets bigger, more people will use them. When you make them smaller, drivers discover and use other routes, and traffic… Read more »

Shriek
Guest
Shriek

You kau beh over high density. Low density means sprawling. Sprawling means bigger area. Don’t expect ah peks to walk long distance

Shriek
Guest
Shriek

Go for alliance project. If profit every gain. If loss, everyone orso mati. Teamwork.

Norman
Guest
Norman

Penang has finally received the green light to build People’s Housing Project (PPR) in all five districts in the state, announced Penang Housing, Town, Country Planning and Local Government Committee chairman Jagdeep Singh Deo.

Describing the move as “positive”, Jagdeep said Housing and Local Government Minister Zuraidah Kamaruddin had written to Penang Chief Minister Chow Kon Yeow on July 31 asking the state to identify land for the PPR to be built.

https://www.thestar.com.my/news/nation/2018/09/03/jagdeep-penang-finally-gets-approval-for-ppr-in-all-five-districts/#qhzCyjEBcH5a8pxg.99

glissantia
Guest
glissantia

PH stated earlier that it was cancelling Klang Valley MRT3 (RM35-45 billion, started in 2017) because BN had switched from the “proven PDP model” (used for MRT1/2) to turnkey model – a change that disqualified local contractors. So, something certainly “does not add up” here.

In his advisory (non-Minister) role, Tony should emulate Daim and not Anwar, i.e. control the urge to make policy statements.

glissantia
Guest
glissantia

There is also the mysterious “Public-Private Partnership”. PM’s Dept. had a sub-dept. called Ukas to promote this. PH only transferred it to another ministry. Is this back-door deregulatuion?

George
Guest
George

Read today Star got special report Chief Minister Chow telling us why PTMP is needed instead of Halcrow plan. Penang Forum will refute?

Norman
Guest
Norman

Penang gears up to solve traffic woes https://www.thestar.com.my/business/business-news/2018/09/01/penang-gears-up-to-solve-traffic-woes/#19E4y6kwC87SFRrj.99 The concept of a transport masterplan for Penang was first drafted by Halcrow, but critics say it is for a period of 20 years. Halcrow’s proposal reportedly favours the BRT and trams, but implementing these will mean making Penang’s roads, already cramped for space, even narrower and possibly making conditions for driving even more unbearable. The new PTMP replaces that and looks at a longer timeframe to cater for Penang’s transport needs. According to CM Chow, the Georgetown FIZ Bayan Lepas corridor has the highest travel demand, with the Tun Dr Lim… Read more »

Shriek
Guest
Shriek

News reported shops and radio announcer Alan j. protest against billion dollars light rail tram project in parramatta city suburb to Sydney. They fear what is like Sydney. The tram is costing their business. They have to retrench staff, close shops and even sue the gomen. Spanish contractor is an experienced tram contractor but a pedestrian a young girl get electric shock from construction work.did half crow account for all services in the tram route? Drain, telephone, tnb, pipes and some private utilities?

tunglang
Guest
tunglang

Q: And what is the Ministry of Finance’s position on the PDP model in Penang. Shouldn’t the PDP be scrapped in Penang as well?

Are you asking a former CM now in MOF to scrap his legacy?

Shriek
Guest
Shriek

What had mof has to do with the PDP model? What is there for mof to say if they did not foot a single cent? Pg is only a state and who had the expertise to do multi billion ringgit project?