An overseas-bases international banker working with a prominent global financial institution has criticised the Request for Proposals procurement method used to select a project delivery partner to implement the Halcrow masterplan.
He added that SRS Consortium had no experience in delivering an integrated transport masterplan as the consortium comprised infrastructure contractors or property developers. This is an excerpt from his open letter to the Penang chief minister:
The procurement approach adopted to date has not delivered the world-class planning expertise which is required for a sustainable Penang transport masterplan.
I know of no other public entity in the world that has used the Request for Proposals procurement method to select a project delivery partner for an estimated RM46bn (US$11.5bn at current exchange rates) investment of the scope and ambition of the SRS proposal, which has significant, complex and multi-generational impacts,” wrote the banker.
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, he said.
In the case of the Penang transport masterplan, the Request for Proposal objectives are exceedingly broad, vague and complex. “As such, costs and risks are near impossible to estimate for any reputable bidder. Therefore, a fair and robust comparison of technical and financial proposals amongst different bidders is certainly impossible (with all due respect to KPMG),” he added
Furthermore, there is confusion between the roles of the state government and the project delivery partner in terms of accountability for planning functions, under the current arrangement, he said. a near abdication of the roles and responsibilities of the state government – which is clearly undesirable.
The state government needs to focus on establishing consensus on critical and urgent steps to formulate, implement, manage, monitor and enforce integrated land use and transport plans especially with the recent dissolution of the Land Public Transport Commission (Spad).
Given the scale and ambition of the proposed investments, a new state transport unit needs to be established with the required expertise, resources and mandate to ensure that the public good is not compromised by the profit incentive of a private project delivery partner.
SRS Consortium has no demonstrated experience or expertise in delivering an ambitious integrated transport masterplan.
Again, with due respect to the state government and KPMG, the capabilities of SRS Consortium, which consists of Gamuda Bhd, Loh Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd, as a project delivery partner are not evident.
READ MORE: Penang Forum calls for greater dialogue on pressing issues
None of the consortium members have demonstrated experience or expertise in implementing an integrated transport plan on a scale such as the Penang transport masterplan as they are either engineering or property companies experienced in delivering infrastructure projects or developing real estate.
They clearly do not have the requisite world-class expertise in implementing sustainable, integrated transit and land-use plans. Entrusting the future vision of Penang and the quality of life of our children and grandchildren to an untested consortium such as SRS seems like a recipe for disaster.
I would urge you to review the contracting arrangement with SRS Consortium and instead formulate a plan to establish a state transport unit with expertise in managing public-private partnership (PPP) projects such as the transport masterplan proposals.
Along the same lines, I would also urge you to revisit the arrangements with Consortium Zenith.
Read the international banker’s full open letter to the Penang chief minister.