Worries over price of cement

STAR, Tuesday January 1, 2008

Builders say automatic price mechanism will raise costs

By LAALITHA HUNT

PETALING JAYA: Two bodies representing builders are worried that the automatic price mechanism (APM) for setting cement prices, due to take effect today, would further increase their cost burden and in turn affect new property launches.

The Real Estate and Housing Developers Association of Malaysia (Rehda) and Master Builders Association Malaysia (MBAM) said in joint statement that “any attempt to further increase the price of cement will definitely affect project costs. Inevitably, this will result in upward revision of prices of new housing and property launches.”

Deputy Prime Minister Datuk Seri Najib Tun Abdul Razak made the announcement on the automatic price mechanism (APM) earlier last year.

The two associations, whose members are the main end-users of cement, said the APM was not in the interest of the industry or property buyers. They called for the scrapping of the APM, saying cement prices should remain status quo.

“Cement is a major and essential component of the construction industry. The country's consumption of cement totalled 19.5 million tonnes in 2006 and it is expected to increase due to the planned developments under the Ninth Malaysia Plan,” MBAM president Patrick Wong said.

On the average, cement and cement-related products such as cement sand bricks, plasters, concrete roof tiles, reinforced concrete piles, concrete culverts, ready-mixed concrete, drainage, among others, comprise 50% of the materials used in a project.

The Government believes the introduction of the APM would give reasonable profit margin to encourage re-investment by cement manufacturers, because prices would automatically adjust to costs.

But Wong, and Rehda president Ng Seing Liong, said “with the APM, cement prices would be revised every four months. And, with regular review, the industry believes there is a high tendency that prices would be revised upwards instead of downwards.”

“Developers and contractors are disappointed that no prior consultation was made with the main players of the Malaysian property and construction industry, consisting of more than 2,000 developers and 60,000 contractors,” Wong said.

According to Wong, cement makers had asked the Government for an increase in prices to offset rises in their production costs and to match prices in the region.

He suggests that for the interim, cement should remain a price-controlled item to ensure that the rollout of infrastructure and housing projects, especially affordable homes, are not affected.

“In the long run, the Government should consider allowing free market forces to decide the price of cement. By opening up the market, market forces will find their own equilibrium and this would cause prices to be more stable,” Wong said.

Ng added that since the price control on cement would create market distortion, in the form of shortages, its import should be allowed.

“As it is, contractors and developers are paying RM10.90 per 50/kg bag effective Dec 1, 2006 when the price before adjustment was RM9.90 per 50/kg bag despite cement operators operating at 60% of capacity,” Ng said.

“Imports would ensure uninterrupted supply of cement. This would also encourage competition and greater efficiency among local cement manufacturers, instead of unhealthy and uncompetitive oligopoly,” he said.

The fence that eats the rice

STAR, August 12, 2007

POINT OF VIEW
By TUN HANIF OMAR

The police force and the Anti-Corruption Agency – two crucial institutions leading the fight against malpractices and corruption. Yet they are sadly disappointing in their inability to even clean up their own backyards.

TWO once greatly respected institutions have continued to remain notorious, using the word in its plain meaning but over the past 10 years for the wrong reasons.

The first we all know because among the first things that this government did after the last general election was to convene a Royal Commission from February 2004 to enquire why that institution had gone so far down the road of self-destruct and to make recommendations as to how to enhance again its operations and management. That was our Polis Diraja Malaysia (PDRM).

The Royal Commission Report was released in April 2005. Numerous recommendations were made but it was the setting up of the Independent Police Commission Against Malpractices and Corruption (IPCMC) that was felt to be cardinal to the whole effort. It was strongly felt that the rot within the PDRM was so deep-seated that an independent, extrinsic monitoring authority was needed to help the IGP and the Police Force Commission steer back the force to the straight and narrow.

I briefed the Royal Commission that police corruption was so extensive that a very senior ACA officer had confided in me and another top retired police officer that 40% of the senior officers could be arrested without further investigations – strictly on the basis of their lifestyles. One state police chief had a net worth of RM18mil. My friend and I had watched the force getting deeper and deeper into the morass of corruption.

It was the daily talk and the butt of gibes on the golf courses that embarrassed retired police officers no end; yet even we were stunned by this revelation and its implication. Would the force we had served for so long and which had given us so much experience and such great pride for what we had built it into, be destroyed in the expected ACA action?

I could not help telling the ACA officer that he really had his work cut out for him and that his fight against corruption was the most important fight facing the country but I hoped that he could effectively stamp out this corruption without destroying our PDRM which had done such yeomen service to the nation.

The Royal Commission Report was made public two-and-a quarter years ago, yet PDRM has still not burnished its image. It is still mired in controversy. Need I say why? It is so clearly divided into at least two groups at the top and, consequently, affects the officers below. That is why one group carries out arrests of alleged crime kingpins and the other group and the ACA have allegedly interrogated the arresting officers in the belief that the first group is eliminating the informants of the other group.

Whom can we believe when one group is headed by the IGP and the other by a police director backed by the Deputy Minister of Internal Security? They are at opposite poles. Both the IGP and the Deputy Minister of Internal Security have allegations of corruption thrown at them but both have been investigated by the ACA, the content of the reports to the AG we do not know. What we know is that the AG has absolved both of them. So, between the two, whom are we to believe?

That is why the IPCMC is so important – so that we have an instrument to get to the truth. By not letting the IPCMC see the light of day after such a long study by the AG speaks volumes of the AG’s understanding of the seriousness of the problem and its effect on the criminal justice system. The AG himself has lost his credibility for this recalcitrance and for his “defeats” in recent high profile cases as well as for some high profile cases not seeing the light of day after so long in his hands: and this is disastrous because his Chambers is the second other vital institution in the criminal justice system.

So, whither go our vital institutions? The ACA is another vital institution. It is its abject failure to act hard against the highly corrupt at the very top levels all these years that has allowed this pervasive corruption culture to thrive and grow within the public sector. Let me say it here: you will not stamp out corruption by only giving talks or by tackling only the lower rankers. The lower rankers are emboldened by the top-level corruption that could get away.

Can the new ACA chief, drawn from within the ACA ranks itself for the first time, show a greater and singular dedication to his bounden duty? We shall see and I wish him strength and success. But so far he has not shown the kind of mettle that we must expect from people in his new post. He must be proactive and independent!

Operators struggle with rising costs

16 August 2007
New Straits Times

KUALA LUMPUR: Big express bus companies share a common problem with their smaller and newer counterparts: They are struggling to cope with rising costs.

Increases in the cost of diesel, maintenance and repairs are putting a strain on them, said Konsortium Transnasional Bhd executive director Tengku Hasmadi Tengku Hashim.

This has taken a toll on the smaller operators to the extent that some of them are trying to sell their business.

KTB and the Sri Maju Group, another established player, have admitted that they are losing money from their bus operations.

Sri Maju operates the Sri Maju/Jasaramai fleet of express buses that ply the North-South Expressway.
KTB manages the Transnasional, Plusliner and Nice coach fleet.

The last express bus fare increase was in 2005 when it went up by 20 per cent.

According to a Sri Maju spokes- man, funds were constantly being channelled by directors to keep the company going.

In the case of KTB, they had come up with innovative ideas to increase revenue.

Tengku Hasmadi said higher income was being generated by increasing passenger volume and leasing the buses for charter during slow periods.

"We have had to go taller and bigger just to accommodate more passengers, from the normal 38 to 59."

He said a fare hike of about 20 per cent was timely.

"The last increase was in 2005, but diesel prices have gone up three-fold since then. It is inevitable that some of the smaller operators are not able to sustain given the rising costs. This would lead them to cut corners."

The Sri Maju spokeswoman said the fact that toll charges along the North-South Expressway were expected to increase next year would put more pressure on bus companies.

Tengku Hasmadi said the government should extend more help to express bus operators.

There was also a need to revise up the life span of express buses from the current 10 years imposed by the Commercial Vehicle Licensing Board.

The other issue he highlighted was the diesel subsidy of RM1.43 sen per litre, which he said only applied to about one-third of the volume used by a company.

Health Ministry to set minimum price for cigarettes soon

Monday August 13, 2007
STAR

The Health Ministry has had enough of the price war among cigarette companies and plans to set the minimum price soon.

Health Ministry parliamentary secretary Datuk Lee Kah Choon said it could be very soon.

“When we feel it is time, we will announce it and enforce the new price,” he said.

Lee said the ministry was unhappy the price war has hampered the anti-smoking campaign.

“As far as we are concerned, the cigarette companies can withdraw their price war now and have another price war later but we are not going to play cat and mouse with them.

“The price war frustrates the government’s effort to discourage smoking among Malaysians and we are going to take measures to overcome the problem,” he said after launching the state-level Jom Tak Nak Merokok programme at Mak Mandin here yesterday.

The price war, which started in April, has made cigarettes cheaper despite the annual increase in duty, as manufacturers were cutting prices and offering attractive packaging to lure the young.

Lee hinted that duty on tobacco would be increased in the coming Budget. He said although each pack of cigarettes had been slapped with taxes of at least RM3.60, some manufacturers could still sell a pack for about RM4.

“This not what we want. This is an unhealthy way of promoting their products “ he stressed.

More abattoirs to be appointed to open up beef trade

Thursday August 9, 2007

More abattoirs to be appointed to open up beef trade

By EDDIE CHUA

eddiechua@thestar.com.my

PETALING JAYA: The cartel that has been controlling beef imports for the last 20 years has been targeted to be broken by the Government.

Forty more overseas abattoirs are expected to be allowed to export beef to Malaysia, which would lead to a better supply and cheaper beef.

“We don’t want the business to be monopolised,” Veterinary Services Department director-general Datuk Dr Aziz Jamaluddin told The Star.

He said the decision to “liberalise the beef trade with more suppliers” was the decision of Agriculture and Agro-Based Industry Minister Tan Sri Muhyiddin Yassin, who was upset with the monopoly.

“Allowing more abattoirs to supply halal beef here will benefit consumers directly. This will prevent anyone dictating the price and supply,” he added.

Dr Aziz said the department’s inspectors would visit abattoirs in India, Brazil, Uruguay, Argentina, Sudan, Kenya, Zimbabwe, Australia and New Zealand next week.

“The new abattoirs must comply with the halal meat requirement. Only those who can supply halal meat will be allowed to export their products here,” he said.

He said there was no shortage of beef “but certain groups are manipulating prices and supply”.

An industry source said that at least five groups of importers have been dictating prices of between RM8 and RM12 per kilo, depending on the cut and season.

Malaysia depends on 32 abattoirs in Argentina, Australia, Brazil, China, India, New Zealand and Uruguay for its beef supply.

Almost 85% of the supply is imported from India, and much of it is actually buffalo meat. The country imports about RM840mil worth of beef products annually.

Meanwhile, Muhyiddin said his ministry and the Domestic Trade and Consumer Affairs Ministry would be monitoring the 40% price increase for buffalo meat imported from India.

NS water supply deal scrapped

PLANS to privatise the water supply in Negeri Sembilan have been aborted as the new tariffs proposed by a consortium planning to undertake the project was exorbitant.

Menteri Besar Datuk Seri Mohamad Hasan said although the state government had awarded a letter of intent (LOI) to NS Water Konsortium (NSWK) for the purpose, the Economic Planning Unit (EPU) in the Prime Minister’s Department had rejected it.

“Although we issued the LOI, the EPU still has the final say. It felt that the proposed tariffs are too high,” he said.

Mohamad was speaking to reporters after opening the Kemas nursery at Taman Satria in Senawang, Negeri Sembilan.

Following the EPU decision, the state government had decided to corporatise the Water Supply Department (JBA) instead.

Muhamad said the state Water Enactment would be amended to provide for this.

The project was part of the RM5bil privatisation bid that NSWK had proposed to undertake for 30 years.

Recently, NSWK chairman Datuk Rahiman Dawood had disputed a claim by Zecon Bhd that it had successfully bagged a RM125mil raw water transfer project in the state.

Zecon chief executive officer Datuk Zainal Abidin Ahmad had claimed in a statement that the RM125mil deal was to construct a 12.6km tunnel for the Sungai Teriang Water Transfer Scheme.

The project entails the transfer of some 330 million litres of raw water per day from Sg Teriang and Sg Kenaboi to Sg Terip Dam for consumption in Seremban and its surrounding areas.

Rahiman said Zecon could not be awarded the project as the state government had in 1997 given the nod to NSWK.

He said the matter had yet to be decided as it was before the High Court.

Mohamad said the decision to award the project to Zecon was made by the Energy, Water and Communications, and the Finance ministries.

“Since the matter is now under the jurisdiction of the federal government, we have no say in the matter,” he said.

Source: STAR, 13 July 2007

No hike in rice price, wholesale or retail

Source: New Straits Times, 10 July 2007

PUTRAJAYA: There will be no increase in the price of rice at both wholesale and retail levels.

Prime Minister Datuk Seri Abdullah Ahmad Badawi said as rice was a price-controlled item, any move to increase the price without consulting the authorities was an offence.

"Only ministers concerned can make such announcements," Abdullah said after launching the 18th Conference of International Islamic Fiqh Academy in Putrajaya yesterday.

Meanwhile at a separate event, Agriculture and Agro-based Industry Minister Tan Sri Muhyiddin Yassin said Padiberas Nasional Bhd (Bernas) officials have been told to retract their July 1 announcement on a wholesale price hike.

"This decision means there will not be a price increase at the wholesale level, which also means there will be no increase in the retail price or at any other level," he said.
Speaking at a press conference after attending a dialogue held in conjunction with a workshop on agriculture financing organised by Umno’s agriculture bureau and his ministry, Muhyiddin said he would inform the cabinet tomorrow of the decision.

Bernas officials had met with officials from the ministry and the Domestic Trade and Consumer Affairs Ministry on the matter.

At the meeting, chaired by Agriculture and Agro-based Industry Ministry secretary-general Datuk Dr Zulkifli Idris, it was also agreed that Bernas must officially inform and negotiate with the ministry on any increase in the price of rice.

"They will have to justify the price hike. Bernas cannot simply raise prices in the future," he said.

It was also decided that any future announcement of a price hike in rice must come from the ministry.

Muhyiddin said in the agreement between Bernas and the government, any decision Bernas wanted to make had to be referred to its custodian, which in this case was the ministry’s secretary-general.

"Whether or not the price of rice has increased or decreased at the international level this year doesn’t matter. In the past, when the international price of rice went up we didn’t increase the price.

"Similarly, when the international price came down, we didn’t reduce the price. So why did they make such a decision?" he said.

On July 5, Bernas had announced an increase in the wholesale price of rice by five sen to 10 sen per kg for white rice, fragrant rice and basmati rice. The price had gone up by 20 sen for glutinous rice.

Bernas has the exclusive rights to supply Malaysia with rice. This agreement with the government ends in 2011.

"(Bernas) cannot exploit its monopolistic position to do things without taking into consideration the effect on our consumers," Muhyiddin added.

He said there were foreign parties interested in supplying rice for local consumption.

"This will be better because there will be more competition and consumers will get a better price.

"We at the ministry will now have to look into this issue and study the possible positions we want to take before the agreement period expires."

In a two-paragraph statement, Bernas said that it would abide by the government’s decision and announced that it had cancelled, with immediate effect, the increase in the wholesale price of rice.

"Bernas will also continue to work with the government, namely the Agriculture and Agro-based Industry Ministry, in applying for an increase in the price of rice in future."

Port operators want more freedom to run business

By Chong Jin Hun (jinhun@nstp.com.my)
Source: New Straits Times, July 7 2007

MALAYSIA'S port operators have urged the Government to grant them greater autonomy in running their business to stay globally competitive.

These include the freedom to buy quality equipment and allowing market forces to determine their service levels and tariffs.

"We request that ports have the freedom to purchase the best equipment and services to ensure that we can deliver globally competitive services," Federation of Malaysian Port Operating Companies (FMPOC) chairman Datuk Mohd Sidik Shaik Osman said at its inaugural gala dinner in Subang Jaya yesterday.

Transport Minister Datuk Seri Chan Kong Choy was the guest of honour.

"(Also) let the market/consumers regulate the service levels and tariffs," Mohd Sidik said.

Currently, port operators have to seek approval from the Government before they can make changes to their tariffs. The process could take years.

Non-revision of port tariffs has exerted considerable pressure on local ports' operating margins in recent years.

Mohd Sidik, who is also Port of Tanjung Pelepas chairman, said port tariffs in general have not been reviewed for almost 20 years.

"For FMPOC to move on to greater heights, the Government must take privatisation to its logical conclusion. It must remove many of the constraints that hinder the accelerated development of the industry," he said.

The port industry recently had a breakthrough as the Government decided Thursday to fully liberalise the import of cranes.

Mohd Sidik also said that FMPOC has requested a dialogue with the Transport Ministry on the proposed legislation to set up a new structure to administer the port industry.

"We are aware that the draft legislation is different from the earlier version. FMPOC was given the opportunity to comment on the earlier version and we have requested that a similar opportunity be granted to us now," he said.

FMPOC represents nine local ports, but hopes to eventually include all privatised port operations.