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.