Transparency needed in government spending, says PAC

STAR January 17, 2008

PETALING JAYA: Transparency and accountability are expected in all government expenses, said Public Accounts Committee chairman Datuk Shahrir Abdul Samad.

He said there was a system within the Government that ensured all expenses and projects were carried out with transparency.

He said the system required a tender committee to be set up for every project and the committee should have some selection and decision process.

He said such a system must be implemented and applied to all expenses and projects, whether they were carried out locally or overseas.

“Although there are projects that need to be carried out overseas, we still have to follow procedure,” he said, adding that the Government also required suppliers to be registered with the Treasury.

Shahrir was commenting on the recent allegation against two senior Tourism Ministry officials for misusing funds overseas under the Visit Malaysia Year programme.

The two are now being probed internally while the Anti-Corruption Agency has started querying ministry officials.

Minister Datuk Seri Tengku Adnan Tengku Mansor said the officials would be suspended if they were found guilty.

People to know their local councils under star rating

STA, January 19, 2008

PETALING JAYA: Ratepayers will soon know how good their local councils are when the star rating system is implemented in the next three months.

Housing and Local Government Minister Datuk Seri Ong Ka Ting said the country’s top 38 local authorities will be the first to be rated by a special team.

The councils to be rated first are those that have achieved city or municipal status. The other local authorities will be rated later.

Ong said the evaluation team would consist of officials from his ministry and the Malaysian Administrative Modernisation and Management Planning Unit.

The star rating was introduced as a means to measure the performance and efficiency of local authorities, particularly their delivery system.

“Local authorities with three- to five-star rating will be re-evaluated every two years while those with one or two stars will be evaluated every year and be given necessary guidance,” he said at the launching of the book Counselling Local Councils here yesterday.

Urban planning: Ong launching the book Counselling Local Councils while Dr Goh looks on yesterday.

The book by Kolej Tunku Abdul Rahman vice-principal Dr Goh Ban Lee is a collection of observations and suggestions for the good governance of local authorities.

Dr Goh is an urban planner and also a former Penang municipal councillor.

Ong said with the rating system in place, local authorities would be more mindful of their performance and obligation to the public.

“I hope to see some positive results from this new initiative in due course,” he said.

On the installation of CCTVs at crime-prone areas under the jurisdiction of 25 local councils, Ong said the move was one of the 23 steps under the Safe City Concept, which had started since last year, to improve safety.

“We will cooperate with the police and they will tell us the places which are desperately in need of CCTVs,” he said.

Bar on 20 essential items

STAR, January 20, 2008

ALOR STAR: Twenty controlled items will be barred from being taken out of the country in a move to check the outflow of subsidised goods.

Domestic Trade and Consumer Affairs Minister Datuk Shafie Apdal said the items included sugar, condensed milk, rice, cement, and liquefied petroleum gas (LPG).

He said those caught smuggling any of the items listed in the Control of Supplies Act 1961 risked being fined RM100,000 or jailed two years.

“A meeting will be held next week with all the relevant enforcement agencies before we implement the ban, hopefully before the end of the month.

“We are taking such drastic action to check the shortage of essential goods and to prevent financial losses to the Government,” he said yesterday after giving a briefing on price increase issues at the Universiti Kolej Insaniah hall.

Currently, action is taken only against those caught smuggling diesel, flour and cooking oil.

Smuggling of essential goods has become rampant because flour, sugar, diesel, petrol, LPG, cooking oil and chicken are among the cheapest in the region and even in the world.

Shafie said cooking oil had been banned from being sold at the Rantau Panjang Duty Free Area since Jan 7 after enforcement officers discovered last month that one-third of the 2,600 tonnes of cooking oil supply to Kelantan was concentrated in the area.

“We believe the cooking oil was smuggled into Thailand,” he said.

The ministry is also planning to compel the commercial sector to buy non-subsidised cooking oil that is sold at RM62 per tin of 17kg.

Players in the commercial sector including hawkers and small and medium enterprises tend to buy the subsidised cooking oil in packets and bottles that only cost RM42.50 for the same weight.

Getting strict on foreign labour

By LEANNE GOH and JOSEPH LOH
STAR, Sunday January 20, 2008

PUTRAJAYA: Reduced dependency on foreign workers and more and better paying jobs for the locals.

With these objectives in mind, the Government will go all out to reduce the number of foreign workers in the country with set targets and strict enforcement of Home Affairs Ministry regulations.

By reducing the number of foreign workers in many of the industries, employers will be forced to hire local workers at “reasonable” salaries.

“We are going to re-look at the policy of managing foreign workers in this country. We have a total of 2.3 million foreign workers, students and expatriates and short-term workers from southern Thailand; we want to lower (the number) to the 2006 figure of 1.8 million,” ministry secretary-general Datuk Raja Azahar Raja Abdul Manap told Sunday Star.

The ministry's target is 1.8 million foreign workers by next year and 1.5 million by 2015. However, it faces a dilemma because it has approved applications from employers last year to bring in 200,000 foreign workers this year.

The ministry also has consider the manpower needs of the Government’s development projects such as the Iskandar Development Region and the Northern Corridor Economic Region.

Only three industries – construction, manufacturing and plantations – that are heavily dependent on foreign workers because locals do not want to work in them will be exempted from the strict measures.

“For others like the service industry (hotel, restaurants, petrol stations, cleaning services, etc) and agriculture, we will come down hard.”

For a start, effective now, said Raja Azahar, the ministry would not approve the work permit of any foreign worker who has been in the country for five years or more.

This alone could reduce the number of foreign workers by 200,000 this year.

“In the employment contract, the permit is for 3+1+1. After three years, we allow annual extensions. We were liberal in the past, but now we will be very strict.”

To ensure compliance and to weed out illegal workers, the ministry has received approval in principal to beef up its enforcement officers from 1,500 to close to 5,000 to be set up as inspectorate teams, each covering specific industries.

He said skilled workers could work in the country for a maximum of 10 years but they must have qualifications recognised by the Government.

“We have been lax with the ruling to allow employers to cut costs with cheaper foreign labour but now, they have to turn to locals and pay a reasonable salary based on supply and demand,” he added.

It was reported recently that foreigners took up 20% of the 200,000-300,000 new jobs created last year, especially in the labour sector, according to the Malaysian Institute of Economic Research (MIER). .

Domestic help, however, is one sector that may be affected in the effort to reduce foreign workers.

“We are looking into the possibility that only those who earn more than RM5,000 a month (currently RM3,000) be allowed to employ foreign maids. This issue is still being studied by the Economic Planning Unit.

“At the same time, we are talking to the Women, Family and Community Development Ministry to assist in the setting up of child-minding centres that employ foreigners, so we can reduce dependency on domestic maids,” said Raja Azahar.

Langkawi ferry fare hike put off

New Straits Times, 11 December 2007

LANGKAWI: Ferry passengers heaved a sigh of relief when Menteri Besar Datuk Seri Mahdzir Khalid announced that the planned fare increase would be put on hold. Mahdzir said the state government and the Transport Ministry had agreed to delay the implementation of new charges.

"We have agreed that the ferry charges will remain for the time being."

Mahdzir made the announcement after meeting with the Langkawi Umno division to discuss preparations for the next general election.

He did not give the reason for the postponement, or when the new ticket prices would be implemented.

The current one-way fares are RM18 (adults) and RM12 (children) for ferries departing from Kuala Kedah.
The fare from Kuala Perlis is RM15 each way, while children are charged RM10 each.

Transport Minister Datuk Seri Chan Kong Choy was expected to announce new fares for Langkawi-bound ferries last Wednesday to take effect on Thursday. The fares were said to be going up by RM3 to RM5.

Frequent ferry users, especially those who live and work on the island, were disgruntled over the proposed hike in ticket prices.

A group of passengers recently collected 80,000 signatures in a petition against the proposed fare hike.

Ferry operators insist the increase is necessary to cope with spiralling fuel prices and maintenance costs. But passengers have been complaining of shoddy services.

Reforms boost investment flows

by Hamidah Atan
New Straits Times, 3 December 2007

MALAYSIA's competitive edge in terms of investment flows has been improved by the transformation and reforms of its economic structure, the deputy prime minister said.

Economic policies, including reforms of government-linked companies (GLCs) undertaken since 2004, have borne fruit with greater confidence of foreign investors and fund managers in Malaysia's growth, said Datuk Seri Najib Razak.

Najib yesterday ended an investment road show where he met about 50 top global fund managers, potential investors and Hong Kong's captains of industry.

The road show, organised by ECM Libra Avenue Bhd and Credit Suisse, is Najib's second after the one held in Singapore in May. It is aimed at keeping Malaysia on the radar screens of investors.

At the macro level, Malaysia's growth prospects and the strength of its domestic fundamentals had contributed to resilience and strong mitigating effects in reducing the impact of global downside risks, Najib said.
He said global economic growth remained uncertain due particularly from volatility in the financial market as a result of the US subprime crisis, a depreciating US dollar and rising inflationary pressures, due to unprecedented increases in oil price.

However, Malaysia has been able to withstand the risks.

"We told them that we were in a better position to weather all these as our economy has diversified significantly. They were very happy with the GLC reforms that we have carried out. However, their only concern is the lack of liquidity in our market which is being addressed," Najib said.

The listing of Sime Darby, whose market capitalisation stood at RM58 billion on the first day of listing on Friday, was a clear example of the dividends that had been reaped from government's systematic and long-term reforms, he said. "It has suceeded beyond our expectations."

Malaysia's gross domestic product (GDP) has continued to strengthen from 5.5 per cent in the first quarter of the year to 5.8 per cent in the second quarter and 6.7 per cent in the third quarter.

For the first nine months of this year, the economy grew by six per cent and Najib said the growth target of six per cent for this year was on track.

"With this sustained strong growth, Malaysia's economic fundamentals continue to remain strong," he said.

There were also questions relating to Malaysia's growth corridors, especially the Iskandar Development Region (IDR).

"They want to see things on the ground but they must realise that it will take time for this to be implemented. However, we told them that there would be significant developments by the middle of next year," Najib said.

The fact that Hong Kong Chief Executive Donald Tsang personally made a request for Kuala Lumpur to assist the city in the development of Islamic finance was clear proof of a greater confidence in Malaysia.

Najib, who called upon the former British colony's leader at Government House on Friday, said Tsang raised the matter and he had given him a positive reply.

Malaysia, the world leader in Islamic banking, would have no problem sharing its expertise with Hong Kong.

"Even the fund managers took note that we are the world's leader in this system. We are the only country that can offer a whole range of Islamic financial services and products, including Islamic bonds. Sixty-six per cent of the Islamic bonds are raised in Malaysia and we are in the best position to help Hong Kong," Najib said.

Those in his entourage included Second Finance Minister Tan Sri Nor Mohamed Yakcop, Bank Negara assistant governor Datuk Lillian Bee Liang, Securities Commission executive director Datuk Kris Azman Abdullah, Khazanah Nasional Bhd managing director Datuk Azman Mokhtar, AirAsia Bhd chief executive Datuk Tony Fernandez, Boustead Group Holdings managing director Datuk Lodin Eok Kamaruddin, Genting Berhad Group chairman Tan Sri Lim Kok Thay, Sapura Group president and chief executive Datuk Seri Shahril Shamsuddin, KL Kepong chief executive officer Datuk Seri Lee Oi Hian and ECM Libra Avenue chairman and chief executive Datuk Seri Kalimullah Hassan.

Nor Mohamed, meanwhile, said that part of the objective of the road show was to create regional champions in Malaysian companies, both GLCs and non-GLCs.

"For every MAS (Malaysia Airlines), there is AirAsia, for every Telekom, there is Maxis and Digi."

Nor Mohamed said the success stories of Malaysian companies should be told for stronger growth and development.

Proposal for bus fare hike under study

New Straits Times, 10 January 2008
By Kamachy Habimanan and Minderjeet Kaurnews@nst.com.my

KUALA LUMPUR: Bus operators have been told to be patient while their proposal for a fare hike is being studied.

Commercial Vehicle Licensing Board (CVLB) chairman Datuk Markiman Kobiran said the board was in the final stages of studying proposals made by the bus operators.

"We are considering the fare structure. But sabar-lah (be patient). Let us complete our study first," he said.

Markiman was commenting on remarks made at a news conference yesterday by Pan Malaysian Bus Operators Association president Datuk Mohamad Ashfar. He said the association wanted all fares for express and stage buses to be raised by 100 per cent this year.

During the news conference in Johor, Mohamad Ashfar said the association was working out the exact fare increases and planned to submit a memorandum to the government next month.
"The government has been imposing rules and regulations on bus operators. And if it wants us to meet all its requirements we need money," he said.

The association represents 108 bus companies throughout the country.

Mohamad Ashfar said there were many reasons for fares to go up.

He said the CVLB had issued too many bus permits, while ticket collections had dropped because of increased car ownership.

Illegal taxis, especially in Sabah and Sarawak, were also affecting bus operators' bottom line. Bus companies were also finding it more difficult to obtain charter licences as well, he said.

Operating costs had been rising, especially since the CVLB imposed age limits on buses -- 15 years for stage and 10 for express buses. And the cost of chassis and parts had gone up as well.

He also said tour buses operated by the Tourism Ministry were affecting their business.

Many bus companies would have to close down, if these issues were not addressed by the government, he added.

Markiman said the bus companies should approach the Domestic Trade and Consumer Affairs Ministry to look into their diesel subsidy to reduce costs. And they should discuss the cost of chassis with the International Trade and Industry Ministry.

Operators want higher bus fares

The STAR, 10 January 2008

JOHOR BARU: Stage and express bus operators nationwide have proposed to increase their fares as they could no longer cope with the increasing operating costs particularly on fuel.

Pan Malaysian Bus Operators Association president Datuk Dr Mohamad Ashfar Ali said a memorandum on the proposed hike would be submitted to Transport Minister Datuk Seri Chan Kong Choy soon.

“Diesel price has increased from RM1.08 in May 2005 to RM1.58 in February 2006. The last time the bus fares were raised was in May 2005.”

He said their operating costs for fuel had escalated from 25% to 43%.

“The monthly diesel subsidy quota provided by the government, which was 1,800 litres for stage buses and 3,600 litres for express buses, was insufficient,” he said.

Ashfar said a stage bus used an average of 6,000 litres of diesel monthly while an express bus needed 9,000 litres per month.

“Many bus operators have gone out of business due to cash flow problems,” he said.

He said the price of tyres and batteries have also gone up.

“Toll has also gone up and Puspakom inspection fees are now much higher,” Ashfar said.

There are about 3,200 licensed stage and express buses operated by 108 companies nationwide.

5kg buying limit on cooking oil

By MAZWIN NIK ANIS, SYLVIA LOOI, SIRA HABIBU, CAROLYN OOI and STEVEN DANIEL

The STAR, 5 January 2008

PUTRAJAYA: Five kilograms – that is the maximum amount of cooking oil that each consumer can buy when a move to solve the shortage of the essential item is enforced next week.

Domestic Trade and Consumer Affairs Minister Datuk Shafie Apdal however did not specify when the move would be implemented to increase stocks of cooking oil, especially in areas like Kelantan, Pahang, Malacca, Kedah and some parts of the Klang Valley where the shelves are getting bare.

Scarce commodity: A customer picking up a bottle of cooking oil from an almost empty rack at a hypermarket in Petaling Jaya yesterday. The Government hopes to overcome the shortage in a week or two. — AZHAR MAHFOF / The Star

Shafie said that while manufacturers have been instructed to increase production from 48,000 tonnes to 53,886 tonnes a month, the restriction in purchase was necessary to ensure there would be no hoarding or panic buying.

He said the ruling would not only apply to those buying cooking oil in hypermarkets or supermarkets but also in smaller retail outlets and grocery stores.

One reason for the shortage was industrial users buying cooking oil in small packets, which is subsidised by the Government, instead of buying it in larger quantities, he said.

He added that smuggling also contributed to the shortage and that the ministry had alerted enforcement agencies at the country’s borders to conduct strict surveillance to prevent cooking oil from being taken out of the country.

“The shortage has also occurred because of the rising population. There are also more businesses such as food production factories and restaurants being opened that use a lot of cooking oil.

“With the restriction in place and the increase in production, we hope to be able to solve the shortage within a week or two.

“At the same time, the ministry will study other measures, including stopping leakages in the distribution system to prevent the problem from recurring,” he told a press conference yesterday.

Asked if the increase in production was permanent or whether the ministry would order an increase again should the problem persist, Shafie said he would have to gauge the results before making decisions.

Last year, the ministry directed 23 cooking oil manufacturers to increase output to 48,000 tonnes a month, an increase of an additional 3,000 tonnes a month.

Fuel subsidy 'needs thorough study'

New Straits Times, 5 January 2008

KUALA LUMPUR: The government will have to do a careful study before deciding whether to cut or leave the fuel subsidy at its present level, Second Finance Minister Tan Sri Nor Mohamed Yakcop said.

He said the government may not cut the fuel subsidy but said it was something that it had to review and decide on.

Global oil prices flirted once again with the US$100 (RM330) per barrel mark this week before falling slightly yesterday.

"At US$100, the total subsidies to oil and gas in Malaysia is RM35 billion. Another RM5 billion is for other subsidies like milk, which brings the total subsidies to RM40 billion per year," said Nor Mohamed.

He added that the amount was the same as that allocated to the country's development expenditure each year under the Ninth Malaysia Plan.
"In the long run, the issue is whether or not this RM40 billion allocation can be better used to improve the country's growth rate," he said in an interview on TV3's The Exchange programme yesterday.

"Although the country's growth rate of 6-6.5 per cent per year is good, we need to move to a higher growth trajectory of 8-9 per cent per year like China and India and we can do it. We have done it in the earlier decade."

It is not known when the government will make a decision on the fuel subsidy but he said it would have nothing to do with timing of the general election.

Meanwhile, the government was maintaining its economic growth forecast for this year at 6.5 per cent, with Nor Mohamed anticipating inflation to remain benign, at 2 to 2.5 per cent, and 2008 budget deficit reduced to 3.1 per cent from 3.2 per cent last year.

"We are aware that the external environment will continue to be challenging, even daunting.

"The US appears to be on the edge of a recession, which spills over into consumer confidence and the credit market. The US subprime (mortgage) crisis is turning into a full-blown financial crisis.

"Although we cannot say that we are isolated or decoupled from whatever happens in the US, we believe that Malaysia is resilient enough to overcome these challenges coming from Western countries, particularly the US."

He said for one thing, growing demand in China, India and other emerging Asian markets would offset a possible slowing economy in the US.

"My feeling is that, irrespective of what happens in the US, the growth momentum of China and India's economies will remain strong.

"That is good for us in terms of tourism and exports of our commodities, where the two countries are becoming more important."

Another factor that will fuel the country's growth this year is the development of the regional corridors.

"This is something that is personal to the prime minister (Datuk Seri Abdullah Ahmad Badawi) himself because he came out with this idea of (developing) regional corridors to make sure that the benefits of growth are enjoyed by everyone. This plan will take off this year."

Meanwhile, he said Malaysia was on track to achieve its six per cent gross domestic product growth target for last year or even surpass it.

"The economy grew at 6.7 per cent in the third quarter (of 2007), which was extremely good, and we expect to continue the momentum in the fourth quarter."

On national carmarker Proton Holdings's future, he said it was likely that a strategic partnership would be established over the next three to five years.

"But whether the strategic partner will be an equity partner or a technical partner (for Proton) will have to be discussed and decided upon. It need not be an equity partner, but a technical partner."

He also explained that talks on a strategic alliance with Germany's Volkswagen AG (VW) and US-based General Motors Corp (GM) were called off because the government "believes that Proton will do better in the next few years than what it has done previously".

Nor Mohamed said: "We felt that it was better for Proton to improve its performance (first) so that it will give new confidence to the potential strategic partner and that strategic partnership can be sealed on a more win-win term.

"At the point of time when the VW deal was put on the table, Proton was in a weak position."

ACA probes import of RM60m rice

New Straits Times, 5 January 2008

KUALA LUMPUR: The Anti-Corruption Agency has started a probe against rice distributor Padiberas Nasional Bhd (Bernas) and the Agriculture and Agro-based Industry Ministry.

Investigations centred around 25,000 tonnes of fragrant rice worth RM60 million imported from Thailand without an import permit. A team of ACA officers interviewed several ministry staff on Thursday.

Yesterday, ACA officers went to the Bernas offices in Petaling Jaya where statements were recorded. ACA investigations director Mohd Shukri Abdull confirmed the investigations.

"Checks at the two premises are being conducted as part of investigation. So far, only the statements of several officers at the ministry and Bernas have been recorded," he said.

Investigators are also probing whether the rules and regulations regarding imports had been followed. The ACA is also investigating whether there is any hanky-panky going on.
Meanwhile, ministry secretary-general Datuk Dr Zulkifli Idris said Bernas officials met ministry officials and Customs officers yesterday.

"Bernas apologised for importing rice above the permitted quota without referring to the ministry. It also given assurances that such a mistake will not be repeated," he said.

He added that Bernas claimed it was forced to place an early order for rice because of anxieties that it would be difficult to get supplies of rice as there was currently a shortage in the world market.

"In a situation of first-come, first-served, Bernas placed an order for 16,000 tonnes of rice for last year and an additional 19,000 tonnes for this year although the overall quota for 2008 has yet to be decided," Dr Zulkifli said.

He added that an AP had been issued for the rice which exceeded the permitted quota. All parties also agreed on a more effective mechanism for the process of importing rice and to hold more frequent meetings.

The ministry also agreed to issue APs immediately for importing rice within the permitted quota and additional APs within a week if the imports exceeded the quota.

Last Monday, Bernas had imported fragrant rice without an AP resulting in 10,000 tonnes to be held at the Pasir Gudang port. An additional 10,000 tonnes could not be unloaded on a ship in the Kota Kinabalu port and 5,000 tonnes at Port Klang.

Bernas is said to have submitted an AP application to the ministry on Dec 20, as soon as the ships carrying the rice docked at the ports.

It is an offence to import fragrant rice without an AP as the rules state that the AP has to be issued prior to the rice being imported and not the other way around.

Travel agents to charge service fee for MAS bookings

The STAR, 3 January 2008

KUALA LUMPUR: Travellers will now have to pay more for Malaysia Airlines (MAS) tickets purchased from agents.

Travel agents in the country have implemented a new service fee -- a minimum of 5% ticketing/reservation fee, on cash on delivery terms -- after MAS' Zero Commission and Nett Fare plan came into effect on Jan 1.

According to Malaysian Association of Tour and Travel Agents (Matta) president Ngiam Foon, there were now neither commission nor distribution fees for MAS-appointed agents, for the promotion and sale of tickets.

He also said travel agents have never received any form of fee from the national carrier and Malaysia Airport Holdings Berhad for the promotion, sale or collection of fuel surcharges, airport taxes, airline insurance and other taxes on their behalf.

“As such, the association has included a service fee to replace the commission withdrawal,” he said at a news conference here.

“The service fees will vary depending on the services requested by the customer,” he said, adding that those on credit terms will generally be charged with higher fees.

MAS still offers ticket commissions to appointed agents in other countries.

Smuggling 'cause of oil shortage'

New Straits Times, 2 January 2008
By Melissa Darlyne Chow and Adie Suri Zulkefli

GEORGE TOWN: Checks on the supply of cooking oil have begun following complaints of reduced supplies from wholesalers and retailers.

State Domestic Trade and Consumer Affairs Committee chairman Lau Chiek Tuan said enforcement officers were checking the supply chain to find the problem.

He was responding to complaints from some wholesalers, retailers, mini-market operators and sundry shops that they had to ration cooking oil to one or two packets per customer per day.

"I have received reports that there is a severe shortage of cooking oil in Bukit Mertajam and Seberang Prai Utara.

"I have not received any complaints from other areas, but the department will check on the suppliers," he said yesterday.
He plans to meet with 16 cooking oil packagers in the state to resolve the matter.

He said if the packagers faced a supply problem, he would talk to the manufacturers and suppliers.

On claims that manufacturers have been reducing the production of cooking oil pending the payment of subsidies, Lau said it was not true.

In Bukit Mertajam, a packager has blamed the shortage on the rampant smuggling of cooking oil to Thailand.

The production manager, who did not want to be named, said: "A kilogramme of cooking oil in Thailand fetches RM3.50 to RM4, as opposed to RM2.50 in the local market."

He added that production was subjected to subsidies and his company had been fulfilling the quota.

But he pointed out that the demand had increased significantly in the past several weeks.

"Most of our customers have asked for more cooking oil, but we are restricted by the subsidy mechanism."

He said that there had been an influx of people from Kedah, where there was a serious shortage, looking to buy cooking oil.

"We have received many calls from shopowners in southern Kedah who wish to make bulk purchases.

"But we have to turn them down as we have an obligation to ensure adequate supplies for our regular customers here."