REFSA statements: PEMANDU clarifies
JUNE 22 — Below are clarifications by PEMANDU to statements made by REFSA ‘Dissecting the ETP Annual Report (Part 3)’ published in The Malaysian Insider on June 21, 2012.
Statement 1: Actual investment of RM12.9 billion is 7 per cent of the RM179 billion committed that PEMANDU highlights, making it a fraction of the total RM94 billion of private investment and RM171 billion of total investments achieved in 2011.
Investment must be committed before it is realised. Typically, a particular investment may take anything between one to three years, or even beyond, to be fully realised. To expect a sizeable percentage of investment to be realised within the same year it is committed is absurd.
We have been clear in differentiating committed investment and realised investment in our announcements. To suggest we are misleading the public is irresponsible.
Committed investment of RM179.2 billion will be realised progressively by 2020. Out of the RM16 billion, RM12.9 billion was realised by project owners in the first year of the implementation of the Economic Transformation Programme. In our view, this is a healthy beginning. We have eight more years to go to becoming a high income nation and to realise the remaining investment committed in 2011 as well as the subsequent years.
Statement 2: Private enterprises are rejecting the ETP. The private sector is targeted to account for 60 per cent of ETP investments, but so far is contributing only 37 per cent of the total.
To this end, the ETP targets 8:32:60 ratio of investments from government, GLCs and the private sector. However, as it stands, government and GLCs already account for 63-65 per cent of the committed investments so far.
As stated in the ETP Roadmap, we aim to achieve total investment target of RM1.4 trillion by 2020, with private:GLC:public ratio of 32:60:8.
It is disingenuous for REFSA to state the ETP target investment ratio is static. It is impossible for the ratio to remain roughly the same from the start to the end. What we hope to achieve is for the said ratio to be the average over 10 years.
We must also bear in mind that some big ticket and catalytic projects such as MRT and RAPID are announced at the onset of ETP as these project require time to realise, create significant multiplier effect and spur other investments. These projects skewed the ratio heavier towards government and GLCs. However as we progress, the ratio is expected to become closer to our target ratio.
Private investment committed within the first year stands at about RM60 billion, coming from MNCs such as Shell, ExxonMobil, Petrafac, Emery Oleochemicals, Toshiba, AMD, Biocon and GE, as well as local enterprises such as Dialog, SapuraKencana, KLK, IOI, Pensonic, YTL, Hovid and UCSI.
No reasonable person will conclude that this equates to the “private sector rejecting the ETP” and we question the authors’ motive to discredit the progress made.
Statement 3: PEMANDU deserves very little credit for the RM94 billion private investments actually achieved across the whole country.
At no point has PEMANDU claimed that RM94 billion private investments in 2011 to be wholly ETP’s achievement. Our teams work closely with the Ministries and agencies to contribute to the overall economic impact across Malaysia, and the RM94 billion achievement is a concerted effort by all parties.
This is an old broken record that the authors continue to play. Dato’ Sri Idris Jala in his Transformation Blues column dated 18 June 2012 published in the Star, emphasised the following:
“We are an agency of the Government and we manage performance, monitor it and help the
Government deliver. We are part of and work with Government — every department. Any achievement is the achievement of all, not just the Government but also everyone who participates, including the private sector. In the role that we have been appointed to do — lead and facilitate the economic transformation of the nation — we must communicate updates and highlight progress. How does this mean that we are taking the credit for what is not ours?”
Statement 4: The Ministry of Finance as far back as October 2010 had already projected private investment of RM86 billion in 2011. Why is PEMANDU, which is supposed to be adding value and transforming the economy, targeting a level lower than what was anticipated by the Ministry of Finance?
We acknowledge that the figure should be RM86 billion and not RM83 billion. Regardless, the RM94 billion in private investment achieved surpassed national targets.
There was no intention to purposefully set lower targets.
Statement 5: PEMANDU conveniently left out that the 19.4 per cent private investment growth last year is a nominal figure while the 12.8 per cent target under the 10th Malaysia Plan is a REAL target.
At the time of publishing the ETP 2011 Annual Report in early 2011, we only had access to nominal/current price investment data. The real/constant price statistics were released by Bank Negara Malaysia in their 2011 Annual Report, which was published in March 2012, after our report had gone to print.
We could have been clearer that 19.4 per cent is a nominal figure for private investment growth. Regardless, real private investment growth of 14.4 per cent achieved in 2011 is above the national target of 12.8 per cent, and well above the 6.7 per cent average recorded over the previous ten years.
It is interesting to see that REFSA chooses to repeatedly nitpick and present a totally biased opinion. As an “independent research” organisation, we question their approach.
Statement 6: PEMANDU says that RM94 billion worth of private investments in Malaysia last year was “some 113 per cent above our target”.
When we look at the economy, we examine it as a whole, as opposed to analyzing the economy in bits and pieces. Private investments achieved in 2011 at RM94 billion is 113 per cent of the national target or 13 per cent above target.
The ETP’s true north has been defined as RM1.4 trillion in investment to generate GNI of RM1.7 trillion and create 3.3 million incremental jobs by 2020. This has been and will continue to be our focus.
Statement 7: Karambunai Corporation’s ability to execute its plan, and issues surrounding its projects.
We have responded to this question earlier this year. For the benefit of readers, here is the link to our earlier response (http://etpblog.pemandu.gov.my/posts/2012/03/05/your-questions-answered-financial-services-and-karambunai-city-resort/).
Additional new information from Karambunai Corporation states that the company is currently working with Dewan Bandaraya Kota Kinabalu and Bomba to finalise CF for the Karambunai Restaurant. The Resort Residences plans are being reviewed by the investor with the development and construction planned to commence by end 2012. The additional sections of the project will be approved in phases pending the due process of the Environmental Impact Assessments and other requirements.
Nexus Karambunai is a separate legal and business entity from Karambunai Resorts City, and not a project within the ETP as wrongly inferred by REFSA.
To be totally clear, PEMANDU does not guarantee the success of any of its projects. The private sector takes the lead in meeting their targets and deadline. PEMANDU, through tracking and monitoring, acts as facilitator to ensure critical obstacles are resolved.
Statement 8: There have not been any reports on the Tanjong Agas project.
Oilfields Supply Centre Ltd has partnered with Tanjong Agas Supply Base and Marine Services Sdn Bhd to form a company called Tanjong Agas Oilfields Supply Centre Sdn Bhd.
This partnership aims to build an initial oil and gas supply centre worth RM620 million. Infrastructure work has since been completed and its first tenant, Akers Solution, is currently constructing their manufacturing facilities. A few more investors are expected to sign agreements with Tanjong Agas by end 2012.
We would like to categorically state our disappointment that The Malaysian Insider news article based on REFSA’s report serves only to further sensationalise REFSA’s rhetoric, and grossly misrepresent the work we do.
We urge The Malaysian Insider to instead challenge REFSA to develop an equally comprehensive alternative programme. We will continue to stay focused on the challenge of transforming the economy and achieving our objective of high income nation by 2020.
For readers who are interested to read our previous responses to REFSA, please click on the links below.Clarification of initiatives under the Entry Point Projects (Published on 13 June 2012)
Focussing on Our True North (Published on 1 June 2012)
Focus, Focus, Focus (Published on 25 May 2012)
Keeping It Real : The ETP as A Microcosm of Life (Published on 17 April 2012)
Reply to ‘A Critique of the ETP’ Part Six (Published on 13 March 2012)
Your Questions Answered: Financial Services and Karambunai City Resort (Published 5 March 2012)
Your Questions Answered: Choosing the NKEAS (Published on 2 March 2012)
Response to “ETP: Part 5 — The ETP so far is just a handful of mega-projects” (Published on 1 March 2012)
Your Questions Answered — NKEA Labs (Published on 29 February 2012)
Your Questions Answered: Projects, Targets and Transparency of Data (Published on 27 February 2012)
* This is the personal opinion of the writer or publication. The Malaysian Insider does not endorse the view unless specified.