Thursday, June 21, 2012

PEMANDU exaggerating ETP’s investment figures, REFSA claims

PEMANDU exaggerating ETP’s investment figures, REFSA claims

June 21, 2012
Malaysian Insider 
KUALA LUMPUR, June 21 — Putrajaya’s efficiency unit had exaggerated the RM179 billion figure in total investments recorded last year under the Economic Transformation Programme (ETP), a think-tank alleged today, saying the number of “actual investments” received in 2011 only totalled RM12.9 billion.

The opposition-linked Research for Social Advancement (REFSA) think-tank, which has published a series of critiques on the ETP that aims to double per capita income by 2020, disclosed in a focus paper today that the government’s Performance Management and Delivery Unit (PEMANDU) had downplayed the fact that RM179 billion was merely the total “committed investments” for last year and not the “actual investments”.

It said that a Maybank report in April this year had pointed out that only RM12.9 billion of investments had actually been realised in Malaysia last year, a far cry from the RM179 billion boasted by PEMANDU.
“The gap between actual and committed investments is huge,” REFSA wrote in Part 3 of its focus paper, which dissects the ETP’s recently released 2011 Annual Report.

Further to this, REFSA also pointed out that in the ETP report, PEMANDU had appeared to claim credit by boasting that the total private investments of RM94 billion in 2011 was 113 per cent above its target.
“PEMANDU is stealing credit again,” the research body complained, pointing again to the RM12.9 billion “actual investment” figure for last year, which it says encompasses both private and government-linked investments.

“So PEMANDU deserves very little credit for the RM94 billion private investments actually achieved across the whole country,” it said.

Next, REFSA accused PEMANDU of shifting goal posts, pointing out that the efficiency unit had claimed that its target for private investments was RM83 billion, when the Finance Ministry had already in 2010 stated a RM86 billion target.

“Why is PEMANDU, which is supposed to be adding value and transforming the economy, targeting a level lower than that anticipated by the ministry? In fact, PEMANDU’s professed RM83 billion target is equivalent to a paltry 2.7 per cent growth in real private investment,” REFSA said.

The think-tank also drew doubts over the RM179 billion figure in “committed investments”, claiming to have found at least five Entry Point Projects (EPPs) under the ETP worth RM17 billion where the ultimate investment may be less than promised.

“At least two big ticket private sector EPPs — Karambunai Integrated Resort and Tanjong Agas Oil & Gas Hub — may not deliver as much economic transformation or investments as PEMANDU would like us to believe,” it said.

As an example, REFSA said that PEMANDU had given itself a 110 per cent score in its KPI for the villa pre-bookings at the RM9.6 billion Karambunai resort even though the project developer is being sued for defaulting on RM18 million in rental payments.

Karambunai Corp, it said, is currently the subject of legal suits mounted by some 100 investors in the Nexus Residence development in Kota Kinabalu. The investors, who had bought luxury beachfront properties which were completed in 2009, are claiming that the company is nearly one year in arrears of rental payments due to them.

REFSA also drew question marks over investment targets identified for the Tanjong Agas Oil & Gas hub in Pekan, Pahang, saying the ETP report had touched very little on the project’s progress so far.

It said that while PEMANDU had in November 2010 said that RM3 billion of investments was expected in the industrial park between last year and this year, the ETP report had gone on to proclaim that total investment of RM30 billion was expected in the next decade.

“The validity of this assertion is questionable, given that the very same Annual Report says little about progress so far,” REFSA said.

“Two other projects under this EPP with foreign partners — in Pengerang, Johor and Pulau Daat , Labuan — were cited as achievements. But nothing was said about the RM620 investment commitment into Tanjong Agas by the Dubai-based Oilfield Supply Center (OSC) announced in October 2010,” it added.

REFSA also alleged that based on present figures, it was clearly shown that private enterprises are rejecting the ETP, only contributing some 37 per cent to the total number of investments here.

The private sector, it added, is targeted to account for at least 60 per cent of ETP investments in the 8:32:60 ratio of investments from the government, GLCs and the private sector.

“We reiterate our call: PEMANDU must take the bull by the horns and address the root causes of why the private sector has little confidence in the long-term potential of the country to invest capital in the so-called shovel-ready projects under the ETP,” REFSA said.

It added that if private sector investment is lagging, “hiding” behind different sets of data would not help Malaysia achieve its high-income nation status.

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