Transforming Perak into k-economy State govt focuses on attracting foreign investors, and streamlining administration and strategy

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1 21 March 23-29, 2013 Transforming Perak into k-economy State govt focuses on attracting foreign investors, and streamlining administration and strategy FROM a mining community to a community to develop the mind, the state of Perak is carving its way forward as the new intellectual boomtown. Focusing on bringing in foreign investors, and streamlining the state administration to make it more efficient and its multi-pronged strategy to lift the Silver State to greater heights, the current state government has proven its mettle by surviving more than three months as some critics speculated when it came into power in In an interview with FocusM, Menteri Besar Datuk Seri Dr Zambry Abd Kadir shares how the state is transforming itself into a national powerhouse, focusing on a knowledge-based economy (k-economy), information technology and even the automotive and mining industry once again. Education hub Zambry says the transformation of Perak into a k-economy includes plans to develop the state as an education hub. This is in line with the establishment of a growing list of both private and public universities, including Universiti Teknologi Petronas (UTP) in Bandar Seri Iskandar, two Universiti Teknologi Mara (UiTM) campuses in Bandar Seri Iskandar and Tapah, Quest International University in Ipoh and the upcoming establishment of the SEGi Enclave in Ipoh. We are in the process of marking up the areas of Kampar, Ipoh and Tronoh as an educational triangle, says Invest- Perak CEO Datuk Ir Muhammad Hafni Ibrahim. I think one of the most understated achievements in Perak is in the form of education. If you look at our state historically, we have a history of establishing some of the best schools in Malaysia. This includes the Universiti Perguruan Sultan Idris, the Malay College Kuala Kangsar, not one but two Universiti Teknologi MARA campuses, and more, says Perak State Development Corp chief executive Datuk Aminuddin Md Desa. Also part of the transformation into a knowledge-based economy is the focus on information and communication technology. This is managed by the K-Perak INC Corp based in the Perak Techno Trade Centre in Ipoh. Cutting red tape The key to the state s recent success is the streamlining of the way the administration works, says Zambry, citing the land status change procedure as an example. The procedure before his administration took 1½ years to complete. We went down to the ground and met up with those involved in the land office, and we asked if they could make their work faster. They managed to reduce their process duration to six months. While that was good, we approached them again and asked if it was possible to make it even faster, and they said yes. This continued for some time until now, the procedure takes only one hour today, Zambry says, adding that the state government had launched its own blue ocean strategy some four years ago. The menteri besar says the changes are also seen in how the state executive councillors work. We have this room which was stacked with files four years ago; files of issues relating to excos. In the past four years, we managed to clear that backlog of outstanding files and it Zambry says the end-game for his administration would be to achieve all that are listed out on a national and state level is all because we changed the culture of administering the state. While other states have an exco meeting every two weeks, we do it on a weekly basis. Furthermore, we also work with the goal of all departments to complete [deliberating on] the file during that meeting, and not just ending the meeting by 5pm and going home. Through this change in culture, we managed to clear thousands of files, Zambry says, adding that such changes were necessary in bringing in high investments. The state s transformation programme entails a restructuring to make the state attractive to investors, cutting short the waiting periods and red tape to make the government investor-friendly through the formation of InvestPerak, which Zambry dubs the state s Pemudah. It is a one-step centre that when investors visit it, they [are able to] open all doors in the state government departments for authorisation, he adds. Asked about the weaknesses and challenges to develop Perak, Zambry concedes there are issues regarding the lack of time, the need to reappraise institutions and even the administration of the state itself. We need to understand that unlike past administrations, the idea that one size fits all is no longer applicable. We need to understand that the days of the government is always right is over. And this requires us to be more people-oriented and recognise our own limitations. This is why we must promote transformation; be transformative, not only [for] ourselves, but [also for] the state for a better future, he adds. Bringing in the money On investors perception of Perak, Zambry believes that their confidence in the state is high. In 2012, we contributed 5% to national GDP growth. And recently, we had a meet-up with some members of the business community who told us that we need to review our GDP contribution from 5% to 6.5%, he says, adding that major investments such as the Edu City development by Menteri Besar Incorporated (MB Inc) and even T-City, which will have an F2-circuit developed by a Singapore-based firm, were proof that investors did not lose confidence in the state. by HAFIDZ photo by SHARIL AMIN ABDUL RAHIM The menteri besar also highlights his Perak Amanjaya plan, the state government s master plan to improve the quality of living and income in the state, and to generate greater opportunities for the state s people. Zambry explains that this consists of multiple thrusts. This includes several focuses like the establishment of state GLCs [government-linked companies] to encourage businesses and investments, develop a k-economy and also going further into employee development. We are also looking at adding value. For example, we have plenty of quarries which produce raw material, but we need to focus on value-added programmes and businesses, he adds. Listing the investments in Perak, both Hafni and Aminuddin spoke of the establishment of Proton Auto City in Tanjung Malim which Zambry believes will help the state generate more interest as an automotive industrial hub. Also based in Perak is Japanese technological multinational conglomerate Toyo Corp, which is due to begin operations in May. We also have [a] Vale set-up in Lumut which has expanded three times in the past four years. They ve invested more than RM8 bil in the state so far. Thus, if people were not confident, would they still expand their industry in the state? Hafni asks. Vale SA is a Brazil-based diversified metal and mining multinational corporation, in addition to being the second-largest mining company in the world. Untapped tourism market Zambry concedes that one sector which the state government has yet to develop fully is the tourism market. I think we have yet to do so. There is a huge market for tourism and we have the resources, but these still remained untapped. And we need to tap into this, but we re still working out the kinks, he says. Looking forward, Zambry says the end-game for his administration would be to achieve all that are listed out on a national and state level. The end-game would be to recognise the Perak Amanjaya vision along with achieving Vision It is to develop Perak into a fully developed knowledge-based state by 2020, using information technology as an enabler, Zambry adds. Amanjaya masterplan to raise quality of life THE Perak Amanjaya master plan is the brainchild of the state government and the Darul Ridzuan Institute with the goal of alleviating the state s quality of life, and increasing income and opportunities. The plan consists of seven key thrusts which include equal development, creating a learned society, developing more active youths, a sustainable and effective civil service and also maintaining the biodiversity of the state. Each of these includes a list of key result areas (KRAs) which the state government will keep track of. 1. EQUAL DISTRIBUTION AND DEVELOPMENT Each region and everyone from all walks of life will enjoy the benefit from development initiatives in a fair and balanced manner. 2. CREATING A SKILLED AND LEARNED COMMUNITY WITH INTEGRITY Every individual has the ability to meet current needs and, equipped with moral values, is able to engage effectively in community development and economic activities with high potential 3. STATE AND GOVERNMENT AS A CATALYST The government is the catalyst to develop economic growth through efficient delivery systems which meet the expectations of all stakeholders 4. CONNECT AND UNITE THE COMMUNITY Each individual believes, trusts and mutually respects the cultural diversity and faith of one another 5. AN ACTIVE AND PARTICIPATORY YOUTH FORCE The development and wellbeing of youths is maintained through the provision of quality opportunities that enable them to participate actively in all socio-economic sectors 6. CREATING A SUSTAINABLE SYNERGY WITH THE PRIVATE SECTOR The intensive and active involvement of the private sector in sustainable economic and social developments 7. ENVIRONMENTALLY- FRIENDLY PRACTICES AND PRESERVATION OF NATURAL RESOURCES Environmental sustainability and the preservation of natural resources are maintained by emphasising the need for cooperation by all parties in the preservation and conservation of the environment

2 30 FocusM CONTACT US Tell us about your property launches and new development. Send information about real estate/property conferences and events and shopping carnivals to Realty & Retail June 8-14, 2013 WITH an impressive pretax profit of RM420 mil for 2011, the Selangor State Development Corporation (PKNS) is the envy of most state economic development corporations in the country. However, PKNS has ironically come under sustained fire from certain quarters for having apparently made too much profit and developed highcost housing out of the reach of the common people in Malaysia s richest state. The critics are particularly targeting high-end projects by PKNS wholly-owned subsidiary DatumCorp International Sdn Bhd (DCI). There are nine projects under the Datum series developed by DCI. PKNS denies that embarking on higher-end products is a move to boost its burgeoning cash pile. On the contrary, it says, the move is necessary as its high-end projects enable the corporation to subsidise the cost of affordable housing in the state, says general manager Othman Omar. So what we want people to know is that our high end is what is subsidising our affordable housing. This is why our houses are much cheaper, he says. The whole idea is to make profit from this high-end project and actually subsidise the affordable housing, Othman says, adding that PKNS has built 92% of its houses priced below RM400,000. Of this, 52% are priced below RM200,000 per unit. He explains that under PKNS, housing categories are determined by name, which determines the price of the houses in each development. PKNS has the Rumah Idaman, priced below RM150,000. Up to RM400,000 is Residensi. From RM400,000 to RM1.5 mil is Signature, and above RM1.5 mil is Prestige. It is easier for people to know which category to look out for so that they don t mess up looking for a BMW when they want to buy a Perodua, Othman explains. Asked about the protests which have taken place regarding the Datum Jelatek development project located in Ampang/Ulu Klang, Othman says that this was purely for political mileage. We believe it s all media-spinning, because of the recent general-election fever. Some people wanted to get elected, promising certain things. Rumours arose that we were selling Kompleks PKNS, which was untrue. We even had a press conference clarifying the rumour and still, six news agencies carried reports that we were selling it, says an exasperated Othman. On how these rumours were dealt with, Othman explains that PKNS makes decisions in private, with the federal government s knowledge. We have representatives from the federal government on our board. There are two members from the Ministry of Finance, one from the Economic Planning Unit, he adds. Too much profit? While PKNS continues to build affordable housing while developing high-end properties, critics are saying that the corporation is making too much profit. We made record profit in 2011, RM420 mil before tax by the entire by HAFIDZ photos by ANWAR FAIZ AHMAD TAJUDIN When people say it is not a level playing ground, we agree. They start from zero, I start from negative RM1 bil. PKNS high-end strategy to subsidise homes Profit from high-end projects enables corporation to subsidise affordable housing in Selangor OTHMAN group, but we got hit. People said we were making profit because rental and homes were expensive. No, this money is what we use to subsidise projects such as Bukit Botak. Our profits go up and down, Othman says. Asked how much subsidy PKNS was dishing out, Othman could not give an exact figure but furnished FocusM with examples from recent housing projects. Taking the example of a development in Bukit Botak called Selayang Mutiara, 1,420 units of semi-detached houses were sold for RM99,000 each. Of course, the value is about RM350,000. It costs us RM180,000 to build, so the subsidy is almost RM100,000 per unit. We spent RM260 mil for this development and we have to subsidise, lose RM80 mil in total, Othman says. These are some of the things we need to do for corporate social responsibility [CSR], for the state and the people. So people need to understand that we need to make a profit from somewhere. We have a lot of subsidised social projects, he adds. Othman says that this is where DCI and another subsidiary, Worldwide Holdings Bhd, were contributing through privatisation projects, since other developments either had very low profit margins or were heavily subsidised. As such, Othman says the people should not have issues with PKNS turning a profit. But this is what we provide for people. This is why people love to buy our houses, but at the same time they shouldn t be hitting on us for making a profit. Whatever profit that we make is to contribute back to our some five million stakeholders. It should be

3 &R R 31 June 8-14, 2013 Making PKNS more transparent Othman believes that the controversy surrounding DatumCorp s Datum Jelatek project is purely for political mileage during the general election okay for PKNS to make a profit, he argues. Othman also denied that PKNS had abandoned helping the bumiputeras. We want people to understand that PKNS is indeed helping the bumiputeras, the underprivileged. So I don t think they should hit on us. They should do it to those who don t comply with the quotas. We have a bumiputera quota of 70% when the quota is only 30% for others. It is more difficult for us, he says. Othman also dispelled the misconception even among developers that PKNS was getting government support in the form of grants and free land for development. No, we don t get free land. We pay premium market rate, even higher than the market rate, but we have to spend on affordable housing, subsidise projects, build infrastructure, sell at lower than cost because we want to bring in foreign domestic investments and create job opportunities. So these are the things we deal with. So when people say it is not a level playing ground, we agree. They start from zero, we start with negative RM1 bil, Othman says, adding that PKNS had additional costs whenever it built a township. When we build a township, we will build the interchange. Do they build such things? It s about these challenges, balancing the profit, people and planet, says Othman. We want people to understand that PKNS is indeed helping the bumiputeras, the underprivileged. So I don t think they should hit on us. They should do it to those who don t comply with the quotas. THE Selangor State Development Corporation (PKNS) has implemented measures to make it more transparent and accountable in its bid to fend off accusations of shady practices. While general manager Othman Omar admits there have been accusations that the state development body was lacking in transparency in its dealings, he points out that in terms of staff placement and support from non-government bodies, these claims are baseless. They say that we re corrupt but we have collaboration with Transparency International Malaysia (TI-M). There are three staff from TI-M looking into our decision-making processes, he says. We have independent directors in PKNS including Datuk Salih Mahmud who is the ex-accountant General. We then started the corporate governance integrity committee. We invited Datuk Paul Low [former TI-M president] to be in the committee, and now he s the Minister in the Prime Minister s Department on transparency, he says. Othman adds that the semi-government body has had a lot of people contributing to the enhancements on corporate governance and its policies. We have the whistle-blowers policy, no gift in hospitality policy, open tenders and bottom-line savings of about RM100 mil every year from these [initiatives]. So it s not just whitewash, and we did not sign the integrity pledge with the Malaysian Anti-Corruption Commission (MACC) until all these were done, he says, adding that everything on the checklist provided by the agency was implemented before it took the integrity pledge. Because we don t believe in signing first and only then working towards it, so instead we did the pledge with everything in place, to show that we mean business, he adds. Othman also believes that PKNS staffers also need to be included in the process of combating corruption and promoting transparency in the workplace through shared values. And we have campaigns to include the staff because we need to instill the values. People need to understand what it is, how to be transparent, how to have high integrity, how to enhance corporate governance; it needs to be in our culture, says Othman. Zero landbank strategy for urban regeneration WITH virtually no landbank to speak of in the urban areas, the Selangor State Development Corp (PKNS) has now adopted what it calls the zero landbank strategy. Our strategic landbank is depleted 99% depleted. A lot of our new landbank are outside the Klang Valley. We have 6,000 acres in Bernam Jaya, Antara Gapi, Kota Puteri, and then we have 1,500 acres in Cyberjaya, says general manager Othman Omar. Explaining the zero landbank strategy, Othman says this includes urban regeneration in the state, which is the main purpose of PKNS wholly-owned subsidiary DatumCorp International Sdn Bhd (DCI). So, now it s about how do we get more land to develop without land? So that s what we call the zero landbank strategy. One is what we call urban regeneration, meaning transforming all those brownfield areas, slum areas, old flats and even the Kelana Jaya Sports Complex into vibrant communities with mixed use, he adds. However, Othman also points out that such development projects come with the need to compensate those living on the land which PKNS wishes to redevelop. And we do not get grants and we do not get free land as a lot of people think. We buy it off the market. Actually, for projects such as the Datum Jelatek [in Ampang/Ulu Klang], we don t get land from the state. It is our land we compensated the people who owned those flats to contra with our houses. So now, they are in semi-detached houses, landed property, bungalows even, and they re very happy. Instead of staying in a 500 sq ft flat, they are staying a bit further away in Antara Gapi but they are happy, he says. Othman also says the state-owned development company has found certain plots of land to be developed for mixed use in strategic locations such as Kelana Jaya, Petaling Jaya, Ampang/Ulu Klang, thus becoming a new landbank for new projects. Secondly, it is also to do reverse privatisation. Before, people would develop our land and they call it privatising. In reverse privatising, we develop other people s land. So we have a few such as the Perbadanan Kemajuan Pertanian Selangor (PKPS) land in Bandar Baru Sungei Buloh, Othman adds, referring to the Datum Educity 1 project. The Educity is PKPS land, we give them a percentage of the shares, then we sell en bloc 90% of the development to HCK Capital. We just keep the other 10%, the front row of shophouses, Othman says, adding that this was the new modus operandi for PKNS. According to Othman, PKNS was looking to sell en bloc and buy en bloc, likening the corporation to a property supermarket. This is where we look at another developer s project. We just go in and sell it. Why should I buy a piece of land, wait for one and a half years to convert it, and then take another three years to build and then only launch it? I might as well talk to other developers and they are eager to work with us on this modus operandi, he adds. Othman says PKNS was in talks with a few other developers, but could not divulge details due to non-disclosure agreements. Another measure under this strategy is the upgrading and rehabilitation of old buildings owned by PKNS. So either we buy them or in the case of Kompleks PKNS, we upgrade it by spending another RM10 mil and increasing the GDV. We are doing the same with Menara PKNS in PJ. These are the two we are enhancing at the moment. We are also getting the rights of development for Kompleks PKNS because we are supposed to have another three buildings that go on top of the complex, Othman says, referring to the Shah Alam shopping complex located in Section 14 which was built in the 1970s. For the Datum series in Shah Alam, Othman says PKNS was talking to three parties on developing the land within the triangle. So we are talking to three more parties over the rights of development, such as Ancom Bhd. It has land opposite Kompleks PKNS which we sold to them previously. So they are proposing to work together so that they can actually provide the car park, which is limited. If we build the car park, we can put three towers on top. Then there is value added to Kompleks PKNS, he says.

4 20 FocusM April 6-12, 2013 MRT connectivity conundrum Klang Valley s transportation network still needs to be properly linked up THE RM50 bil Klang Valley Mass Rapid Transit (MRT) project may end up being a monumental disappointment if underlying issues such as integration and inter-connectivity are not quickly addressed by the transport authorities. This includes revamping the Klang Valley s bus network and addressing the security concerns relating to public transportation. MRT Corp CEO Datuk Azhar Abdul Hamid says there is a realisation that if the MRT lines are not integrated well, effective mobility across the city would remain a pipe dream. In a hard-hitting interview with FocusM, Azhar talks of the challenges of interconnectivity and the need for further development in Kuala Lumpur s by HAFIDZ SAIFUL HIZAM MANSOR/FOCUSM Azhar talks of the challenges, interconnectivity and the need for further developments in the mass transportation system to ensure total effective mobility of Greater KL-ites come 2017 mass transportation system to ensure total effective mobility of Greater KLites come MRT Corp is fully owned by the Ministry of Finance, Inc and was set up to be the developer and asset owner of the city s MRT project. Azhar acknowledges that the onus is on MRT Corp to ensure that public transport becomes an abovepar convenience. One of the challenges is to make sure that we can get people to the station conveniently. This is why the proposal to have an effective feeder bus system is going to be very important so that you can reach out to an area that is two or three kilometres out of the station and bring them to the station as opposed to having them drive to the station or walk, he says, adding that the RapidKL feeder bus systems managed by Syarikat Prasarana Negara Bhd will be responsible for this. It will be (Prasarana s responsibility). And I think this is where an organisation like SPAD, as the regulator, plays an instrumental and important role in assuring that this happens effectively, he adds, referring to the Land Public Transport Commission. I think if you look at the railway scheme today, there is already very clear connectivity with the LRT, monorail and the KTM Komuter, says Azhar, adding that along the first 51km of the MRT line, there will be seven connectivity points. He also says there is a need to change the Malaysian public s mindset on using public transport. First and foremost, you cannot blame Malaysians for not wanting to use public transport because of two key reasons. One, at the moment, it does not meet the key requirement; DD HOE/FOCUSM The MRT project, to be completed by December 2016, is expected to create more than 130,000 jobs during its construction and is expected to generate between RM3 bil and RM4 bil in gross national income per annum it does not take them to where they want to go most of the time. It s not convenient. And two, we are naturally at a disadvantage because Malaysia is a tropical country, with the issue of sun and rain to contend with. So really, we have to start thinking of ways and means of encouraging people to use public transport in the best possible way, he says. Personal security concerns Asked if security is another concern of the public, Azhar agrees, adding that the hardware is no good without the software. If you imagine a young lady who wants to use the MRT, leaves her car in Sungai Buloh to come to the city centre, we want to make sure that she is comforted. That, one, her car is safe and secure in the parking lot. And two, it s also safe for her to use the park-and-ride From plantations to MRT systems DATUK Azhar Abdul Hamid, 51, who was appointed CEO of MRT Corp in August 2011, spent a major part of his illustrious career at Sime Darby. He was the acting president and CEO of Sime Darby Group during the hectic period after the sacking of Datuk Seri Ahmad Zubir Murshid and before the appointment of Datuk Mohd Bakke Salleh in June He began his senior executive career with British Telecom Plc, UK in 1989 as an internal audit manager before returning to Malaysia in 1991 to join Malaysian Cooperative Insurance Society as head of internal audit. In 1994, Azhar joined Sime Darby Group serving in Sime Tyres International Sdn Bhd as financial controller, Sime Conoco Sdn Bhd as business development director and the group s engineering, oil and gas division as group general manager. He left Sime Darby in November 2001 and was appointed as the group chief executive of Pernas International Holdings Bhd, a post he held until October 2002 before returning to Sime Darby as the business development director in Sime Plantations Sdn Bhd. Between 2004 and 2006, Azhar was the managing director of Tractors Malaysia Holdings Bhd and at the same time the divisional director of Sime Darby s heavy equipment division, Asia-Pacific. He returned to Sime Plantations Sdn Bhd as managing director while concurrently holding the post of divisional director of Plantations & Food division of Sime Darby Bhd. Following the merger of Sime Darby, Golden Hope Plantations and Kumpulan Guthrie in November 2007, Azhar was reappointed as the managing director of Sime Darby Plantations Sdn Bhd and executive vice-president of Sime Darby s plantation & agribusiness division. Azhar also served as chairman of the Malaysian Palm Oil Association, and as a board member of Malaysia Palm Oil Board and the Malaysian Palm Oil Council. facility and it s safe to get back, even late at night. So, of course security is going to be an issue for us as well, he says. Azhar adds that the major challenge for the MRT is to remain fresh when it is launched, ensuring that the development is proactively developed to remain relevant in the future. Today, we are in 2013, but the product will only be delivered in So, if we think about what we have now, it s going to be stale by the time it comes. We don t want that. As far as possible we want to be as proactive as possible. Connectivity for young people is very important to us. So when they come into the stations, they can be on the Internet, when they re on the train they can be on the Internet. When they are moving in a tunnel they can be on the Net. So it has to be fresh, he says. Azhar also admits that Malaysia is late in the development of public transport infrastructure, going so far as to describe the MRT project as a rushed one because everything has to be done by To make up for this, the MRT Corp CEO suggests that the development should be proactive. In the good old days, people were talking of development of above ground real estate. Today, in many countries, especially the developed ones, people are talking about underground property development. We should now, in certain areas like underground property development, be proactive. We need to start planning so that all these will come together, Azhar says. Kuala Lumpur has got a long way to go. I don t think it will end with the LRT Ampang-Kelana Jaya line and the MRT Lines 1, 2 and 3. I think we ve got a long way to go, Azhar adds. The Economic Transformation Programme (ETP) annual report 2012 reveals that the MRT project, to be com-

5 21 April 6-12, 2013 MAIN CONTRACT PACKAGES pleted by December 2016, is expected to create more than 130,000 jobs during its construction period and expected to generate between RM3 bil and RM4 bil in gross national income (GNI) per annum. With the project only 7% physically complete and with another three years to go, questions are now brought up on how connected the MRT system will be. The report also states that the year 2020 will see the Greater KL s future 10 mil population growing dependent on urban mass rapid system, and labels the MRT project as a catalyst for economic growth. Keeping costs low When addressing the claim that MRT Corp s costs were ballooning, Azhar was adamant that the company had focused on keeping costs low. The best approach is that our tender process is relatively objective in terms of making sure that the cost is kept low. We certainly don t have direct negotiations. All our packages or work contracts are on tender basis, he says, adding that MRT Corp has adopted the best practices of the civil and private sectors. The way we award our contracts is based on very well-proven guidelines and we have clear segregation of responsibilities in ensuring that different review decisions are taken at different levels. So, we even adopt the two envelope system that is commonly adopted by oil and gas companies like Petronas and a lot of tenders which are done on PQ (pre-qualification) basis. But we also have tenders on an open basis, he adds. MRT Corp also sought to reduce the cost of land acquisition, which constitutes a major portion of the total cost of the project, through using government land reserves as much as possible. In SECTION V1 (5.03km, 3 stn) Syarikat Muhibah & Perniagaan & Pembinaan Sdn Bhd Value: RM1, mil SECTION V2 (5.40km, 3 Stn) Gadang Engneering (M) Sdn Bhd Value: RM mil finalising the alignment we were trying to minimise the encroachment into private property which required us to undertake compulsory acquisition and we wanted to keep that to a minimum and we did. Of course, we can t avoid it. So, whatever acquisition we need to do, we have already done. Azhar also points out that MRT Corp has to-date exceeded the targets set by the government in terms of bumiputera participation. One of the objectives that we have in this project is that we have a target for ensuring there is adequate and acceptable bumiputera participation. Now what the prime minister has done is that he has asked us to ensure that we give at least 43% SECTION V3 (6.26km, 3 Stn) DEPOT Trans Resources Corporation Sdn Bhd Value: RM458.98mil Mudajaya Corporation Berhad Value: RM mil SECTION V4 (6.32km, 3 Stn) Sunway Construction Berhad Value: RM1, mil in terms of value to bumiputera companies. What we have done now is that we have exceeded that, at 47%, he says, adding that localisation of contractors is also another step in lowering costs. We have shortlisted, or pre-qualified, small bumiputera companies that are localised along the alignment. We re not looking at a bumiputera company based in Kuantan to come and do work in Sungai Buloh, for example. So, we are avoiding that and localising the contractors. Once we ve done that, we carry out a balloting process, similar to what the Public Works Department does for small bumiputera contracts, he says. According to the recent ETP annual report, the land acquisition process was SECTION V6 (5.42km, 3 Stn) Ahmad Zaki Sdn Bhd Value: RM mil SECTION V7 (4.03 km, 2 Stn) MTD Construction Sdn Bhd Value: RM mil SECTION V8 (4.40km, 3 Stn) UEM Construction Sdn Bhd Value: RM mil UNDERGROUND SECTION (9.5km, 7 U/G Stn) MMC Gamuda KVMRT(T) Sdn Bhd Value: RM8,280 mil SECTION V5 (4.59 km, 4 Stn) IJM Construction Sdn Bhd Value: RM mil DEPOT TSR Bina Sdn Bhd Value: RM mil already 94% complete. Of course, the only patch now is Jalan Sultan. But that does not need to be resolved soon. We re only tunnelling through there in It s not a big issue. We re not going to take any property there. Whatever acquisition we need we have already done. We have already flattened those and we are now constructing the station box, he adds. Azhar also explains that the RM8.8 bil underground development works package awarded to MMC-Gamuda KVMRT (T) Sdn Bhd was also about to begin. We ll start tunnelling in May. In early May, we ll probably start in [Jalan] Cochrane and [Jalan] Semantan, he says. Where Malaysia stands in regional healthcare industry MALAYSIA is the smallest contributor to medical tourism in the Asia Pacific when compared with its peers Thailand and Singapore. According to Frost & Sullivan, Thailand is the main centre of medical tourism with over 56% market share in terms of revenue last year. Singapore, with a market share of 17%, has a good reputation in complex specialty services like transplants and oncology. While Malaysia had contributed about 3% market share, the research house says Malaysia s medical tourism is one of the fastest-growing in the region with an estimated 20% growth in revenue in 2012 over the previous year when the revenue from medical tourism hit a record RM mil. The medical travel market in Malaysia is also expected to triple in the next three years to RM1.57 bil in 2016, registering a compound annual growth rate of 25.2% during the period. Patients from the Middle East, followed by Indonesians, are the most frequent tourists seeking healthcare in Malaysia, compared with Thailand which attracts a large proportion of Japanese patients, says Frost & Sullivan vice-president of healthcare Rhenu Bhuller. In pharmaceuticals, Thailand is a stronger manufacturing hub than Malaysia. Thailand imports about a quarter of its pharmaceutical products with the rest manufactured locally, while Malaysia mainly imports for its domestic consumption. In terms of medical research and development, Singapore is the more successful among the three countries in attracting companies, investments and talents in the sector through the Economic Development Board and Agency for Science, Technology and Research. Going into specialised services From page 19 (EPP) under the government s ETP while the 1NIH complex and Perdana University Hospital project are private initiatives. The Setia Alam 1NIH complex and Perdana University have a different concept compared with the Health Metropolis. 1NIH is a replacement facility for the Ministry of Health s Research and Training Institute in Bangsar whilst Perdana University is a medical school with a teaching hospital, says Dr Chua Hong Teck, the director of Healthcare NKEA at the Performance Management and Delivery Unit (Pemandu). The Health Metropolis concept, however, features a campus which co-locates flagship tenants from both private and public sectors involved in care, research and academia. This means other than UM [University Malaya] and its teaching hospital, other private hospitals, private medical schools, private research centres and other private healthcare-related entities can be located within the same campus, he says. We foresee that in the future, there will be other medical clusters with similar concepts in the country and there will be inter-cluster collaborations. The ultimate benefit will be the development of the medical sector in the country, he adds. Besides that, diversification into other segments of the healthcare market like biologics and medical devices manufacturing can also be an area in which future medical hubs could focus on. Despite tough economic conditions in 2011, the revenue of medical devices companies in Malaysia grew by 4% to almost RM5 bil from RM4.7 bil in 2010, Bhuller says. While market forces will determine the growth and progress of these medical hubs, Dr Chua says Pemandu does encourage market players to work together where there are synergistic benefits. In the end, it is all about finding a niche and creating a competitive edge for every new medical hub. As investpenang general manager Loo Lee Lian comments on the competition from hospitals in Thailand and Kuala Lumpur: We are not competing with each other. In fact, we are complementing each other, as one can go to other places for some treatments and come to Penang for further treatment or the other way round. We differentiate ourselves from the rest by selling Penang as a package. Patients and their families can come here to enjoy the beaches, the hill, the shopping centres, the food and the Unesco heritage city area while getting treated. They include those coming here for business too. We promote the location as well as the services.