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Friday, December 31, 2010

The Untouchables at TM and Khazanah- Final Part.


Picture this scenario.



It is now the second phase of providing the 3G services. Nokia and Huawei have performed well. The services were well taken up by consumers. It's time to expand. New tenders must be called. They are called.



The tender committee deliberated on the prospective vendors to expand the services of 3G. The successful vendors in the First phase, Huawei and Nokia participated too. So did other established players. Probably 10-12 were shortlisted.



Now here comes someone, admitting the name of Alcatel. Alcatel says we have the product. But it has no track record. Its product hasn't been tested for its technical integrity and robustness. It didn't get a favorable verdict at the technical stage.



Nevermind. We have been asked to help if we can. That means we have to. Just this time, we set aside the provisions in the colored books. The whispers from beyond the walls of Khazanah are more potent. So, some people insisted Alcatel be given a chance to participate. So it did. It won the contract as vendor to supply the 3G services for the rest of the country. The price was USD 85 million.



A minority objected to this late entry insisting that it must be subjected to the protocols of tender. By that I suppose, it meant, Alcatel must go through a rigorous process of selection and evaluation. Having qualified, they are admitted into the final phase of selection, being assessed by the tender board committee. Assuredly, the person carrying the cause of Alcatel was a member of the tender committee.



It didn't go through such a robust and transparent procurement process, but was admitted in any case. A larger number of board members didn't see anything amiss at this manner of entry. There were whispers that Alcatel's entry has been endorsed right up to the corridors of MOF2. Even though, it was clear, such highhanded admission violated the rules and guidelines ensconced in the multicolored management manuals supplied by Khazanah. The High Priest at Khazanah sayeth- do, so it must be done.



Protestations by minority were easily defeated. The chairman of the tender board put his foot down insisting that Alcatel be considered.



I suppose now TM will grill the chairman of the tender board then. The two fall guys are said to be runners for some board members or to some senior management at TM. If they are runners, they receive instructions. We must go after them.



By the way, I must salute Zamzairani for declaring that investigations into the conduct of TM will be an open book. That book will be much more respected if it leads to direct investigation by the police or MACC. I salute him further, if his statements were made independent of Khazanah's supervision. Hey Zam- did you get clearance from Amok? You mau mati kah? And lose the RM 1.5 million annual income?



Move over to Indonesia. TM has an international arm, TMI. In Indonesia for example TM through its TMI operates it cellular services through ExCelMinIndo. It wanted to offer the same vendor for the Sumatran market. Since Alcatel has already been accepted as the vendor for peninsula Malaysia, why not appoint it as vendor for the Indon market? Senang kerja bukan? If it's good for Malaysia, it must also be good for Indonesian operations.



Those people in Sumatra were asked repeatedly to accommodate the technical compatibility that comes with Alcatel. The CFO was asked to accept the appointment of Alcatel for the end user- Ex Celcom Indo by reporting that Alcatel offered the best in terms of financial acceptability. He refused unless the people here in TM Malaysia request so in writing.



The chief engineer there was asked to report that Alcatel satisfies all the technical requirements and its appointment will therefore be technically justified. . He refused too unless the request from the parent company in Malaysia was done in writing.



In the end, to decide for the end user in Indonesia, TM tender board here approved the award to Alcatel.



What is the relevance of the story above?



The relevance lies in our ability to place what is happening now in its proper context. That context is a procuring regime which is far from what TM has pompously claimed. We have seen how, the procurement regime which consists of certain protocols was often violated to allow selected and preferred and that which has received whispered endorsement to be appointed vendor.



Now now people, the Alcatel people have themselves admitted to bribing the Malaysians, we are now setting up a board-subcommittee to investigate? I am not about to allow the cheap trick in retorting that criminal charges cannot be proffered by a company. Someone commented that on my article on Sime Darby. Then, the most logical step for TM and Axiata is to jointly refer the matter to SPRM so that criminal charges can be taken.



All this setting up a committee is akin to the chisel making noises when the house is already completed. Pahat bising, rumah sudah siap. We the people are reading it more as a CYA ruse- Cover Your Ass ruse. Somebody other than the 2 guys has benefited from the deal. The surest way to get to the bottom of this affair is to get the two jokers to sing like canaries.



It is also strange; the MACC is offering to verify the allegations. Will TM and Axiata or even MACC will then come do the Singapore thing of saying, the version of the story doesn't seem to match with our own internal notes?



The facts are these. Whatever was supplied by Alcatel didn't work and was scrapped. The question is, at that time, was Alcatel evaluated rigorously or was its entry into the business system of TM in Malaysia and also Indonesia, conducted under strict terms of reference of TM's robust and transparent procurement policy.



The way Alcatel was pushed through for the Sumatran market raised serious objections by certain people. It must have been very serious indeed to have led to the resignation of Dato Nurjazlan Mohamed who at that time was a board member of TM and also member to the board audit committee.



So, let us take TM on its "believes that it has a robust and transparent procurement policy and adheres to policy, processes and current best practices". Further, TM added:-



"We take these allegations seriously and we will extend all necessary co-operation where required to the relevant authorities. Through a proposed board sub-committee, we will further conduct a thorough internal investigation to safeguard the integrity of our procurement process and Code of Business Ethics. "TM has a zero tolerance policy towards such improprieties and will take appropriate action in the event that any of our employees were indeed involved," the company said in the filing.

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