MAKING A FOOL OF THE MALAYS: Kulim & NUR not success stories but UMNO FAILURES

The Kulim Hi-Tech Park (KHTP), was officially opened in 1996, the first commercial estate to house specialist high technology industries in Malaysia. The nature of this park is to catch a niche market that needs a 'fool-proof' uninterrupted power supply. There are many sophisticated operations that cannot tolerate even for a second a power brown-out as that may be enough to create havoc in the costly manufacturing processes. So when there is a hiccup in power supply, the firms who have committed to set up stall there stand to lose millions as it is very time consuming to restore the complex systems and re-start production.

Kulim, which was another of former premier Mahathir Mohamad's 'brainchild', was beset by problems right from the start. There were few and insufficient takers for the 31 industrial lots needed to provide economics of scale for the developer's construction of 5 mini-power plants. The 5 power plants were needed to provide sufficient standby power that TNB could not provide through the main power grid lines. And these 5 plants, although not supplying power simultaneously, had to be on standby 24/7. Thus, it is very costly to have all 5 systems working when there is no or insufficient income because the power has to be burnt or wasted in any case.

So for years, the situation at Kulim was like the proverbial chicken-and-egg, i.e. which came first? Without the power plants, there would be no hi-tech manufacturing plants. Yet without the hi-tech manufacturing plants, the 5 power plants cannot be constructed as the costs would be too prohibitive.

Then, as usual in Malaysia, whenever there is huge money to be made, UMNO is bound to be involved. And more often than not, the money somehow vanishes into thin air, leaving behind a big huge white elephant which will have to be paid for over and over again by the people..

Greed that knows no bounds

Indeed, Kulim is symptomatic of UMNO's greed during the Mahathir era. Some greedy 'warlords' were not content to monopolize the power industry through Tenaga Nasioal Bhd. They wanted a set-up like Kulim, where the 5 plants would be totally independent and untouchable by even TNB. Kulim would not only be a separate power producing entity but also the gateway to the Forbes' List of the World's Wealthiest for many quarters with close ties to Mahathir and UMNO.

To cut the story short, in the end instead of 5, only one power plant was constructed producing some 228 mega-Watt of electrical power (compared to normal plant supply 1,500 MW). The deal was given to Northern Utility Resources Sdn Bhd ( NUR). This obscure firm was given a 30 year concession period beginning 1997. But as a result of building only one power plant instead of 5, not many hi-tech companies were keen to invest there. The investors were not at all keen to take the risk that there would not be any brown or black outs.

After a while, amid much haggling and the notorious UMNO arm-twisting, the Mahathir administration managed to lure 25 companies - of course,  mostly local 'crony firms' and GLCs - to open shop there. Like sitting ducks, these firms agreed to go there to save the entire Kulim 'Hi-Tech' project from becoming an embarrassing white elephant. But they were forced to sacrifice their need for uninterrupted power supply and the best joke of all, NUR still made huge losses and was indebted to the tune of RM1.5 billion.

Ex-minister

What happened next is actually incredible but sad to say, it has become part of the UMNO-BN SOP or standard operating procedure for failed mega projects. After 'saving' Kulim, the BN administration stepped in to save NUR!

The UMNO-led BN government did this by changing NUR's license allowing it to sell power to the national grid. However, the firm failed to sign a power purchase agreement with TNB despite being in discussion for more than 2 years.

Some people say that this is due to one 'adamant' UMNO leader who wanted to take control of NUR and was trying to use the government to bail out the NUR just like the Ministry of Finance was persuaded to bail out the perennially loss-making national carrier MAS. To this particular UMNO leader, who is surely very influential, it was a case of 'if you can do it, why can’t I do the same?'

The latest postings in the back-biting UMNO blogs have already hinted that NUR is now under the control of a powerful ex-minister. Of course, he's from UMNO! Just like the DRB-Hicom's daring purchase of Proton without using 'real' money or having any know-how in car manufacturing, this ex-minister is said to be confident of being bailed out by the UMNO-BN government.

But of course - why else would he have got involved in the first place if not for the fact that he knows he would be bailed out and generously too!

Malay success story or RAPE & PLUNDER OF OWN RACE?

However, the UMNO media and bloggers are spinning the story as being one of the major successes of Prime Minister Najib Razak's ETP and NKEA economic programs. They are selling the Kulim failure and NUR bailout as a Malay economic success story. And thanks should be given to Najib's 'foresight' and 'great love' for his race, they insist.

But in actual fact, this is nothing but another RM1.5 billion down the drain - at the very least. It may be nothing compared to the RM12.5 billion PKFZ scandal but it is stunning enough to knock another hole in the country's coffers and ratchet up a national debt that has already surpassed its 55% legal ceiling.

If this is a Malay success story, then Malays would do well to worry about their future with UMNO leading their own rape and plunder.

Malaysia Chronicle