Najib Did Graduate..From The Proton School Of Management

It is well known that the PM did not complete his degree in the UK. Various excuses have been created over time - he had to take over the family business etc. Fact is he never graduated. 

Since then he has come to imbibe the philosophy of the Proton School of Management where it is a good thing to buy something high and sell it low.  Or buy something high and then sell it even higher to people who have few options. 

Someone was saying yesterday that these folks in gomen just do not understand business. 

Folks do you realise that the Prime Minister has stopped talking about the KLIA2 project? That project is a disaster. The completion date has been postponed so many times. The initial cost was RM2.0 billion. Now it has doubled to RM4.0 billion. 

An MCA crony was awarded the project. He bid cheap to get the contract. Now they cannot complete it. The gomen will be embarrassed again. The KLIA2 project is a mix of cronyism, wrong costing, tak tahu niaga all mixed up into one. 

Now with the cost gone up and up, it is unlikely that the airports revenues can repay the financial costs of the project. It is financially not viable anymore.  

Here is another case of buy high, sell low.  This is from The Star.

Toll rate decision after study by special lab

• increase in toll rates after study by a lab, said Najib.
• opening RM100mil Sungai Buaya interchange on the NS Expressway
• Govt paid millions compensation to expressway concessionaires 
• if another postponement this year, have to pay them RM404mil
• Govt juggle interests of road users and (crony) concessionaires
• need funds to service loans & maintain infrastructure
• Compensation in 2012 RM329mil 
• last year RM343mil. 
• 29 expressways in the country
• deferment in increase for 15 expressways since 2008
• seven expressways made toll-free 
• another three saw a reduction in rates

First things first ok. Can anyone detect anything wrong with this news? 

RM100 million for the Sungai Buaya interchange !!! Are you mad Mr Prime Minister? Here is a picture I lifted from the net. This is the Sg Buaya Interchange.

Folks does this look like RM100.0 million worth of construction to you? No country, other than Malaysia, builds a simple road interchange like this for RM100.0 million. 

I spoke to a friend who is a civil engineer and contractor whose company actually builds those pillars or vertical columns (the tiang-tiang konkrit lah) on which these interchanges sit.

He knows the Sungai Buaya story very well. About 14 years ago the area was developed as a medium priced new development. Many UMNO folks and ordinary Malay people bought houses in the area. They were promised an interchange but it was postponed. Then they lost Selangor to Pakatan.  

Now after seven years the UMNO boys realise that they are NOT going to win back Selangor. So what the hell. Just build the interchange and make some money anyway. So they whacked the RM100 million. Siapa akan bayar? You and me folks. For the next 50 years kut? 

My engineer friend estimates that this Sg Buaya interchange can be built for about RM50 - 60 Million. Although my friend is the expert, I think even his estimate is a bit high. I think something like this simple Sg Buaya interchange can be built for well within RM50 million. Maybe RM40 million. 

(If anyone of you readers can say something about this costing please do. But dont bs that RM100 million is the correct figure).

If you overpay for something, it means you may never get the financial returns to cover the financial costs. That is why we are paying, paying and paying tolls without end. Because some of these highway projects have been overpriced - two or three times market price. 

What does that mean? It means that the traffic volume will not be enough to pay for the cost of building these things for a long, long time. This means you and me must pay toll for a long, long time.

Here is an example. Say many taxi drivers buy Nissan taxis. A Nissan can carry four pax, burns so much fuel per kilometre and needs servicing, wear and tear of RM X every month. And it sells for a market price of RM xxx,000.  Plus the taxi driver is a human being (not a mechanical robot) who can only work a max of 10 hours a day. 

Put all this together and the taxi driver can earn so much per month from his Nissan taxi cab. 

Now do this : multiply the Nissan's price to say four times market price. 

With no added improvement in fuel efficiency, no added increment in comfort, no added improvement in wear and tear, no added increase in passenger capacity.  It is just a blind, wild assed increase in the price of the car. Plus the taxi driver can still work only 10 hours max a day. 

So how is he going to earn FOUR TIMES more money to cover the costs of paying for a Nissan taxi that costs FOUR TIMES market price?  This means if he still has to pay FOUR TIMES market price for his Nissan taxi, he will go bust. It will be a financial disaster. Boleh bawa penumpang, boleh ke sini dan ke sana tapi revenue tambang taxi tak akan cukup nak bayar bulanan kepada bank.  Better buy a Proton and live with it. Enjin rosak, tingkap tak naik,  signal rosak and all sorts of rosak.

In the same way, when a highway operator pays twice the price for an interchange (RM100 million instead of say RM40 million - RM50 million) the only way the highway operator will be viable is if the people (that is you and me) pay more tolls, pay higher tolls and pay toll for a longer period. 

In other words folks, we (you and me) are paying for the "upfront spending" splurge of these people. We are the ones who have to "buy high" from them and we have to suffer this with our same income or lower income (for those who are increasingly jobless).  We are buying at a very high price. But we get something that is worth lower.

So when Najib says : "Government had to constantly juggle interests of road users and concessionaires" he is not telling the truth. We dont want to call the PM a liar, he being such a nice guy. Lets just say the PM is talking through his @$$. 

He wants to juggle the "interests of the concessionaires" who have built an interchange for double the price ie RM100 million.   

So here the Prime Minister is blatantly and shamelessly making fun of you, me, himself and everyone.  

Then to add insult to the injury the PM says : "..increase in toll rates after study by a lab.."

First of all how many million Ringgits is this lab going to cost? 

Let me remind you all that the Prime Minister of Malaysia has already said (not me ok, bukan saya yang cakap tapi Perdana Menteri sendiri yang cakap) that the civil servants are stupid. The PM has said point blank that the Civil Servants cannot produce useful work. 

So how are the same stupid Civil Servants going to run a lab over toll rates? One dunggu has already written a clarification in this Blog that the Ministry of Youth of Sports will be helping them do the study on the toll hikes. 

Why not involve the Jabatan Veterinar and the Jabatan Perhilitan as well? I am sure they are more relevant. They know how monkeys behave.

And after this lab, the toll is going to go up anyway. So why the need for the lab? 

Folks, there really are other ways to solve the toll problem. The gomen can just buy up all the shares of the listed toll operators. Just "nationalise" the toll roads. Then remove the tolls. All it takes is political will. 

Some kroni-kroni koporat are looking at it this way - can BN sustain in 2018? They are taking the bet that come 2018 the BN will 'squeeze' through with 130 seats or 120 seats. PAS will form a 'unity gomen' with the BN. Just wait and see. This means they can continue sucking us dry for another five years. It will be "cronyism" as usual.

So your rights and the rights of the ordinary people can go to hell. And I believe the clueless PM is part and parcel of this thinking.