KUALA LUMPUR, June 14, 2008 ─ Malaysia has overhauled the planned construction and management of the second bridge in Penang, a move that could radically alter how the government awards contracts for large infrastructure projects under its privatisation programme.
Government officials say that Prime Minister Datuk Seri Abdullah Ahmad Badawi has decided to break up the key elements of the project ─ the construction of the bridge and the concession to collect tolls.
Under the current plan, state-controlled United Engineers Malaysia (UEM) and China Harbour Engineering, owned by the Chinese government, will jointly carry out the project.
UEM also has a preliminary agreement with the government for rights to collect tolls on the second link.
Under the new plan, the government will scrap that agreement and open the rights to collect tolls and operate the bridge to public tender.
“There is a need to be transparent and through a public tender exercise, the burden the public will have to bear on the toll rates can be reduced,” a senior Finance Ministry official close to the project told The Straits Times.
The project to build the 24km link ─ touted as the longest bridge in Southeast Asia ─ is being closely scrutinised as it is the single-largest contract award under the five-year Abdullah administration.
Analysts say the push for greater transparency follows changes to the political landscape in Malaysia after the March election.
Penang was among the five states won by the opposition. Government officials say Abdullah wants to ensure greater transparency in the award of public projects to shore up his government's appeal.
The proposal to decouple the construction of the bridge and the concession to operate and maintain it would represent a major overhaul to the country's privatisation programme.
Under this programme, which began in the mid-1980s, private firms were awarded contracts for infrastructure projects such as roads, bridges and water-supply networks through direct negotiations with the government.
Along with this, the builders were also granted rights to collect tolls and other related charges to operate and maintain these projects.
The chief criticism against the programme was that the infrastructure contracts and the concessions that came along with them often favoured companies at the expense of the public because they had not undergone the scrutiny of a public tender exercise.
Government officials say Abdullah, a proponent of the privatisation policy initiated by his predecessor Tun Dr Mahathir Mohamad, believes that more transparency must be injected into the awarding of contracts and concessions.
Government officials hope that the plan to separate the construction of Penang's second bridge and the concession award will help jump-start the project, which has been plagued by delays. UEM and China Harbour Engineering have been locked in a dispute over the design of the four-lane expressway.
Engineering consultants involved in the project say that the two companies have since ironed out major disagreements over the design and apportioning of the project's cost.
They say construction is expected to begin within the next two months, and that the project should meet its 2011 completion deadline.
Plans for a second crossing to link Penang and the mainland have been on the drawing board since early 2000. It aims to help ease traffic congestion on the existing bridge, which was completed in 1985. ─ Singapore ST
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