6 Principles to make PPP successful - Nor Mohamed

Salam and dear all, Utusan Malaysia (23rd Nov. 2010) reported that Nor Mohamed Yakcop, Tan Sri, a Minister in the PM's Department made the following statements in relation to the implementation of PPP in Malaysia... Malaysia would be using PPP as among the key investment platform in effort to promote some RM150 million in spending over the next 10 years. He claimed that such spending is required to sustain a 6% growth in the economy up to 2020. He listed 6 principles to make PPP successful;

• High commitment by the government in implementing PPP projects
• Creating conducive and supportive environments to implement PPP projects
• Selecting capable private sector entity with the necessary financial capability
• Capacity building in human resource
• Financially capable to implement projects on longer term basis
• Work ethics between the public and private sectors.

Read the full report at http://www.utusan.com.my/utusan/info.asp?y=2010&dt=1123&pub=Utusan_Malaysia&sec=Ekonomi&pg=ek_02.htm Wassalam

Rising building material, labour and hidden costs of construction...

Salam and dear all, Read here (The Star, 15th November 2010) on the: Rising building material, labour and hidden costs main concern for Johor developers Wassalam

Price of property, shortage of land for development and potential strategies

Salam and dear all,

• An article in The Star (30th October 2010) discusses the continuous and upward increases in the price of property in Malaysia... land price at RM7,000.00 per square feet in Kuala Lumpur!
• Read here: Most Malaysians cannot afford the high price of property

Wassalam

Mediation as an alternative method of dispute resolution

Salam and dear all,

1. The article below (from The Star, 29th October 2010) illustrates the growing trend in using ADR to settle disputes, in this case via Mediation.
2. For those in the construction industry, the PAM Form 2006 includes a provision on Mediation but this requirement is not mandatory. Read the article here: CJ pushes mediation option

Wassalam.

The 2011 Budget in brief

Salam and dear all,

1. Here is an overview of the 2011 Budget (taken from The Star)... 5%-6% growth seen next year.
2. Go to (copy-paste) http://www2.treasury.gov.my/data/le/le11.html for the 2011 Economic Report.

Wassalam.

The construction industry in the 2011 Budget

Salam and dear all, Here is a review of the construction industry in the 2011 Budget (taken from The Star)... Construction seen expanding 4.9% Wassalam

Tighter rules for contractors of govt jobs to prevent failure

Tighter rules for contractors of govt jobs to prevent failure

Construction index hits 2-year high

Construction index hits 2-year high

M'sian Govt considering 53 projects worth US$97bil for investments

M'sian Govt considering 53 projects worth US$97bil for investments

Programme for the 6th International Multi-national Jv for Construction Works Conference, Kyoto Japan

Salam and dear all, Preparations for the 6th International Multi-national JV for Construction Works Conference, Kyoto Japan, 22-23 Sept 2010, is now in full swing. A total of 19 papers, including 2 keynotes, have been accepted for presentation at the conference. For further details on the conference and programme click here. See you in Kyoto. Wassalam.

Discussion on the move by Bank Negara Malaysia to curb speculation on the property market prices

Read the discussion, published by the starpropertyhere; Malaysia Property portal, Classifieds, Listings, News, Home & Décor

Poser on whether real property gains tax will be raised

Poser on whether real property gains tax will be raised

Construction industry specific Ethical Infrastructure

Salam and dear all,

I was invited by CIDB Sarawak and presented a keynote speech in their Seminar on Integrity in the Construction Industry 2010, 28th July 2010, in Kuching. The seminar was attended by some 280 participants, mostly contractors from within Sarawak.

In the seminar I discussed the concepts of ethics and integrity and proposed a construction industry-specific 'Ethical Infrastructure' as a way foward towards strengthening the image and profesionalism of the construction industry.

Below is the abstract of the said presentation.

I thank CIDB Sarawak and CIDB HQ KL for making all the arrangements.

Wassalam.

Construction Industry Development Board Malaysia

Seminar on Integrity in the Construction Industry 2010

Strengthening the Image and Professionalism of the Construction Industry

Kuching, Sarawak, 28^th July 2010

Strengthening Ethics and Integrity in the Construction Industry: Developing a Construction Industry-Specific “Ethical Infrastructure”

Khairuddin Abdul Rashid[1]

Abstract

Data from literature review on the construction industry shows that various forms of corruption and un-ethical practices prevail and their extent is widespread. This phenomenon suggests that the numerous initiatives put in place by individuals, firms, organizations, government agencies and other stakeholders to strengthen ethics and integrity of the construction industry thus far have not been very effective. Consequently effort to identify, develop and implement innovative initiatives must be intensified.

This paper contends that many of the currently employed initiatives to combat corruption and to strengthen ethics and integrity in the construction industry (similar to the practice of the construction industry itself) are too fragmented i.e. they either profession-specific or organization-specific, or lacking in construction industry-wide management, co-ordination and evaluation, or lacking in clear and measurable objectives and outcomes, or a combination of any two or more of these and other factors, and therefore is either relatively in-effective or probably un-sustainable.

It is acknowledged that there is no easy or quick solution to combat corruption and to strengthen ethics and integrity of the construction industry. This paper proposes the development of a more holistic approach and a construction industry-specific “Ethical Infrastructure”.

The “Ethical Infrastructure” shall comprise of a framework of components including: generic and construction industry-specific moral values, ethical principles and Shari’ah compliant, construction code of conduct, construction procurement specific anti-corruption legislation and administrative procedure, a system of construction ombudsman, enhancing collaborations and de-fragmentation of the various anti-corruption agencies related to the construction industry, and management, co-ordination and evaluation; and socialization of the construction industry-specific “Ethical Infrastructure”.

The idea mentioned herein is still at its infancy. Research and institutional and industry support is required.

---

[1] Dip. QS (ITM), B.Sc. QS (UK), M.Sc. QS (UK), PhD Construction Procurement (UK), MISM, Reg. QS, BQSM; Professor Department of Quantity Surveying and Head Procurement and Project Delivery System Research Unit, International Islamic University Malaysia. Contact: khairuddin@iium.edu.my

MPS to get tough with contractors who perform shoddy work - StarProperty.my

MPS to get tough with contractors who perform shoddy work - StarProperty.my

RM82bil construction projects in M'sia this year - StarProperty.my

RM82bil construction projects in M'sia this year - StarProperty.my

Malaysia’s New Wave PPP

'Smart and effective partnerships between the public and private sectors will be established to drive the economic transformation agenda. This new wave of PPP will ensure equitable sharing of risks and returns' (YAB Dato' Sri Mohd Najib Bin Tun Haji Abdul Razak, Prime Minister of Malaysia, in his speech during the launching of the 10^th Malaysia Plan).

By Khairuddin Abdul Rashid

The provision of public infrastructures and services has, in the past, been the responsibility of the government. However, through modern and innovative procurement strategies such as Privatization, PPP and PFI the government has been able to share some of the responsibility with the private sector.

Broadly, when a government agency and a private sector entity work together in delivering a public infrastructure or service, the arrangement is referred to as Public-Private-Partnership or PPP. However, when such working relationship involves the private sector entity providing funding and expertise the arrangement is referred to as Private Finance Initiative or PFI.

It is a known fact that governments across the world would not always be in a position, financially as well as in other resources, to provide the necessary public infrastructures and services especially if the demand is almost always continuous and on the upward-side. Privatization and PPP are therefore increasingly being seen by most governments as among the key strategies in order to meet the said demands.

In the case of Malaysia, Privatization and PPP are not new. Malaysia started PPP in 1981 with the implementation of the Malaysian Incorporated Policy. The implementation of the policy was further enhanced when the Privatization Policy was implemented in 1983, followed by the Guidelines on Privatization in 1985, and later on by the Privatization Master-plan in 1991. Under the 9^th Malaysia Plan, a significant measure to streamline PPP was introduced via the Private Finance Initiative or PFI.

Under the 10^th Malaysia Plan, measures to be implemented by the government in order to make PPP more effective include mechanisms to ensure both the public and private sectors are subjected to a more equitable distribution of risks and returns.

The government is very determined to make PPP work. This can be gauged by looking at the efforts currently being planned. For instance, under the 10^th Malaysia Plan 52 high-impact projects worth RM 63 billion have been identified and are to be implemented via the PPP.

In addition, to help the private sector in initiating and implementing projects the government has established a Facilitation Fund of RM 20 billion.

Further, institutional infrastructures have also been formed in order to facilitate the implementation of PPP. These include the establishment of the Public Private Partnership Unit or 3PU (Unit Kerjasama Awam-Swasta or UKAS) parked under non-other than the Prime Minister's Department, and the publication of the 'PPP Guideline'.

3PU was established on 22^nd April 2009. It has been given the responsibility to coordinate the implementation of PPP and the administration of the Facilitation Fund.

The new wave of PPP has led to renewed interest and intense debate among Malaysians especially those related to the construction, manufacturers of construction related materials, plant and equipment and the banking and financial sectors; the accounting, business, legal, insurance and facilities management service providers, government officers and policy makers, NGOs, academics, researchers and others.

For further details contact:

Prof Sr Dr Khairuddin Abdul Rashid Procurement and Project Delivery System Research Unit, IIUM

khairuddin@iium.edu.my

Malaysia needs a clear framework to implement PFI

Salam and dear all, An article on the above is in the Business Times (22nd July 2010). Click here for the article. Wassalam. Acknowledgement: Business Times

Bank Negara Malaysia raises OPR by 25 basis point

Salam and dear all,

1. Bank Negara Malaysia has raised the Overnight Policy Rate (OPR) by 25 basis point to 2.75%. Read the full press statement BNM Press Statements .
2. Read The Star (9th July 2010) news article on the latest OPR increase here.
3. See also my previous postings on the OPR dated 30th July 2009,17th August 2009 and 9th March 2010.

Wassalam.

Innovation in teaching and learning measurement courses at IIUM

Salam and dear all,

1. I have developed what I consider to be an innovative approach in teaching & learning measurement courses at IIUM. Descriptions on the methodology and feedback on its use from students has been written into a paper that was accepted & presented in a referred COBRA Conference (Australia, 2005).
2. Those interested to read the paper (by Khairuddin Abdul Rashid & Sharina Farihah Hasan, COBRA 2005) can go to the RICS website, click here.

Wassalam.

Impressive cantilever buildings (The Star Property 6th July 2010)

Salam and dear all, Students learning construction technology and trying to understand the term 'cantilever' may click here for further descriptions and images of impressive cantilever buildings. The article is available on-line, published by the Star Property (www.starproperty.my), 6th July 2010. Wassalam.

IIUM and 3PU of the PM's Department to host a Seminar on 'Malaysia's PPP'

Salam and dear all, The International Islamic University Malaysia, in collaboration with the PPP Unit (3PU) of the Prime Minister's Department, will be hosting a one-day seminar on 'Malaysia's PPP' on 5th August 2010, at a hotel in Petaling Jaya, Selangor. Key aspects to be addressed at the seminar include:

1. PPP within the context of the procurement paradigm
2. An Overview of PPP and the Malaysian Experience
3. PPP Guidelines
4. Risk Allocation and Management
5. Value for Money and the PSC, and
6. Are the Key Players of the Malaysian Construction Industry Ready?

The seminar will be facilitated by experts from IIUM and the 3PU of the PM's Department. Registration: RM485 (students: RM200). Closing date for registration: 2nd August 2010. For details contact: 03-61965271 (Aiza/Hasnita) or email: hnaiza@iium.edu.my, hasnita@iium.edu.my and pfippp2010@yahoo.com View the brochure here and the seminar's blogspot here. Wassalam.

The Prime Minister’s speech on the 10th Plan relating to PPP

The Prime Minister's speech on the 10^th Malaysia Plan, in Parliament, 10^th June 2010, relating to PPP

Public-Private Partnership

Smart and effective partnerships between the public and private sectors will be established to drive the economic transformation agenda. This new wave of public-private partnership (PPP) will ensure equitable sharing of risks and returns.

To date, 52 high-impact projects worth 63 billion ringgit have been identified for implementation. These include:

Seven highway projects at an estimated cost of 19 billion ringgit. Among the projects are the West Coast Expressway, Guthrie-Damansara Expressway, Sungai Juru Expressway and Paroi-Senawang-KLIA Expressway;

Two coal electricity generation plants at an estimated cost of 7 billion ringgit; and

Development of the Malaysian Rubber Board‟s land in Sungai Buloh, Selangor covering an area of 3,300 acres at an estimated cost of 10 billion ringgit.

The private sector will also have the opportunity to participate in the development of several projects led by government-linked companies (GLCs). These include projects such as the Kuala Lumpur Strategic Development by 1Malaysia Development Berhad (1MDB) covering the Sungai Besi Airport area, the KL International Financial District in Kuala Lumpur, construction of the liquefied natural gas regasification plant by PETRONAS in Melaka at an estimated cost of 3 billion ringgit as well as two aluminium smelters in SCORE Sarawak with an estimated cost of 18 billion ringgit.

To help the private sector finance these projects, a Facilitation Fund of 20 billion ringgit will be provided under the 10MP. This fund aims to help bridge the private sector viability gap with respect to projects that have a strategic impact and those with huge economic spill over. The fund is expected to attract private sector investments worth at least 200 billion ringgit during the Plan period. Projects that are being considered for financing under this fund include Land Reclamation in Westport in Port Klang, Malaysia Truly Asia Centre in Kuala Lumpur and Senai High Technology Park in Iskandar Malaysia, Johor.

Wassalam

Estimating for construction works: Roti canai, just 20 sen?

Salam and dear all,

1. Roti canai, nasi lemak, teh tarik, etc are famous in Malaysia.
2. So I hope this article Roti canai, just 20 sen? (NST, 13th June 2010), provides good reading on how to understand the principle of estimating for construction works.
3. Quantity surveying students learning courses such as estimating, analysis of prices, tendering, etc take note that prices of construction works include costs of materials, plant and equipment, labour, wastage, overhead, profit and other strategic issues and these aspects on cost (not the amount) are more or less the same as those in the food and catering industry.
4. Many thanks to NST, the authors of the article and others for having a facility to share the article.

Wassalam.

Construction sector under the Tenth Malaysia Plan (2011-2015)

Salam and dear all,

1. The statistics, under the 10^th Plan, relevant to construction include:
   1. GDP in 2015 is expected to be RM 740,250 million (2009 = RM 521,095 million).
   2. Construction GDP in 2015 is expected to be RM 21,818 million (2009 = RM 17,321 million).
   3. GDP is expected to grow at 6.0% per annum and construction GDP at 3.7% per annum. Construction's share to GDP is at 2.9%.
   4. Malaysia's population is estimated to grow at 1.1% (2011 - 2015) reaching to 29.8 million persons in 2015 (2010 = 28.3 million persons).
   5. In terms of employment, construction in 2015 is expected to employ 776.5 thousand persons or 5.9% of total employment (2009 = 762.4 or 6.6%).
2. In addition to the RM 230 billion allocated for development that would either directly or indirectly benefit the construction sector, the 10^th Plan also include a host of initiatives and incentives that are expected to generate more robust activities in the construction sector. These include economic reforms in terms of private sector led economy, innovation led growth, rationalization of the government's role in business by increasing privatization and PPP, and developing the SMEs.
3. In relation to privatization and PPP, Malaysia has, since 1983, been very active. Since 1983, 510 projects related to transportation, roads, communications, health, and energy sectors have been privatized or procured via the PPP approach.
4. Under the 9^th Plan 22 projects worth RM12 billion were privatized / procured via the PPP approach.
5. Under the 10^th Plan 52 projects worth RM62.7 billion are to be privatized / procured via the PPP approach. The projects include toll highways, universities, Penang Port and the Angkasapuri as Media City.
6. To assist the private sector in meeting the initial costs / investment in privatized / PPP projects a sum of RM 20 billion has been allocated under a scheme known as Facilitation Fund. Projects with minimum cost of RM 100 million are eligible for assistance.
7. Further assistance to the construction industry include government support for firms to export professional services overseas especially within ASEAN, India, China and the OIC countries, establishing a consolidated presence and brand of Malaysian construction professional services overseas via the CIDB and PSDC, creating and promoting demand in green technology, etc.
8. Some of the more prominent infrastructural facilities earmarked for development under the 10^th Plan are;
   1. RM 2.7 billion for roads and rail networks leading to key ports and airports.
   2. Completion of the double-track rail project between Johor Bharu and Padang Besar (RM 16.5 billion).
   3. MRT to cover a 20km radius from the Kuala Lumpur city centre that is expected to carry 2 million passenger-trips per day when completed.
   4. RM 1 billion for capital dredging of port channels to cater for bigger vessels for Westport Port Klang and PTP Johor, and RM 6 billion upgrading works to these ports and Penang Port.
   5. Expansion of airport capacity at a cost of RM 3.3 billion (to cater for 62 million passengers in 2015: 47 million in 2008), a new low cost carrier terminal at KLIA and upgrading of the Penang International Airport.

Wassalam.

Reference: 10^th Malaysia Plan 2011-2015.

Latest statistics on QS in Malaysia

Salam and dear all, The latest statistics on QS in Malaysia;

• Registered QS - 878
• Graduate QS - 977
• QS Practice - 311

Wassalam. Source: BQSM 12th June 2010.

Videos on career in quantity surveying

Salam and dear all, I found several online videos on quantity surveying. In this blog I would like to share 2 of them (see my two earlier postings today) namely;

• Rhona-Downie - trainee quantity surveyor (youtube.com), and
• Quantity surveying - myTalentplace (youtube.com).

I would like to acknowledge the producers and all those behind the production/publication of these videos. Wassalam.

Video: Quantity surveyor - myTalentplace

Video from youtube.com: Rhona Downie - Trainee Quantity Surveyor

QS & Construction Procurement has a new look

Salam and dear all, This blog has a new look (thanks to Blogger and others). I hope all will enjoy the new look Wassalam.

10th Malaysia Plan (2011-2015)

Salam and dear all,

1. The Malaysian Prime Minister yesterday, 10^th June 2010, tabled in Parliament the 10^th Malaysia.
2. The 10^th Plan, covering the period between 2011 and 2015, aims to transform Malaysia towards becoming a high-income and high productivity economy.
3. According to the Plan the per capita income is targeted to increase to RM 38,845 in 2015 (RM 26,420 in 2010) on the basis that real GDP grows at a rate of 6% per annum. Unemployment rate is expected to be at 3.1% in 2015.
4. A sum of RM 230 billion has been allocated for development under the 10^th Plan.
5. The breakdown (%) of the RM 230 billion is as follows:
   1. General administration 5%,
   2. Security 10%,
   3. Social 30%,
   4. Economy 55%.
6. There are 5 strategic trusts namely;
   1. Designing government philosophy and approach to transform Malaysia through the National Key Results Areas,
   2. Creating a conducive environment for unleashing economic growth,
   3. Moving towards inclusive socio-economic development,
   4. Developing and retaining a 1^st World talent base, and
   5. Building an environment that enhances quality of life.
7. To generate high income for Malaysia, the government has identified 12 National Key Economic Areas (NKEAs) namely oil and gas, palm oil, financial services, wholesale and retail, tourism, ICT, education services, electrical and electronic, business services, private healthcare, agriculture and Greater Kuala Lumpur.
8. Read the 10^th Malaysia Plan documents at: http://www.pmo.gov.my/dokumenattached/RMK/RMK10_Eds.pdf
9. Read the Prime Minister's speech on the 10^th Malaysia Plan at: http://www.pmo.gov.my/dokumenattached/speech/files/RMK10_Speech.pdf

Wassalam

References:

• 10^th Malaysia Plan 2011-2015
• Prime Minister's speech on the 10^th Malaysia Plan
• StarSpecial Malaysia Plan 2011-2015, The Star, Friday 11^th June 2010.

Partnering in Construction Part 2: Construction Partnering

Salam and dear all,

1. The following notes (abridged) are taken from Khairuddin, 2002, Construction procurement in Malaysia: Processes and systems, constraints and strategies, IIUM, Chap. 10, pp155-167.
2. The concept of 'Construction Partnering' for the PWD was developed in 1999-2000 by a Special Committee in the PWD, headed by Khairuddin (when Khairuddin was serving the PWD).

   Partnering

3. Partnering is a concept based on co-operative efforts for mutual benefits.
4. Construction Partnering is neither a form of construction procurement system nor a form of project management technique or tool.
5. Construction Partnering is more of a management approach that focuses on promoting and creating positive working relationship amongst the key players of the processes of construction procurement. It encourages teamwork and avoids dispute, enhances trust and shares goal.

   Why partnering?

6. Many past disputes and problems associated with construction procurement were attributed to barriers that exist between clients and the constructors. This is because they represent 2 distinct organizations with separate aims and objectives and each makes decisions based on their own goals and objectives.
7. In partnering, efforts are made to design for each project a problem-finding and problem-solving team comprising of members from both parties and recognizes and honours the objectives of all parties and that of the project.
8. Its key purpose is to align and unite the parties – client and constructor – with a shared goal of completing the project in a cost effective and timely manner.

   Benefits of partnering

9. The benefits may include: 1. Greater certainty of the outcome in cost and time, 2. Reduced wastage, 3. Improved communications amongst the parties, 4. Improving safety, 5. Reduced costs associated with disputes, and 6. Potential for continuous improvement.
10. The application of partnering during the construction of the Kuala Lumpur International Airport (KLIA) is said to be among the key factors that enabled the mega airport to be completed in record time.

    Elements of partnering

11. The 3 key elements of partnering are: 1. Mutual objectives (to be agreed and committed at the outset of the project), 2. Problem resolution, and 3. Continuous improvement.
12. Provisions for partnering must be incorporated into tender advertisements and into the tender and contract documents (if partnering is to be made contractual).
13. The provisions may include: 1. The intention of the parties to partner, 2. Workshops and a 'partnering charter', 3. Monitoring performance, 4. Continuous improvement, 5. Resolution of disputes, 6. Good communication, and 7. Definition of roles of key personnel in the partnering arrangement – Facilitator, Client and Contractor's representatives.
14. One of the key elements in "Construction Partnering" that was developed by the PWD then was to encourage and facilitate the contractor to propose innovation.
15. If the contractor's proposal is accepted by the government, the contractor benefits by retaining savings in costs (one-half) and other non-monetary rewards (such as earlier completion date if there is saving in time). The government benefits from value added to the work, reduced costs and earlier date of occupation.
16. Consequently, the concept calls for a partnering contractor to have special characteristics including 1. Commitment, 2. Vision (continuous improvement, dispute avoidance, etc), 3. Quality conscious, 4. Innovative and active in R & D, 5. Experienced and possess the necessary financial and technical capabilities, and 6. No or minimal record on confrontation.

    Partnering and VECP

17. In my earlier postings I said that VECP (see The Star, 8^th June 2010, pN25) and Partnering are similar. The key similarities relate to win-win situation for the government and the contractor, sharing of the money saved and that they both require contractors with the necessary qualifications (see items no 14-16 above).

    Conclusion

18. This posting pointed out the similarities between VECP and Partnering.
19. Notwithstanding whatever is the initiative called or labeled, VECP or Partnering, the effort by the Ministry of Works to reduce costs in the procurement of public sector infrastructure and facilities is commendable.
20. The aim of this blogger in publishing this and the earlier postings is simply to highlight that a similar effort has been initiated and put in place in 2000, and that it is worth a re-visit.

    Records of workshop and seminars on Partnering held by the PWD include:

    Seminar on the Concept of Partnering in the Construction Industry, JKR Kuala Lumpur, 7^th September 1999.

    Workshop, Procurement via Partnering for the Construction Industry, Melaka, 14^th-15^th October 1999.

    Seminar on the Implementation of the Concept of Partnering in JKR, Penang, 21^st March 2000.

    Seminar, Introducing the Concept of Partnering in the Construction Industry with Specific Reference to Project Based Partnering in JKR, Putrajaya, 22^nd April 2000.

Wassalam.

Partnering in Construction Part 1: An overview on construction procurement

Salam and dear all,

1. In my last posting I commented on the Ministry of Works' proposal towards achieving value for money via a technique known as "value engineering change proposal." I also mentioned that in 2000 a similar technique but labeled as "construction partnering" was developed and put in place in the PWD (JKR).
2. The purpose of this posting and the next is to describe (briefly) what "construction partnering" is about.
3. Firstly, it is best to acknowledge that "construction partnering" is not a system of procurement. Consequently, it is appropriate to situate "construction partnering" within the overall concept of construction procurement. This posting therefore will provide an overview on construction procurement.

   Construction procurement

4. According to Khairuddin (Construction procurement in Malaysia: processes and systems, constraints and strategies, 2002, International Islamic University Malaysia) the term procurement, in the context of construction, refers to the processes and systems involved in acquiring constructed facilities. Consequently, construction procurement has 2 distinct body of knowledge i.e. the processes of procurement, and the systems of procurement.
5. Processes of procurement refer to the 7 main elements that represent the steps that are to be carried out when procuring constructed facilities. The 7 main elements are (in no particular order or sequence): 1. Initiation or promotion of a project, 2. Funding, 3. Design (3 sub-categories: schematic design, detailed design and specialist design), 4. Statutory approval, 5. Tendering, 6. Construction (2 sub-categories: management and physical construction on the site), and 7. Risk allocation.
6. Systems of procurement refers to how best the 7 element of the processes of procurement are to be planned and managed and it relates to how risks in procurement are to be allocated amongst the parties involved.
7. The key procurement risks are: time, price, design, project finance, effectiveness of the project in operation, and quality.
8. The key parties involved are the client, funder (if different from the client), consultants or designers, and the constructors (or contractor and sub-contractors).
9. There are 3 dominant systems of procurement in Malaysia: 1. Traditional or design-bid-build system, 2. Design-build and Turnkey system, and 3. Management approaches procurement systems (2 sub-systems: management contracting and construction management).
10. In a survey by Khairuddin (2002) the traditional or design-bid-build system of procurement is the most dominant system in use in Malaysia.
11. In terms of time and cost, Hashim (1996, in Khairuddin, 2002) reported that the management contracting procurement system is most efficient (least time and cost overruns).
12. Construction partnering could be used in any of the above systems of procurement.
13. In my next posting, I will provide an overview of "construction partnering".

Wassalam.

P/s: To achieve brevity it is not possible to provide further description on the subject of construction procurement. For detailed understanding please refer to the many publications on construction procurement including Khairuddin, 2002, Construction procurement in Malaysia: processes and systems, constraints and strategies, International Islamic University Malaysia.

JKR to Implement VECP... what happens to Partnering?

Salam and dear all,

1. The Star (Chan Li Leen, Tuesday 8th June 2010, pg N25) reported that the Works Ministry is 'looking at implementing a "value engineering change proposal (VECP)" to enable greater savings when carrying out government projects.'
2. According to the Works Minister 'the VECP was a written mechanism in the contract document that allows contractors to suggest alternatives or more innovative methods to carry out projects ... without sacrificing safety and functionality...'
3. The Minister further said VECP would be a win-win situation for the government and the contractor and that a mechanism is currently being designed to enable the contractor to share a portion of the money saved (arising from the alternatives or innovative methods proposed by the contractor and accepted by the government).
4. The article in full is available at http://thestar.com.my/news/story.asp?file=/2010/6/8/nation/6423474&sec=nation (copy paste).
5. The above report is very interesting in the sense that the government is persistent in looking at ways to achieve 'value for money' in the procurement of public sector projects.
6. However, I would like to point out that a similar government-contractor collaborative and win-win approach was initiated and promoted by JKR in 2000.
7. The approach otherwise known as "Construction Partnering" was formally announced to the Malaysian Construction Industry on 22nd April 2000 in Putrajaya via a seminar entitled Introducing the Concept of Partnering in the Construction Industry with specific reference to project based partnering in JKR. The seminar was officiated by the then Deputy Prime Minister (now Tun Abdullah Ahmad Badawi, former Prime Minister).
8. Prior to the seminar in Putrajaya several workshops and seminars including those held in Kuala Lumpur, Penang and Melaka were held to develop the concept and train JKR officers.
9. The continuous effort by JKR to better manage construction costs and contracts augur well for the construction industry especially for the procurement of public sector projects.
10. In addition, aspects including management of cost, contract administration, value engineering and management are matters that are closely related to the quantity surveying profession, and that these aspects are among the core courses (elective in the case of value engineering and management) in a typical undergraduate program in quantity surveying.
11. Consequently, I would like to see quantity surveyors, especially those in JKR, to take leadership in effort towards achieving greater 'value for money' in public sector procurement.
12. Insyaallah, I will elaborate on the JKR's concept of Partnering that was introduced in 2000 in my next posting.

Wassalam.

Re-accreditation of the BQS (Hons) degree at IIUM by the Board of Quantity Surveyors Malaysia

Salam and dear all,

1. I would like to congratulate the Department of Quantity Surveying, International Islamic University Malaysia for the successful re-accreditation of their BQS (Hons) degree program by the Board of Quantity Surveyors Malaysia (pending written confirmation by the Board).
2. The re-accreditation exercise, involving submission of various documents on the program (program structure, course outlines and other academic and administrative matters, staff, students, teaching and learning facilities, etc) reached its apex when three representatives from the Board visited IIUM on 18th May 2010. During the visit the representatives were given a briefing about the department, the faculty and IIUM, the BQS (Hons) program, etc; and they visited / viewed the various teaching and learning facilities; interviewed students, talked to staff; and inspected students' works, etc.
3. The re-accreditation is for the period up to 2012.
4. The BQS (Hons) program was first accredited in 2004.
5. Quantity Surveying, as a profession, is governed by an Act of Parliament, i.e. Registration of Quantity Surveyors Act 1967, Act 487 (Revised 1992). For more on the Act and on the BQSM visit http://www.bqsm.gov.my.

Wassalam.

Paying for your graduate studies at IIUM

Salam and dear all,

Tuition fee for graduate studies at IIUM is considered to be affordable. Go to http://www.iiu.edu.my/finance/fee_struc.php?nav=2 for detailed fee structure for graduate studies at IIUM. In addition to tuition and other university fees, potential students must also be able to afford living and other expenses (food, accommodation, books, traveling, clothing, communications, medical, insurance, entertainment, etc and to those already married, expenses for their dependents).

A prospective student (Malaysian) may look at the following options on how to fund for his/her graduate studies at IIUM.

1. Self- funding, i.e. through personal savings or funded by parents/close relatives.
2. Those in employment may look at the various options such as the in-service training scheme for graduate studies offered by the Public Services Department for civil servants; lecturers' scheme for university/polytechnic lecturers; companies' in-service training schemes that may include financial assistance and study loans; etc.
3. Those in employment may consider withdrawing money for the purpose of financing their graduate studies from their EPF Account 2 (for details go to http://www.kwsp.gov.my). In addition, they could also claim for income tax relief and purchase of book tax relief (http://www.hasil.gov.my/lhdnv3e/individuIndex.jsp?process=21000&menu=13&expandable=1).
4. Study loan under the government's Higher Education Student Loan Scheme (PTPTN at http://www.ptptn.gov.my/web/guest/pinjaman/onlineapps).
5. Study loans offered by banks and other financial institutions.
6. Organizations such as MARA, Bank Negara, Petronas, Pusat Pungutan Zakat and other corporations and organizations etc do offer scholarships/grant for graduate studies. These are normally advertised in the major newspapers.
7. In addition to the above, a student may be employed by IIUM or his/her supervisor as a part-time research assistant, part-time teaching assistant, etc.
8. A student may continue to work full-time and pursue his/her studies on a part-time basis.

For details on admission go to http://www.iiu.edu.my/admission/admission.shtml?id=prepg.

Wassalam.

QSs are not happy with the RICS?

Salam and dear all,

An article in the Building, dated 14^th May 2010 and written by Roxane McMeeken, suggested that QSs within the RICS are not happy with the body. Those interested to know more about this story please go to

http://www.building.co.uk/story.asp?sectioncode=29&storycode=3163333&c=1&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+QuantitySurveyingNewsFromBuilding+%28BLDG+|+Quantity+Surveying+%29

Wassalam.

Topics for research for graduate studies in QS (by research) at IIUM

Salam and dear all,

In my previous postings (26^th April 2010), I wrote about graduate studies in QS at masters and PhD. In a graduate studies by research at IIUM the style of the award is: masters - MSc (Built Environment); and PhD - PhD (Built Environment).The core component of these programmes is research and usually a graduate student will come up with his/her own topic. Below is a list of potential topics (or areas of research; in the broadest sense).

Quantity Surveying

• Measurement and Documentation
• Tendering/Bidding Strategies
• Construction Contracts Administration (public; private)
• Construction Law, ADR
• Value Engineering & Management
• Construction Business
• Construction Marketing
• Istisna'
• Takaful in construction
• Wakala (agency) in contracts
• Productivity (costing, estimating)
• Maintenance, LCC
• Cost planning, cost control
• QS practice

Construction Procurement

• Procurement Process
• Procurement System
• Procurement Strategies
• Innovative project delivery (Partnering, PPP, Privatization, PFI)
• Shari'ah Compliant
• Construction Industry Development
• Construction Finance
• Joint ventures

Others

• Quality
• Project management
• Construction management
• IT in construction
• Contracting

Potential students may contact me at khairuddin@iiu.edu.my for initial discussions. For information on graduate studies at IIUM and online application please go to IIUM's postgraduate website at http://www.iiu.edu.my/pgstudy/programmes.php.

Wassalam.

Understanding Government Procurement Policies and Procedures

Salam and dear all,

1. In the course of providing public services, a government procures goods (such as uniforms for the army, the police, etc), services (consultancy services) and works (construction of buildings and other infrastructures).
2. Typically, the government of a country/state/province is the largest procurer of goods, services and works (either direct procurement or through the PPP/PFI procurement routes).
3. As public funds are involved, government procurements are subjected to detailed scrutiny by many: individuals, businesses, politicians, NGOs, etc.
4. Consequently, it is crucial that the concepts including transparency, accountability, efficiency and value for money are upheld at all times.
5. To understand the policies and procedures of government procurement in Malaysia, in relation to the above concepts, students may read the ADB/OECD report "Anti-Corruption Initiative for Asia and the Pacific: Thematic review on provisions and practices to curb corruption in public procurement, self-assessment report Malaysia." The report is available at: http://www.oecd.org/dataoecd/8/53/35134584.pdf.
6. The ADB/OECD report (in 10 pages) covers aspects including laws and regulations related to government procurement, Public Procurement Office (PPO), procurement policies and practices, transparency and fairness, integrity, accountability, review and complaints mechanism, etc.

Wassalam.

Reference and acknowledgement: The Secretariat, ADB/OECD Anti-Corruption Initiative for Asia and the Pacific.

Masters and PhD, what's the difference?

Salam and dear all, I have been asked on what's the difference between a Masters and a PhD. Briefly:

• Masters

1. Normal entry requirement: a 'good' first degree
2. Duration of study: 12 to 24 months
3. Style of programme: taught or research
4. Tendency to be career oriented / career advancement

• PhD

1. Normal entry requirement: a Masters or a 'very good' first degree
2. Duration of study: at least 36 months
3. Requires perseverance on a scale above and beyond that of a Masters
4. Style of programme: research (there may be a small portion of taught courses such research methodology)
5. Tendency to be career oriented related to research / academia

• Note

1. At IIUM (and most universities) it is among the requirements that a lecturer must have a PhD (effort is currently being taken to achieve this target)
2. In effort to develop scientifically advanced society and industries, the Malaysian Government has place a target of 60,000 PhDs by 2023

Sources: for masters and phd in general (include en.wikipedia.org); 60,000 PhDs (MOHE); others: Khairuddin (IIUM, 2010). Wassalam

A QS with a Masters / PhD would enjoy better career prospects

Salam and dear all, Preece & Khairuddin (IIUM, March, 2009) conducted a simple questionnaire survey among Malaysian Quantity Surveyors (N=124). The results of the survey, in terms of benefits of a post-graduate degree related to quantity surveying are (in order of importance):

1. Develop career and gain promotion
2. Use knowledge to solve more complex problems
3. Enhance employment prospects
4. Client will be impressed with the higher qualification(s)
5. Increase salary
6. Increase in (quantity surveying) productivity

Wassalam.

Brazil 2014 - Which standard form of contract?

Salam and dear all, Brazil is the host of the 2014 Soccer World Cup.

• In an article by Zarina Kellerman and Natasha Jansen in Lexology (online, retrieved 21st April 2010, see full address below) the authors wrote that Brazil will be working towards procuring infrastructural facilities including 4 new stadia, upgrading of 8 existing stadia, upgrading of airports, roads, and the construction of a new high speed railroad.
• In terms of which standard forms of contract that could be used, given that contractors the world over might be called to assist Brazil, the authors discussed the advantages of using either the FIDIC Red Book and the New Engineering Contract (NEC3) Engineering and Construction Contract.
• Students may access and read the article in full (copy-paste) http://www.lexology.com/library/detail.aspx?g=4ce4cff9-bf3b-4493-a64b-f3561f50950f&utm_source=Lexology%20Daily%20Newsfeed&utm_medium=Email&utm_campaign=Lexology%20subscriber%20daily%20feed&utm_content=Lexology%20Daily%20Newsfeed%202010-04-21&utm_term=

Wassalam. Special note:

• Students must observe the copyright conditions (Globe Business Publishing Ltd, copy-paste, http://www.lexology.com/info/copyright.aspx),
• This bloger acknowledges the source of the article i.e. Lexology; the authors of the article entitled All eyes on Brazil 2014 i.e. Zarina Kellerman and Natasha Jansen; and Globe Business Publishing Ltd).

6th International Conference on Multi-national Joint Ventures for Construction Works: Submission of Abstracts & Papers

Salam and dear all,

1. Kyoto University will host the 6th International Conference on Multi-national Joint Ventures for Construction Works.
2. Collaborators for the 6th Conference are: International Islamic University Malaysia (IIUM), Manchester Business School (MBS), and Kyoto University's GCOE.
3. The 6th Conference will be held in Kyoto, Japan on 22nd-23rd September 2010.
4. For details on submission of abstracts, papers, venue, important dates, etc go to the Conference website.
5. Previous JV conferences:

• 2005, Kyoto University and IIUM, Penang, Malaysia.
• 2006, Kyoto University, IIUM and UTC, Hanoi, Vietnam.
• 2007, Kyoto University, IIUM and AIT, Bangkok, Thailand.
• 2008, Kyoto University, IIUM and National Cheng Kung University, Tainan, Taiwan
• 2009, Kyoto University and IIUM, Kuala Lumpur, Malaysia.

Wassalam.

Shah Alam Hospital facing problems and potential delays?

Salam and dear all, It has been reported by several online media that the construction of the Shah Alam hospital is facing problems and potential delays. For further reading go to:

• http://kamal-talksmalaysia.blogspot.com/2010/04/rm482-million-royal-shah-alam-hospital.html;
• http://www.theedgemalaysia.com/political-news/155331-dap-takes-shah-alam-hospital-project-to-pac.html;
• http://www.sapp.org.my/mkini/091208_shahalam_hospital.htm.
• The 2007 story on the construction of the Shah Alam hospital as reported by The Star online.

After reading this posting students may be interested to start a discussion on procurement of hospitals, methods of tendering, negotiated tender, disputes in construction, delays in construction, etc. Wassalam. Special note: the links provided above serve and are specifically aimed at facilitating students accessing the relevant postings and articles and to acknowledge the sources of information forming basis for this posting.

Declaration for non-collusion in a tender

Salam and dear all,

In my previous postings (2^nd April 2010, and 20^th March 2010) I have directed all to effort made by the government to combat corruption, at tender stage, in the procurement of constructed facilities in the public sector.

In the private sector, similar effort includes that tenderers are required to submit together with their tenders signed document known as 'Declaration for non-collusion'.

A typical 'Declaration for non-collusion' includes statements such as:

• The tender is a bona-fide tender, intended to be competitive.
• A tenderer did not fix or adjust the tendered amount by or in accordance with any agreement or arrangement with any other person or any other firm participating in the tender.
• A tenderer did not disclose to other persons (except for the purpose of obtaining quotations for insurances for the preparation of the tender) or other tenderers of his tendered amount.
• A tenderer did not enter into any agreement with anyone that he shall not participate in the tender or as to the amount of his tender.
• The tenderer shall not pay or offer to pay / give or agree to give any sum of money and the likes either directly or indirectly to any person for doing something or causing or having caused something to be done in relation to his tender.

During post contract, the CIDB Standard Form of Contract for Building Works 2000 Edition, Clause 51 Miscellaneous Provisions, sub-clause 51.1 Business Ethics, requires a contractor to practice 'good business behaviour' in his dealings with the Employer thus "… shall properly reflect the facts about all activities and transactions handled for the account of the Employer". However, this provision does not address the issue of corruption during the pre-contract stages of a project.

Sources: Tender documents used in the private sector and the said CIDB form.

Wassalam.

More transparent public sector procurement via “MyProcurement”

Salam and dear all,

The Malaysian government yesterday (1^st April 2010) announced that information on government tenders - projects available for tenders and names of successful tenderers - will be made available, real-time and online, via a newly created portal known as "MyProcurement". The said information will be available at http://myprocurement.treasury.gov.my/. The Prime Minister said that the initiative aims to boost transparency, integrity and to prevent corruption in public sector procurement.

Source: The Star Online, 2^nd April 2010 at http://www.thestar.com.my/news/story.asp?file=/2010/4/2/nation/5984619&sec=nation

Wassalam.

Malaysia's NEM: The Full Report

Salam and dear all, In my earlier posting (the one before this post) I have provided a brief on the NEM. The NEM is the work of the National Economic Advisory Council or NEAC (as stated by the PM in his speech). For those interested to read the NEAC full report go to http://neac.gov.my/node/235 See also The Star at http://thestar.com.my/neweconomicmodel/. Wassalam.

Malaysia’s New Economic Model (NEM)

Salam and dear all,

Malaysia's Prime Minister has announced his latest initiative on socio-economic growth and development, otherwise known as the New Economic Model (NEM), on Tuesday, 30^th March 2010, in Kuala Lumpur. The key ideas and components of the NEM (extracted from the PM's speech) include.

1. Malaysia, after the recent economic downturn (due to the global financial crisis) is focused on:

How to ensure a sustainable and robust recovery in the short and medium term

Enhancing Malaysia's competitiveness

Sparking private investments and growth

Putting Malaysia on a trajectory to achieve high income levels

Building an innovative economy, and

Bold transformation and economic reforms to modernize the economic model for the future.

2. Malaysia's new challenges:

Must not retreat back to the status quo (of the pre-recession years)

Past policies are no longer enough to raise income levels and create high-value economy

Malaysia must expand her economy, she cannot rely on just a few sectors of the economy to drive her growth

The education system must continue to be re-evaluated and improved to create the workforce of the future

The government should be able to facilitate and empower the private sector.

3. The NEM

The NEM forms the core of Malaysia's long-term policy agenda and it will be integrated into the 10^th and 11^th Malaysia Plan.

The NEM has 3 key principles namely high income, sustainability, inclusiveness; and 8 strategic reform initiatives.

4. The 8 strategic reform initiatives of the NEM are:

Re-energize the private sector to lead growth

Develop domestic human resource and reduce dependency on foreign labour

Create a competitive domestic economy

Strengthen the public sector

Put in place transparent and market friendly affirmative action

Build knowledge base infrastructure

Enhance the sources of growth; and

Ensure sustainability of growth.

Read the PM's full speech at: http://www.pmo.gov.my/?menu=speech&page=1676&news_id=227&speech_cat=2)

Students may want to start a discussion on the impact of the NEM on Quantity Surveying and Construction Procurement.

Source: the web address at stated above.

Wassalam.

FIDIC Forms 1999 Edition

Salam and dear all,

Students studying contract administration and international construction procurement courses at IIUM and practitioners ask me on the various types of forms currently available and in use for construction contracts globally.

In Malaysia, the more popular standard forms of contract in use include the PWD 203 (1983;2007) with and without quantities series, PAM (1998;2006) with and without quantities series, the IEM forms and forms of contract published by CIDB. These Malaysian forms are used as reference materials for contract administration courses in the B.QS (Hons) programme at IIUM.

Internationally, the FIDIC standard forms of contract are preferred by many employers and contractors. To understand better the FIDIC forms, the FIDIC website at http://www1.fidic.org/resources/contracts/which_contract.asp lists the various types of FIDIC forms:

Before 1999;

• Conditions of Contract for Works of Civil Engineering Construction: The Red Book (1987)
• Conditions of Contract for Electrical and Mechanical Works including Erection on Site: The Yellow Book (1987)
• Conditions of Contract for Design-Build and Turnkey: The Orange Book (1995)

New FIDIC forms First Edition 1999:

• Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer: The Construction Contract
• Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer (M;DB Harmonised Edition) - for bank financed projects only: The MDB Construction Contract
• Conditions of Contract for Plant and Design-Build for Electrical and Mechanical Plant and for Building and Engineering Works Designed by the Contractor: The Plant and Design-Build Contract
• Conditions of Contract for EPC/Turnkey Projects: The EPC/Turnkey Contract
• Short Form of Contract: The Short Form
• Dredgers Contrcat (based on the Short Form of Contract): Dredgers Contract

Go to http://www1.fidic.org/resources/contracts/launch/bowcock1.html for the speech by Mr J. Bowcock, Chair of FIDIC Contracts Committee during the launching of the new FIDIC forms.

Source: FIDIC websites as stated above.

Wassalam.

"Integrity Pact" in public procurement

Salam and dear all,

Furthering her effort to combat corruption in public procurement, Malaysia has introduced what is known as an "Integrity pact". The pact, to be signed by all bidders and the authority responsible for calling tender/a contract, aims to:

• Uphold transparency and accountability, and
• Ensure excellent work ethics and good governance.

The "Integrity Pact", introduced by the Port Klang Authority, a body under the Ministry of Transport; requires among others that bidders must not collude with each others, and they must report all commissions or expenses paid to anyone in relation to a tender or in a contract.

An ongoing initiative to combat corruption is a training program entitled "Integrity for Contractors" conducted by the CIDB. The training program, made compulsory to all firms registered with CIDB since 2007, reiterates the importance of integrity in public procurement and also includes aspects such as goverment procurement policies on integrity, work ethicts, etc. (http://www.cidb.gov.my).

Here goes the full story on the "Integrity Pact", as it appeared in The Star Online, 20^th March 2010:

Saturday March 20, 2010

PKA draws up anti-graft pact in its contracts

By DHARMENDER SINGH

PKA now requires contract bidders to sign integrity pact

PUTRAJAYA: Bidders for Port Klang Authority (PKA) contracts will have to sign an integrity pact with the authority, undertaking not to participate in activities linked to the payment, offering, demanding or accepting of bribes.

Transport Minister Datuk Seri Ong Tee Keat said the pact was proof that he was serious about his pledge to uphold transparency and accountability.

It also showed that the ministry was not in the habit of commissioning studies and appointing consultants just to have the reports lie on shelves gathering dust, he added.

"The integrity pact will ensure excellent work ethics and good governance, while also providing a deterrent against corrupt practices, which lead to blatant excesses like the ones involving the Port Klang Free Zone," Ong said.

"This will not be the end of efforts by me and the ministry to uphold transparency and accountability. "As long as I continue as the Transport Minister, I will walk the talk," he added.

Ong was speaking at a press conference after witnessing the signing of statutory declarations between PKA and Jurutera Perunding Hartkonsult, Business Associates Consulting Sdn Bhd, MSC Management Services Sdn Bhd, Engineering and Environmental Consultant Sdn Bhd, Minconsult Sdn Bhd and Orion Maritime Malaysia Sdn Bhd here yesterday.

The six firms are bidding for tenders for the Jalan Parang upgrading and Port Klang Master Plan study projects being undertaken by the authority.

Transparency International-Malaysia president Datuk Paul Low was also present at the signing.

Meanwhile, PKA chairman Datuk Lee Hwa Beng, who announced the integrity pact, added that it also required bidders to refrain from colluding with competitors to obtain contracts or engaging in such abuses while carrying out the contract.

Bidders also have to disclose all commissions and similar expenses paid by them to anyone in connection with the contract, he added.

"Anyone violating the pact will face stiff penalties, like the termination of contracts, blacklisting, forfeiture of performance bonds and claims for liquidated damages, as well as having the violation reported to the Malaysian Anti-Corruption Commission," said Lee, adding that the authority was also bound by the pact.

"The terms will also be included in the contract signed with the successful company, and will apply throughout the time that work on the project is being carried out," he added.

He said action could also be taken if proof of any corrupt practices surfaced years after work was completed.

Lee said signing the integrity pact would be a requirement for all future PKA contracts, although for now, it would only apply to jobs worth RM1mil or more.

Wassalam.

No more traditional light bulb

Salam and dear all,

• The government today announced that by 2014 the "traditional light bulb" will not be in the market anymore.
• The government's decision to switch to "compact fluorescent lamps, fluorescent tubes and light-emitting diodes" is in line with the concept of sustainable built environment.
• According to the government benefits of stopping the use of the traditional light bulbs include reduced carbon dioxide emissions by 732,000 tonnes a year and reduced energy usage in Malaysia by 1,074 gigawatts a year or 1% of the total current energy usage.
• Students may want to study the cost implication of the move, as in the context of life-cycle-costing or LCC, the cost of the traditional light bulbs is a lot cheaper but has a shorter life span when compared to the more energy efficient compact fluorescent lamps, fluorescent tubes and light-emitting diodes.
• Read the full article as it appeared in The Star Online, 19th March 2010 http://thestar.com.my/services/printerfriendly.asp?file=/2010/3/19/nation/5889920.asp&sec=nation:

Friday March 19, 2010 2014 date to switch off traditional light bulb By DHARMENDER SINGH and CHAN LI LEEN newsdesk@thestar.com.my PUTRAJAYA: The traditional light bulb will no longer be available by January 2014. The Government will stop all production, import and sales of the bulbs by that date as part of efforts to save power. Traditional light bulbs, also called incandescent light bulbs, are considered less energy-efficient and, as a result, not as environmentally-friendly as compact fluorescent lamps, fluorescent tubes and light-emitting diodes. Power, Green Technology and Water Minister Datuk Seri Peter Chin, who announced this yesterday, said the move to stop the use of these bulbs would help reduce carbon dioxide emissions by 732,000 tonnes a year. “The shift to more energy-efficient bulbs will help reduce energy usage in the country by 1,074 gigawatts a year. This is 1% of the total current usage,” he told a press conference after launching his ministry-level Chinese New Year celebrations. In money terms, Chin said the shift would save RM336mil a year in energy costs and this would allow consumers to better deal with any increase in tariffs that might occur in the future. Chin said the phasing out of the bulb would be implemented in two phases. The first phase, from January to December next year, would involve stopping all production, import and sales of 100 watt or higher capacity bulbs. The second phase, from January 2012 till the end of 2013, will see an end to the production, import and sales of all other light bulbs. He said the move was in line with Prime Minister Datuk Seri Najib Tun Razak’s commitment to reduce carbon intensity by 40% by the year 2020 that was made during the United Nations Framework Convention on Climate Change Conference that was held in Copenhagen in December last year. In a related development, the Housing and Local Government Ministry has proposed the use of LED bulbs to replace conventional light bulbs in street lamps. Minister Datuk Seri Kong Cho Ha said a 60W LED bulb gave out the same amount of light as a 250W conventional light bulb. This level of light was the minimum requirement under ministry guidelines. Kong, who was speaking to reporters after launching the Manjung district-level Ops Cerah in Lumut on Wednesday night, said the Government could save a lot on electricity if street lamps in the entire country used LED bulbs. Wassalam.

QS News and Stories and Building Legal News from BUILDING

Salam and dear all, I have added two news items namely "QS News and Stories from Building" and "Building Legal Case of the Week." Both news items are added on to this blog via RSS sourced from BUILDING (http://www.building.co.uk). I believe quantity surveying students (construction procurement and contract administration) would benefit from these news items. Wassalam.

Roof collapse at Sultan Mizan Zainal Abidin, Kuala Terengganu caused by design flaws, poor materials and workmanship

Salam and dear all,

Reference: previous postings dated 3^rd and 4^th June 2009 and 9^th January 2010.

The Mentri Besar of Terengganu today (11^th March 2010) released the report on the roof collapse at the Sultan Mizan Zainal Abidin, Kuala Terengganu. (Referring to the report) he said the main causes of the collapse were: engineering flaws, shoddy workmanship, inferior materials and lack of expertise in the key project management team. He also stated that the Terengganu government "had sent a letter to the main contractor to bear all the costs for the reconstruction as the incident occurred less than a year after the handover and the stadium was still under warranty" (Source: The Star Online, 11^th March 2010, for the full story visit http://thestar.com.my).

Wassalam.

Bank Negara raised the OPR

Salam and dear all,

Reference: earlier posting 30^th July 2009.

• Bank Negara Malaysia has, on 4^th March 2010, raised the OPR (Overnight Policy Rate) to 2.25% (from 2.0%). The move suggests that Malaysia is indeed easing out of the recession.
• Consequently, there is a potential that commercial banks may soon increase their BLR.
• What is OPR? OPR is the rate of interest that banks and other financial institutions lend money they have and deposited with the Bank Negara overnight to other banks and financial institutions. The interest rate, otherwise known as OPR, is 'controlled' by Bank Negara. The consequences of the changes in the OPR would normally include changes in the BLR, other costs of borrowing money (short-term interest rates, fixed deposits, long-term interest rates) and other events in the economy including employment, output, and prices of goods and services (http://www.realestateagent.com.my, 4^th March 2010).
• What is BLR? BLR is the minimum rate of interest determined by banks and other financial institutions. The BLR is based on factors including the banks' cost of funds and other administrative costs (http://www.realestateagent.com.my, 4^th March 2010).

Wassalam.

Malaysia (and construction) is out of the recession

Salam and dear all,

1. Recent media reports pointed out that Malaysia is out of the recession.
2. According to the government, Malaysia's GDP for the 4th quarter of 2009 grew 4.5% (the GDP suffered contractions during the first 3 quarters).
3. The GDP for 2010 is predicted to grow at 5%.
4. The positive outlook is due to a combination of local and external factors especially the government's effort in promoting efficiency via the GTP, NKRAs and KPIs initiatives; the 2 economic stimulus packages amounting to RM67b; the yet to be announced 10th Malaysia Plan and the New Economic Model (NEM). External factors include improved economic situations in Malaysia's key trading partners (US5.7%, Japan 4.6%, Vietnam 6.5%, Singapore 4.0%).
5. Leading the positive growth is the construction sector with 9.2% (Q3=7.9%) largely due to the government's RM67b stimulus packages.
6. Other sectors: agriculture 6% (Q3=-0.5%), manufacturing 5.3% (Q3=-8.6%), services 5.1% (Q3=3.4%), mining -2.8% (Q3=-3.5%).
7. Sources: online media reports, 25th and 26th February, including Bernama, The Star and My Sinchew.

Wassalam.

Seminar "Opportunities for Graduate Studies in QS and Procurement"

Salam and dear all,

1. The Procurement and Project Delivery System Research Unit, IIUM will host the above seminar on 11th March 2010, 1.45pm to 5pm, at KAED IIUM.
2. During the seminar Prof Sr Dr Khairuddin Abdul Rashid and Assoc Prof Dr CN Preece will discuss aspects related to graduate studies in quantity surveying and in construction procurement including benefits of graduate studies, areas of studies, approaches in supervision, etc.
3. In addition, officials from IIUM will explain the application procedures, fees and funding, etc.
4. The organizer has applied for 2 CPD points from the Board of Quantity Surveyors Malaysia.
5. This event is free.
6. For further information call Mr Mohd Amir Adli at 03-61965284.

Wassalam. Prof Sr Dr Khairuddin Abdul Rashid Head, Procurement and Project Delivery System Research Unit, IIUM

Public Private Partnership Unit or 3PU

Salam and dear all,

• There is further progress, in terms of organizational set-up, in the government's PPP initiative with the setting up of a dedicated unit within the Prime Minister's Department. The newly established unit is known as the Public Private Partnership Unit or 3PU (Unit Kerjasama Awam Swasta or UKAS).
• Prior to the setting up of 3PU, the history of Malaysia's PPP may be traced back to 1981 when the government introduced the Malaysian Incorporated Policy. The policy promotes greater collaborations between the public and private sectors.
• Subsequent to the Malaysian Incorporated Policy, the government introduced the Privatization Policy in 1983, followed by Guidelines on Privatization in 1985, and the Privatization Master Plan in 1991.
• Privatization initiatives then were administered by the Special Task for Privatization (Pasukan Petugas Khas Penswastaan) of the Economic Planning Unit of the Prime Minister's Department. This group of experts acted as secretariat to a committee known as the Privatization Committee; the later was responsible in making recommendations on privatization initiatives to the Cabinet.
• In 2006 and under the 9th Malaysia Plan, Malaysia's PPP moved a step further when the government introduced PFI as among the key approaches in government procurement for public infrastructures.
• The 3PU mentioned at the beginning of this posting was established on 22 April 2009. The Unit is headed by a Director General and two deputies, each for Privatization and PFI.
• Under the 10th Malaysia Plan and under the government's New Economic Model (NEM) it has been said that the government places higher emphasis on private sector involvement in the delivery of public infrastructures through the privatization and PFI approaches in procurement.

Wassalam. Sources: various media reports and http://www.3pu.gov.my

GTP, NKRAs, KPIs and the construction sector

Salam and dear all, In April 2009 the present Government introduced the Government Transformation Programme or GTP. The objectives of the GTP include to make the government's delivery system more accountable and effective in the provision of public services.

1. There are 6 National Key Result Areas (NKRAs) under the GTP i.e. reducing crime, fighting corruption, improving students outcomes, raising the living standards of low-income households, improving rural basic infrastructure and improving urban public transport.
2. The outcomes of the NKRAs are to be measured based on pre-determined Key Performance Indicators (KPIs).
3. In the context of the construction sector, the GTP and specifically the NKRAs, has potential positive implications such as:
4. Fighting corruption. The KPI for fighting corruption is that by 2010 Malaysia's Corruption Perception Index (CPI) score, as compiled by Transparency International (TI), should move from 4.5 to 4.9. In 2009 Malaysia's position on the TI CPI was 56; 1995 = 23. In the context of the construction industry measures put in place to fight corruption includes to reduce leakages in government procurement via disclosure of government tenders on the e-government portal.
5. Improving rural basic infrastructure. Several rural parts of Malaysia remained without modern basic infrastructures such as roads, electricity and treated water. The KPIs for rural infrastructure includes construction of some 7,000 km of new/upgraded roads by 2012, construction of 50,000 new/refurbished homes for the poor by 2012, access to treated water to some 360,000 households by 2012 and access to 24 hour electricity to some 140,000 households by 2012.
6. Under the GTP, using the two NKRAs mentioned above as example, it is expected that the construction sector would become more efficient and with accountability and transparency, and that the allocation targeted for basic infrastructures benefits the construction sector and the economy as Malaysia strives to move out of the current economic downturn.
7. For further details on the GTP Roadmap visit http://www.transformation.gov.my/
8. Malaysia's TI website http://www.transparency.org.my/

Source: various newspapers and the above websites. Wassalam.

PFI. Is Malaysia Ready?

Salam and dear all, Khairuddin (2009) in "Understanding PFI" (Scholar Mind Publishing, pp128-138) reported the outcome of a survey to identify key competencies and to ascertain whether key players of the Malaysian Construction Industry possess those competencies in the provision of PFI services. The outcome of the survey (N=36) include:

• Identified 31 key competencies required in the provision of pfi services. The competencies may be divided into 6 key categories namely: technical, financial, legal, hard and soft pfi skills, contractual and value for money;
• Most QSs, Architects, Financiers, Engineers and Contractors do possess general understanding of pfi; but
• Many "lack competencies" (identified above) to deliver pfi projects.

There is therefore an urgent need for capacity building... training for civil servants and other key players and participants of pfi projects. Wassalam.

Malaysian PPP - Guideline

Salam and dear all, Khairuddin (2009) in "Understanding PFI" (Scholar Mind Publishing, pp142-143) suggested a list of measures in effort to improve understanding and the delivery process of projects procured under PPP and in particular under the PFI approach. Among the measures suggested include establishment of guideline on PPP/PFI. A document entitled "Public Private Partnership (PPP) Guideline" is now available. The document is published by the PPP Unit, Prime Minister Department Putrajaya. Wassalam.

Poor design, materials and workmanship... a comprehensive study is urgently required

Salam and dear all, 1. In June 2009, I posted a note on the collapsed of the newly completed Kuala Trengganu stadium's roof. 2. Now it has been found that the collapse was due to a combination of factors including 'poor design, material, roof not built to specification and poor quality control at construction site'(see Bernama, Jan 7, 2010, quoting the Works Minister Datuk Shaziman Abu Mansor). 3. Why many projects suffer from time and cost over-runs, poor quality (workmanship and material), poor design, etc (see also my postings on the reports prepared by the Auditor General)? 4. What happens to the construction industry and its supply chain? 5. A comprehensive study on the state of the construction industry is urgently required. The study should identify the 'real' problems and their causes and collect data that could be used in developing appropriate and robust strategies to combat the problems. 6. CIDB, university faculties, professional bodies representing consultants, contractors and clients, government departments, etc must collaborate. Wassalam.