Kit Siang to ask Dr.Mahathir in Parliament why United Engineers Malaysia (UEM) is given preferential treatment in all Government privatisation programmes

Speech by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, at a DAP ceramah at Nibong Tebal, Penang on Saturday, May 26, 1990 at 8 p.m.

Kit Siang to ask Dr.Mahathir in Parliament why United Engineers Malaysia (UEM) is given preferential treatment in all Government privatisation programmes

When Parliament meets in a fortnight, I would ask the Prime Minister, Datuk Seri Dr. Mahathir why the UMNO-owned and controlled company, United Engineers Malaysia (UEM), has been given preferential treatment by the Malaysian Government in its privatisation programme.

A week ago, it was reported that the United Engineers Malaysia, which had already been awarded the North-South Highway privatisation contract and the right to collect tolls for 30 years, is involved in another privatisation project, the $500 million second in between Johore and Singapore.

Other major privatised contracts awarded to UEM included the National Sports Complex consultancy project and the Peninsular Gas Utilisation (PGU) Phase 11 management consultancy project.

Recently, it was announced that the UEM’s controlling company, Hatibudi, was awarded the privatisation contract for the commercial printing of Government Printers.

UEM transformed from 10 cents a share to $14 a share in three years all because of the UMNO connection

UEM has become the ‘blue-eye’ boy of the government for its privatisation programme, although it was a bankrupt company before it was taken over by Hatibudi, the UMNO trustee holding company. However, within three years, UEM has been transformed from a bankrupt company which had been suspended from the Kuala Lumpur Stock Exchange and which is worth 10 cents to a high-flyer now worth $14 per share – solely because of its UMNO connections!

From the North-South Highway scandal, where the $3.4 bil¬lion highway contract was privatised to a company which had not built an inch of road or foot of bridge, but famous for the collapse of the
Northam Court building in Penang, it is clear that the criteria for such privatisation is because of its UMNO links.

In fact, the Prime Minister, Datuk Seri Dr. Mahathir was very frank during the height of the North-South Highway controversy in August 1997. His reply to criticism that it was improper and irregular for a leading political party to make use of its power to amass wealth at the expense of other business ventures, was: “We agree … but who is going to pay the $360 million for the UMNO complex?”

Another UMNO leader also publicly defended the privatisa¬tion contract to UEM as a “mean of UMNO solving its problems by repaying loans taken for the new UMNO headquarters building.”

Now that the general elections is around the corner, and UMNO Baru needs billions of dollars for its general elections fund, it may not be surprising that more and more privatisation contracts are being given out to UEM and other UMNO-connected companies like Hatibu¬di, PLUS, Fleet Group, etc.

According to market news, there are many other gigantic privatisation contracts in the pipeline for UEM and other UMNO-¬connected companies.

The question that I have put to the Prime Minister for next month’s Parliamentary meeting reads: “To ask the Prime Minister whether the government is giving preferential treatment to United Engineers Malaysia (UEM) in the government’s privatisation programme, and to give a list of all privatised projects and contracts (stating the value of the project) awarded to UEM or its subsidiary or associated companies, as well as a list of privatised projects which the UEM, its subsidiary or associated companies, are involved in whether at feasibility study, consultancy or other stages before the formal award of the privatisation process.”

The recent RENONG deal is another elaborate corporate exercise by the UMNO Baru to raise funds for its general elections campaign, as it has been estimated that the RENONG deal could generate about $500 million in cash sorely needed by UMNO Baru.

Call on the Regulatory authorities to hold public inquires before approving the RENONG deal to ensure that it is not against public interest

It is therefore no wonder that Malaysia has been described as the only country in the region whose political system has developed such sprawling and deep corporate inroads into the nation’s economy, with the country’s main ruling party controlling the links.

This arrangement may be to the interest pf the ruling party, in turning a modest-size property company into one of the biggest investment-holding concerns in the region, with controlling interests in eight publicly-listed companies, such as Bank of Commerce Bhd., New Straits Times Press (M) Bhd., Hume Industries (M) Bhd., United Engineers Malaysia, Kinta Kellas, Time Engineering Bhd., TV 3, Cement industries of Malaysia Bhd.(CIMA), but it may not be in the public interest.

For this reason, before the various regulatory bodies approve the RENONG deal, public hearings should be held for RENONG, the UMNO-controlled and UMNO-owned companies like UEM, Fleet Group, Hatibudi and even the UMNO leaders to explain why the merger and conglomeration of such diverse interests such as the printed and electronic mass media, construction, engineering, manufacturing and banking, is really in the public interest – particularly with the close connection between politics and business in the entire transaction.