Friday, November 30, 2007

Singapore 'wins' in Pedra Branca claim

It's not exactly official but Singapore has trounced Malaysia in the competing claim for Pedra Branca/Pulau Batu Putih, according to an online poll by Sophie's World.

When the three-week poll closed tonight, a total of 334 readers had cast their votes. This is quite a decent number but it is still not big enough as a scientific poll. The three options were:

Who will win Pedra Branca/Pulau Batu Putih?
1. Singapore because it has been squatting on the little rock for more than 150 years;
2. Malaysia because the islet is nearer to the country; or
3. Two countries should re-merge and have joint ownership of Pedra Branca/Pulau Batu Putih

Those who voted for Singapore outnumbered Malaysia 169 to 141. Votes for Singapore represented exactly half of the total number of votes. Support for Malaysia was 42%, while the remaining 24 votes or 7 per cent picked the third option of joint ownership of the little island.

The court hearing ended on Nov 23 and the judges are still deliberating on the decision. The International Court of Justice's judgement is expected within the next two months.

The issue has naturally divided readers on both sides of the causeway, due probably to nationalism and differing interpretations of history.

Sophie's World is still betting on an official victory for Malaysia despite the odds against the country.

Wednesday, November 28, 2007

Haphazard Malaysian railway blueprint

Malaysia's railway blueprint is as haphazard as the country's current political climate.

The Straits Times today reported that the government is set to revive part of Malaysia's massive railway project with the award of a RM12.5 billion contract to a joint venture led by businessman Tan Sri Syed Mokhtar Al-Bhukary.

The report said MMC Corporation, the corporate flagship of Tan Sri Syed Mokhtar's vast business empire, will team up with Lin Yun Ling's construction house Gamuda to build an electrified, double-track rail system stretching from the central city of Ipoh in Perak to Padang Besar on the Malaysia-Thai border.

The news is not unexpected although the project to build the entire track was shelved by the current administration following the retirement of former PM Mahathir Mohamad in 2003. The lobbying to revive the project has been intense.

The cost also appears to have ballooned. The plan to build the entire track along the peninsular was estimated to be RM14.5 billion back in 2003. But the price tag is now reported to be RM12.5 billion for a segment of the Malaysian peninsular.

Another point that's not been made clear by the government is the other major leg of the Malaysian railway blueprint -- between the Malaysian capital of Kuala Lumpur and Johor Baru and/or Singapore.

A report this week by Singapore's The Business Times cited JP Morgan as saying that Francis Yeoh's YTL bullet train project between KL and JB is set to take off. The price tag also appears to have gone up -- RM11 billion from the reported figure of RM8 billion earlier.

Will the two railway projects be able to coordinate their operations and make fast train service seamless from southern Malaysia to the tip of the Thai border? Will travelers be able to hop on the train one day in Singapore and travel all the way via Malaysia and Thailand to reach Kunming in China as part of the Asean dream?

Sophie's World doesn't have high hopes, after so many false starts amidst all the problems within Asean.

Maybe, Malaysia must continue to rely on the good old, snail-pace Keretapi Tanah Melayu.

Monday, November 26, 2007

Sad day for Malaysian Indians

I read news about the massive protest by Malaysian Indians (Pix source: The Straits Times. You can see more pix at Screenshots) in Kuala Lumpur with a tinge of sadness.

I feel sad that many Indians feel marginalised over the years in their country of birth due to socio-political reasons, one of which is the Bumiputra policy that has been favouring the Malays since the 1970s.

Their unhappiness over a litany of issues, including the recent demolition of a temple in the state of Selangor, erupted over the weekend.

Reports said Malaysian riot police fought running battles with more than 5,000 Hindu protesters gathered at various places for the banned rally in the Malaysian capital yesterday.

ST reported that many held posters of Indian independence leader Mahatma Gandhi and waved identity cards and Malaysian flags to show they were also Malaysians, as they demanded equal rights.

The report said the gathering was organised by the Hindu Rights Action Force, ostensibly in support of a suit it filed against Britain in August claiming US$4 trillion for the suffering of Indians, whose ancestors were taken to Malaysia by the British as indentured labourers 150 years ago.

Another report cited the organisers as claiming that more than 100,000 members of the ethnic Indian community had signed a petition, addressed to the Queen, asking for help to end racial discrimination under Malaysian law.

Apart from feeling sorry for their plight, I feel sad that some Malaysian Indians made such a ridiculous appeal and claim against the former colonial master.

Yes, the British brought Indians and Chinese to Malaya then. But Malaya, like many other former colonies, has since gained independence. The country has had 50 years -- read half a century -- of rapid economic development, albeit several dark chapters of its history.

The answer is not to make the ridiculous appeal to the Queen or the huge monetary claim, which is equivalent to nearly one-third the value of the US economy today!

Instead, the Indian community should work within the system to improve it instead of blaming the former colonial master. At the same time, the Malaysian government, which is led by Umno and other members of the National Front coalition, must not ignore the grievances of the Indian community or any other marginalised communities anymore.

All parties must work together to help improve the system, and show that Malaysians can run the country well, long after the departure of the British.

Postscript: I have just read the petition by the Hindu Rights Action Force and am totally disgusted with the complete misrepresentation of the situation in Malaysia. The petition even resorted to describing Indians as being "persecuted by government backed Islamic extremist violent armed terrorist" and even suggested "ethnic cleansing" in Malaysia. The petition is even more ridiculous than what I have imagined earlier! Gandhi would not have condoned such an act!!!

Sunday, November 25, 2007

Singapore 'pips' Malaysia in Pedra Branca claim

Sentiment in blogosphere towards the court tussle for Pedra Branca/Pulau Batu Putih seems to have turned in favour of Singapore instead of Malaysia when the hearing ended yesterday, at least according to the online poll of Sophie's World.

Some 275 people have taken part in the poll so far. With just five days to go before the poll closes, votes for Singapore have outnumbered Malaysia 132 to 121. Another 22 voters picked the third option of joint ownership of the little island in the South China Sea.

As stated earlier, the sample size is just not big enough to make a conclusive statement. At best, it's just an indication of the mood of a group of people.

Sophie's World noted the swing of votes happened when the photograph saga happened last week. Votes for Malaysia were ahead of those for Singapore until the Singapore legal team questioned the veracity of the photograph evidence submitted by the Malaysian legal team.

Since then, some readers, including readers from Malaysia, have lambasted Malaysia for using the photograph, which exaggerated the closeness of the island to Malaysia. Many bloggers on both sides of the causeway also ridiculed Malaysia for using the photograph from an unverified and little-known blog although the photograph is not the crux of whole court battle. The photo is merely an image of the island, regardless of its distance to the Malaysian shores. The photograph should not be used as the basis of the court judgment, which will be made next year.

What's more important is the argument whether Malaysia or Singapore had effective ownership of the island. Was Singapore merely a lighthouse operator on an island owned by Malaysia? Did Singapore or Malaysia act in good faith in the whole issue? Or was either side being legalistic in the bid to win at any cost?

Sophie's World is still rooting for Malaysia despite the odds.

Saturday, November 24, 2007

Can everyone fly KL-Singapore? Part 2

IT's finally confirmed that Malaysia and Singapore will open up the long-protected Singapore-Kuala Lumpur air route to limited service by budget airlines.

According to The Straits Times, from Feb 1, at least one low-cost carrier from each side will be allowed to operate two daily flights - a total of four extra services a day.

The report said all restrictions on the lucrative sector will be lifted on Dec 1, 2008, to allow airlines on both sides of the Causeway to fly as often as they want between the two points. ST added that the liberalisation of one of Asia's most restricted air routes is in line with an Asean initiative to free up air links between capital cities of the 10-member bloc by December next year.

It's definitely a step in the right direction but will it make much of a difference to many long-suffering travelers of Singapore and Malaysia? For air travelers, they will see lower fare but will the cost saving be significant to the bulk of the passengers?

Budget airlines -- AirAsia of Malaysia and Tiger Airways of Singapore -- will put pressure on the national carriers but the bulk of the air rights are still lodged with the national carriers until the end of next year.

The provision for budget airlines of 16 daily flights a day represents 8 per cent of the current total number of flights between Kuala Lumpur and Singapore a week. According to the news report, Singapore Airlines and Malaysia Airlines operate about 85 per cent of the over 200 flights a week, charging about S$400 for a return flight that lasts 45 minutes each way.

As pointed out by Sophie's World earlier, what's more important is the fall in the average airfare for the sector, not the headline-grabbing lowest fare for a few early birds.

Wednesday, November 21, 2007

Wake up, Asean!!! Part 2

ix of the deadly crackdown of the pro-democracy demonstration in September.
Pix source:

Asean, which kowtowed to the murderers of Myanmar this week, still has many grand plans although it is beset by many unsolved regional disputes and problems.

One of the grand plans is the idea of a common stock exchange for easier cross-border trading in big-cap stocks, AFP cited an official at the Thai bourse as saying today.

The report said Singapore, Thailand, Malaysia, the Philippines, Indonesia and Vietnam would jointly set up an exchange for regional trading in late 2008. Under the plan, large-cap shares in each participating country could be exchanged on the new trading board.

Asean, please wake up! Can an Asean-wide stock exchange realistically take off next year when the two historically linked stock exchanges of Malaysia and Singapore can't even set up a joint trading platform after talking for more than three years?

And the two bourses -- Bursa Malaysia and Singapore Exchange -- are the only two publicly-listed stock exchanges within Asean. Their status would have made it easier for them to undertake commercial decisions such as setting up a joint trading platform. But the proposed cross-trading mechanism remains a pipe dream.

Asean members must resolve the long list of outstanding bilateral issues first, before the bloc could truly undertake real regional joint efforts or have greater moral authority to preach to Myanmar's dumb generals.

Wake up, Asean!!!

Alamak! All the Asean leaders formed a human chain with PM Thein Sein of Myanmar, which is ruled by murderers and dumb generals.

They formed the traditional Asean human chain following the signing of the Asean charter in Singapore this evening (AFP pix on ST).

Sophie's World is speechless and disgusted. Read Choo Zheng Xi's far more eloquent piece in The Online Citizen.

Wake up, Asean!!! It should not be business as usual anymore. Myanmar didn't just disperse protesters with tear gas. It killed unarmed protesters and monks!!!

And yes, the so-called historic Asean charter is generally full of motherhood statements as expected, and procedural matters that should have been in place after 40 years.

Tuesday, November 20, 2007

Pictures don't tell a thousand words!

Photo submitted by Malaysia (Pix source: The Straits Times, which said the Malaysian photograph, taken with a telephoto lens, magnifies the height of the hill by seven times)

Singapore's The Straits Times said this photo was taken with a camera that approximates what the human eye sees.

It’s truly fascinating that the current trial over who should own Pedra Branca (according to Singapore) or Pulau Batu Putih (according to Malaysia) has, at times, focused on form rather than substance.

In the rebuttal to Malaysia, Singapore chastised Malaysia over its photo evidence of the little outcrop, saying that Malaysia had misrepresented the distance of the island to Malaysia. Singapore seems to be technically correct as seen in the two photos in The Straits Times.

It’s odd that the Malaysian government had resorted to using a picture from an little-known blog to back up its photo evidence. Singapore has correctly questioned the veracity of the blog and the picture.

The truth of the matter is simply that the little island – whatever you call it, Pedra Branca or Pulau Batu Putih – is 25 nautical miles or about 40km from Singapore. The Singapore press would never fail to mention the distance between Pedra Branca and the Republic.

But Singapore press would generally leave out the mention of the distance between Pulau Batu Putih and Malaysia, which is actually 7.7 nautical miles or about 12.3 km.

Sophie’s World had earlier mentioned the distance as one of the factors in favour of Malaysia, but Singapore is banking on the legal notion of adverse possession to claim ownership of the islet.

Regardless of the photo evidence submitted, the indisputable point is that the little rock is a lot nearer to Malaysia.

I guess a picture doesn’t quite tell a thousand words!!!

Monday, November 19, 2007

Temasek not guilty

As expected, Singapore government investment arm Temasek Holdings has been found guilty of unfairly dominating and manipulating Indonesia's telco market.

Temasek issued a terse but strong statement to say it is not guilty of the charges and will appeal the sentence.

Simon Israel, Temasek’s executive director, stated: “We are not guilty. The decision makes no sense. It ignores the facts. The charge against Temasek is groundless – Temasek has no shares in Indosat and Telkomsel, and we play no role in their business decisions and operations.

Telkomsel is controlled by the Indonesian Government which also has a golden share in Indosat. The telecommunications industry in Indonesia is regulated. It is inconceivable that the Indonesian government and the telecommunications regulator would allow the prices to be fixed or cause a loss to the consumer. Temasek will fight this decision.”

Sophie's World agrees that the Indonesian ruling doesn't quite make sense as the Indonesian government has a bigger say than Temasek in the two Indonesian telcos. The ruling will no doubt dent Indonesia's image among foreign investors. Will leave it to Indonesian experts to talk about this.

Temasek is technically correct though to say it doesn't own shares in the two telcos. The shares are held through two Temasek subsidiaries. Temasek owns 56 per cent of Singapore Telecommunications which in turn owns 35 per cent of Telkomsel, Indonesia's largest mobile phone carrier. Temasek owns all of Singapore Technologies Telemedia which, along with Qatar Telecom, owns a 41.9 per cent stake in Indosat, the second-largest telecommunications company in the country.

Although Temasek is probably sound on the technical and legal fronts, the ruling has wider implications on Temasek as a sovereign wealth fund. This is not the first time that Temasek has had missteps in the region.

Last year, Temasek caused an uproar in Thailand when it acquired Shin Corporation from the family of former PM Thaksin Shinawatra. The Thai court ruled against a unit of Temasek-controlled Shin following the takeover by Temasek.

Thailand is still involved in the protracted review of its foreign ownership rules to ascertain whether Temasek did indeed breach the rule in the deal, which subsequently triggered a military coup that ousted Thaksin.

It seems that some quarters are determined to whack Temasek at all cost as it is seen as the vehicle of the Singapore government.

There is definitely no shortage of volcanic problems within the Asean family.

Saturday, November 17, 2007

Asean a happy family?

The ten Asean members will sign a charter in Singapore to mark yet another commitment to build a stronger community with over 500 million people.

According to news reports, the charter marks the first time that the 40-year-old bloc, which has often been described as a family by its member nations, will codify its basic principles and organisational rules.

The Straits Times said the 31-page Charter includes provisions for leaders to meet twice a year, new rules for settling disputes peacefully, more flexible decision-making processes, and steps to beef up the organisational structure of the grouping so that it is able to monitor and implement what members have agreed to do together.

Sophie's World has not seen the implementation details but is curious about the provision to resolve disputes. Will it be a motherhood statement about the need to resolve disputes peacefully without resorting to violence? Or will the charter spell out something concrete like all neighbourly disputes be referred to an international court or arbitrator if affected parties are unable to come to terms after 10 years of bilateral negotiations?

The provision is definitely an important point because there is no shortage of disputes within the so-called Asean family. Some of the family tiffs include:

1. Asean members' inability to rehabilitate the dumb generals and killers of Myanmar;
2. Malaysia and Singapore are crossing swords at the ICJ over a rock known as Pedra Branca or Pulau Batu Putih in the South China Sea;
3. Singapore and Malaysia still can't resolve their bilateral problems after nearly two decades;
4. Malaysia and Indonesia are still banning sale of sand to Singapore;
5. Indonesia and Singapore couldn't seal a treaty to extradite any Indonesian criminal in Singapore;
6. Singapore and Indonesia could not seal a defence cooperation agreement;
7. Nearly all Asean members are pissed off with Indonesia's annual haze;
8. Thailand is still seething over Singapore government investment arm Temasek Holdings' controversial deal with former Thai PM Thaksin Shinawatra's Shin Corp;
9. Indonesia and Malaysia have not fully embraced each other after another round of Konfrontasi;
10. Malaysia and Singapore can't even agree on a new overhead bridge to replace the old causeway to help improve the massive cross-border flow of goods and people, although Asean dreams about a region with free movement of goods, services, investment, skilled labour and freer flow of capital by 2015.

The Singapore charter is definitely a step in the right direction to set up a proper framework for the interaction of its ten family members.

But individual members of the Asean family must look at wider interests, not just their narrow self-interest.

Sophie's Note: Wikipedia
entry showing
satellite image of the 2006 Southeast Asian haze over Borneo.

Friday, November 16, 2007

Malaysia 'pips' Singapore in Pedra Branca claim

Malaysia has pipped Singapore in Sophie's World's online poll on the likely winner of the tussle for Pedra Branca/Pulau Batu Putih.

Sophie's World started an online poll a week ago, asking readers whether they think Singapore or Malaysia will emerge triumphant in the current court tussle for the tiny rock in the South China Sea.

Many readers had been rooting for Singapore, until today.

Readers supporting Malaysia outstripped Singapore 34 to 32 as of today. Another 7 readers voted for the third option -- the two countries should re-merge and have joint ownership of the disputed island.

It's still early days as we still have 15 days to go before the online poll closes. Do take part in the online poll but be objective! :-)

Whatever the outcome of the poll, it's not likely to be conclusive as the sample size is way too small. A poll needs at least 3,000 voters to be reasonably credible. News reports have been rather divisive on this issue as well.

Nevertheless, Sophie's World is still betting on a victory for Malaysia despite the earlier odds against the country.

The little rock is nearer to Malaysia. It sounds reasonable for Malaysia to say that it didn't make any claim on the island earlier because it has always regarded it as part of Malaysia although Singapore has been squatting on the rock for 150 years.

Singapura was also once part of the Malay sultanate. The old Singapore was given away to the British by the Johor sultanate for a song. Hence, one can argue that the Johor Sultan transferred ownership of Singapore but not Pulau Batu Putih to the British.

And as correctly pointed out by another blogger, Singapore was once part of Malaysia between 1963 and 1965.

Tuesday, November 13, 2007

Mickey Mouse going to Malaysia? Part 2

Can Malaysia's southern state of Johor succeed in luring Mickey Mouse (Image from Wikipedia) when it can't even get the basic infrastructure in place?

According to Bernama yesterday, Johor chief minister Abdul Ghani Othman said there is a need for a better transport network between the state and neighbouring Singapore as investments flow into the Iskandar Development Region in Johor.

The Johor state has grand plan to house a Walt Disney theme park within IDR.

The chief minister said building a rail link to connect to Singapore's Mass Rapid Transit subway system remains crucial. But Johor's own light rail system remains a concept at this stage.

The chief minister also suggested building more ferry terminals to ferry people across the Straits of Johor, which separates the two countries.

Will the ferry plan work? It will have rather limited effect as the Straits of Johor is blocked by the land-based causeway. The two countries have not been able to agree on a simple plan to build a new overhead bridge to replace the old and dilapidated causeway, as noted in a previous posting.

As a result, many people on both sides of the Causeway have had to endure the daily crawl on the overused land bridge, compounded by slow immigration clearance by the two governments.

The new Malaysian Immigration complex, which was supposed to be linked to the aborted bridge project, will soon be completed. Will it help ease the bottleneck? Unlikely. This is because the causeway, which was built more than 80 years ago, simply cannot handle the volume of traffic today.

More tourists will continue to flock to Singapore and Malaysia in the next few years. In the case of Singapore, Las Vegas Sands and Genting International have gone full-steam ahead in building their casino resorts that are expected to be completed in 3-4 years.

But don't expect tourists to Singapore to make a beeline to see Mickey Mouse in Malaysia if Johor can't even fix the basic infrastructure of its southern gateway.

Saturday, November 10, 2007

Corporate comeback of Mokhzani Mahathir

Mokhzani Mahathir - the second son of former Malaysian Prime Minister Dr Mahathir Mohamad - has staged a comeback since he quit the corporate scene six years ago. He appears more focused now, as seen in the Raffles Conversation in The Business Times of Singapore today.

Back with a vengeance
Malaysian businessman Mokhzani Mahathir, written off after the 1998 Asian financial crisis, has made a spectacular comeback with the listing of his 46.7 per cent-owned firm Kencana Petroleum. S JAYASANKARAN reports

IN what has proved to be a well-timed return to the market, Malaysian businessman Mokhzani Mahathir floated his 46.7 per cent-owned firm Kencana Petroleum on the Kuala Lumpur stock exchange earlier this year, offering investors' shares at RM0.41 apiece. Given the boom in Malaysia's oil and gas industry, Kencana's shares soared and at current market valuations, Mr Mokhzani has emerged richer by at least RM236 million (S$102 million).

That's a triumphant comeback for a businessman who was all but written off after the 1998 Asian financial crisis. For Mr Mokhzani, however, his movement into oil and gas represents a back-to-roots event.

'By profession, I am a petroleum engineer anyway and I started my career with Shell,' he says. 'It was the first thing I did after I got back to Kuala Lumpur. It was also the first thing I did when I set out on my own.'

Then the businessman, the second son of former premier Mahathir Mohamad, got bitten by the Think-Big mentality that typified much of the Malaysian corporate sector in the 1990s.

In his words: 'Unfortunately, I got sidetracked and went into the other businesses which you know about and got into trouble. Tongkah, Pantai, I leveraged both the companies and me personally.'

In 2001, to stave off creditor banks and to blunt claims that his father's administration was practising nepotism (see sidebar), he had to sell the two companies, which had been involved in operations as diverse as healthcare and financial services.

'It was the same in both politics and business,' said Mr Mokhzani, who used to be assistant treasurer of the youth wing of the ruling United Malays National Organisation. 'I suppose the moral of the story is ... when you lose your way, go back to what you started from.

'We tried to settle all our debts but we couldn't. Nevertheless, the effort was made and it put us in good stead with some banks. Some of them wanted to maintain relationships with us, said they would be willing to help going forward. And the economy began turning and a few proposals had come to our table.'

One such proposal came from HL Engineering, a fabricator and petroleum services company. 'A lot of people make the mistake that it stands for Hong Leong,' says the businessman. 'But, no, it stands for Hin Loon after Chong Hin Loon, now the managing director of Kencana. We bought into it in late 2001 and we built it up and took it public this year.

The shares now trade at over RM2.50 apiece, which means the businessman is well and truly back. 'I have gone through the whole process of seeing shares fly and then crash,' he says, shrugging. Still, in Kencana's case at least, the shareholders have enjoyed seeing their shares going up.

A new shareholder is Quek Leng Chan, the tycoon behind the Hong Leong conglomerate, now reported to be among the top 10 shareholders. 'He is quite an aggressive investor,' says Mr Mokhzani. 'But I didn't know he was coming in. I only heard about it through a mutual friend, and I don't know what his strategy is.'

He intends to stick to Kencana. 'It is our main vehicle,' he says. 'We want it to be a brand name. I know there are others out there with the same name but they aren't related. For example, there is Kencana Property Management which recently bought Sungei Wang Plaza in Kuala Lumpur. We got calls over that but they are no relation.'

His point is that the company will stick to its core business. 'Kencana concentrates solely on oil and gas and nothing else,' he insists. 'And we intend to remain that way. It's not going to be an investment holding company like Tongkah and Pantai were. No more, this time we are going to be very focused and concentrate on just one thing at a time.'

He does have other interests but they are relatively insignificant. 'They are not under Kencana and they are small,' he says. 'I have the franchise for Porsche, an IT company in education software and some very small property development.'

Porsche? 'I've always loved high performance cars, which is why I am involved in motor-sports and the Sepang International Circuit ,' replies Mr Mokhzani, who is chairman of the F1 circuit in Malaysia. 'In 2001, someone approached me to take up the Porsche franchise and I thought, 'why not, it's a good brand'.'

How many cars does he sell? 'We sell around 130 a year which is nothing compared to the 300 or so that are sold annually in Singapore,' he says. 'It's just amazing, the number they sell there.'

He has bowed out of active politics. 'I used to be treasurer of Umno Youth but now I no longer have any political ambitions,' says Mr Mokhzani. 'My father used to say 'choose one or the other, business or politics'. So I choose business.'

Still, he thought at one time that his business benefited his politicking. 'At the beginning, it helped,' he recalls.

'My hospital group came in very handy because I could send doctors to the villages to give free treatment and medicine ... My manufacturing division gave people jobs. Once I left all of that, I lost the ability to do that.' Mr Mokhzani's younger brother Mukhriz, however, is still in active politics and is an elected member of the executive committee of Umno's youth wing.

Mr Mokhzani downplays his property ventures. 'We have invested in a small way,' he says. 'It's just that we occasionally take up 5 to 10 per cent in other development projects through a private company.'

But he waxes enthusiastic about oil and gas. 'Global oil prices are high and so there is a lot of new investment,' he says. 'The oil people are hungry for concessions. I think it will remain bullish and it will last for quite a while.

'When companies sign a production sharing contract in Malaysia, it is usually for around 25 years. The first five, to explore and find, then you develop for the next 20 years. Once you sign, you have to work, that's the way it is. And Malaysia has signed quite a few PSCs (production sharing contracts) so for us, the support services, there is plenty of work. For the next three to five years, it will be bullish.'

But he wants to take it slowly and to lead through alliances. 'We are the new boys on the block and our shareholders' funds are still small,' he says. 'I don't want to stretch our resources. It's better for us to team up with known players rather than going it alone.'

One recent venture was an alliance between the Singapore-based unit of Thailand's Mermaid Maritime to form a drilling services company. Separately, another joint venture between the two awarded Kencana a US$136 million contract to design, construct, equip and deliver a new-build tender rig.

Mr Mokhzani is enthusiastic about the alliance. 'It has done three things for us,' he says. 'We signed a contract to create our own drilling service where we have a 60 per cent interest. Two, we formed a company to own a vessel where we have 25 per cent. And, three, we won a contract to build a vessel for them at US$135 million. Building such a vessel has not been done in Malaysia, so we will be the first.'

He is bullish about the company's potential. 'We are going to grow 10-15 per cent a year, easy,' says Mr Mokhzani confidently. 'We think Mermaid will give us another order in six months, this time for a US$200 million vessel. Our order book right now stands at RM1.8 billion. When we listed, it was around RM800 million. So we are delivering.'

'We have expanded our yards significantly but still we have our hands full at the moment,' he continues. 'The Mermaid deal is a very big undertaking for us and we are bringing in technical experts. It will jump-start the business for us.'

On a separate note, the businessman, who is an F1 buff and chairman of the Sepang International Circuit, does not see a problem with Singapore's entry into motor-sport. 'Every year there are, what, 17 to 18 races throughout the world?' he says. 'When the season starts, we are the second race and they will be, maybe, the 13th. And the races are getting better in the sense that this year - with the Hamilton/Alonso thing - was really exciting.'

'I know Ong Beng Seng (the hotelier who helped bring F1 to Singapore) very well,' confides Mr Mokhzani. 'We had begun to talk about this two years ago and we have helped them. They've come here and we have shown them the workings of the track. To my mind, we are not really competing. Next year may be their first but it will be our 10th.'

He thinks it's been a great boon to the country. 'We have aggressively marketed it and by doing so we have promoted the country,' he says. 'Consumers are spoilt for choice - they have the English Premier League, they have rugby, all sorts of things. So we have had to hard-sell it to bring in the tourists, RM6-RM7 million a year in promotion. I believe Singapore is also looking at it from that point of view.'

Painful lessons from Asian crisis

MOKHZANI Mahathir surprised everyone when in April 2001 he declared that he was giving up his business interests in a bid to protect the family name in response to people who had accused his father's administration of nepotism. Mr Mokhzani's father is Malaysia's fourth prime minister Mahathir Mohamad, now 82, who stepped down on Oct 31, 2003.

Mr Mokhzani informed the stock exchange that he was selling his interests in two listed concerns - Pantai Holdings and Tongkah Holdings - which were then involved in healthcare, manufacturing, financial services and property development. He sold at a time of depressed stock market prices and couldn't have made much out of those transactions.

It was clear from his tone during that period that he was tired of repeated attacks from his father's political opponents that his corporate climb had been due to family ties. 'I am fed up with all these allegations,' he told a newspaper then. 'In this political climate, everything these companies do is construed as favouritism, and it's unfair to other shareholders.'

The onset of the Asian financial crisis deepened tensions between Dr Mahathir and his deputy Anwar Ibrahim, who was sacked in September, 1998, accused of 'moral misconduct'. Political temperatures soared and, in the process, the scrutiny over the business interests of Dr Mahathir's children intensified, hurting the premier's prestige.

Now Mr Mokhzani is back and enjoying favourable investor attention again through his company Kencana Petroleum which he took public late last year. But he's not about to forget those dark days. 'In 1999, the political temperature was quite hot,' says the businessman. 'And there was the economic crisis. And so for me, it was one step forward and several steps back.'

Is there anything he will carry over from the Asian crisis? Mr Mokhzani does not hesitate: 'With 20:20 hindsight, I guess I was far too diversified, I spread myself too thin and geared up too highly.'

The moral for the businessman is simple. 'Don't borrow too much,' he says. 'I geared up personally so I should know. You know, Pantai Holdings was a gem of a company, it had cash and it had a good, viable business with concessions. But we had to sell, you have to be able to survive so you step away and wait to come back another day.'

At the height of the crisis, Mr Mokhzani was reported to have racked up debts of close to RM200 million. He sold his interest in hospital specialist Pantai Holdings to Malaysian businessman Lim Tong Yong who controversially sold it to Singapore's Parkway Holdings last year. That caused a brouhaha as Pantai had two lucrative government concessions. In the end, state investment agency Khazanah Nasional stepped in and took up a majority interest in Pantai.

'I didn't have much of a surplus after I sold everything, not at all, just sort of enough to keep the bankers off my back,' continues Mr Mokhzani. 'But I did the right thing. Someone once told me never to be emotional about my companies. There should be no sentiment in business.'

He does not state the extent of his debt. 'Frankly, I'd rather not remember,' he says, wincing. 'It pushed me to take drastic action. We were getting letters from the banks with some threatening to take legal action against me. Not all though, one or two stood by us. Now, the bankers who stood by me are happier today than they were five years ago.'

Sophie's note: Wonder why Mokhzani has such short hair nowadays? He took a real haircut recently! :-)

Thursday, November 08, 2007

Malaysia to reclaim Pedra Branca?

Will Malaysia or Singapore win in the court tussle over a overlapping claim for an islet the size of a football field in the South China Sea?

Both governments are crossing swords at the International Court of Justice in The Hague in the Netherlands to settle ownership of Pedra Branca (its name to Singapore) or Pulau Batu Putih (according to Malaysia).

So far, media of the the two countries, which used to be one nation briefly in the 1960s, have backed their political masters. Malaysia's The Star cited the Foreign Minister as saying that the team was the one Malaysia sent to handle the sovereignty dispute over Pulau Sipadan and Pulau Ligitan which Malaysia won over Indonesia. Malaysia's New Straits Times reiterated the country's stand that Malaysia was not making a claim over the island as it was always part of her territory.

Singapore's The Straits Times said Singapore has exercised sovereignty and administered the island since the 1840s, when the British colonial government built the Horsburgh Lighthouse there.

And Singapore is likely to depend on similar arguments used by Malaysia in its successful claim over Indonesia in the fight for Sipadan and Ligatan, two islands to the east of Borneo, five years ago. Malaysia won because it had effectively exercised state functions over the two islands. These actions ranged from building lighthouses to regulating the collection of turtle eggs, according to ST. Hmmm, now I understand why people collect turtle eggs! :-)

Similarly, ST pointed out that Singapore has built other facilities, including a water desalination plant and a helicopter pad on Pedra Branca/Pulau Batu Putih.

Many people would probably think that Singapore will win this round, based on the general concept of adverse possession.

But Sophie's World takes a different view on this. Although Singapore and its former colonial master had exercised control of the islet for more than a century, the situation is not so straight forward in the case of Malaysia and Singapore.

For a start, the little rock is nearer to Malaysia. It sounds reasonable for Malaysia to say that it didn't make any claim on the island earlier because it has always regarded it as part of Malaysia.

Second, Singapura was once part of the Malay sultanate. The old Singapore was given away to the British by the Johor sultanate for a song. Hence, one can argue that the Johor Sultan transferred ownership of Singapore but not Pulau Batu Putih to the British.

Sophie's World is betting on Malaysia emerging triumphant in the tussle for Pedra Branca.

Related posting: Singapore, Malaysia going to court again?

Wednesday, November 07, 2007

More expensive bets

Well, news that Genting International will incur a cost overrun of S$800m for its casino resort (Pix source: Genting International Proposal listed by Wikipedia) on Singapore's Sentosa Island due partly to higher construction expenses has not come as a surprise.

Genting International, a unit of the late Malaysian tycoon Lim Goh Tong's Genting Bhd, now expects to spend as much as S$6 billion to build the Sentosa casino, up 15 per cent from an earlier estimate of S$5.2 billion.

The Reuters report said the new budget for the casino, which includes a contingency provision of S$250 million, also covers the cost of six new attractions as well as improvements to transportation and access infrastructure.

Singapore is undergoing a construction boom due to the award of several large projects such as a new financial centre, the two casino resorts, several shopping malls and a slew of redevelopments of private apartments known as en-bloc deals in Singapore.

Similarly, Sophie's World reckons that cost overrun is expected for the other casino project -- Las Vegas Sands' 20.6-hectare piece of waterfront land at Marina Bay.

Apart from the tight construction market, Singapore is facing a higher import bill for sand and other building materials due to the ban on the sale of sand by neighbours Malaysia and Indonesia.

In addition, the construction job for the Marina Bay Sands project on the reclaimed land is likely to be way more complex than Genting's project. According to an engineer, a lot of big boulders were used in the reclamation of the land in the 1980s. This makes it more difficult to extricate the boulders for the foundation work. By the way, Sophie's World has never seen so many construction cranes on a single site!

So, will the two casino resort developers be able to complete the mammoth projects -- each resort will cost as much as the Circle Line subway system in Singapore -- by 2010 as planned?

Don't bet on it!

Sunday, November 04, 2007

Mickey Mouse going to Malaysia?

This is an old story that just won't die, but not as old as Mickey Mouse (Image from Wikipedia)

According to Malaysian weekly The Edge, Walt Disney Co is looking to build a theme park on a 500-acre (202-hectare) site in southern Malaysia. The theme park will reportedly be sited at Bardar Nusajaya near the second link bridge in the Iskandar Development Region zone in Johor. The report said it would be ready in six years if a deal is signed.

The proposed Disneyland theme park and resort is slated to be bigger than Hong Kong Disneyland and about the size of Tokyo Disney Resort, the report said. Although the talks with Disney are progressing fast, discussions with other theme park operators, including Warner Bros Entertainment and MGM, have not ceased, the report said.

Will Mickey Mouse learn to speak Malay and appear at the theme park in Johor, which is next to Singapore?

Can Disney compete with the two integrated resorts and casinos that are coming up in Singapore? Las Vegas Sands and Genting International have gone full-steam ahead in building their resorts that are expected to be completed in 3-4 years. The casinos in Singapore are set to attract many gamblers and their families to Singapore. Casinos can help subsidise the rest of the resorts and theme park that are generally less profitable.

But any new theme park or resort in Malaysia won't have a casino. Unlike Singapore, Malaysia still has a ban on new casinos or gaming outlets since it granted the sole casino licence to the late Lim Goh Tong's Genting more than four decades ago.

Maybe there will still be room for Mickey Mouse in Malaysia as its concept is different from the two resorts in Singapore. But there are many problems at the Johor end.

Johor has the land and the resources to undercut Singapore but Malaysian planners simply lack the ability to execute their grand plans.

Johor has a long history of false starts in many overly ambitious projects -- Desaru, Waterfront City, a theme park by ex-UN Sec Gen, and even Universal Studios, which has since teamed up with Genting for the resort on Sentosa in Singapore.

The Iskandar Development Region is a grand plan but the government can't even resolve some basic problems in the state like proper city planning (Malaysia has since scrapped the proposed passport-free zones in Johor), crime, flooding and the failed attempt to jointly build a new bridge to replace the old causeway with Singapore.

So don't bet your last dollar that Mickey Mouse will finally learn to say "Selamat Datang ke Malaysia"*.

* Welcome to Malaysia in Malay

Thursday, November 01, 2007

Will Burma Ever Change?

By Uncle Cheng

Ever since my first visit to the country in 1971, Burma has remained one of my most loved nations. I can think of few nations that have changed less during nearly four decades. It seems that the Burmese are cruelly fated to no improvement in their lives. They are still stuck exactly where they were forty years ago.

The original, indigenous peoples of what is now Burma were cousins of the Tibetans, and they remain, as television images have graphically reminded us recently, overwhelmingly Buddhist. That Burma’s Buddhism is established on the austere, Theravada, school, means that the country’s Buddhists remain especially severe and ascetic. Over the years I have been lucky to visit nearly all Burma’s major cultural sites, some many times, and there is no doubt that Burma, despite being trapped in its past, remains a wonderfully unspoilt place.

While we have been able to witness Burma’s political drama unfold day-by-day on our television screens, it is worth reminding ourselves that Burmese population have never known any government which was not both oppressive and tyrannical. The present military junta is just the latest example of such governments. It was not that long ago that the Burmese suffered the appalling atrocities of last king Thibaw, who was unceremoniously sent into Indian exile by the British colonialists.

When Burma was annexed by the British and made into a virtual province of India, it was hoped that the life of ordinary Burmese would improve. Sadly, the Japanese occupation made Burma into one of the most severe and deadly battlefields of the Second World War. When the British, worn out by war, gave India its independence in August 1947 it was inevitable that independence would be forced on Burma as well.

The hope had been that Burmese independence would herald peace and prosperity for that tortured country but all dreams of stability were swiftly dashed when the charismatic national leader General Aung San (the father of the present opposition leader Aung San Suu Kyi) was assassinated in mid-1947, some six months before the British finally left the country.

Despite all its handicaps Burma in 1948 remained a potentially prosperous country and its people should rightfully have gained affluence. Instead, ever since the dictator Ne Win brutally destroyed all the country’s political and economic infrastructure and imposed a truly dismal dictatorship, the Burmese people have been forced into penury.

So why have the people of Burma been so unfortunate? Why have they missed out on all the great economic and social advances enjoyed by the peoples of neighbouring countries such as Thailand, India and China? The obvious responsibility lies with the military’s grip on all aspects of Burmese life. There is no greater truth than the maxim than that the sword is mightier the pen. Perhaps the pen will triumph in the end but that will be small consolation to the average Burmese family who have suffered so much for nearly half a century.

A stage has been reached where all decent people the world over want Burma to escape from its military hermit status. Everyone knows in their bones that the army’s dictatorial rule is nearing its inevitable end. Yet there are nevertheless some ominous signals on the horizon. The wished-for transition to democracy, especially liberal democracy, will quite probably lead to the total disintegration of Burma into separate states based on ancient tribal loyalties. The large western province of Arakan, for example, which was once independent, and the northern Shan states may seek autonomy or even independence.

Political change in Burma may not be an altogether pleasant experience. Nor should we forget that we depend on Burma for the best, most precious jades.