Toray sets up new unit in Penang


Toray Malaysia Systems Solution Sdn Bhd
managing director Peter Chan (second right) speaking at a press
conference on Oct 17 after the official opening of Toray Malaysia
Systems Solution Sdn Bhd at the Setia SPICE Convention Centre in Penang.
Among those who were also present were Deputy Chief Minister II Dr P.
Ramasamy (middle) and Toray IS Division, Japan general manager Akihiro
Tada (first left)

 

Toray Malaysia Systems provides IT services

GEORGE TOWN: Toray Group (Malaysia), wholly-owned by Toray Industries Inc, Japan and one of the pioneers of Penang’s industrialisation programme, has expanded its business operations in Penang with the establishment of yet another company, namely Toray Malaysia Systems Solution Sdn Bhd (TMS).

TMS was established on May 2 with a RM5mil investment injected from Toray Japan.

It has offices at two locations in Penang, namely its head office at the Subterranean Penang International Convention and Exhibition Centre (Spice) and in Prai.

TMS managing director Peter Chan said the company, which is certified with MSC status by MDEC, provides global business services to its group of companies in Malaysia and abroad.

He said the company currently employs some 50 people and expects to increase the number to 100 within the next two to three years.

Chan said TMS provides full suite of information technology (IT) solutions and support for all aspects of business operations, ranging from planning and development to operation of information systems.

“These IT services include systems study, design, development, integration, deployment and maintenance, network infrastructure installation, IT helpdesk, systems administration support as well as IT consulting and IT research and development, according to customers’ stringent needs,” he added.

Chan said TMS is under the direct supervision of Toray Japan Information Systems Division.

“Backed by many years of information systems development experiences, technical know-how and skillful dedicated staff, TMS is set to contribute to Toray’s global business expansion as well as other related clients in Malaysia and the region.

“The head office at TMS Spice is equipped with the latest network infrastructure and IoT (Internet of Things) technology. It is designed to ensure that employees work in a conducive, healthy, happy, flexible working environment,” he said at TMS’ official opening at the Setia Spice Convention Centre recently.

Deputy Chief Minister II Dr P. Ramasamy, who was guest of honour at the event, said Penang recorded a total of RM5.3bil approved manufacturing investments from Japan from 2008 to 2016.

“I am also pleased to note that after the US and EU countries, Japanese investors make up the largest investments in Penang, making Japanese companies among the top FDI contributors to the Penang economy,” he added.

Source : The Star


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JPMorgan CEO warns he will fire any employee trading Bitcoin for being “stupid.”


 
Tough stand: Dimon has warned that he will fire JPMorgan traders who traded in bitcoin ‘in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.’ — AFP

NEW YORK: JPMorgan Chase & Co chief executive officer Jamie Dimon said he will fire any employee trading bitcoin for being “stupid.”

The cryptocurrency “won’t end well,” he told an investor conference in New York on Tuesday, predicting it will eventually blow up. “It’s a fraud” and “worse than tulip bulbs.”

If a JPMorgan trader began trading in bitcoin, he said: “I’d fire them in a second. For two reasons: It’s against our rules, and they’re stupid. And both are dangerous.”

Bitcoin has soared in recent months, spurred by greater acceptance of the blockchain technology that underpins the exchange method and optimism that faster transaction times will encourage broader use of the cryptocurrency.

Prices have climbed more than four-fold this year – a run that has drawn debate over whether that’s a bubble.

Bitcoin initially slipped after Dimon’s remarks. It was down as much as 2.7% before recovering.

Last week, it slumped after reports that China plans to ban trading of virtual currencies on domestic exchanges, dealing another blow to the US$150bil cryptocurrency market.

Tulips are a reference to the mania that swept Holland in the 17th century, with speculators driving up prices of virtually worthless tulip bulbs to exorbitant levels.

That didn’t end well.

In bitcoin’s case, Dimon said he’s sceptical authorities will allow a currency to exist without state oversight, especially if something goes wrong.

“Someone’s going to get killed and then the government’s going to come down,” he said.

“You just saw in China, governments like to control their money supply.”

Dimon differentiated between the bitcoin currency and the underlying blockchain technology, which he said can be useful.

Still, he said banks’ application of blockchain “won’t be overnight.”

The bank chief said he wouldn’t short bitcoin because there’s no telling how high it will go before it collapses.

The best argument he’s heard, he said, is that it can be useful to people in places with no other options – so long as the supply of coins doesn’t surge.

“If you were in Venezuela or Ecuador or North Korea or a bunch of parts like that, or if you were a drug dealer, a murderer, stuff like that, you are better off doing it in bitcoin than US dollars,” he said.

“So there may be a market for that, but it’d be a limited market.”— Bloomberg

 

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Living at the edge of chaos, climate change is not fake science


 

Nature’s fury: A car dealership is covered by Hurricane Harvey floodwaters near Houston, Texas. The chaos caused by the hurricane proves that climate change is not fake science. — Reuters

THIS month, two Category 4 hurricanes hit the United States within 17 days of each other. In Asia, North Korea is threatening nuclear Armageddon, and floods and famine are putting thousands of lives at risk from Bangladesh to Yemen. How can one survive in this chaotic era?

A first step must be to make sense of the apparent chaos. Hurricanes Harvey and Irma have proved that climate change is not fake science, but real threats to home and security. When hailstones the size of golf balls hit Istanbul in the middle of summer, even the agnostics accept that climate change is serious business.

The biggest uncertainty that has hit Asia recently is the shock that North Korea has not only developed possibly a hydrogen bomb, but also the missile capability to deliver it even to the United States. This has changed the geopolitical balance not only in North Asia, but globally because it is no longer possible for the United States alone to contain nuclear proliferation.

Physics teaches us that chaos is often a characteristic of transition from one order to another. Chaos is also a pattern in which there is apparently no discernible pattern.

But there is a seismic transition from a unipolar world led by the United States to a multi-polar world of competing powers and ideology, particularly after the 2007 global financial crisis. As the share of US GDP in the world declines relative to the rest, the rise of China, India and increasing assertion by Russia and non-state players like IS means that the United States’ ability to dominate militarily and ideologically is being challenged.

At the same time, increasing stresses from social inequalities and paranoia of terror, immigration and job loss have tilted the United States to become more inward looking. The Trump administration has dramatically begun to dismantle the neoliberal order of multilateral trade and finance that shaped US foreign policy since the end of the Second World War.

There is a raw open division within the United States in outlook and values. The Democratic Left believes in maintaining the old order of moral leadership on human rights, democracy and multilateral global stability and prosperity. The Republican Right questions these beliefs and prefers America First, negotiating bilaterally to achieve that premier status.

Earlier this year, the Pentagon asked the Rand Corporation to conduct a review on “Alternative Options for US Policy toward the International Order”. The key questions for the New Global Order are: Who sets the rules and how binding are the rules?

The study breaks the future order into two camps of rule-makers – the US and its allies or a concert of great powers. Under such a division, there are two conditions where rules are binding – one dominated by the US camp to enforce rules and the other where the great powers agree to a global constitutional order enforced by institutions. The other two conditions where rules are not binding involve a coalition of states aligned to counteract against revisionism and a new concert of great powers.

The immediate problem with the Rand categorisation of New Order Visions is that the existing liberal, rules-based order is not being challenged by others, but by the US itself.

First, after German Chancellor Angela Merkel’s comment earlier this year that Europe must begin to look after its own interests, it is no longer clear that America’s traditional allies are going to follow the US leadership when there are serious disagreements on trade, climate change and immigration. It is no coincidence that the largest trade imbalances are no longer between China or oil producers with the US, but between Europe and the United States. Germany alone is running a current account surplus equivalent to around 8% of GDP.

Second, within the Middle East, alliances are shifting almost by the day. The quarrel between Saudi Arabia and Qatar has riven the Gulf Cooperation Council, while Turkey is playing an increasingly pivotal role within the shifting alliances.

Third, North Korea’s bid for nuclear power membership, despite being a small state, means that Great Powers may have to accommodate new players whether they like it or not.

Fourth, climate change in the form of Hurricanes Harvey and Irma demonstrate that nature can impose larger and larger economic losses on nations and regions, which will require global public goods that the current order is neither willing to fund, nor able to agree on how to address. The economic losses from Harvey alone is estimated at US$180bil, equivalent to the annual GDP of a middle-income economy. The existing multilateral bodies such as the United Nations and the World Bank are facing serious resource shortages relative to these new global demands.

The bottom line is that the current order has neither the resources nor the collective will to enforce rules when the human population growth puts increasing competition for scarce water, food and territorial spaces. Chaos arises from the breakdown of rules and borderlines.

In short, globalisation of trade, information and human migration has meant that traditional borders in many regions are becoming non-enforceable. For example, it is 101 years since the 1916 Sykes-Picot Agreement divided up the collapsing Ottoman Empire into British, French and Russian spheres of interest and eventual control. These borders were drawn and enforced by the Great Powers through their military superiority.

Seen from the long lens of history, with the Great Powers being unwilling to put troops on the ground to enforce borders drawn up under the colonial era, these artificial borders are failing.

A hallmark of the times is that even the best of think tanks cannot map out how to navigate through this era of disruptive technology, unpredictable climate and shifting alliances and interests. What history teaches us is that the fault lines will be at the borderlands, at the confluence of emerging forces and stresses.

We should therefore be prepared for not only disruption at the borderlands of physical space, but within the realms of cyberspace.

By Andrew Sheng

Tan Sri Andrew Sheng writes on global issues from an Asian perspective.

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Citizens’ frustrations, Malaysian youths worry about future; MCA dares to face criticism


Citizen Liow’ plays dual role in National Day video
Myself and I: Citizen Liow (left) comes face-to-face with the politician in ‘Citizens’ in conjunction with National Day.

Malaysia is all about us – On The Beat

‘Citizen Liow’ vents his frustration in short film

KUALA LUMPUR: It is Datuk Seri Liow Tiong Lai as we have never seen him before – shabby, dispirited and a little rude.

Without his signature full-rim spectacles, Liow, playing an ordinary citizen in a video with a poignant but powerful message, vents his spleen about the country’s current mood.

From the hurtful balik tongsan comment to corrupt practices, Citizen Liow is determined to get his frustrations off his chest.

He even throws a fistful of sweets at a guest in his home. The guest is also played by Liow, who essentially portrays his everyday role of a politician.

The on-screen sparring between both Liows is a creative, yet brutally frank, account of the general sentiments of the local Chinese community.

It is almost painful to watch the heated encounter, but that is exactly why the six minute-long video Citizens is so compelling.

Producers Pete Teo and Liew Seng Tat did not attempt to paint a rosy and glowing picture even though the clip was meant for the upcoming National Day celebrations.

The video boldly addresses the grievances and fears of the Chinese community in Malaysia, which means there will inevitably be “anger, helplessness and conflict”, as Teo explained on his Facebook.

Liow, in his real life as Transport Minister, Bentong MP and especially MCA president, must have often been at the receiving end of the kind of harsh comments hurled by “Citizen Liow” in the clip.

“Politicians only know how to talk!” is perhaps the most common sweeping statement that disregards the efforts and contributions of community and government leaders. In the video, Liow the politician admits there are shortcomings.

The seasoned politician says: “I can find excuses and try to defend ourselves by saying that circumstances do not work in our favour, but no, I won’t do that.”

“We didn’t say there weren’t mistakes. We did not handle many things well, but it is not easy to rule a country.”

“We have seen many politicians from both sides dwelling on the negatives when support for them fades. This alienates the people even further,” he said.

With the National Day just days away, the video is a timely reminder to those with political ambitions to reflect on their vision for the country.

Similarly, the public can look back at the past 60 years of the country’s development, from a mining and agricultural-based economy to today’s multi-sector economy anchored in manufacturing and services.

Of course, there will always be challenges and sacrifices as we progress. Good governance is a must if we are to continue on that path of growth and prosperity.

But as Citizens reminds us, it is important not to lose hope. We must believe that our founding father Tunku Abdul Rahman’s vision of Malaysia will come true.

At the end of the video, “Citizen Liow” has a change of heart. He quietly retrieves the Jalur Gemilang from storage and displays it on his balcony, with his real-life wife Datin Seri Lee Sun Loo at his side.

When met by reporters yesterday, Liow was visibly pleased with how the video has turned out. He said the message he wanted to send through the video was for Malaysians to unite and work together to make the country a progressive nation.

“We love this nation. We are proud to be Malaysians and we are working hard to make this country a stronger nation. That’s the aspiration and message we want to send out,” he said.

By Tho Xin Yi The Star/ANN

‘Youths worry about future, not politics’

Future wave: Liow and Chong (second from left) sharing a light moment with students after the TN50 DialogueUTAR in the Sungai Long Campus.

CHERAS: Youths are more concerned about their future than politics. This is the feedback gathered during the recent TN50 dialogues with students from several universities, said MCA president Datuk Seri Liow Tiong Lai.

“However, I don’t think they are indifferent towards politics. They are aware of issues.

“For instance, they know that this is about TN50 and about a future that they want,” Liow said after attending a TN50 Dialogue @UTAR with 700 students at UTAR Sungai Long Campus here yesterday.

He cited education and health issues, including the ability to earn a decent living, as some of the aspirations raised by the students during the hour-long dialogue session.

Liow said it is crucial for youths to continue upholding the core value system practised by Barisan Nasional.

He added that Barisan’s core values such as consensus, mutual respect, unity, cooperation and harmony are shared by Malaysians.

“Barisan upholds values of consensus and mutual respect but DAP is sowing the seeds of hatred. The party is also sowing the seeds of anger towards the Government which is causing a split in our society,” he said.

Liow added that the Opposition lacked the core values and was now in a chaotic state.

There was a casual air about the dialogue session where students were asked by moderator MCA youth chief Datuk Chong Sin Woon to address Liow as “Ah Liow” and himself as “Ah Chong”.

Earlier during the dialogue, Chong warned students to be wary of fake news on social media.

“The reality is that most news on social media are fake.

“You should check the source and not blindly believe all that you read,” he said.

He also said that youths were more concerned about “bread and butter” issues rather that politics.

At another function, Liow said more skilled workers were needed as the country progresses.

“It is important for us to train more technical professionals. For MCA, we would like to expand VTAR Institute because of our significant growth in students from 100 to 700 in these few years.

“We will find the right place to expand VTAR and we hope to have more than 1,000 students here,” he told reporters after launching the PW2 wireman competency licence course at the institute in Setapak here yesterday.

VTAR is the vocational education arm of MCA.

Earlier during the function, VTAR CEO Tan Cheng Liang signed a memorandum of understanding with the Federation of Malaysian Electrical Appliances Dealers Association (Fomeda) president Gan Cheng Swee to run the PW2 programme. – The Star

‘Citizen Liow’ plays dual role in National Day video

国民 CITIZENS

A screengrab from the video short “Citizens”.

PETALING JAYA: You’re not seeing double – it really is Datuk Seri Liow Tiong Lai playing two roles in a National Day video by producers Pete Teo and Liew Seng Tat.

The six minute-long video short entitled Citizens was released on Monday in conjunction with the upcoming National Day celebrations.

In the video, he portrays himself in his everyday role as Transport Minister, having a no-holds-barred conversation with a citizen who has grouses about the way the country is run – a role also played by Liow.

Liow, the minister, is smartly dressed in a long-sleeved shirt and slacks, while “Citizen Liow” is dressed very casually, with his hair a little unkempt and wearing a grey T-shirt, without spectacles.

Teo, in a Facebook post on Friday, said the project took months to put together.

“Largely this was because the script required a Federal Minister who had the gumption to submit to what we wanted to shoot.

“We kept trying and eventually found our man,” he said.

Teo said they did not want to make a film that could be confused for a “tourism video.”

Citizens reflects the current mood of the country, especially the fears of the Chinese community.

“It would therefore have to contain anger, helplessness and conflict. Yet it must contain hope – for we are even now not without hope – and so the film should also unite us in hope across the political spectrum,” said Teo.

This is not Liow’s first film. He previously acted in other 15Malaysia and Hari Malaysia shorts, also produced by Teo.

“What is different this time is that while he was civilly treated as a cabinet minister before, he will be brutalised this time; and while he was stereotyped as a politician before, he is now a human being – filled with the same fears, regret, conflicts and hope as all of us,” said Teo, adding that he thought long and hard about the casting.

Also making an appearance in the film is Liow’s wife Datin Seri Lee Sun Loo.

Teo said that it took courage for Liow, who is MCA president, to act in the film especially since he and MCA “are deeply maligned in sections of the Chinese community”.

‘Citizens’ Liow trends at second spot

PETALING JAYA: As Pete Teo expected, his National Day video in which Datuk Seri Liow Tiong Lai plays two roles is gaining traction among Malaysians.

The six-minute clip Citizens clinched the second spot on YouTube’s Malaysian trending list as at yesterday afternoon. It had 127,766 views, trailing Taylor Swift’s new music video. The rest were content related to SEA Games.

In the video, Liow, 56, portrays himself as the Transport Minister having an honest conversation with a citizen, also played by Liow, who has grouses about the way the country is run.

Teo, who produced the video with Liew Seng Tat, was glad to see it attracting attention.

“We expect the video to do well, because we think it is a good video and it has something important to say that goes beyond party politics,” he told The Star.

Teo said there were twice as many likes as dislikes.

He applauded Liow for being able to rise above his persona as MCA president and act as an ordinary citizen.

The video was released on Monday in conjunction with National Day celebrations.

Meanwhile, Tan Sri Pheng Yin Huah said the video was “unpretentious and right to the point” and therefore, was well received by the community.

The Federation of Chinese Associations Malaysia (Hua Zong) president said it rightly captured the country’s current situation.

“A main point stressed is that the situation warrants the need for us to listen to each other, consolidate our strengths, stay united and be loyal to our country.

“This is a way to overcome the challenges, instead of just venting our frustrations,” Pheng said.

Apart from acknowledging the people’s disappointments and empathising with them, he said Liow had been tirelessly reaching out to the community to guide and help them in whatever ways possible.

Pheng pointed out that Liow had to draw on the party’s strengths and his role in the Government to help the community effectively.

In conjunction with National Day, Pheng said it was timely for all Malaysians to reinforce respect, love and tolerance among themselves and for the country so as to move forward together.

‘Citizen’ producer all praise for Liow – Nation


PETALING JAYA: The producer of the National Day video titled Citizen says it was brave of Datuk Seri Liow Tiong Lai to come onboard a production which had an “edgy” script.

Saying he would absolutely cast the Transport Minister in such a role again, filmmaker Pete Teo (pic) brushed aside some of the adverse comments on the casting choice.

“We think he did a great job playing the dual role of minister and citizen.

“That his casting is controversial has nothing to do with the job he does.

“We hope Datuk Seri Liow’s contribution will at least be acknowledged in the good spirit that it was given,” Teo said when contacted.

Teo, who produced the clip with writer-director Liew Seng Tat, said they had expected some form of backlash as soon as they decided that the role would be best played by a real-life politician.

“The fact that we eventually cast a Barisan National politician is besides the point, really. If we had picked an Opposition politician, the situation would be the same, except the accusations would be from Barisan supporters.

“So in a way, it was a no-win for us unless we had cast an actor,” he pointed out.

According to Teo, the film would have lost immediacy if they had cast an actor to play the role.

“So the decision was made to cast a politician. In fact, our choices were more limited than that because the script ideally required a Federal Minister.

“This narrowed down the choice to only several people. In the end, Datuk Seri Liow agreed to play the role and we went with him,” he added.

Teo said through the film, he and Liew wanted to drive home the message that it was important not to lose hope and to stay united when the going got tough.

“As said in the film’s opening lines, the last decade or more have been tough for the country. Non-Malay communities, in particular have felt alienated, helpless and fearful.

“That is why we are getting such hyper-emotive response to a Merdeka PSA film promoting hope and unity featuring a serving Cabinet minister from the MCA.

It would be easy to dismiss these aggressive social media outbursts as rantings of opposition cybertroopers, but these are real people with real grievances,’’ he added.

Teo, a multiple award-winning singer-songwriter, also praised Liow for having the courage to be involved in a film with “brutally frank dialogue”.

“Many have ignored the fact that the minister explicitly said in the film that he doesn’t mind who citizens voted for as long as they let their conscience be their guide.

“This is a massively important statement. It underlines our film’s non-partisan credentials,” Teo said.

In the six-minute video, Liow portrays himself in his everyday role as Transport Minister, having a no-holds barred conversation with a citizen who has grouses about the way the country is run – a role also played by Liow.

The video clocked in more than 200,000 views in four days since it was uploaded on YouTube.

 

‘MCA dares to face criticisms’ , Liow: We understand the voices and feelings of the people

 

Liow chatting with China’s Ambassador to Malaysia Dr Huang Huikang.

KUALA LUMPUR: MCA understands the voices and feelings of the people and dares to face criticism, said Datuk Seri Liow Tiong Lai.

The party president said having understood the people’s grievances, MCA is committed to overcoming the problems.

“I must stress here that I am aware of the people’s opinions and feelings. Therefore, I am willing to face the reality as I know that is the only way for us to change for the better,” he said.

Liow, speaking at the Blossom Arts Festival Malaysia (BAFM) 2017 awards ceremony and closing at Wisma MCA last night, was responding to some of the responses towards his double role in “Citizens”, a National Day video.

In the clip produced by Pete Teo and Liew Seng Tat, Liow portrays himself as the Transport Minister having an honest conversation with a citizen, also played by Liow, who has grouses about the way the country is run.

Liow also explained that the video aimed at telling people to have faith in the country and never give up, besides showcasing the inner voices of a Cabinet minister and a layman.

Liow added that MCA is steadfast in performing its role in Barisan Nasional.

“We will continue to be the defender of the Federal Constitution, the corrector and the balancing force against hegemony.

“History would reveal that during critical moments, be it fighting for citizenship, persistency on multi-stream education, pushing for the establishment of National Economic Action Council or the recent movement against PAS’ Private Member’s Bill to amend Act 355, MCA has been consistent in playing its role in Barisan,” he said.

Meanwhile, MCA vice-president Datin Paduka Chew Mei Fun said the next edition of BAFM would be put on hold pending the general election.

“My comrades and I, as well as MCA staff, must turn our full attention towards preparing for the coming general election,” Chew, who is also the Malaysian Chinese Culture and Arts Consultative Council chairman and BAFM organising chairman, said.

Big celebration: Drummers performing during the closing ceremony of the Blossom Arts Festival Malaysia at Wisma MCA. (Right) Liow chatting with China’s Ambassador to Malaysia Dr Huang Huikang.

She said BAFM has received the attention of foreign academicians.

Chinese University of Hong Kong’s Department of Cultural and Religious Studies, for instance, sent professors and students to observe the event, she added.

“If we persevere, we are confident of becoming a household name and a premier event among artists,” she said in her speech.

The month-long BAFM concluded yesterday. Also present at the event was China’s ambassador to Malaysia Dr Huang Huikang.

By Yimie Yong The Star Online

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Too good to be true? Think twice


 

HAVE you ever grabbed an offer without any hesitation, simply because the price is too cheap to resist?

Many of us have this experience especially during sales or promotional campaigns. We tend to spend more at the end or buy things which we are uncertain of their quality when the deal seems too good to say no.

It may be harmless if the amount involved is insignificant. However, when we apply the same approach to big ticket items, it can cause vast implications.

Recently, I heard a case which reinforces this belief.

A friend shared that a property project which was selling for RM300,000 a few years ago is now stuck. Although the whole project was sold out, the developer has problem delivering the units on time.

The developer is calling all purchasers to renegotiate the liquidated and ascertained damages (LAD), a compensation for late delivery.

One of the homeowners said he is owed RM50,000 of LAD, which means the project is 1½ years late. When we chatted, we found that he purchased the unit solely due to its cheap pricing without doing much research in the first place.

The incident is a real-life example of paying too low for an item which can leave us as losers, especially when it involves huge sum of investment, such as property.

To many, buying a house maybe a once-in-a-lifetime experience, a decision made can make or break the happiness of a family.

A good decision ensures a roof over the head and a great living environment, while an imprudent move may incur long-term financial woes if the house is left uncompleted.

Nowadays, it is common to see people do research when they plan to buy a phone, household item, or other smaller ticket items.

Looking at the amount involved and implication of buying a house, we should apply the same discretion if not more.

It is always important for house buyers to study the background of a developer and project, consult experienced homeowners regarding the good and bad of a project before committing.

I have seen many people buy a house merely based on price consideration.

In fact, there are more to be deliberated when we commit for a roof over our heads. The location, project type, reputation of a developer, the workmanship, the future maintenance of the property etc, are all important factors for a good decision as they would affect the future value of a project.

Beware when a discount or a rebate sounds too good to be true, it may be just too good to be true and never materialised. If the collection or revenue of a housing project is not sufficient to fund the building cost, the developer may not be able to complete the project or deliver the house as per promised terms. At the end of the day, the “price” paid by homeowners would be far more expensive.

In general, the same principle applies elsewhere. It is a known fact that when we pay a premium for a quality product from a reliable producer, we have a peace of mind that the product could last longer and end up saving us money. Some lucky ones will end up gaining much more.

For instance, when we purchase a car, we should consider its resale value as some cars hold up well, while others collapse after a short period. Other determining factors include the specifications of the car, the after sales service, and the availability of spare parts.

Quality products always come with a higher price tag due to the research, effort, materials and services involved.

In addition to buying a house or big ticket items, other incidents that can tantamount to losing huge sums are like money games, get-rich-quick scheme, or the purchase of stolen cars or houses with caveats.

When an offer or a rebate sounds dodgy, the “good deal” can be a scam.

Years of experience tells me that when what is too good to be true, we should think twice. I always remind myself with a quote from John Ruskin (1819-1900) who was an art critic, an artist, an architect and a philosopher. “It’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money – that’s all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do.

“The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”

Food for thought by Alan Tong

Datuk Alan Tong has over 50 years of experience in property development. He was the world president of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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The rail economics of East Coast Rail Link (ECRL)


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Rail link seen as game changer but cost is a concern.

TOK Bali, a fishing village in Kelantan with its beautiful sandy beaches and pristine blue waters has long been a hidden gem among well-travelled backpackers. But that may soon change. The idyllic town is one that is touted to potentially become a tourist hotspot, as it sits along the alignment of the East Coast Rail Link (ECRL), a multi-billion infrastructure project that promises many economic spin-offs.

After almost a decade in planning, ECRL was launched with great pomp this week.

Touted as a key game-changer for the east coast states of Peninsular Malaysia, the interstate ECRL is expected to help the economy of the four states that it covers by an additional 1.5% per year over the next 50 years.

On a micro level, more employment opportunities, particularly skilled jobs, will be made available to Malaysians. Domestic industry players especially in the construction sector, can now anticipate construction contracts to the tune of RM16bil, at least.

   
Another milstone:Najib checking out a train model at the ground-breaking ceremony this week.He called ECRL ‘another milestore in the country’s land public transport history”.

The ECRL is expected to benefit freight transport because it would link key economic and industrial areas within the East Coast Economic Region such as the Malaysia-China Kuantan Industrial Park, Gambang Halal Park, Kertih Biopolymer Park and Tok Bali Integrated Fisheries Park to both Kuantan Port and Port Klang.

Prime Minister Datuk Seri Najib Tun Razak called it “another milestone in the country’s land public transport history”.

Despite the much highlighted economic benefits from the rail network, the venture is attracting its own share of controversies from the way the contract was awarded to the price of contract.

For one, China’s state-owned China Communications Construction Company (CCCC) has been appointed for the construction of ECRL via a direct negotiation method.

Detractors have labelled ECRL – at a cost of RM80mil per kilometre – as the world’s costliest rail project. Note that, the Gemas-Johor Baru double-tracking stretch costs RM45mil per km.

ECRL, however, will go over hilly terrain and has several tunnels to be built.

There are questions on whether the 688km rail venture, at RM55bil, will be financially feasible.

Sources say the price tag is unlikely to have included land acquisition costs.

They indicate that close to half of the land plots required for the rail link sit on private land and would require land acquisition. At this point, the total land acquisition cost is unknown.

No money in rail

The concerns of the critics are understandable, given the fact that public infrastructure projects, namely rail projects are usually not commercially viable.

A quick check on the finances of Malaysia’s very own Keretapi Tanah Melayu Bhd (KTMB) and a number of major rail operators abroad, affirms the fact that rail projects do not promise easy money.

The loss-making KTMB which was corporatised in 1992, has not been able to financially sustain itself, resulting in the deterioration of its level of service despite attempts to turn around the company.

According to the railway service operator’s latest publicly available audited report for financial year 2013, the group registered a total net loss of RM128.2mil. However, note that, the net loss had narrowed by 46% from RM238.5mil in the previous year.

Had it not been for the government’s subsidy which kept it afloat, KTMB would find it difficult to continue its operations without a further raise of its fare.

In India, where railway is a favoured mode of transportation, the Indian Railways has been incurring losses on passenger operations every year. Earlier this year, the lower chamber of the Indian parliament was told that the state-owned rail operator recorded a loss of Rs359.18bil (RM24.04bil) in the period of 2015 to 2016.

This was slightly higher than its loss of Rs334.91bil (RM22.42bil) in the period of 2014-2015.

On the other hand, China’s state-owned rail operator, China Railway Corp, was reported to have recorded a 58% increase in earnings last year despite huge losses in the first nine months. However, a zoom into its finances reveals that the high profit made was only possible due to a significant annual government subsidy.

Similarly, Singapore’s SMRT Corp which manages the city-state’s rail operations posted a profit of S$7.4mil (RM23.33mil) in its financial year of 2016. This was on the back of a revenue of S$681mil (RM2.15bil), which rose by 4.1% year-on-year.

While the rail operations saw higher ridership in that year, SMRT Corp would have registered a loss of S$9.6mil (RM30.26mil) for its rail business, if not for the net property tax refund of S$17.1mil (RM53.9mil).

Considering the lack of commercial viability in such rail projects, ECRL would ultimately require assistance from the government in ensuring smooth operations, while maintaining an affordable service for its users. This is akin a crucial trade-off, to complement the government’s move to provide an integrated transportation system in Malaysia, which is long overdue.

AmBank Group’s chief economist Anthony Dass tells StarBizWeek that for every ringgit spent on capital projects such as transportation, it generates a return or multiplier effect of around 5% to 20%.

In his estimation, he says the ECRL should create around RM50-55bil in terms of gross domestic product.

“The impact of this project to the economy will be multilevel. Impact on the respective states’ GDP and national GDP will be evident, though the magnitude of the impact on the respective states is poised to vary.

“On a longer term, once the entire project is completed, we expect strong benefits seeping into services related activities. Properties in the major towns is likely to enjoy more especially the port-connected towns, driven by logistics- and trade-related businesses.

“Other areas would benefit from the movement of tourism. As for the smaller towns, they are more likely to enjoy from the spillovers of this connectivity through movement of people commuting to work and new areas of business growth especially in areas like the small and medium businesses,” says Anthony.

High cargo projections

By the year 2040, an estimated 8 million passengers and 53 million tonnes of cargo are expected to use the ECRL service annually as the primary transport between the east coast and west coast.

By 2040, ECRL is projected to support a freight density of 19 million tonnes.

The freight cargo projections of the rail network stands in stark contrast to the total cargo volume running through the entire Malaysian railways today.

As of 2015, the entire Malaysian railways operations handled a sum of 6.21 million tons of cargo, according to a study related to the ECRL.

To note, the revenue from the operation of the venture is projected to be obtained through a transportation ratio of 30% passengers and 70% freight.

If the projections of ECRL are anything to go by, the planners are anticipating a ballistic growth in volume of cargo being moved along the tracks.

Is this realistic?

Socio Economic Research Centre executive director Lee Heng Guie remains concerned on the details of the project financing, albeit the expected trickle-down benefits of ECRL.

“While ECRL has been identified as a high impact public transport project that will connect east coast states with the west coast, especially Greater KL and Klang Valley, the high cost of RM55bil requires further justification. More clarity on the cost structure and terms and conditions of the loan is needed to ease public genuine concerns.

“It must be noted that the high costs, low profits and long gestation periods of transportation projects do not always make them financially viable. The financial viability of the ECRL would depend on the revenue generated to cover operating cash flow, including interest expenses.

“As the loan will have a seven year moratorium, the bunching of loan repayment together with interest payment will be substantial in the remaining 13 years,” he says.

Lowering cost the key

In terms of funding, 85% of the total project value of RM55bil would be to be funded by Exim Bank of China’s through a soft loan at a 3.25% interest.

The balance 15% would be financed through a sukuk programme by local banks.

There is no payment for the first seven years, and the government starts paying after the seventh year over a 13-year period.

At 3.25% interest per annum, the interest servicing bill for the project is huge.

“Hence the main challenge to this project will be to bring down cost as low as possible. The lower the cost, the lesser it would be the burden on the government’s balance sheet,” says an industry player.

Echoing a similar view, Lee noted the ERCL project loan is expected to be treated as “contingent liability” as it will be taken by Malaysia Rail Link Sdn Bhd, a special purpose vehicle owned by the Ministry of Finance.

This is also to ensure that the Federal Government will not breach the self-imposed debt to GDP ratio of 55%.

As at end-March 2017, the Federal Government’s debt stood at RM664.5bil or 50.2% of GDP.

At the end of the day, despite the concerns on the possible cost overrun in the ECRL project, proper management and efficiency in project delivery could lead to cost savings and ultimately lower overall expenditure for ECRL.

History has shown that Malaysian companies can lower the cost, especially on rail projects compared to foreign players.

In the late 1990s, a consortium of India and China state-owned companies were awarded the contract to build a double track electrified railway system from Padang Besar to Johor Baru. The cost was estimated at RM44bil and paid through crude palm oil.

However, an MMC Corp Bhd-Gamuda Bhd joint venture managed to win the job in 2003 with a RM14.3bil proposal. However this project was shelved and subsequently continued after a lull of few years.

ECRL is a seven year project to be built in stages. Many factors can come into play in that period like delay in construction and rise in material costs.

However in the bigger picture, the infrastructure venture should not merely be seen from a commercial-viable lens alone. The trickle-down benefits on the economy and the Malaysian population should also be factored into the calculations.

The lower the cost, the higher the multiplier effect.

Source: The Star by ganeshwaran kanaandgurmeet kaur

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Malaysia must retool education, skills to adapt to knowledge economy


KUALA LUMPUR: Malaysia needs to reinvent its education system to adapt to the knowledge economy, which has led to a sharp reduction in unskilled jobs and spike in demand for data analysts.

Tan Sri Andrew Sheng, Distinguished Fellow of Asia Global Institute, University of Hong Kong, said Malaysia needs to retool its education and skills, and experiment across the spectrum, in positioning itself in the new economy.

“Formal education is outdated because of the speed of new knowledge. Companies do not spend on ‘on the job’ training, because of cost cuts and staff turnover,” he said during his presentation at the NCCIM Economic Forum 2017 yesterday.

Between 2007 and 2015, the loss of unskilled jobs was 55% relative to other jobs while demand for data analysts over the last five years has increased 372%.

In the global supply chain, old economy companies are quickly losing their edge as digitisation moves faster than physical goods while unskilled jobs will be quickly replaced by robotics due to the fast adoption of artificial intelligence (AI).

“Moving up the global value chain is about moving up knowledge intensity. If you don’t get smarter you won’t get the business.

“We are already plugged into the global value chain. We are very successful in that area but we cannot stay where we are. Remaining still is no longer an option. We need to move from tasks to value added growth to high value added production. In order to do that, we need to learn to learn.”

Sheng said the Malaysian economy is doing well but faces many challenges, including subdued energy prices, growing trade protectionism, geopolitical tensions and is still very reliant on foreign labour.

“Are we ready for the new economy? The way trade is growing is phenomenal but the new economy’s challenges are great and very complicated politically because technology is great for us as it gives us whatever we want but at the cost of our jobs,” he said.

When education fails to keep pace with technology, the result is inequality, populism and major political upheaval.

“What the new economy tells us is that robotics or AI (artificial intelligence) calls for Education 4.0, which means that we have to learn for life,” he said.

Sheng noted that Malaysia has successfully moved quietly into education services, medical tourism, higher quality foods, all through upgrading skills, branding and marketing.

“But formal education has become bureaucratised, whereas we are not spending enough on upgrading our labour force, prefering to hire imported labour,” he said.

Although Malaysia cannot compete in terms of scale and speed, especially against giants such as China, it can compete in terms of scope with strength in diversity, soft skills and adaptability.

“We are winners … but have we got the mindset?” Sheng questioned.

He said Malaysia must upgrade its physical technology through research and development, harness its unique social technology and digitise its business model in order to create wealth.

While the government can help, he added, true success comes from community self-help irrespective of race or creed, and retired baby boomers who have wealth of experience must mentor the youth to start thinking about the new economy.

Eva Yeong, sunbiz@thesundaily.com
Related Links:

 Andrew Sheng – Institute for New Economic Thinking

Andrew Sheng
is a distinguished fellow at Fung Global Institute, chief adviser …
member of Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia.

MALAYSIA should leverage on social technology, which is its true strength, … Tan Sri Andrew Sheng, who is a distinguished fellow at Asia Global Institute, … the new economy as it involves lifelong learning to adapt, innovate and create. … To enhance the skills of the civil service, he pointed out Singapore’s …

Andrew Sheng – Project Syndicate

Andrew Sheng, Distinguished Fellow of the Asia Global Institute at the University of Hong Kong and a member of the UNEP Advisory Council on Sustainable …

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