Friday, May 2, 2008

Unlocking the secrets - The Sun

Unlocking the secrets By Terence Fernandez and Maria J. Dass

Tan Sri Abdul Khalid Ibrahim CAME TO PROMINENCE AFTER THE "dawn raid" of the London Stock Exchange IN 1981 which delivered the Guthrie Group into Malaysian hands. AT DAWN ON March 9, The former CEO of PNB was part of another coup which brought Selangor under PAKATAN RAKYAT. the mentri Besar talks to Terence Fernandez and Maria J. Dass about Umno, pig FARMING and the state’s DIRECTION under his leadership.

Tan Sri, the integrated pig farming issue is getting out of hand. Is it true you approved such a large area?

Well, the exco during (then mentri besar Datuk Seri Dr Mohamad) Khir Toyo’s time approved over 300 acres (120ha) of land. And he admitted that he in fact agreed in principle. There’s no issue here. Let me explain. When I came in (as mentri besar) I read all their reports, quite elaborate reports. I don’t think they made a decision without much thought. This indicated that they were serious. They went around town … they even went overseas, did environment reports, studied them and made their decision. And as a professional, I looked at the decision and said "hey, this is reasonable".

But of course I wanted to make sure of some issues such as integrity and equality where all pig farmers are involved and the sharing of the co-operative is fair. So I improved the implementation process and said "OK, we approve it".

After all, the other option is to just leave them as they are and there will be pig farms everywhere; or ban pig farming altogether which is too drastic. This is the best option. It is clean and sophisticated. So we had three options and we chose the best one.

Your administration seems to be going out of your way to bridge the cultural and religious divide – a legacy of your predecessor. Do you fear you may be alienating the Malay/Muslim community with these overtures, including preaching a more just economic policy for non-Muslim communities?

Not at all. Part of my exco team includes three people from PAS who are highly professional ... doctors, architects. Dr Hassan Ali is a motivator with a PhD in town and country planning. They look at things very rationally, so even if you have a so-called Islamic framework, you have to take care of all the people who are going to live with you.

Your detractors say you are compromising on Malay rights.

Oh ya, I’m quite sure they are. The people from Umno are using it to say how PAS and even I betrayed the Malays by allowing this sort of thing (the pig farming issue) to happen.

But politically, we are in a different environment. Fifty years have passed. We are already globalised and this is the way to go. In Ijok, the younger generation contributed the majority of my votes. They came from the 21-40-year age group. They wanted change. Those who are close to retirement don’t seem to want much change. People are getting more and more globalised and vocal. And only now the BN realises that newspapers are not the only communication platform. They don’t go into the internet or alternative media.

So is it safe to say there won’t be any more temple or church issues in Selangor, with the previous administration seemingly reluctant to approve new places of worship?

The exco has started a committee headed by Teresa Kok, which includes Dr A. Xavier Jayakumar and Ronnie Liu for non-Muslim affairs. First we must accept this: How many churches or temples do we have so we can secure them … are they in the right place, so we can rectify it if they are not. They should not be on TOL (temporary occupational licence) land or squatter areas. If need be, we must recognise the land for religious purposes, then we charge them rental of RM1 a year. We are moving towards this.

Previously, each time there was a request for a church, one was told it could not take the shape of a church, no crosses must be visible and the location is in some industrial area. Churches end up looking like factories! Even the Shah Alam church took 26 years to establish.

We must change this. Even like pig farming, they raise their songkok for this and that. It is not the way to go. We must change this mindset.

Cabins belonging to political parties have mushroomed on open spaces and playgrounds around Selangor. Will you be demolishing these illegal structures?

We have given instructions to all local councils to follow the law. Ronnie is in charge of this. We have to work in stages. All public amenities must be protected. But that issue we are not pushing yet as there are bigger issues we are tackling such as protecting forest reserves. We want to contain the reserve land from deforestation. There are about 4,000ha. With the playgrounds, it is a matter of one or two acres, but here we are talking of thousands of hectares.

Some of these forest reserves are alienated to state-linked companies.

Ya lah, to some state agency, but there is a slight twist. There is a joint venture. The state agency gets a small 30%. If the company fails, the state will suffer, if the company makes money, it gets 70%. So we are reviewing it. If we don’t, there is a bigger problem.

So these playgrounds, we leave it as it is until we sort out certain major issues. Of course we are coming back to them as we need to provide alternatives, and if the playground has been intruded into, we take action.

One reason open spaces continued to be developed under the previous admin-istration was the state government’s refusal to gazette them as requested by the prime minister.

We will gazette them now. But we must also understand the meaning of zoning. To these people, zoning means tomorrow you can de-zone. So we have to explain zoning and a lot of research has to go towards this, as we don’t want situations where you zone one area and then later discover that it is not suitable.

Of course the (state) staff have to face up to the new way of thinking. At every discussion we ask about social, financial and environmental implications. So they really need to get used to us. Because last time it was just "saya setuju" (I agree), you don’t need to consider any implication. Once you get a letter (from the top), everything else is irrelevant and you don’t need to think or write a report. But the culture is different now and is starting to take a bite at them!

Do you trust your officers? They were once working hand-in-glove with the former administration. How do you reconcile this fact with the reality that you need them to help you run the state?

I have to live with it because if I want to make changes and want the people to be with me, I cannot throw everyone out, no one will trust me as an agent of change. Of course, if they cannot cope with the new way of working and thinking, they can opt not to work with us. Of course I have taken a positive attitude that everyone is interested in change.

But it is difficult to discard the old ways, one reason being that one has built this relationship with his previous boss over the last eight years.

I can see things change. Now they realise, as there was a recent statement by Khir Toyo on the duplication of land titles which hurt a lot of staff. He said it was "in-house" work. It frightens everyone. It could be one or two persons involved, but if you say "in-house work", then I have to pacify everyone. Now I am winning their trust. At one stage they said "this chap will protect me". But now this chap is not protecting anyone! He is protecting whoever he is protecting (laughs).

Speaking of fraud in land offices, it is a problem that previous administrations have failed or refused to address. What makes you think yours will be successful in resolving it?

First, we need to have proper electronic recording such as E-Tanah which is in place; then you must make it available and be transparent, and the procedure must be well known and there is no such thing as official secrets any more. I am unlocking the secrets so that more people will gain access to their records and there will be fewer instances of duplication.

So you have uncovered more dirt apart from the dodgy land deals?

Yes, but I have to take the attitude that I am not here on a witch hunt. I am here to develop Selangor and at the same to make the requisite changes.

We see you have roped in the Anti Corruption Agency for this.

Oh ya, the ACA was here this (April 9) morning and they have said they will be doing forensic accounting. Of course the ACA also needs to learn to live with us and share information and make a case. But the long and short of it is that the ACA also has its own political masters in the federal system. So sometimes, even after their hard work, the decision to pursue the case is not in their hands but unfortunately in the hands of the AG (attorney-general). The AG on whatever wisdom he has or influence, may not pursue it. So we are learning to work with the local ACA and later on learn to fight the bigger group.

So, you aren’t confident of the eventual findings of the investigations?

Well, during our discussions with the ACA, Ronnie and Hassan Ali were there. They are experts in lodging ACA reports from their non-government days (laughs) … as many as 20 to 30 and none have been pursued. I am not very opti-mistic, but at least now, people are seeing that we are doing something about it and these people (Ronnie and Hassan) have the training to push for it.

You said you would run Selangor as a corporation. Having had a look at the books, are we strong fiscally?

Yes, fortunately. Selangor is in much better shape because of the urbanisation. The quit rent received by Selangor is much higher than other states in the peninsula. It is in a vibrant environment and I think the state has enough resources to sustain itself. The budget is always a balanced budget. But the state can always improve. For example, I look at the fund management; they could get 2-3% on their liquid funds, but I can stretch it a bit by 4-5%. And 2-3% over RM200 million – that pays the salaries of everyone for one or two years.

So the state has these resources, but how you refine it to move into a more competitive and value-added level takes a bit of time, but it is there.

It is not that you are taking over a losing company – then to move up you must cut cost. If you translate the state into a company, this company has resources and turnover, but you can make it better. That means if someone can make it grow 2-3%, you can make it grow 7-8% with a lot of work.

Can you do without federal funding, since the Rural Development Minister had announced that such funds will go directly to BN appointees in the state?

We are not worried about that. If they channel it to Selangor, the multiplier will still be in Selangor. But, I don’t want to waste my time going to the federal government asking for money because I have enough work on my hands managing the resources.

I am quite happy if the federal ministers do this because the people will now know that these are the people who should not be there. So over time, they will be cast aside. The more they continue to do this, the better we are politically. Let me say to you ... these people, they are in Umno ... one example is this pig farming issue. The report shows that MCA proposed this and then Umno worked with them, saying "let’s do it".

Nothing to do with racial reasons; it is socially good and economically viable to have a clean and modern pig farming industry.

Now here comes a chap who wants to champion Umno who ignores MCA and now says it cannot be done. Can you imagine? If MCA continues to lick Umno I don’t know what level of dignity they have! This is the partner that they have. Can you imagine this? And none of the MCA leaders are willing to speak up. And here Umno says forget about the pig farmers, forget about the Chinese, even though they are in a weak position. I am enjoying this. It is a good thing for us. Let the Chinese and the Indians open their eyes to what sorts of fellows they are dealing with. Hey, it’s true you know. If I were an MCA man who promoted this, and now I am being betrayed, what am I going to tell the other Chinese? This is what people tell me and I say promote it so society knows that this is what you have experienced the last 50 years.

Back to the earlier question, you have said Selangor can be self-sufficient.

Of course, but I still grumble as Selangor pays a lot more in taxes than other states. If they don’t want to go through the states due to political affiliations, I am not worried, but if they don’t want to invest in the people of these states, I think it is unconstitutional as it is ultra virus to their decision-making as the people in these states pay taxes.

I think they are doing it (investing in Selangor). If they aren’t or they try to do like in Terengganu when it was under PAS, subduing the state government there, they are killing themselves. They are shooting themselves in the foot! Lower growth in Selangor means lower growth in Malaysia.

How has investor confidence been over the last month?

I have more than enough investors coming to make deals with me. I got calls from international investors who have funds and say "I allocated US$500 million (RM1.6 billion) for you, you decide (where to invest)". So I call them back and say "I’m sorry, I am now mentri besar, not your fund manager!" (laughs)

Do they now feel it is easier and cheaper to do business in the state?

I trust it is easier and cheaper (laughs). We have received many proposals. I told them to give me a bit of time, so I can settle the administration. If I go out now and do investment marketing when the infrastructure and administration cannot cope with their needs, they will be frustrated, so I must get myself ready first.

Is it prudent for the Selangor govt to be involved in rescuing the Port Klang Free Zone (PKFZ)? What is in it for the state? Already RM4.6 billion of taxpayers’ money has gone towards bailing it out.

Provided that the value is right, if the government writes off the value, I can manage it and the government can have a share in it. The intentions of PKFZ are good, but how to implement it in a more efficient and effective way? The idea of making an industry within the free trade zone has been done in Malaysia for many years, but the question is where is your cost? Is it in real estate or is it in trade? Unfortunately this whole thing is a real estate ploy to make gains by being a contractor and all that. But of course, with PKFZ, if the cost is too prohibitive, people will not come if you charge them based on your high cost (of operations) and your trading margin is very small. That allows a lot of turnover. But I think I can manage it if you have a net worth of people who can do it. The government must be open minded, they must write off their losses. Then they can move on.

But what about the RM4.6 billion of our money?

The state will not be doing a bailout! Later on, if managed well, the value of PKFZ will be higher and we will own it.

There are high hopes of a rehabilitation of the PKFZ with Klang Port Authority GM Datin Paduka O.C. Phang’s contract not being renewed and the appointments of Datuk Ong Tee Keat and Datuk Lee Hwa Beng as Transport Minister and port authority chairman respectively.

We know that and I can sit down with them and speak to them on a business-to-business platform. Our idea is that you must be able to manage it, that’s all; not a political upmanship. It is in the state of Selangor. If it is prosperous, the state will prosper, so it is in my interest and I have also to provide infrastructure connecting to PKFZ. Initially people were talking about the politics of it, but that’s human nature. At the end of the day you have over RM4 billion invested, and how do you want to make it happen?

We know you are not giving up your parliamentary seat in Bandar Tun Razak for Datuk Seri Anwar Ibrahim. But don’t you think you are way over your head taking on all these responsibilities? Is it good for the people?

We have a mentri besar’s office in Ijok (his state seat). They (Khir Toyo’s administration which set it up during the Ijok by-election) didn’t use it. Now I use it. It is fully utilised! (laughs)

Bandar Tun Razak is a question of getting the Datuk Bandar to work efficiently with the 10 opposition members of parliament, that’s all.

Do you know that Selangor has vacancies for two advisory board members in DBKL? Now the Datuk Bandar knows who he is dealing with.

Give me a few months so I can stabilise the whole thing. I think I can cope. The question is you must have the support of and quality people who work with you. Like a CEO, once you get the best lieutenants around you, it is plain-sailing. It just takes a bit of time.

So you have capable people to delegate duties to?

Yes, many. This is the challenge of a lifetime. I had that experience when I was about 32 or 33 years old at PNB. I enjoyed it. Now if I can get three or four people of that nature, they move everywhere. And they must have the right spirit of doing things.

Fortunately Selangor is not a troubled state. It is like if you are going into a company that has problems, then you have a nightmare. Here you just need to refine and fine-tune it, and it will run well.

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