Now and Then

I have muscles aches after two days of playing in the Super 8 Championship at Kinrara Oval. Not much of batting, but I did produced a wonderful bowling spell with one wicket maiden.

Nowadays all the latest status or photos one can upload them on IG or FB. Unlike those days in the 80s and 90s where notebooks, sketch books or diaries were the only means to express yourselves.

Whereas, those days your status and opinions were meant to be private, come 2015 you'll be disappointed if nobody likes your entries.

Some Random Photo Stories: Glasgow - Years Apart

A 20-year old yourstruly wearing a British Army bundle jacket with 3 more layers of clothing (t-shirt, shirt and sweater) having a hot coffee outside Bonnypack, a cash & cash outlet in Glasgow. Two days after landed in Glasgow. Awesome hairdo.

Twenty eight years later, I came back to the same Bonnypack to get some Glasgow souvenirs.

Graduation, Summer of 1991.
Yourstruly posing with the Aeronautical Engineering degree scroll with my name written on it. 

Happier times with fellow Malaysian who graduated, friends and lecturer.

Years later, here I was in front of the Hunterian Building Glasgow University

Here I was years later strolling down the memory lane in Kelvingrove Park just in front of the University, the very same place I wrote the poem 'Di Kedinginan Begini' 

It was snowy, and my ladies were enjoying it.

Kampung Boy

Now that it has become a common knowledge, let me jot something about my hometown, Sitiawan. It was in the good old days, when as a kampung boy I grew up with the company of friends. Somehow, my dear dad enrolled me in the SRK ACS rather than the ones nearby my house. Thus, I had two groups of good friends, viz. the town boys and girls during school hours and the kampung boys and girls after school. 

At school, I was amongst the best Malay student. I managed to get at least the top 5 in the whole form. I represented the school in almost all of the reading contest, plays and sketches, recitation of the Holy Quran, you name it. After school, I did all sort of things with my band of kampung colleagues i.e. fishing, playing police-sentry, playing lala (something like rounders but with holes), hence nurturing my future cricketing skills, guli (marbles), spinning top, rubber band, self-made catapult, galah panjang, congkak, ad infinitum. I also joined the kompang group and made performances during weddings.

With our retro 70s bicycles, my kampung friends and I did the ‘round satu kampung’ rituals almost every day. The best of times were during the rambutan seasons. My house was surrounded by at least 13 different types of rambutan trees. There were sweet ones, sweet and ‘lekang’, slightly sour, etc. That’s why until now, I can’t stand to eat the rambutan bought from the fruit sellers, as the tastes are not to my liking and certainly they are not freshly picked.

My dad was a teacher in one of the school in Sitiawan. Every day he brought me two story books, of which I finished reading them in no time. In fact the whole collection of the 20 plus 20 volumes of the Grolier Encyclopedia and The Book of Knowledge respectively, in my house were my true close companions during the day and night.

By age of ten, I practically knew all the names of the 50 states of the USA and their respective details (flags, capital cities, rivers, flowers, birds, places of interest, population, etc.), and have read the abridged version of all famous literary works like Wuthering Heights, Huckleberry Finn, les Miserable (except I do pronounced Jean Valjean as ‘Jin Valjin’), etc.

Life then (with no Astro, no internet, no smart phones) was very interesting as all the international magazines such as Time, Newsweek brought by my elder brothers as well as all the Dewan Bahasa, Dewan Sastera bought by my dad, all of them were all accessible, and I read them all.

Then, there’s standard Five Assessment Test, and I managed to get good result. The next year, when I was 12 like all the other boys, I had my bersunat (circumcision) at the kampung health centre.

Later that year I was offered a place at a boarding school in Ipoh, the big city.

MIS750_5: Mobile (Smart) Phones, Mobile Phones Every Time

Ever been to a restaurant, either with friends or your own family nowadays, and when everybody starts staring at their mobile phones?

Yes? No?

Yes, mostly yes.

Mobile phones are in fact an important part of modern life. We somehow have to admit this very fact. However, during mealtime, especially so at the restaurants, there should be some of etiquette on using mobile phones, if possible.

Firstly maybe nobody should be allowed to look at a phone during dinner. The phone must be placed facedown, you can look at it but never touched. Not even a minute to check the email.

Definitely not Facebook, especially if you want to 'hipsterly' snap the photo of the food or selfie your ownself and upload it via your Facebook (or Instagram) to get as many likes.

What about when going to the toilet? Yes, using your phone is permissible, else like me I still bring the car magazines.

If during the dinner conversation to need to check some facts when suddenly you are out of ideas, then 'googling' Google might be permissible, but not encouraged.

What about Twitter? Especially you want to find out what actually happened to Spain in the FIFA World Cup, when it was the former champion which the first to pack their bags and did not survive the first round. Maybe a yes.

Sources:

New York Times, Wikipedia, Information Technology for Management 6^th Edition

MIS750_4: Alien Software

Ever watched the blockbuster movie called “Independence Day” (ID4) recently shown in Astro, starring Will Smith? In the movie, an alien mothership enters Earth's orbit and deploys several dozen saucer-shaped destroyer spacecraft, each about 24 km wide in circumference.

However, a MIT graduate computer geek devises a plan and introduced a computer virus and disrupted the force fields of the destroyers, and the aliens were defeated. In a not related circumstances in Chapter 9 of MIS750, there is a topic on Information Security and the many types of software attacks including the term alien software.

Among the types of alien software for humans like us are as follows:

1. Pestware: Clandestine software that uses up valuable system resources and can report on your Web surfing habits and other personal information.
2. Adware: Designed to help popup advertisements appear on your screen.
3. Spyware: Software that gathers user information through the user’s Internet connection without their knowledge.
4. Spamware: Designed to use your computer as a launch pad for spammers.
5. Spam: Unsolicited e-mail, usually for purposes of advertising.
6. Cookies: Small amount of information that Web sites store on your computer, temporarily or more-or-less permanently.

Back to ID4, during the movie screening, back in mid 90s the audiences (in America) were standing up in cinemas to cheer the trailer, which showed such US landmarks as the Empire State Building and the White House being obliterated by giant flying saucers. The truth was, ID4 was never going to be anything else but a massive box-office hit of over US$800 million.

However, once you've got past the “too much” explosions and the astonishing amount of vehicular, architectural, and airborne carnage, ID4 is basically a boy's own adventure with soap opera elements that has an entire species of technically superior aliens bested in all departments by good old Uncle Sam (an American) and his can-do (Amerika Boleh) spirit.

Sources:

New York Times, IMDB, BBC1, Wikipedia, Information Technology for Management 6^th Edition

MIS750_3: Strategy on Targeted Advertising

In MIS750 Chapter 7, we are exposed to a topic on “IT Strategy & Planning”.

In short, strategy is the direction of an organisation to achieve competitive advantage by allocating its resources for growth especially within a challenging environment. The organisation will then need to develop a strategy of performing activities differently than its competitors.

This includes making radical changes to the business processes for producing or distributing products and services innovatively which sometimes the fundamental structure of the industry.

For example Facebook has recently announced two major changes to its advertising policy that will let it track users across the web while giving them access to the advertising profiles created by the social network of their likes and interests. The site creates profiles in order to sell targeted adverts tailored to the individual but has never before let users view or edit the information in those files.

In addition to Facebook users, other web browsing activities outside of Facebook will also be added to this profile through the Facebook ‘Like’ button. Even if individuals do not click this on third-party sites it still registers their presence if they are logged into Facebook in the same browsing session.

Similar buttons from Twitter and Google have identical abilities, but this is the first time Facebook has chosen to utilise this wealth of data. If users don’t want to be tracked in this way then they can opt out via the Digital Advertising Alliance or for mobile browsing adjust their settings on their handset.

The strategy adopted by Facebook is via “targeted advertising” that the aim to make it clearer to individuals why they were seeing certain ads. It is anticipated that although Facebook is giving people more control over what sort of adverts they see they’re also becoming more aggressive regarding the types of data they collect.

Targeted advertising is a type of advertising whereby advertisements are placed so as to reach consumers based on various traits such as demographics, psychographics, behavioural variables such as product purchase history.

Most targeted new media advertising such as the one by Facebook uses second-order proxies for targeting, such as tracking online or mobile web activities of consumers, associating historical webpage consumer demographics with new consumer web page access, using a search word as the basis for implied interest, or contextual advertising.

A conducted a study on targeted advertising in 2009 revealed that targeted advertising has secured an average of 2.7 times more revenue per ad as non-targeted "run of network" advertising.

Sources:

New York Times, Wikipedia, Information Technology for Management 6^th Edition

MIS750_2: How to Steal a UAV?

I confessed that I’m a kind of a movie buff, especially if the movies or TV series are with a spy-thriller genre, the intelligent ones off course ...

In my last MIS750 blog entry, I did mention about the UAV. This time I wanted to elucidate a little more with regard to this wonderful piece of high technology and how actually MIS works in practice.

In Chapter 5 of MIS750, we learned a bit about what is called as the Enterprise Information Systems (EIS). An example of the deployment of EIS is by the United States (US) Military to enhance communications by allowing quick dispersal of combat intelligence and connecting support applications with tactical applications.

In the recent and on-going ‘24:Live Another Day’ shown every Tuesday 10.00 pm on AXN, the tv series plot is about a group of terrorist who managed to capture 10 drones (UAV) that belongs to the US Military and wanted to launch attacks at designated targets in London as possibly creating catastrophic disasters.

Actually at first the plot seems strange enough, as how a group of terrorist could hijacked sophisticated US Military drones. However,  the fact is, this has been done before by Iran in December 2011. Iran’s cyber warfare unit stationed near a city of Kashmar managed to brought  a US Military  drone down with minimum damage. 

According to one report, the drone was captured by jamming both satellite and land-originated control signals to the UAV, followed up by a GPS spoofing attack that fed the UAV false GPS data to make it land in Iran at what the drone thought was its home base in Afghanistan.

There is also an unconfirmed news that the very same drone technology is said to have undergone reverse engineering, fully decoded and was being smuggled from Iran to China via a supposedly safe route i.e. MH370 flight, and the rest is history (yet to be uncovered).

A typical US Military drone like the MQ-9 Reaper and RQ-170 Sentinel (the model captured by Iran) posses highly advanced avionics and complex mechanical systems technology to perform in any airspace environment.  These drones are equipped with precise and independent inertial position information for navigation, targeting and attitude reference. The drone power plant for example was designed for low size, weight and power consumption operating across the spectrum of rugged military environments.

For the US Military the EIS workload is largely handled by their Defense Information Systems Agency (DISA). The DISA provides, operates, and assures command and control, information sharing capabilities, and a globally accessible enterprise information infrastructure in direct support to the US national interests.

As for the case of mobilizing the drones, the DISA provides support to engineer, develop, maintain, and operate a global net-centric enterprise in direct support to joint and coalition across the full spectrum of the drones’ operations. This includes designing and implementing a high-capacity, strategic communication network to ensure reliable communications and less dependency on satellite communications and tactical microwave links, which had limited bandwidth capacity and other limitations including possibly exposed to hostile cyber warfare attacks similar to what Iran has done in 2011.

MIS750_1: Where Exactly is MH370?

Sometimes, one needs to keep everything within perspective as well as keeping it simple. To borrow Einstein's word of wisdom, 'everything must be made as simple as possible, but not one bit simpler'.

I was in my EMBA class today when the good professor asked his students, 'Where is exactly flight MH370?' He didn't asked this question directly to me. Else, I would have answered him like this:

The MH370, or to be more specific the MAS Boeing 777-200ER ('ER' for Extended Range) is somewhere in a huge Faraday cage where the 63.7m long aircraft is shielded from any external electromagnetic radiation and will be almost free from any electromagnetic interference, or simply means the aircraft cannot be detected by radar or any reconnaissance satellite.

Can this huge Faraday cage fit a Boeing 777-200ER ?

If you watch the Scott brothers (Tony and Ridley) spy-thriller movies like 'Enemy of the State' and  'Body of Lies', the deployment of continuous and recorded satellite imagery or live feed from remotely controlled unmanned aerial vehicle (UAV) will basically enable the US National Security Agency (NSA) or CIA to have almost full access in global monitoring, collection, decoding, translation and analysis of information and data for foreign intelligence and counterintelligence purposes, including surveillance of targeted individuals. Therefore, tracking a huge aircraft like the 777 would be simply a piece of cake.

A CIA operative was tracked via UAV imagery miles above the ground, seen here in the movie 'Body of Lies'

As the saying goes, 'the truth is stranger than fiction' which basically means the real world is stranger than fiction. Fiction is made up stories and all imaginations like novels, movies etc. Whereas the truth is in fact sometimes can be out of this world, so strange that it is even stranger than fiction.

The disclosure by Edward Snowden by whistle-blowing the NSA secret intelligence documents amply testify to their capabilities such as collection of internet browsing, email and telephone data of not only every American, but citizens of the world as well. In short, our spending habits, our location, our every movement and conversation, are visible to others whose motives we cannot know. The free apps like Waze which is a GPS-based geographical navigation developed by the Israeli start-up Waze Mobile, now in most of our mobile phone, including my own iPhone.

Waze, the harmless looking free apps is indeed outsmarting the traffic, and all of us.

So back to the question again, where exactly is flight MH370, my assumption would be that it was tracked by a reconnaissance satellite, then deliberately hijacked via remotely (like remote UAV), landed in Diego Garcia in the Indian Ocean, refueled, and now in a Faraday cage somewhere in Israel.

There will be a lot of activities with regard to the management information system (MIS) to ensure adequate provision of information that NSA/CIA/Israel require to manage themselves efficiently and effectively. There will be a lot of hardware, software, data, procedures and spies (people) will be involved and used to analyse and facilitate this strategic and operational activities to ensure MH370 to keep on missing until today.

Allah knows best.

5 + 7

That's the term that we use in my company. Five months already passed by in the year 2014. There will be seven more months to go for this financial year. My team and I will be reassessing our business performance so far, and will make necessary adjustment and recalibrating our approaches and strategies where necessary. Next, we will conduct similar assessment during 8 + 4. Yes, you have got it ... in the month of August.

Wait a minute, what am I saying ?

All praise to Allah. I have made a career move to another company, which is actually my former company back in 2001 to 2006. This new job poses quite a challenge for me as I'll responsible for the entire business. May Almighty Allah give me strength and wisdom to excel in my job.

Twenty Thirteen in Review

All Praise to Almighty Allah for His Kindness and Mercy. Salawat and Salam to the Holy Prophet Muhammad s.a.w.

Nothing much is happening in 2013, or is it?

I have made a forecast at the end of 2012 that I will not be travelling much in 2013 compared to the previous years. And yes, the prediction is true. Unlike past journeys to exotic places like Tokyo, Paris, Milan (and Venice) and Istanbul, in 2013 I only went to a more sedate kind of places such as Kunming, Hanoi, few times to Singapore and couple of times to Kota Kinabalu.

The reason for this self inflicted travel control is solely due to EMBA, short for Executive Master of Business Administration. I’ve enrolled to the EMBA program for 2 years starting 2013. My mostly sleepy weekends usually after the sumptuous home cooked breakfast prepared by my dearest Jay, will be quickly fade in a distant memory for these two exigent back-to-college years. If that wasn’t sacrificial enough, I even had to forgo my favourite cricket slogging afternoons at those serene green ovals.

Not entirely though, on the cricket thingy. Once in a while I did play in a few matches both friendly and competitive in nature (albeit at social club cricket level). As usual, I managed to strike 2 to 3 wickets per game and hit couple of fours while batting, and won a medal or two.

2013 also saw the 13^th General Election. I’m deeply concerned on the sickening Chinese Tsunami voting trend. In my small little circle of influence, I’ll do my best to offset that effect. The best thing is to equip ourselves with the required knowledge, exercise constraints and to always seize the opportunity.

The other thing about me is that I’m quite a complacent guy. I’m the type of person who not normally concerned about changing jobs. It has been a steady 8 years at my current job. Nevertheless, I have been hunted and tracked down by Head Hunters (Talent Recruitment Agencies), twice in 2013. This happened merely by just updating the word EMBA in my Linked-In info.

In the second occasion, I have been interviewed by many mat sallehs with first names like Matt, Geoff, Joe, Colin, Brad and Sarah, either face-to-face or via voice over half a day time zone difference. Who knows, maybe I have the chance to end the 8 year stagnation.

My kids, the delights of my life, they are all grown up. Ahwaz just finished his 5 year high schooling at STAR, which happens also to be my alma mater. Awateef was really enjoying herself at SMK Bandar Sunway (SMKBS) of which her mom was the form teacher. She did many marvellous things like getting the highest marks in her English and few other subjects, to writing a short story which then published in the school magazine etc. Wassem had a few health issues and twice been admitted to the hospitals. He is moving to SMKBS, hopefully he will gain some benefits there. And my Ayra is transforming from the sweet adorable little princess to a beautiful and smart early teen age girl.  Meanwhile, my wife and I are enjoying ourselves looking after them.

Adieu 2013. Thank you for everything. 

May Almighty Allah grant His Kindness and Mercy to us all for the coming 2014.

Position Paper ECON740: The ETP NKEA for the Oil & Gas Industry is not supporting the Bumiputera Economic Agenda

Introduction

With much hype on the Economic Transformation Plan (ETP), announced by the Malaysian Government under the leadership of Prime Minister Datuk Seri Najib, as well as the importance to have effective delivery system through the GLCs, one may question whether the stakeholders are putting the Bumiputera Economic Agenda in their planning, or even make it among their priorities.

We shall take a look at what’s what and who’s who in the current economic discussions and heated debates as well as accusations on many sides of the equations of the Bumiputera Economic Agenda, focusing on the Oil & Gas industry.

After elucidating all the facts and figures as well as from the writer’s own personal involvement in the Oil & Gas industry in Malaysia, we will make an attempt to make a clear position on whether the ETP National Key Economic Areas (NKEA) for the Oil & Gas Industry is not supporting the Bumiputera Economic Agenda, or otherwise.

The ETP, NKEA OGE and the EPPs Explained 

The Economic Transformation Program (ETP) is an initiative by the Malaysian government under the New Economic Model (NEM) to turn Malaysia into a high income economy by the year of 2020. It is managed by an agency under the Prime Minister Department of Malaysia.

Launched on 21^st September 2010, the ETP is a comprehensive economic transformation plan to propel Malaysia's economy into high income economy. The program will lift Malaysia's Gross National Income (GNI) to US$523 billion by 2020, and raise per capita income from US$6,700 to at least US$15,000, meeting the World Bank's threshold for high income nation.

Various sectors for development have been identified and are called National Key Economic Areas (NKEA). There are 12 identified NKEAs will be the key driver to the success of this program as such activities have the potential to contribute significantly to the growth of the economy of Malaysia.

One of the NKEA is the Oil, Gas and Energy (OGE) sector. As of 2010 the energy sector has been an important part of Malaysia’s economic growth and constitutes about 20 percent of Gross Domestic Product (GDP).

The Malaysian government plans to increase diversification of the energy industry, increase exploration for new oil and gas resources as well as enhancing production from known reserves. The government is working to meet these goals of what it calls "entry point projects" or EPPs. The government wants the energy sectors contribution to GNI to rise from RM110 billion in 2009 to RM241 billion in 2020. Achieving these goals will require RM218 billion in funding, of which PETRONAS will be contributing to the most of it through the EPPs.

The Roles of PETRONAS in the Oil & Gas Sector

PETRONAS (Petroliam Nasional Berhad) was founded on 17^th August 1974. Wholly owned by the Government of Malaysia, the corporation is the custodian of the entire oil and gas resources in Malaysia and is entrusted with the responsibility of developing and adding value to these resources. PETRONAS is ranked among Fortune Global 500's largest corporations in the world. Fortune ranks PETRONAS as the 68^th largest company in the world in 2012. It also ranks PETRONAS as the 12^th most profitable company in the world and the most profitable in Asia.

Since its incorporation, PETRONAS has grown to be an integrated international oil and gas company with business interests in 35 countries. As of the end of March 2005, the PETRONAS Group comprised 103 wholly owned subsidiaries, 19 partly owned outfits and 57 associated companies. Together, these companies make the PETRONAS Group, which is involved in various oil and gas based activities. The Financial Times has identified PETRONAS as one of the "new seven sisters" the most influential and mainly state-owned national oil and gas companies.

The PETRONAS group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining and others.

PETRONAS is such a very important entity that provides a substantial source of income for the Malaysian Government, with estimated of about 45% of the government's budget dependent on PETRONAS' dividend.

For the ETP NKEA for OGE, PETRONAS will invest substantially to carry out the EPPs projects and increasing exploration activities for new oil and gas resources as well as enhancing production from known reserves.

The GLCs, GLICs and PETRONAS

The Government Linked Companies or GLCs are defined as companies that have a primary commercial objective and in which the Malaysian Government has a direct controlling stake. Controlling stake refers to the Government’s ability (not just percentage ownership) to appoint Board of Directors (BOD) members, senior management, make major decisions such as contract awards, strategy, restructuring and financing, acquisitions and divestments etc. for GLCs either directly or through the Government-Linked Investment Companies  or GLICs.

Whereas, the GLICs are defined as the Federal Government linked investment companies that allocate some or all of their funds to GLC investments. The Federal Government will have influence in the appointing and approving BOD members and senior management, and having these individuals report directly to the Government, as well as providing funds for operations  and guaranteeing capital placed by unit holders.

The transformation of GLCs into high-performing entities is critical for the future prosperity of Malaysia as the GLCs constitute a significant part of the economic structure of the nation. GLCs employ an estimated 5% of the national workforce and account for approximately 36% and 54% respectively of the market capitalisation of Bursa Malaysia and the benchmark Kuala Lumpur Composite Index. Even with active divestment and privatisation, GLCs remain the main service providers to the nation in key strategic utilities and services including electricity, telecommunications, postal services, airlines, airports, public transport, water and sewerage, banking and financial services.

While PETRONAS is not under the same category of the GLCs or GLICs mentioned above, it is by virtue the single most important GLC in Malaysia, with annual revenue of more than RM300 billion, which more than the total of the annual revenues of other GLCs and GLICs combined.

MTEM Laments at PETRONAS 

MTEM stands for Majlis Tindakan Ekonomi Melayu (Malay Economic Action Council), is the national umbrella organisation for the Malay economic-based NGOs. There are also about 120 of similar state level NGO organisations under MTEM, which represents more than 500,000 of ethnic Malay businesses. MTEM also acts a pressure group to ensure practical and amicable actions to be taken by the Government with regard to raise the level of socio-economics of the Bumiputera.

Upon the recent announcement of PETRONAS to award a RM10 billion worth of offshore hook-up, commissioning and maintenance services contract to six local service providers, MTEM cynically offered a congratulatory message to PETRONAS who has been ‘generous’ enough to make big announcement as well as media release in their corporate website, which is not the normal practice.

In their media release on 19^th November 2013, according to MTEM, they are not really interested in questioning either in the legality or the ‘Malayness’ statuses of the so-called local service providers.

MTEM seems to be very interested in comparing the massive RM200 billion of capital expenditure in PETRONAS as the RM10 billion give away will be around 5% only. They argued that the message by the Prime Minister urging PETRONAS to disperse around RM100 billion for the Vendor Develop Program (VDP) for 22 work scopes through the Bumiputera economic enhancing program, was not taken to heed. Thus the RM10 billion will be too diminutive to be used as a comparison.

An initial reaction by PETRONAS to this accusation by MTEM was to have their own media release on the next day i.e. on 20^th November 2013 by making announcement that PETRONAS has appointed 3 new Bumiputera vendors under its Vendor Development Program (VDP). 

PETRONAS go on stating that the VDP has the primary objective of creating resilient and competitive Bumiputera entrepreneurs in oil and gas-related manufacturing and technical services of medium and high technology with an import-substitution end-goal.  

PETRONAS however, seemed to again failed to provide justification on the reason why since the first VDP vendor in PETRONAS was appointed in 1994 (as of to date, some 79 VDP companies), and collectively they have over the years been awarded contracts worth more than RM7.5 billion, which again a very small figure comparatively.

MTEM went on to argue and echoing the Prime Minister urge that the success of the VDP program in any GLC companies, including PETRONAS will be used as the Key Performance Indicator (KPI) for its President and CEO. It seems that since Tan Sri Shamsul took over the PETRONAS leadership, he has seen to be less effective in the implementing this very important KPI.

The accusation by MTEM is equipped with facts and figures. As an example the Exploration & Production (E&P) work scopes as well as all the upstream activities such as Drilling & Completion, Seismic Monitoring and others are still being monopolised by foreign companies. Whereas the Development works such as Engineering, Design & Construction including the Hook Up Commissioning and Topside Major Maintenance, where previously were given to Bumiputera companies, now only for selected local companies only. To make it worst, PETRONAS has made it mandatory for the local companies to make joint venture exercise with foreign companies.

According to MTEM, of the 79 VDP companies mentioned by PETRONAS, what was left is only 11 companies. The 3 new additional VDP companies announced just one day after MTEM media release will not do any justice. 

MTEM believes that there are a lot more space for the Bumiputera contractors and suppliers to play their roles in PETRONAS. The VDP program for example should be strengthened and not systematically marginalised, and its implementation should be extended from 5 years to at least 10 years. This will provide chance for companies to implement effective and holistic business modules through sound investment, development and trainings.

MTEM is also urging PETRONAS to be more sincere and to have faith in the capability of the Bumiputera oil and gas entrepreneurs to carry out the complex and highly technical work scopes. The capability of Bumiputera entrepreneurs has been proven through many accolades received in the international arena where some of the Bumiputera companies successfully completed upstream projects with foreign oil and gas companies. These Bumiputera companies are well respected for their efficiency and competitive pricing offers. It is therefore very unfortunate that the very same companies are being sidelined by Malaysia own GLC i.e. PETRONAS.

PETRONAS’ Roles in Supporting the Bumiputera Agenda

In a slightly different tone, and not really taking cue of the MTEM claims, PETRONAS CEO and President Tan Sri Shamsul Azhar Abbas claimed that PETRONAS will continue in helping Bumiputera companies, but put a standard well known statement i.e. it will not award contracts to those with no track record in the oil and gas sector.

PETRONAS’ practice is not to sideline Bumiputera companies but awards projects to them based on merit, transparency and competency. Based on 2012 figures, according to PETRONAS they gave out RM52.48 billion in contracts to companies which were majority-owned by  the Bumiputera. It was almost double the RM29.35 billion awarded in 2011. In 2010, the total was RM25.97 billion.

Tan Sri Shamsul also said that while PETRONAS welcomed the participation from Bumiputera companies, it would not directly award projects to companies without oil and gas expertise and experience, as the operations and project delivery will be at risk in the hands of incompetent and inexperienced partners (read Bumiputera companies).

In a different twist to the issue brought by MTEM, PETRONAS said that they are currently working closely with those who wanted to improve and enhance their capabilities, such as the Malaysian Oil and Gas Services Council (MOGSC), an association of 430 members, of which 90% are Bumiputera companies.

This has been concurred by MOGSC president Sofiyan Yahya who in the opinion over the years more and more Bumiputera companies have changed their business strategy from just being agents to actually doing the job themselves. Sofiyan also said that its members found PETRONAS’ services exportable as they followed international standards.

He also dismissed claims that companies that could not secure jobs are caught in a chicken and egg situation, meaning that they cannot build a track record which is necessary to win contracts.

Sofiyan offered that those who held such views did not understand the nature and needs of the industry, where when a big contract is handed to an industry player, a whole range of services needed to be provided, for example, foreign oil majors in the country need to hire locals for support services and are rarely ever standalones.

Sofiyan argument is seen to be more from the actual implementing companies and from sub-contractors point of view, which could make a lot sense and more practical, compared to the macro view by MTEM.

In a similar fashion, the PETRONAS Chief Operating Officer (COO) Datuk Wan Zulkiflee Wan Ariffin said in 2012, about 75% of its contracts worth RM70 billion were awarded to majority owned Bumiputera companies. The numbers seems to be contradicted by the one given by Tan Sri Shamsul by about RM20 billion. In an even contradicting report, the New Straits Times (NST) has quoted that PETRONAS has always put in practice the equal opportunity by giving RM70 billion in contracts awarded to Malay-majority firms in 2012.

According to Datuk Wan Zulkiflee, PETRONAS has close to 4,500 licensed and registered vendors, 94% of which are Bumiputera companies.

He went on to say that to ensure that they will not be accused of cronyism practises, PETRONAS employed a Chief Integrity Officer (CIO) seconded from the Malaysia Anti-Corruption Commission and a few of its officers sit in our tender committee on key tenders. 

What both CEO and COO failed to mention was it is their KPI as the leaders in a GLC company to ensure the success of the VDP program in PETRONAS.

Tun Mahathir’s Point of View 

Whenever there are issues in the nation, it is very interesting to hear what Tun Dr Mahathir Mohamad our most respected senior statesman has to say. According to Dr Mahathir as a GLC, PETRONAS must toe the line and support government policies, in particular the New Economic Policy (NEP) which offers special rights to the Bumiputera community.

Dr Mahathir, who is also PETRONAS former adviser, insisted that the present government under Datuk Seri Najib Razak has yet to dismantle the NEP, a pro-Bumiputera affirmative action policy that was mooted in 1971 but implemented mostly during Dr Mahathir’s administration.

“The current government policy as far as I know, includes implementing the NEP. The government has not rejected the NEP. This means PETRONAS is also involved (in implementing the NEP),” the former prime minister told the press. But adding a disclaimer, Dr Mahathir said although Bumiputera firms should be accorded special treatment from PETRONAS, this must be based on merit.

“To protect (Bumiputera firms), it must be because of merits too. Those without any merit cannot be protected,” Dr Mahathir said.

Dr Mahathir was responding to the newspaper’s report recently on complaints from MTEM that several PETRONAS has begun sidelining Bumiputera-owned firms. He also informed that he too had received similar complaints and had passed along the concerns to the top management of PETRONAS.

“My work (as adviser), I’ve informed the PETRONAS President (Tan Sri Shamsul Azhar Abbas) about these issues (complaints that PETRONAS for sidelining Malays),” he was quoted as saying.

With regard to the NEP, it ended officially in 1990, but the key aspects of its Malay/Bumiputera-preferred action plan remains in various forms years later. When Datuk Seri Najib took on the reins of the country in 2009, he sought to burnish his reformist and liberalist image with pledges to revamp the administration, even introducing the New Economic Model (NEM) to replace the NEP.

The NEM was launched on 30^th March 2010, with an eye on doubling the nation’s per capita income by the year 2020 to an estimated US$15,000 (RM49,500).

The three underlying themes of this dream were “high income, sustainability and inclusiveness”, as the Prime Minister stressed on the need to reduce fiscal disparity between the rich and poor without relying on affirmative action policies ala the NEM.

But faced with harsh objections from many within his own team, and even worse, from a large segment of the Malay-dominated Malaysian electorate, Najib has had to rollback on some of these pledges slowly over the years.

Just weeks before he sought re-election as UMNO president this year, the Prime Minister announced a new Bumiputera economic agenda, which some have termed as the “pro-Bumiputera NEM”, effectively giving the NEP a new lease on life.

The Government Announcement on the Bumiputera Economic Council

To quickly address the pressing issues mooted by MTEM and the corresponding lame responds from PETRONAS, the Government has announced new measures and strategies to empower the Bumiputera economy, with the Prime Minister himself heading the Bumiputera Economic Council (Majlis Ekonomi Bumiputera or MEB), which will be set up soon.

Najib said the MEB, will implement five main strategies as a continuation of the implementation of the Bumiputera economic empowerment agenda. He said the focus areas will include enhancing Bumiputera equity ownership in the corporate sector as well as asset ownership.

One of the main measures in this strategy is the setting of targets for all Chief Executive Officers (CEO) of government-linked companies (GLCs), including for projects awarded to vendors. This means that all GLC CEOs will have a KPI specifically on Bumiputera economic development in their job scope. In addition, in all government ministries, there will also be a Bumiputera Development Unit, responsible for formulating proposals and implementing Bumiputera agenda initiatives. With this announcement and measures, the CEOs like Tan Sri Shamsul will have to put priorities in the Bumiputera agenda, and not mere offering lip services.

The Government stressed that it will ensure the Bumiputera socio-economic development agenda is effectively implemented and the delivery system will also be strengthened to create an efficient, comprehensive and constructive ecosystem.

Further Observation and Conclusion  

The ETP is seen to be a forward looking economic plan by the Malaysian Government under the leadership of Datuk Seri Najib. The NKEA OGE in the ETP has sufficiently addressed the needs for the required holistic development in the sector which contributes more than 20% of the GDP.

PETRONAS is transforming itself from a National Oil Company (NOC) to a multinational integrated energy giants competing with the likes of Shell and ExxonMobil. PETRONAS has to be seen to be competitive and inclusiveness. 

However, being a wholly owned by the Malaysian Government, PETRONAS is in fact a GLC, and bound to advocate and support national interests. Among the top priority is to develop the Bumiputera economy to become resilient so that the majority population will close the apparent economic gap between the Bumiputera and the minorities especially from the Chinese ethnic.

Yes, it is acknowledged that the ETP National Key Economic Areas (NKEA) for the Oil & Gas Industry is a good platform to increase the economic cake, but on its own do not have the specific mechanism to support the Bumiputera Economic Agenda.

Most of the Bumiputera companies which involved in the Oil & Gas will be looking forward with full enthusiasm on the details of the MEB and the mechanism, the checks and balances, especially now the strengthening of the Bumiputera Economic Agenda will be put as the KPI for all GLCs and GLICs CEOs.

References

1.       www.pemandu.gov.my

2.       www.khazanah.com.my

3.       www.petronas.com.my

4.       www.mtem.my

5.       www.mogsc.org.my

6.       The New Straits Times

7.       The STAR

8.       The Edge

9.       Sinar Harian