OUT-FLOW: RM1 billion vs IN-FLOW: RM350 million
48 hours expired on Koh Tsu Koon today.
Malaysiakini: It's Motorola and Comintel.
During the Japanese Occupation days, it was foolish to exchange rice, a scarce and valuable commodity, for sweet potatoes. Penang Hokkiens treat such foolishness in an enduring colloquial expression: 拿米换番薯。
For the 2008 version "exchanging rice for sweet potatoes', we gave Koh Tsu Koon a 48-hour ultimatum to clarify his role in giving away RM1 billion of taxpayers' money, and in return, to get an American company to stay put in Penang, packaged in a RM350 million "reinvestment".
Failing which, the company will pull out from Penang, and withdraw totally from Malaysia as a form of "necessary business strategic response" to the market environment in the country.
We first blew Tsu Koon's cover on March 1, giving him a saving grace of 48 hours to redeem himself.
We wanted to know his role and decision-making as the incumbent chief minister had said in a confidential letter to the Prime Minister that should Motorola pull out from Penang, it will be a "politically very detrimental" especially in the run-up to the general elections".
We are very concerned that taxpayers' money had been committed for the next 10 years in order to help Barisan Nasional win in this general election.
The 48-hour time-frame expired today. According to media reports, Tsu Koon insisted yesterday that he would not respond to the issue unless the companies involved are identified.
We did what we had we had to do, but Malaysiakini beat us to us by one day. The companies that Tsu Koon helped are Motorola and Comintel, Malaysiakini reported. We confirmed it. Read on.
Here's the sequence of the 拿米换番薯sham.
Letter: Penang 'bribed' Motorola to stay
Beh Lih Yi | Mar 2, 08 1:46pm
Highly-confidential correspondence confirms that the Penang state government had asked the federal government to offer a RM1 billion project to Motorola in a desperate attempt to stop the American telecommunications giant from pulling out of the state.
If this wasn’t done, the Gerakan-led state government warned Prime Minister Abdullah Ahmad Badawi that its "catastrophic impact" would be "politically very detrimental" especially in the run-up to the general elections on March 8.
The three-page letter, signed by outgoing Penang chief minister Dr Koh Tsu Koon, was addressed to Abdullah and dated Dec 3 last year. Malaysiakini has seen a copy of the letter.
According to the letter, the government would offer a RM1 billion project to Motorola involving the upgrading of the police force’s radio network in exchange for the multinational staying put in Penang and pump in an additional investment of RM350 million over the next five years.
Motorola, which has a manufacturing facility at Penang’s Bayan Lepas Industrial Zone, announced its RM350 million investment in the state on Tuesday.
The stunning revelation comes as the opposition intensifies its attacks on the Gerakan state government over its poor performance in reviving the island’s economy.
Koh, who appeared to be on the defensive, has repeatedly denied such claims.
The state’s sluggish economy has topped voters’ concern and is likely to be an influential factor when votes are cast on Saturday.
In the letter to Abdullah, Koh - who is also Gerakan acting president - began by stating that he was "very concerned" over disclosures that Motorola was on the verge of announcing that they would be "pulling out their entire operations in Malaysia".
Koh however stressed that Motorola’s pending decision "was not a threat for a bigger and new contract" but a "necessary business strategic response" to the perceived lack of support from the Malaysian government.
The government had earlier decided not to extend Motorola’s contract to supply and expand the existing radio network of the police force and the project - dubbed the Government Integrated Radio Network - had been given to another consortium.
Three ‘dire consequences’
The letter further stated that Abdullah had earlier promised Motorola executives during a meeting in February last year that the company would continue its work on expanding and upgrading the police’s radio network, which has been put in place by the American giant in 1992.
Koh, in the letter, went on at length to impress on Abdullah the importance of Motorola continuing to invest in the state. This included the company setting up its worldwide headquarters in Penang for certain products.
The outgoing chief minister told Abdullah that Motorola "will have no choice" but to move their product headquarters and related operations to another country, most probably China which Koh said had been "wooing Motorola very aggressively".
Motorola needed to make a decision whether to accept the offer to relocate to China by early this year, he added.
Koh also listed out "three dire consequences" should Motorola decide to pull out:
* It would cause a total of 10,000 jobs to be lost of which 4,000 are direct jobs in the Motorola facility in Penang and the remaining 6,000 jobs among Motorola suppliers and vendors in the country.
* It would be a "bombshell" on the electrical and electronics industry in the country and the decision will trigger a highly probable domino effect with other multinational companies pulling out.
* It will be "politically very detrimental" especially in the run-up to the general elections.
Koh, who has been Penang chief minister for 18 years, appealed to Abdullah and the federal government to reconsider its decision not to award Motorola a new project "in this special case".
However, he pressed the case for Motorola's existing contract to be extended.
"From what I gather, the retention and expansion of the existing communication system for the Royal Malaysian Police radio network will cost less than RM1 billion for 10 years, and not more than RM4 billion as was erroneously conveyed," Koh stated.
He added that the cost will cover an upgrading of "an existing communication system already in full operation" over a 10-year period and he will try his best to convince Motorola to further reduce the offer price.
Koh ‘arm-twisting’
Koh also stressed that Motorola has invested an accumulated amount of RM5 billion in Malaysia over the past 35 years and that it has "contributed significantly" to the nation’s economic development.
He cited Motorola’s move to make an additional investment of RM350 million in research and development and manufacturing over the next five years to back his argument.
"I sincerely trust YAB Dato Seri (Abdullah) will assist Penang, and Malaysia, to retain a major investor, avoiding the catastrophic impact of a pull-out and also to allow the police to continue with expanding a tested and trusted radio network," pleaded Koh.
The controversial deal was first hinted at by opposition PKR leaders in Penang on Thursday, but without providing any documentary proof to substantiate their claim.
PKR Penang chief Zahrain Mohamed Hashim - who is contesting the Bayan Baru parliamentary seat and who said he had read the letter - described it as Koh ‘arm-twisting’ Abdullah.
Koh, when quizzed on the matter by reporters on Friday refused to respond apart from saying the question was ‘vague’.
Five days earlier, Motorola had announced its latest deal to invest RM350 million in Penang over the next five years. It is no clear whether the multinational had been awarded a government contract in return for its decision.
Coincidently, the announcement served as a lifeline to Koh who was caught in a whirlpool of opposition claims that Penang had lost its shine due the relocation of many multinational companies to other countries.
Launching the Penang Progress Report 2008 on Wednesday, a visibly relieved Koh had said: "The announcement by Motorola that it would be investing RM350 million more for its operations in Penang yesterday proves that the state is still competitive."
"The DAP is trying to run down everything but refuses to see the progress," Koh was reported to have said.
CHINESE VERSION, from Malaysiakini
10亿换投资主角是摩多罗拉
子根称撤资灾难性打击选情
王德齐 | 3月2日 下午1点48分
近日愈闹愈大的“10亿公款换3亿外资”风波中的主角－－跨国公司M企业，已被证实就是日前宣布在槟城州再投资3亿5千万令吉的著名美国电子制造商摩多罗拉（Motorola）!
槟州原任首席部长许子根在一封致函给首相阿都拉的3页机密公函中，要求中央政府发出10亿令吉的政府合约给摩多罗拉，以避免该公司撤出槟州。
许子根在这份日期为2007年12月3日的机密公函中表示，若摩多罗拉因为无法获得合约而宣布撤走，恐怕将对即将来临全国大选带来“灾难性的打击”，“在政治上将是非常不利”。
根据有关的合约，摩多罗拉以及其代理人Comintel公司，将获得总值10亿令吉政府合约，以供应和提升警察部队旧有的无线电通讯系统。
采纳两套系统压力使然
这项安排之所以掀起争议，是因为政府先前已经决定采纳新的通讯系统，不过却在摩多罗拉的撤资压力之下，不得不另外耗费多10亿令吉，以维持旧有的通讯系统，浪费巨额的公款。
槟州经济的表现和外资的撤离，已一跃成为选战焦点。人民公正党峇央峇鲁1国3州候选人于周四率先爆料，指控原任首席部长许子根写信给首相阿都拉，要求联邦政府颁发10亿令吉的合约给某家跨国企业，以换取这家企业继续留在槟州操作，掩饰槟州外来投资每况愈下的局面。
随后，公正党与民主行动党昨日又进一步揭露更多详情，指许子根在致给阿都拉的公函中，提出3项重点：
1）如果不发出10亿令吉的合约给有关跨国企业，他们将以策略理由从马来西亚撤资。
2）一旦有关跨国企业撤资，将会导致失去1万份工作机会。
3）由于全国大选已近，因此必须尽快在2008年1月前做出决定。
虽然如此，他们都不愿点名有关跨国企业的名字和其代理人，仅由行动党全国电子选战主任黄泉安称呼有关公司为M企业和C集团。
许子根两度接受媒体询问时，皆以相关指控都没有明确点名有关公司的名字，而拒绝发表任何的评论。
担忧震撼弹和骨牌效应
许子根的机密公函主要目的是通知首相，摩多罗拉因为无法获得延长警察部队无线电网络的供应和提升合约，而“濒临”（on the verge of）决定和宣布撤走他们在马来西亚所有的操作。
许子根在信中进一步向阿都拉分析，若摩多罗拉一旦决定撤走，这项举动将造成下列的影响：
（一）失去4千个在摩多罗拉的工作机会，连带影响6千个在摩多罗拉供应商和销售商的工作机会；
（二）这项宣布将大马电子工业投下一枚“震撼弹”，恐怕极可能对其他跨国公司造成骨牌效应；
（三）这对国阵政府在来届大选的选情，在政治上造成严重的打击。
不获合约准备转移中国
许子根(左图左三）也在信中强调说，摩多罗拉这项举动并不是一项威胁政府以获取新合约的施压行动，并解释说这是一项“必要的商业策略”，避免他们因为缺乏大马政府的支持而陷入窘境。
他指出，现有的无线电网络是在槟州研发、设计、发展、生产，以及提供售后服务，而摩多罗拉一直都以警察部队的执行成果作为产品的卖点，若政府决定采用全新的通讯系统，那么这将对他们的市场策略造成“严重的伤害”。
许子根说，既然连马来西亚都不愿使用有关通讯系统，这将让摩多罗拉处于尴尬地位，不得不将有关产品的总部及运作，从马来西亚转移到另外一个国家，特别是以优渥条件吸引该公司的中国。
他指出，摩多罗拉必须在今年初决定是否接受有关条件，否则将搬迁到中国。
因此，他希望联邦政府能够重新考虑这个“特别情况”，并指有关计划不会耗费超过10亿令吉，时限长达10年，他也会确保摩多罗拉降低价格。
采用新系统恐打击国安效率
许子根也指出，政府采纳两套并行的无线电网络，对警察部队绝对是有利的。他警告说，若政府采用新的通讯系统，这将引起一段时间的混乱，使国内安全系统的效率受到打击。
他表示，摩多罗拉原本决定于未来5年，在我国再投资3亿5千万令吉，并会多聘500名工程师，及在近期从本地购置多过20亿令吉的物品，但是随着这个问题的发生，他们已决定暂停所有计划，包括WIMAX发展计划。
许子根最后在信中表示，他相信阿都拉将会协助槟州留住一名重要的投资者，避免造成“灾难性的打击”，并确保警察部队会继续使用能够信赖的无线电系统。
March 1, 2008:
48 hours for outgoing Penang CM
Chua Sue-Ann | Mar 1, 08 4:45pm
DAP candidate Jeff Ooi is giving outgoing Penang chief minister Dr Koh Tsu Koon 48 hours to respond to allegations of a contract-for-reinvestment deal involving the state government and a multinational corporation.
PKR Penang chief Zahrain Mohamed Hashim alleged on Thursday that Koh had written to Prime Minister Abdullah Ahmad Badawi seeking to award a RM1 billion contract to a multinational company in exchange for a RM350-million reinvestment.
Zahrain and Ooi - who both claim to have seen copies of the letter said to be written in December 2007 - elaborated on its contents at a joint press conference this morning at PKR's Bayan Baru operation centre in Penang.
Describing it as an “arm-twisting missive to the prime minister”, Zahrain claimed that the letter stated that the corporation would withdraw its investments in Malaysia if the RM1 billion contract was not awarded.
Zahrain - who is contesting the Bayan Baru parliamentary seat - said that the letter also informed that 10,000 jobs will be lost consequently and implored Abdullah to decide quickly in anticipation of the general elections.
Also present today were PKR Penang candidates Sim Tze Tzin (Pantai Jerejak), Raveentharan V Subramaniam (Batu Uban) and Abdul Malik Kassim (Batu Maung) - all of whom are contesting for state seats in the Bayan Baru parliamentary constituency.
Three companies involved
Declining to name the three multinational corporations embroiled in the allegation, Ooi - who is also DAP's e-campaign director - referred to them only as M-corporation, N-consortium and C-consortium.
The popular blogger explained that C-consortium and M-corporation were keen to maintain a contract for an analogue radio network, which was due for an upgrade to the digital system.
“There was a limbo during Mahathir transition. It was finally Koh who broke the impasse for this company to get a contract to continue to maintain this analogue radio network for a particular intelligence agency,” Ooi added.
According to Ooi, N-consortium - the third party involved - was “the favoured party” to handle the digital migration of radio networks.
He also questioned the need for an analog radio system to be maintained alongside a digital one.
Copy of letter unavailable
Since the allegations were made on Thursday, Zahrain had not produced the said letter.
When pressed by reporters at the press conference, both Zahrain and Ooi refused to confirm if they were in the midst of obtaining a copy of the letter.
They also declined to comment if the letter they had claimed to see was classified as an official secret.
In related developments, Koh responded to the ultimatum when met by journalists an hour later at Han Chiang College - a Chinese community funded college - in Penang.
The out-going chief minister and acting Gerakan president reiterated that he will not respond the allegations unless the companies in questioned were named.
The ultimatum expires at noon on Sunday. It is not clear what the opposition would do should there be no response from Koh.
