Tuesday, June 09, 2009

"Tremor" felt at UEM office near Sentral


There was no report from the Meteorological Department of any earthquake. Little bird reported of "tremor" felt near Sentral at Jalan Sentral Stesyen 5 late yesterday afternoon. UEM Builders Chairman, Datuk Abdul Rahim was said to be in a state of shock from the “mild earthquake” after lunch.

Many questions were asked. Who leaked it? How could anyone have known about it? What else do they know? Should we ignore these "housewife, unemployed, and goblog"? The public relation people must be scrambling to figure out a response.

The best tip would be to be honest. If it is possible to get away from us bloggers, God knows of any wrongdoing and irresponsibilities.

To be fair, UEM were trying to solve the problem. They hoped for Government to talk to the Qatar Government. But why did they not take the opportunity when the Emir of Qatar was in town few weeks back? A cat caught their tongue?

Why only try to address the problem now? Why not, when the Qatar Government already threaten to drag them to court in March 2008? Is it because Tun Lah was Chairman of OIC, they will just go … Oh I see?

Much of the problem is due to design problem by Parsons but UEM Group (UEM) did mess up in their execution or in layman term, the construction work, so the Arabs claimed.

The strangest thing is UEM signed a joint and several agreement. It only means that if someone else screwed up and can’t afford to pay up, UEM will have to fork up from their own ass.

The potential loss of QR878,318,972.06 (RM850 million) is serious number. (The conversion rate is RM0.9676 = 1 Riyal.) This does not include contingent liabilities, which could amount to the maximum of QR1.2-.3 billion.

Could it be possible that nobody gave a damn about the Qatar project. Be it at Khazanah, or UEM World or UEM Group or UEM Builder? They may be thinking that having covered up the humongous potential loss, they have set sail free.

It should remind us of Che Khalid of CEO of TNB some years back. When asked of a RM300 million loss in their coal venture in somewhere Borneo, I believe, his answer was that it is insignificant compared to the revenue and profit of TNB.

It seemed business is usual in UEM Builders. On January 24th 2009, UEM Builders gave an appreciation dinner to the staff for the completion of the work in Qatar.


They were in jubilation believing the Qatar project was a success in making further inroad into the Middle East construction market. It is the second for them.

As per written in their website here, the project was “the expansion and upgrading of the Salwa International Highway Phase 1 project which connects Doha to the South-Western town of Abu Samra on the Qatar-Saudi Arabian border.”

"The 81km, dual four-lane highway with 10 major interchanges, 3 camel crossing underpasses and 22 Qatar Petroleum culverts was completed in December 2008.

“It is our singular hope that this success will open the door to many more opportunities, especially in the Middle-East, as we have proven our capability, credibility coupled with quality delivery,” Dato’ Ridza Abdoh, Managing Director of UEM Builders said.
The staffs were proud for completing the work. There was the customary picture for the album.


They can be excused because they do not know the whole picture. They have done their part. But are the management ignorance too? More dangerous, are they in-denial to the fact that an OIC member country or a Muslim brother is actually suing them?

According the initiatory pleading by the Works Department, they found the road built by UEM, to quote, “was affected by rainfall and cleavages as well as earthwork appeared in the parts that were built before the old paving. It was also noticed the appearance of some earthwork after rainfall…”

Item 8 to 11 was focused on Parsons design mistake. Item 12-14 concerns the mistake of both Parsons and UEM for not making extraneous effort to address deviation between the situation on site and design.

To quote, they “committed a serious mistake by not undertaking to study again the WSN for the old paving …” There was “the presence of air voids at a high leel in the asphalt layer in comparison with the acceptable value for good performance.”

They expected that in their capacity as “a multinational company specialised in road execution projects, to discover the design mistake and inform the plaintiff to this effect.” This statement is really malu (shameful).

Upon finding the damages, The Public Works Organisation of Qatar had to employ 11 other companies to redo the work. This will be coming as the next lawsuit to demand the cost of ramification of the project.
On the other side of the coin, a commentator on Dato Mavs’ blog here quoted the following report:

Flaws in Salwa road pavement construction

Source: The Peninsula

DOHA - The Qatar General Organisation for Standards and Metrology (QGOSM) has said that there was clear evidence of a structural failure in the construction of the pavements of Salwa International Highway.

Attending a joint meeting of concerned officials, convened by the Public Works Authority (Ashghal) to look into the massive cracks developed on Salwa International High way, the QGOSM nominees said that there was very clear evidence of extensive fatigue cracking. At the meeting they expressed their serious concern about the use of the Type 5 pavements utilising a specific crack-arrest- layer (GSB).

Top Ashghal officials, who attended the meeting, wanted the Parson International Ltd (PIL), the company responsible for the design work for phase 1 of Salwa International Highway, to clarify the details of the joint interface between Type 5 pavement and the full depth construction type 1 pavement. They also asked the company why a full-depth construction had not been adopted in accordance with Qatar Highway Design Manual (QHDM).

The PIL clarified that the pavement design was done according to the findings of a report prepared on behalf of Roads Department of Government of Qatar.

Henry Saville, currently Parsons Sector manager for Roads and Highways in Europe, said that though the PIL did not agree with the contents of the report, they had been required to base their design on the contents of the ERI report which stated that the structure of the existing road pavement was adequate for the traffic loading foreseen.

Saville, who said that he was responsible for the design works of the highway, added that the design thickness of the required granular sub base layer was increased by 20 per cent in order to accommodate any increase in traffic as well as to allow for then likelihood of overloaded trucks and tyre pressures in excess as anticipated by ERI report.

Responding to a query from Ashghal authorities, the PIL confirmed that a `crack arresting layer' was not included in the pavement type in the Qatar Highway Design Manual (QHDM). It said that a granular subbase crack arresting layer, which was used in Salwa Road project, had been used in road pavement rehabilitation in at least three other nations including Vietnam, Greece and Romania and it was performing satisfactorily in these countries.

The PIL pointed out that sections of the new road, where the Type 5 pavement had been constructed on Salwa Road, had been under traffic pressure for many months. But no pavement distress was recorded. The pavement developed cracks only after the heavy and incessant rains in the beginning of December 2006. “A series of tests had been carried out on materials taken from the failed areas, as well as on samples taken from other areas of type 5 pavements. The test results indicated that the materials used had fully complied with the specific standards", the PIL said.

The volume of traffic had increased over twenty per cent allowed for in the original design. It also suggested Ashghal to carry out a Benkelman Beam test (BBT)...
All these issues are for Engineers and lawyers to slog.

For the public, they should be concerned for the financial liabilities from subsequent claims. What is the final claim on UEM? Furthermore, what if Parrson and Qatar Insurance defaulted? These has financial ramifications on the nation and rakyat.

In another twist, little bird said Dato’ Izzaddin Idris may not join UEM Group with this revelation. He was hoping to be there for a rest to do launching, ceremonies, and “kissing babies”.

In the meanwhile, we await UEM Group response before making more comments and maybe revealing more.

13 comments:

Anonymous said...

Bro,

See the quality of works by UEM. Their own building caught fire today. HEHHEHE

Wenger J Khairy said...

Yo Voicey,
Have you heard of the "efficient market hypothesis" by Fama. Its one of the fundamentals of Market theory. It states that the market will know of all information, even information possesed by corporate insiders. So in a way, you are proving that the Blog is an efficient market, even more efficient than the Dow Jones.

Parpu Kari said...

BRO, I WANT TO SEE WHAT IS THEIR EXCUSE THIS TIME!

Ong Zionis said...

Dunno whether relevant or not, the son of Dato Ahmad Pardas is in Ethos consulting, kept there by Omar Ong, despite having really low credentials compared to an average Ethos consultant..

Maybe Ong saving his cronies...

Anonymous said...

Bro,

There’s nothing to do with ‘wrongdoing’ and ‘irresponsibility’ in the case of UEM in Qatar. It’s just something to do with technical and contractual matters coupled with the unwarranted complexity of local business environment.

I hope you know the ‘General Conditions of Contract’ clearly stated that the extent of contract for UEM is to construct and maintain the highway, not more than that. So, what to “malu”? Nothing to “malu” what…?! You think the plaintiff would listen to them in the first place..? Further, UEM got nothing to do with the design of the highway back in 2001, as the contract was awarded to them only in 2003.

I can say that your blog is highly bias and lacking basic facts in this case. You’ve failed to state that upon finding the damages, the special team namely ‘Salwa Road Project Management Team’ has been appointed by the Central Municipal Council (CMC) and / or the Qatari Government to take control of the Project. No more Public Works Authority or Ashghal.., you know why?! Lu pikir sendiri…

“Disaster” does not just happen; there are chains of critical events. Ask your little bird to unravel the clues…

As commented by anonymous “prince erie” in Dato Mavs’ Blog, we hope that UEM will keep on fighting till the end, not only for the RM or QR, but also for their reputation.

“Enrico Lambardi”

A Voice said...

Wenger

In UEM's case, the potential lost is not known until the company have been delisted.

Mana ada EMH di Malaysia. Shareholders go to AGM to makan and tapau food bawak balik.

Inside the hall ask nonsense.

Enrico Lombardi

I sincerely hope there is really no wrongdoing and irresponsibility on their part. Wonder why you put it in invertd commas.

To say I am bias is unfair, I've posted commentator from Mav's blog at the time of writing. I try to provide the UEM side as best as I could.

The angle I am pursuing is about hiding a major problem ie potential loss. It is leading towards a bigger issue pending.

As far as the specific legal and construction issue you wish to argue, we will wait for the court process.

UEM and Khazanah must response to this.

I am a shareholder of Khazanah. Azman Mokhtar or Ahmad Pardas or Nor Mohd or Najib Razak are shareholders too. Like me, they have only one vote.

Dato' Bendahara said...

Mahathir shouldn't have banned short selling in KLSE. If short selling was allowed, I would have campaigned for Abdullah stay, and since I would've turned my hundreds of thousands then into tens of millions, I think Forbes would've already been knocking on my door.

Short Selling on GLCs can provide a steady stream of income for a few generations. They will continuously bleed and be injected with more blood...

The GLCs worked during Mahathir's time because he kept a tight grip on the cash tills, but Abdullah started the trend where its normal for politicians to have their hands in the GLC's cookie jar.. especially with Omar Ong and Ethos whacking the GLCs left and right...

With Khazanah, as a Malaysian, you can't sell nor buy. Just look at it bleed.

Anonymous said...

Voice,

I guest Malaysian GLC CEOs not Battle hardened enough to fight and conquer in the faraway land. Anyway malaysia has poor mercantile historical track record, the Brits has history of East Indian Company, Spanish has Cortez the killer, the Dutch has VOC, Chinese has History of Cheng Ho armada, Tamils has history of jual botol. Historically the ancient CEOs like Cortez, Cheng Ho, Raffles etc are combination of mercilless conquerers, preachers, slave driveris, diplomat, scholar and traders.Malaysian mercantile history was circled around Malacca Sultanate, where the only trade of business they learned was being a landlord or to today equivalent owner and manager of Suria KLCC,Subang Parade, Pavillion..Nothing beyond that.
MBA schools in Malaysia has something to ponder..

Prof Awe Kecik

Mr. X said...

Tremor kah?
DAP is even more trembling lah, they say NO to English, no to our kids mastering English, tremor or not?

Ciku Muda.. said...

Wow, nice articles and comments. At last, the smelly eggs got burst. The info that I got from my ‘big bird’ is more interesting. The story from the other side of the world..

1. UEM was being victimized and bullied by the arabs! They failed to understand the culture of the arabs before venture into Middle East. Or it’s the Malaysian culture that always being nice to anybody. Arabs are well known for not keeping their words. ‘Insyaallah’ is being use as escape clause for anything. That’s why ME can never be in peace. Don’t blame the Zionist coz Fatah and Hamas themselves cannot live in peace. Kuwait was attacked by Iraq, Iran & Iraq war, blah..blah..blah.. Single currency agenda for the GCC country is also at threat as Oman & UAE walked out from the agreement when Saudi hijacked UAE’s earlier proposal to have the Monetary Agency headquarters in Abu Dhabi. And many others..

2. No any other contractor will survive when the country’s inflation rate skyrocketing to between 7% to 15% for the past 3 to 4 years. The situation in Qatar is not like Malaysia where most of the major construction materials are controlled items. More than 90% of construction materials are imported from all over the world. Steel, cement, bitumen, timber, plywood, paint, and many more. They cannot even produce the aggregate/stone which is essential for producing concrete and asphalt mix! Worst deal, supplies are being monopolized by only few family cartels. Price of raw materials can be doubled if not tripled, within few years if not months. And UEM are being forced to absorb all the additional cost!

3. UEM started the project with many problems, be it internally or externally. The biggest problem was difficulty to get a consistent supply of good quality aggregates/stone for asphalt mix production. The dedicated quarry for the project and even in the whole Qatar, the land are generally formed with young limestone which is very soft and brittle. The project was further hit with decision by the Qatar Government to close all the quarries due to the environmental reasons! UEM got a highway project and now the government is closing all the quarries? What a nonsense! Starting from then, the project was highly depending on the importation of the stones from UAE. The project was further hampered with logistic problems when the tiny seaport congested with so many ships and long queues waiting to berth. Trucks and trailer queuing at the yard and charges was increased due to low productivity in doing business. Can you imagine how much time and cost had badly impacted the project?

4. The design of the project was being carried out by a ‘well reputable’ consultant in the world. The American consultant who was earlier screwed up in Iraq’s development projects was being praised as the best designer in the region. And yet, providing a flawed design for international contractors to tender. And when the project had delayed and failure occurred, ‘twice’, and headed the front page of prime newspapers, Public Works Authority was under tremendous pressure. Even with their internal expert’s Investigation Committee had clearly pointed out that it was due to the design flaws which was not complying to Qatar Standards and Specification, UEM was being dragged into the proceedings. Charging them at fault for not ‘discovering’ the design fault by the consultant and not complying to requirements which were not in the specification? PWA is really trying their luck..



c'tnue...

Ciku Muda.. said...

c'tnue..

5. The WSN study is a detail survey, testing and analysis of existing road condition using specific testing equipment which will be factored in for designing the structural of a highway. An ordinary contractor will not be able to carry out the study if not by appointing a design consultant. (Any Professor, please correct me if I’m wrong). What more if the contract itself does not ‘allow’ contractors to carry out the study when no instruction, information, data, assumptions, design criteria and factors were being issued to contractors for tendering.

6. The failure took place exactly during the prestigious event of Asian Games 2006 (which Malaysia had lost the bid to be the host). Some portion of the highway starts to crack and damage severely. Unusual heavy rain since the past 10 years had deteriorated the damage further. However, it was surprisingly that the failure took place at only one particular type of design which is the pavement ‘Type 5’ out of 7 or 8 different types of road design in the project.

7. Subsequent to the first failure, at half way through the project, UEM was invited by PWA to re-negotiate the contract which ended up UEM being given a new price, new completion date, new design drawings, new requirement & specifications (which was until to date not approved by Qatar General Organization For Standards and Metrology) and less scope (as PWA wish to involve local company participation in the project). Both parties mutually agreed with a further terms in which PWA promised to assess fairly UEM’s earlier submission of financial claim, compensated losses incurred by UEM, no back charging of cost incurred by local companies participation, and many sweet promises more.

8. The ‘2nd phase’ of the project then begin, however with many signs of trouble starts to appear. Asphalt mix design was not being able to attain approval from QGOSM as the new specification again, does not complying to Qatar Standards and Specification and it ended with PWA giving their sole approval. The concern of a high risk for another failure was strongly raised by UEM to the consultant & PWA but UEM’s advice was neglected. Ended up with the 2nd round of disaster.

9. During the ‘2nd phase’ of the project, 10 other local contractors were involved. All other road/asphalt paving contractors facing the same mode of failure which resulted from the introduction of the new unproven specification. And yet, all the contractors including UEM were being blamed for the failure due to incompetency and lack of quality control in the construction! A massive scale of redo and rectification works which involved millions of money were carried out and at the end, all the contractors were not being paid for it. What a world..

10. Even with so many contractors involved in the project, the completion date cannot be achieved. Towards the end of the project, UEM was given few additional works and instructions to take over some of the other contractors’ scope significantly in order to expedite the completion of the project.

Ciku Muda.. said...

c'tnue..

11. During the project life, PWA’s Project Manager has been removed for a minimum of 4 times! Subsequent to the 1st failure and at the beginning of ‘2nd phase’, PWA’s project management team was being removed and replaced with a ‘reputable’ management team which had earlier successfully completed Qatar National Sports Complex for Asian Games 2006. However, the inexperience team (in roads construction) was misled by their internal inexperience consultant from Australia which lead to another disaster and triggered public attention nationwide. Further to the 2nd failure and delays, PWA top guy was removed! The new MD was appointed somewhere in early 2009, after the project was at last being completed. Then, this was the time when the summon was issued to all parties involved in the project (contractor, consultant & insurance company). So, you can see the political agenda and the ‘true colors’ of the arabs! This is the way they are doing bussiness!!

12. What a pity to the arabs who is actually being con by the American and Australian consultants. They were also being mislead by the so called ‘expert’ from UK regarding the investigation of the failure. They had never learn their lessons. Making silly mistake twice and wasted millions of government’s money. In their case, not the tax payer’s money as they are a free tax country. It is the oil money/gas money. That’s why they don’t have to answer to the public, except for some inconvenient to the road user and edgy eye catching.

13. Projects being delayed, contractors at lost, public is suffering and PWA are definitely can’t sleep well. All the well reputable giant contractors from all over the world are suffering in all mega infrastructure projects handled by PWA. The Croatian, Germans, Turkish, Malaysians are all suffering. All their projects had been badly delayed. The whole country is in a mess and being screwed up by PWA. And they are really stupid enough to solve all the problems and just passed it to the court to decide.. (Maybe the rich is getting poorer due to the global economic crisis) Hope that this phenomenon won’t chase investors out of the country. As for the new investors, you better think minimum, twice..

Anonymous said...

Ciku muda..

pls send my regards to the 'big bird' will you..as to bro A Voice..perhaps you should ask your 'little bird' what kind of bird he/she really is..and if you think that all the stories that the 'little bird' tell you make sense to you..what about the stories from the 'big bird'... does it make sense too? as for the cover up phrase maybe the statement from the UEM can clear your conscious

From The MalaysianInsider

"UEM Group is not in the position to comment on the matter as we respect the Qatari legal system. We will not make any statements that may jeopardise our legal position," said UEM's director of group corporate relations and communications Basariah Abdul Latiff.

Cheers bro

Jack

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