Tuesday, September 11, 2012

No funny business in Johor

The Utusan Malaysia report headlined as the Sultan of Johor had cancelled the RM22 billion Mersing Laguna project, in which his highness had launched in April this year.

The announcement itself created attention in many ways. Other than the fact that cancellation of a project of such magnitude would attract attention, such headline involving a Sultan is uncommon. It seemed his highness role in the affair of government has goe beyond the usual role stipulated in the constitution of state enactment (constitution).

This blogger do not claim to know much of this project but wish to caution those quick with the gun to derive to a wrong conclusion. In Johor, the Article of Association of certain state organisation or companies empowers the Sultan to consent before any major appointments.

When the Mersing Laguna was inked in February between developer Radiant Starfish Development Berhad and the state, the developer was supposed to increase it's paid-up capital to RM200 million within six months but it failed to do so.

On top of that it's CEO, Ungku Safian Abdullah passed away last Friday due to health complications. The Star report below:

Sunday September 9, 2012

Johor Ruler: Mersing Laguna developer failed to fulfil condition

MERSING: The RM22bil Mersing Laguna project has been cancelled because the developer failed to fulfil a condition in the agreement, announced Johor Ruler Sultan Ibrahim Almarhum Sultan Iskandar.

He said the developer, Radiant Starfish Development Berhad, had failed to raise the paid-up capital to RM200mil within six months as required under the agreement signed on Feb 25 this year.

“Owing to the failure, the project is hereby cancelled,” the Sultan said, adding that he himself had performed the ground-breaking ceremony for the mega project on April 14.

The project was to have involved the construction of hotels and resorts, a marina, a water theme park and shopping malls. It was to also involve land reclamation to create three man-made islands.

The first phase was to have been completed in seven years.

The Sultan said he would monitor all development in Johor to ensure they were successfully carried out and benefited the people and state.

Meanwhile, palace officials confirmed that Radiant Starfish Development Bhd chief executive officer Ungku Safian Abdullah died on Friday in Kuala Lumpur from health complications.

Read on here

This report certainly missed an important point but was only found in NST report below:
08 September 2012

'RM22b Mersing Laguna project cancelled'

MERSING: The Sultan of Johor Sultan Ibrahim Sultan Iskandar today announced that he authorised the cancellation of the Mersing Laguna, a RM22-billion eco-tourism project after its developer breached a condition in the agreement.

The Sultan said the developer Radiant Starfish  Development Berhad failed to increase the paid-up capital to  RM200 million within the stipulated six months as agreement  when the deal was inked in February this year.

The project, which he launched in April,  was designed to  transform Mersing from a sleepy coastal town into an  international tourist destination.
Logically, since his highness launched the project in April, it could be seen as an insult to the Sultan to cancel the project.  NST worded it as authorised but perhaps a more proper word could be, consent. Thus one can assume that it was the state government that cancelled the project and his highness consented. .

Boost to Mersing

The cancellation would be a disappointment to the people of Mersing that gave much hope for the project to boost the sleepy town of Mersing  off the East Coast of Johor and is part of the regional development plan of East Coast Economic Region (ECER).

NST's Sim Bak Heng described it as the transformation of Mersing in his article written in April, below:

03 April 2012

Transformation of Mersing

By Sim Bak Heng 

Datuk Seri Dr Ng Yen Yen giving her views on the Mersing Laguna development at the briefing. Pix by Roslan Khamis
I WAS in Mersing last Saturday to attend the briefing on the Mersing Laguna project by Radiant Starfish Bhd, the developer of the project, to Tourism Minister Datuk Seri Dr Ng Yen Yen.

I treated my assignment with enthusiasm as I could not wait to see the changes in this east coast town of Johor after my last visit there about three years ago.

Mersing forms part of the East Coast Economic Region (ECER).

The ECER was conceived about the same time as Iskandar Malaysia, but its progress has been at snail's pace and is no match to the vigorous development in Iskandar Malaysia.

Mersing's problem, like Desaru, is the distance.

Desaru is luckier. The opening of the Senai-Desaru Expressway is expected to change its fate for the better.

In fact, there are big plans to transform Desaru into a Little Bali.

For Mersing, it seemed feng shui was not   on its side, until now.

I was particularly impressed with the Mersing Laguna project, which is like a silver lining.

It is set to transform Mersing into a world-class tourist destination.

Mersing town is a transit point for islands such as Pulau Tioman, Pulau Besar, Pulau Tinggi, Pulau Rawa, Pulau Aur and Pulau Pemanggil.

There is nothing appealing about the town except the keropok lekor, which is only popular with the locals.

Tourists have no reason to stay overnight, unless  they have missed the last ferry, as there are   no tourist hot spots or entertainment in the town.

A night out in town will probably turn out to be a boring experience.

So when such a huge project has been planned for Mersing, undoubtedly, the small town can expect to see a major transformation.

There will be at least 22 hotels, including a five-star hotel, on the mainland and three adjoining man-made islands, which will be connected to the mainland by three bridges.

The minister said this will be like Nusantara in Bali.

Nusantara is a tourism belt in the Indonesian resort island, with accommodation for holiday-makers and tour agencies, among others.

The spillover effect will be enormous, said Dr Ng.

It will create plenty of job opportunities for the locals and enhance their quality of living.

Before we can realise this dream, let's start moving ahead, one step at a time.

The road from Johor Baru to Mersing needs to be looked into properly as there is no rail or air link between Mersing and Johor Baru.

The winding journey is tiresome. During certain times of the year, certain stretches of the trunk road are inundated, making transport impassable.

Mersing has a Tourist Information Centre near the jetty which should be open everyday, and not just during weekdays, for the convenience of foreign tourists.

Tourism is a service industry. Providing tourists with accurate information is crucial to the industry.

Closing the centre at weekends shows the poor attitude of the authorities in the industry.

Dr Ng said the lack of hygiene was one of the top complaints made by tourists.

It is commendable that the minister highlighted this problem.

As I was leaving Mersing, I noticed that the market and transport terminal in the middle of the town had been torn down and in their place are rows of modern shop houses.

The transport terminal has been relocated not too far away from its old site.

As I was travelling back to Johor Baru, it occurred to me that I would be seeing many more changes in Mersing in the next five years.

NTV7 reported in their news that
The Mersing Laguna project has attracted investments worth RM18 billion from foreign investors mainly from China and Europe, while local investors have also committed to invest RM4 billion in the waterfront.

Reports claimed that Radiant Starfish had also signed agreements with four partners - Chinese construction conglomerate Sinohydro Corporation (M) Sdn Bhd, China-based theme park developers Shengrong International Group Co Ltd, Johor education foundation YPJ Holding Sdn Bhd and CIMB Insurance Brokers Sdn Bhd.

Under the agreement, the reclamation work to create 2,000 acres of land will be carried out by China's Sinohydro, one of the biggest dredging and reclamation companies in the world and has been involved with the construction of the Three Gorges Dam in China and the Bakun Dam in Sarawak.

The first phase of the project is supposed to be completed in 7 years.

In order to undertake such a massive project involving such large amount of capital within the prescribed time, the company must be sufficiently capitalised. If they are not able to raise up to RM200 million paid-up capital, how are they to raise the money to finance this RM22 billion project?

Too many comedians

For the Sultan to "interfere", bear in mind that Johor have received many commitments from international investors for Khazanah-managed and Khazanah-membered authority of Iskandar Malaysia.

In Medini for instance, it later turned out that these investors do not have the capacity and were merely brokers.These so-called internional investors were asking for ridiculous caluses but turned out trying to sell to other local GLCs.  .

It is widely heard in Johor that the current Sultan is not happy with the Iskandar project shoved at the throat of Johorean by Pak Lah and his team of so-called wiz kid Tingkat 4 boys, including Dato Zaki Zahid.

And it was Pak Lah also that cancelled the scenic bridge to replace the causeway. The late Sultan and his  family had invested money and donated land to enable the scenic bridge to become a reality. The current SUltan was a shareholder in the constructor Gerbang Perdana Sdn Bhd.

One should understand the undertone in Johor against outside investors bringing in investment ideas and end up to be mere flipping into PLCs exercise. There has been many such cases. SUch excercises do not help Johor's economy.

Raising a capital of RM200 million should not be a problem for developer Radiant Starship in pursuing the  GDV of RM22 billion Mersing Laguna project. They should be able to raise it through the stock market if they feel they are a bigger developer bigger than Selangor state, PKNS.

Many Johorean support the Sultan's close monitoring of projects. That way no imposters would take advantage of Johor for quick gains. It would scare many pretenders especially quick buck artistes.

There will be investors who will view the Sultan's action unfavourably but at least, no pretenders dare take Johor for a ride for a quick gain and into some funny business deal. To Johorean, Johor is a great state.  


Hanafiah Shamsudin said...

We must not have a easy-going developer to take advantage in their proposal project but later end-up nothing. it is a true story in SCORE project of aluminium mill in Sarawak which has been cancelled without reasons. In early stage thereis an official inked of the MOU...it really embarassment to our Malaysian people

Anonymous said...

As much as his highness is concern, investors hate the unexpected.

Not just from Sultan but any Minister, Directors and other higher discretionary authorities.

There is more cases of interference bring negative than positive results.

Say he is sincere to see only genuine investors, having sultan interfering will only drive investors away.

Leave the state and government machinery plus enhance their capability.

People can relate and deal with government officials than irratic sultans, no offense intended.

joeel1 said...

We are the "Bangsa Johor".
it really doesnt matter what others think about us and our Sultan.

Anonymous said...

Berlagak. Tak payah jadi orang malaysia hoi orang johor.

Pergi cantum dgn singapork.

Sustainable Living Institute (SAVE) said...

In the international tourism scene Mersing is a nonenity. Even for Malaysia it is still in the backwaters, more of an adjunct to get to Tioman. As it is tourism is seasonal, low during the monsoon months.The locals are happy with current situations because that is all they could handle in terms of investments, attitudes, infrastructure, affording ecosystem.

To transplant a super-mega tourism project at Mersing is akin to putting a blue arwana in a bowl. The whole belt if not the region around Mersing need to be developed in harmonious setting with the proposed project years beforehand. Failing this the mega project is doomed. Realising this the investors chicken out. It is better to fail now than many billions later.

It is good that the Sultan is putting his foot down in the corridors of power for the powers that be has insulted HH with a deafening silence to the scenic bridge.

joeel1 said...

We are just not berlagak...
but wishing to tell others, not to 'berlagak pandai' when it come to our interest.
'Orang Johor' knows their Sultan, very well, instead of other's that only follow unfavourable news on Him, in media.
btw, are you too stupid to differentiate between Johor and Singapura geographically, politically, culturally, etc....

joeel1 said...

by the way, as explained by A VOICE, the Sultan didnt use his position as a 'Sultan' to cancel the project.
His canceling the project as Chairman of the body that in charge of monitoring the whole project.
another word to put it, it all business matter.

Anonymous said...

this is a brick in the wall a brick that stops progress .A brick thats smack on intereference of the roles.They have spent millions and also got ECER to back the project. What if Radiant Starfish genuinely wants to implement and have the capital.What if Radiant sues the occupants of the blue roof aka palace?That will be very messy indeed
So our views is that each have a role to play here and stop interfering in the affairs of business, in the affairs of also security of the country too

Ayah Man said...

PhostepaWhere can we find or examine the complete company profile of Radiant Starfish Bhd. Do they have a proper and all the-time updated company detailed information. I think it is unavailable.
I have been to Mersing a couple of times. I noticed on most of the occassions the few small hotels, homestays,were without good number of occupants...in otherwords very low demand for rooms. Does this mean that Mersing requires many top rated hotels? and just to accommodate who?
Developer undertook a survey and study revealed that a Singaporean would be expected to spend about 6k for a vacationing in Mersing. Is this realistic?
It must be forewarned Port Dickson undertook a similar project on a smaller scale. Also with plan to put up a miniature Disney. Developer abandoned such project leaving many parties in quandry ending up bank having to meet the lost due to technical trap. Individuals from the developers side walked away after having made some unethical gains. Therefore, Mersing has to learn cautiously from this lesson. What is overdue for Mersing is the need to deepening the river mouth, so as to allow efficient arrival and departures of ferrries to the islands. Tioman is a brand. Continue to build this brand by creating a lot of new ideas and with new inventiveness on how to draw visitors to Tioman.
Just look at Desaru. This place is effectively desrted. The state, the Tourism authority must save this place and restore confident and gain back the investors who have slowly lost faith in Desaru

Anonymous said...

A Voice wrote:

"Many Johorean support the Sultan's close monitoring of projects. That way no imposters would take advantage of Johor for quick gains. It would scare many pretenders especially quick buck artistes.

There will be investors who will view the Sultan's action unfavourably but at least, no pretenders dare take Johor for a ride for a quick gain and into some funny business deal. To Johorean, Johor is a great state."

Investors loath uncertainty and having the Sultan's unpredictability as a factor will not do well to attract investment to Johor.

There is also the Sabahan Tan Sri Lim Kang Ho whose hands is into everything.

These are issues Salahuddin Ayub of PAS and Dr Boo Cheng Hau of DAP can take up as election issue.

Will they dare?

Spirit of Hamzah Taib said...

I agree with SAVE and Ayah Man. This project is not viable.

The terms given to them is not realistic too. Did Radiant promised more than they could deliver?

Shouldn't the state planning authority realise that the terms to and promise by Radiant is not realistic?

Why did the state approved it? In another word, did the state not approve but was forced to approve? The late CEO is Ungku Safian Abdullah is an Ungku i.e. distant royal.

Who got the Sultan to mencemar duli to officiate the project?

Now that the supposedly the key man, CEO passed away the deal is cancelled. Naturally the project could fail thus the state should keep the Sultan's intact to seek consent for cancellation.

It is the fishy beginning that is in question now.

Anonymous said...

(Part -1 - Inside Story)

As per Radiant's Bankers (from SCB and ICBC) there was €1 Billion and €4 Billions Cash backed two Bank Collaterals were in placed and blocked by well known Foreign Investors in favor of Radiant, Radiant allegedly promised to the said Foriegn investors that Radiant have financial facilities to raise fundings against the said cash backed bank collateral, infact there was no prior facilities or whatsoever arrangements was there with Radiant's bankers.

Radiant was shopping around with Johor State Government, other contractors and vendors, and other banks with the said bank Instruments, Radiant failed to keep their promises with that reputable Foriegn Investors, which caused to that Foreign Investors a heavy damages approximately over €150 millions in cash and god knows what else damages such as lost of business opportunities and etc..

That's not a joke at all, these kind of activities by developers such as Radiant is spoiling the Image of Malaysia, the Bankers also told that it is possible that Radiant purposely fooled and lured the Investor for Radiant's own hidden agendas and gains by making Radiant from SDN. BHD to BHD. Radiant in various kinds of debt, oweing salaries to its staffs and huge promises to many.

The Chinese Company SynoHydro also been fooled by the Radiant and their component companies.

Somemore there was NO Malaysian high or low profile Politicle portfolio or Top guns involved in this Radiant company.

The Sultan of Johor His Majesty made the right move, actually State and Federal Government should take action against the culprits Radiant and its component companies such as Radiant Marine, Radiant-Sara Timur and God knows whatelse Radiant this n that.

Radiant brought the shame to the Industry, due to the Radiant's despicable and un-ethical business practices, will be a blow to Malaysian Government's efforts to invite foreign Investors to our Country. Hence it is worsening the situations.

The above is just a small part of actuall story, there will be a day when someone will come forward and will let everyone knows about more details about Radiant and its subsidiaries companies.

The Project was also over priced almost 200% and Foreign Investors placed the Said Banlk Collaterals due to beleiving in the Radiant's Promises.

Truth will prevail one day!

Anonymous said...

'The Sultan of Johor His Majesty made the right move'

sultan was fooled by his own family's members.that was not a good move from the beginning

My Say