Ahmad Zaki Resource Berhad and its impressive track record

With the Sime Darby debacle in Qatar still ringing on our ears,

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http://english.peopledaily.com.cn/90001/90778/90858/90863/7002638.html

In the first half year ended Dec. 31, 2009, the company's energy and utilities (EnU) division recorded an operating loss of 110 million ringgit (32.35 million U.S. dollars).

However, Sime Darby Bhd was quoted as attributing the loss to overruns from its 2.1 billion ringgit (617.65 million U.S. dollars) Maersk Oil Qatar project.

Malaysian Anti-Corruption Commission (MACC) was reported to have taken a proactive step by initiating investigations into the losses suffered by Sime Darby Bhd.
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then on 3 September 2010 Ahmad Zaki Resource Berhad, an UMNO linked company,

( you may refer here for a useful listing http://lookchart.blogspot.com/2008/04/umno-link-companies.html )

made this Bursa Malaysia announcement

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http://www.klse.com.my/website/bm/listed_companies/company_announcements/announcements/index.jsp

CONTRACT AGREEMENT FOR THE ALFAISAL UNIVERSITY CAMPUS DEVELOPMENT PROJECT PHASES 1 & 2, RIYADH, SAUDI ARABIA
- UNILATERAL LIQUIDATION OF BONDS
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According to the report by the Edge here:

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http://www.theedgemalaysia.com/index.php?option=com_content&task=view&id=173001&Itemid=79


KUALA LUMPUR: AHMAD ZAKI RESOURCES BHD (AZRB) has initiated legal actions against Saudi Arabia’s Alfaisal University over the latter’s decision to liquidate the performance and advance bonds totalling 52.56 million riyals (RM43.94 million).

AZRB said on Friday, Sept 3 that the dispute arose over the contract agreement with the university for the Alfaisal University campus development project, phase one and two, in Riyadh.

It said that on Aug 23, Alfaisal University sent a letter to AZRB alleging a breach in the performance of the contract, which was strongly disputed by AZRB. On Sept 1, the university unilaterally liquidated the performance and advance bonds.

“The board views that the action of liquidating the bonds is equivalent to a breach of contract on the part of Alfaisal University. AZRB has initiated legal actions against Alfiasal University to protect and defend the interests of AZRB,” it said.
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Sounds like a big blow to AZRB, who as recent as May 2010, announced that they were hoping to gain RM300 million worth of jobs in Middle East.

It can be quite expensive taking those deep pockets Arabs to court, that is even before considering the chance of winning and actually getting the judgement enforced.

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Published in NST on March 19 2010

Ahmad Zaki Resources Bhd (AZRB) (7078) , a construction group, is eyeing contracts worth some RM300 million in the Middle East as it seeks to grow.

Managing director Datuk Wan Zakariah Wan Muda said the contracts are for building and infrastructure projects in Saudi Arabia.

"These are small developments. We are studying the market and expect to make a bid within the next one to two months," Wan Zakariah told Business Times in an interview in Kuala Lumpur recently.

The above is taken from this excellent write up below:

http://sharenkaur.blogspot.com/2010/03/ahmad-zaki-eyeing-rm300m-saudi-deals.html

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As an outsider, I do not have the facts on the nature, reasons as well as the rights and wrongs of the dispute, but I would suggest a proper assessment of sovereign risk should be made before a listed company earning substantially from government contracts hence public funds, venture into potentially loss making situation. Some places are just not worth going into.

According to the audited accounts of AZRB, total operating revenue of the group, including sales of goods, contract works and sale of properties, amounted to RM459 million and RM663 million for financial years ended 31 December 2009 and 2008 respectively

Of the RM459 million operating revenue earned in 2009, RM411.7 million was from its construction segment. Broken down by geographical location, RM367.8 million was earned in Malaysia, RM23 million from India and RM68 million from Saudi Arabia.

The link below reveals some of the source of its revenue:

http://www.reuters.com/finance/stocks/keyDevelopments?symbol=AZRB.KL

In 2009, it received award (probably due to direct negotiation or instructions) RM60 mil from Putrajaya Holding Sdn Bhd, RM50 mil from TNB and RM756 mil from JKR (which makes me wonder if JKR is redundant now), details as below:


Friday, 2 Apr 2010
received the Letter Of Award from Putrajaya Holdings Sdn Bhd of Block 1, Menara PjH, No. 2, Persiaran Perdana, Precint 2, 62100 Putrajaya (the Works). RM59,989,000.00

Wednesday, 23 Dec 2009
the Letter Of Award from Tenaga Nasional Berhad (TNB) for Hulu Terengganu Hydroelectric Project Lot CW1-Preliminary Works (Works) RM49,479,245.00


Wednesday, 18 Nov 2009
Letter Of Award from Jabatan Kerja Raya Malaysia, Kuala Lumpur for Cadangan Kompleks Kerja Raya 2, Jalan Sultan Salahuddin, Kuala Lumpur (Secara Reka Dan Bina) (The Works). RM309,374,000.00


Monday, 10 Aug 2009
Letter Of Award from Jabatan Kerja Raya Malaysia, Kuala Lumpur for Universiti Darul Iman (UDM), Kampus Besut, Pakej 3-Kerja-Kerja Bangunan (the Works). RM225,132,730


Wednesday, 5 Aug 2009
Jabatan Kerja Raya Malaysia, Kuala Lumpur for Membina Persimpangan Bertingkat Dari Istana Negara di Lot 3952, Jalan Duta, Kuala Lumpur Ke Jalan Duta (the Works). RM106,000,000.00

Monday, 18 May 2009
Saudi Oger Ltd to build Reinforced Concrete Structures for Tower H1-A, Jabal Omar Development, Mecca. RM185,632,185


Monday, 1 Dec 2008
the letter of award from Jabatan Kerja Raya Malaysia, Kuala Lumpur for Merekabentuk, membina, menyiapkan, mengujiterima, mentauliah dan menyelenggara Kompleks Pakar Materniti di Hospital Kuala Terengganu, Terengganu (Works). RM115,064,269.84


AZRB also denied that it was the contractor for Stadium Mirzan Zainal Abidin, which collapsed after 10 months.

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http://freemalaysiatoday.com/bahasa/?p=5227


KUALA LUMPUR: Keselamatan Seri Paduka Baginda Yang Dipertuan Agong Sultan Mizan Zainal Abidin mungkin terancam jika kerajaan terus membenarkan Syarikat Ahmad Zaki Resources Berhad menjadi kontraktor utama membina istana baru di Jalan Duta, di sini.

Ini kerana syarikat itu merupakan kontraktor utama yang bertanggungjawab dalam pembinaan Stadium Mizan Zainal Abidin di Kuala Terengganu yang menelan belanja RM280 juta, namun runtuh hanya selepas 10 bulan digunakan pada tahun lalu.

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A check on its corporate website,

http://www.azrb.com/index.php?option=com_content&task=view&id=25&Itemid=49

reveals that it was involved in the Indoor Stadium of Terengganu Sports Comples only,

However the website gave an impressive list of projects, such as Formula One Race Circuit, Kelana Jaya Stadium, Petaling Jaya Court, various medical facilities in Ampang, Kuala Terengganu and Kuantan, mosques in Jalan Duta, KLCC & KLIA, loads of education facilities including the Petronas Technology in Tronoh & Darul Imam University Malaysia in Besut....

Which makes me ponder:

1) why AZRB was awarded contracts in various states of Malaysia? Isn't there any other capable contractors around?

2) Given the frequency, variety and consistent award of various projects over the decades, was there any proper open tenders called, careful review of budgets submitted, audit of whether any excesive sub-contracting ("Ali Baba"), comparison of budget vs eventual final cost was made?

3) how much support is enough for AZRB to be strong enough to move into private venture on its own and let other deserving bumiputra companies to get assistance per DEB?

NEP is New Economic Policies and not Never Ending Protection, and let not Dasar Ekonomi Baru becomes Dasar Ekonomi Basi

Per their audited accounts, as at 31 December 2009, AZRB already has equity of RM233 million and RM153million in cash and cash equivalent.

Isn't this strong enough for them to go on their own? Do they still need a constant flow of government project? Or is this another Proton Saga mentality cultivated under Mahathirism?

Curiously, in note 35 of its 2009 audited accounts, a contingent liability of RM18.5 million was not provided as the notes to accounts stated that

"No provision has been made for the contingent liabilities as the outcome of the legal proceedings are still pending and AZSB has supplementary agreements with joint venture partners to indemnify AZSB against any liabilities which may arise therefrom."

Note 9 of the accounts reveals the JV partners' identity:-

"The Group has a 50%, 7.70% and 70% interest in the jointly controlled entities as mentioned in (i), (ii) and (iii) respectively:

(i) BumiHiway-Ahmad Zaki Joint Venture which undertakes the contract for realignment of the route from Putrajaya to Cyberjaya, Selangor, and

(ii) Malaysia-China Hidro Joint Venture which undertakes the contract for design and
execution of works for Bakun Hydroelectric Project Package CW2 - Main Civil Works at Sarawak."

(iii) Ahmad Zaki-Jasa Bakti Joint Venture which undertakes the design and build for “Sekolah Menengah Sains Hulu Terengganu” at Terengganu.


Firstly the JV partners are the directors themselves

Secondly per the balance sheet, investment in JV shows deficit investment of RM26.6 million and RM26.7 million for 2009 and 2008 respectively so how can the JV pay this RM18million? Given the long list of government projects, your guess is as good as mine.

By the way, how come a very profitable public company's directors can incur so much losses doing the same thing on their own?

Lastly, it is worrying to see huge losses arising not from private business ventures, but public work projects, which at the moment, can run up to deficit of tens of millions - the negative investment of RM26.6 million + another RM18 million + the other JV partners' share...


One man's loss is another's gain. We all know that.

Press Release by Wee Choo Keong, MP for Wangsa Maju, on 19th March, 2008, at KL.

THE NEW ECONOMIC POLICY – "NEP"

THE NEW DEVELOPMENT POLICY – "NDP"

I fully support the New Economic Policy (NEP), which was introduced by the BN Government in 1971 to promote growth with equity with the objective of fostering national unity among the various races. The main noble objectives of NEP were:

1. To reduce and eventually eradicate poverty by raising income levels and increasing employment opportunities for all Malaysians, irrespective of race; and

2. Accelerate the process of restructuring Malaysian society to correct economic imbalances so as to reduce and eventually eliminate the identification of race with economic function.

The NEP was supposed to have expired in 1991 (after 20 years). However, the above objectives have not been strictly adhered to by the BN government.

The NEP recognized that the restructuring of society to correct imbalances was to be achieved by undertaking "within the context of a rapidly growing economy which offers increasing opportunities for all Malaysians. This was considered essential for ensuring that the distribution of income, employment and ownership would be implemented smoothly, without making any particular group feel a sense of loss or deprivation.

Obviously, the NEP has failed miserably because less than 10% of the Bumiputras benefited from the NEP. To put it bluntly, only the UMNOputras or those connected directly or indirectly to the UMNOputras are the beneficiaries of the NEP.

In 1991, after a good 20 years the BN government had failed to eradicate poverty as intended under the NEP, the BN Government had to come out with another policy called the New Development Policy (NDP), which was actually an extension of the NEP. The NDP was supposed to build upon the so-called achievements during the NEP (i.e. 1971 – 1991) "to accelerate the process of eradicating poverty and restructuring society so as to correct social and economic imbalances".

According to the spirit of NDP, "National unity remains the ultimate goal of socio-economic development because of a united society is fundamental to the promotion of social and political stability and sustained development."

The NDP further stressed that "Development policies and strategies under the NDP take cognizance of the diversities of Malaysians – ethnic, linguistic, cultural and religious as well as regional – so that harmonious, tolerant and dynamic society could progressively created."

It is also the policy of BN Government that the "NDP will continue with the efforts to correct economic imbalances to create a more just, united, peaceful and prosperous society. To this end, more effective effort will be made to reduce poverty, irrespective of race, as well as to restructure society so as to achieve an equitable distribution in the context of a healthy and sustained economic growth."

It is most unfortunately that eradication of poverty was never the priority of the BN, especially UMNO, the BN leaders have lost focus and poverty in the Malay community or the Chinese or Indian community for that matter was not eradicated as originally targeted.

In fact, in year 2008, some 27 years after the inception of NEP and 17 years after NDP, the poor Malays, Chinese and Indians remain poorer. The rich and powerful UMNOputras got richer and more powerful. In short, the NEP and NDP have been abused by the UMNOputras at the expense of the ordinary Malays. I would go further to state that the above noble spirits and objectives of the NEP and NDP have been rendered meaningless by the UMNOputras.

We need not go further to illustrate the abused of the NEP and NDP. Just look at these three classic cases below:

i. where a young Malay boy of about 30 years, who was known to be unemployed but with strong political connections with high ranking UMNOputra, was known to have owned RM200 million worth of shares in a company;

ii. the "AP Kings" cases where several hundred thousand of APs were given to a few Malay individuals, who were closely connected to the UMNOputras; and

iii. the late Zakaria Md Deros, who was just a gate keeper for Kerataapi Tanah Melayu, and after joining UMNO he became super rich and he was able to build a "palace" with 21 toilets in Klang without Majlis Perbandaran's approval.

The lists of the abused of the NEP and NDP by the UMNOputras are in exhaustive.

When it suits the UMNOputras, they we will just wheel out the NEP/NDP and make their battle cry that our Malay brothers and sisters needed to be protected. If one were to carefully examine the current economic cakes and one will come to the conclusion that more than 30% of many economic sectors are dominated by a less than 10% of Malays, who are either UMNOputras or directly or indirectly connected with UMNOputras. For example, 95% of the financial institutions have been owned and controlled by only a few percent of Malays, who are the UMOputras or connected to the UMNOputras.

It is clear that the NEP/NDP have failed totally and the majority of the Malays have now realized that the NEP/NDP have been abused by the UMNOputras to benefit only a handful of politically connected individuals.

Our Malay, Chinese and Indian brothers and sisters have spoken out loud and clear in the recent 2008 12^th general elections, which have resulted in the BN losing its 2/3 majority in Parliament and control of Penang, Selangor, Perak, Kedah and Wilayah Persekutuan.

I call upon the BN government to review the NEP/NDP by setting as new condition whereby qualification for assistance under the NEP/NDP is by way of mean test and not based on race. Mean test is the best yard stick to determine whether or not a person is entitled to receive the assistance and benefits under the NEP/NDP and this will no doubt put an instant stop to the abused of the NEP/NDP by the UMNOputras. Thereafter, we will see the actual eradication of poverty in all communities and real restructuring of Malaysian society to correct the economic imbalances, without making any particular community feel a sense of deprivation.

Wee Choo Keong

KeADILan HAS CLEAR AND FIRM STAND ON NEP / PENDIRIAN KeADILan TERHADAP DEB JELAS DAN TEGAS

KeADILan HAS CLEAR AND FIRM STAND ON NEP /PENDIRIAN KeADILan TERHADAP DEB JELAS DAN TEGAS



Saturday, 15 March 2008

--PRESS STATEMENT--

by Dr. Syed Husin AliDeputy President/Timbalan Presiden, KeADILanMarch 15, 2008

Parti Keadilan Rakyat (People's Justice Party) has a clear and firm stand on the New Economic Policy (NEP). As explained by the Ketua Umum of the Party, Anwar Ibrahim in his 20-page article as well as through his many public pronouncements and ceramah, and further reaffirmed in several Party documents, including the Election Manifesto, we intend to replace the NEP with the Malaysian Economic Agenda. The NEP, after nearly 40 years is already anachronistic. It has been abused by a handful leaders and cronies in Umno-Bn to rob the country of its wealth to enrich themselves, in the name of the Malays as a whole. It has led to discriminatory practices that are against the spirit of justice and fairness for all Malaysians, particularly the poor, marginalised and disadvantaged groups of all races. The Malaysian Economic Agenda aspires to:

(a) institute and implement fair, just and equitable redistribution of the wealth in the country;

(b) fight against and finally abolish the evil practices of corruption, cronyism and nepotism and ensure the award of contracts and projects are done in open and transparent manner;

(c) continue the policy of positive discrimination in favour of poor dan deprived Bumiputera while at the same time giving equal opportunities to poor and deprived non-Bumpiputera on the basis of need and not racial greed;

(d) utilise the wealthy resources of the country to provide better social facilities – especially education, health and housing – for the poor, irrespective of ethnic backgrounds; and

(e) generate pro-people development and strengthen the competitive capacity of Malaysia so that she can stand tall with all developed countries, starting with those in Asia.

Those leaders of Umno-Bn and the media they own that accuse Parti Keadilan Rakyat as having no stand on the NEP and on other ways of improving the lot of the poor, marginalized and disadvantaged Malays are deliberately indulging in lies to mislead the public. We wish to emphasise that a policy of positive discrimination in favour of all Malaysians who are poor, marginalized and disadvantaged will benefit the Malay rakyat more, because they form the big majority of this category of people.

--- Kenyataan Media --- Parti Keadilan Rakyat (KeADILan) mempunyai pendirian yang jelas dan tegas terhadap Dasar Ekonomi Baru (DEB). Seperti yang dijelaskan oleh Ketua Umum keADILan, Anwar Ibrahim dalam sebuah artikel 20 halaman dan diterangkannya melalui beberapa kenyataan serta ceramah umum, dan ditegaskan dalam beberapa dokumen Parti, termasuk Manifesto Pilihanraya, kami berhasrat untuk menggantikan DEB dengan Agenda Ekonomi Malaysia. Selepas dilaksanakan hampir 40 tahun, DEB ternyata sudah ketinggalan zaman. Ia disalahgunakan oleh segelintir pemimpin Umno-Bn serta kroni-kroni mereka untuk merompak kekayaan negara bagi mengkayakan diri sendiri atas nama seluruh rakyat Melayu. Ia telah mengakibatkan amalan diskriminasi kaum, bertentangan dengan semangat memberi keadilan dan kesaksamaan kepada semua rakyat Malaysia, terutama sekali mereka dari golongan miskin, terpinggir dan terbiar dari semua kaum. Agenda Ekonomi Malaysia berhasrat untuk:

(a) memperkenal dan melaksanakan dasar pembahagian kekayaan negara yang adil, seimbang serta saksama;

(b) memerangi dan akhirnya membenteras amalan jijik korupsi, kronisme serta nepotisme dan memastikan pemberian kontrak serta projek dilakukan secara terbuka dan telus;

(c) meneruskan dasar memberi pertolongan kepada golongan Bumiputera yang miskin serta terbiar tetapi pada masa yang sama memberi peluang yang sejajar kepada golongan bukan Bumiputra yang miskin, terpinggir serta terbiar, atas asas keperluan dan bukan kemakan kaum;

(d) menggunakan sumber kekayaan negara untuk menyediakan kemudahan sosial yang lebih baik – terutama pendidikan, kesihatan dan perumahan – untuk golongan miskin dan susah tanpa mengira latarbelakang kaum; dan

(e) menjana pembangunan yang menguntungkan rakya serta membina kapasiti bersaing supaya Malaysia dapat berdiri sama tinggi dengan semua negara maju, bermula dengan yang di Asia.

Pemimpin-pemimpin Umno-Bn dan media mereka kuasai yang menuduh kononnya Parti Keadilan Rakyat tidak mempunyai pendirian terhadap DEB dan cara-cara untuk mempertingkat taraf hidup orang Melayu yang miskin, terpinggir dan tercicir sebenarnya berdusta dan segaja cuba hendak menipu dan menyelewengkan perhatian rakyat. Kami menegaskan dasar memberi keutamaan untuk kebajikan golongan miskin, terpinggir akan lebih banyak memberikan keuntungan kepada rakyat Melayu, kerana merekalah yang merupakan majoriti paling ramai di dalam categori ini.