Thinking Allowed

Thinking Allowed: The State Government Should Govern, and Not Run Businesses

By Mariam Mokhtar

The Movie Animations Park Studios (MAPS), is a bit like durian. You either love it, or you don’t; but the fiscal issues linked to its running, are like a cold sore, which keeps returning, and gets more inflamed each time.

The MAPS theme park has been mired in controversy ever since it was built during the tenure of the former Perak MB, Dr Zambry Abdul Kadir.

It has cost a staggering RM520 million and as of last July, was only half finished. It is expensive to run, it is dogged by intellectual property claims, poor ticket sales and low attendance.

The Perak Corporation Berhad (PCB) owns 51 per cent of MAPS’ shares. PCB is a subsidiary of the Perak State Development Corporation (PKNP). The other 49 per cent is owned by the co-developer RSG MAPS Sdn Bhd. However, in May 2018, the Malay Mail reported that 51% is owned by PCB and 34 per cent by the co-developer RSG MAPS Sdn Bhd, whilst an unnamed individual controls the remaining shares.

In the run-up to the nation’s 14th General Election, Pakatan Harapan, then in Opposition, reportedly claimed that the park had lost over RM24 million in 2016, and was expected to lose the same amount in the future due to low visitor numbers.

The Barisan Nasional (BN) which was in government at the time, dismissed this claim and said that the 2016 losses were pre-operational ones. They also expressed confidence in recouping the losses, claiming visitor traffic was good.

The MAPS chief operating officer, Mohd Farid Abdul Aziz, claimed that the park had welcomed 222,750 visitors since opening in June 2017 and in March 2018, Farid said an average of 1077 people visited the park daily.

In view of the losses and poor ticket sales, the Perak Economic Advisory Council member, Nga Kor Ming, has urged MAPS to be audited, especially as its losses total RM474.4 million.

In February 2019, the chairman of the Perak Public Accounts Committee (PAC), Leong Cheok Keng, announced the appointment of an audit firm, PricewaterhouseCoopers (PwC) to conduct a forensic audit on the struggling MAPS. There had been too many irregularities in MAPS.

He said that the report was expected to be ready within two months of the firm’s appointment. The findings would be presented to the state assembly Speaker, Ngeh Koo Ham, after which the PAC can commence its investigations.

Conversely, the Perak Menteri Besar, Ahmad Faizal Azumu, also announced that from March 1 onwards, a new business model would be adopted and visitors would not be charged an admission fee. He said that visitors would enjoy free entry into MAPS, and need only pay for the rides and attractions.

The move by the MB was opposed by Nga, who said that the state government should sell MAPS to avoid incurring further losses. He maintained that businesses should be managed by the private sector.

In March 2019, the PCB audit committee chairman, Chong Zhemin, asked Zambry to explain the RM217 million increase for the construction and development of MAPS, which had been revealed in a special internal audit report.

As the former MB, Zambry had direct control of PCB, and he had also approved an increase in the cost of construction, from RM390 million to RM607 million.

Chong alleged that Zambry had approved an additional advance payment of RM250 million, by PCBD, to the main contractor of the project, despite knowing that the contractor was in financial difficulties.

In addition, Chong said that Zambry had allowed the PCB to become the only company funding the project, despite only 51% share ownership.

For three days, Zambry did not respond to the allegations but left it to the state Opposition leader, Saarani Mohamad, to dismiss Zambry’s involvement. Saarani claimed that Zambry need not answer Chong’s questions and he also said that the PCB’s board members and account committee should be responsible for the decision.

A furious Zambry finally responded to Chong’s claims and said that he was being unfair because the official audit firm PwC had not completed its audit report. He also accused Chong of subjecting him to a ‘trial by media’ following his decision to issue a press statement every day until the start of the state assembly, on April 16.

Perhaps, Zambry should realise that many projects, which are worth several hundred million ringgits of taxpayers’ money, have failed, because the former Umno-Baru politicians, and their cronies, did not practise meritocracy, transparency, accountability and integrity. Many of them also believed that they were above the law. Their cavalier attitude has squandered many millions of ringgits of the taxpayers’ money.

It is also widely alleged that crooked politicians siphon off a substantial percentage of the rakyat’s money via dodgy deals.

As in MAPS, the politicians and their cronies have dismissed the importance of pertinent details like intellectual property rights, public safety, workers’ rights, attendance, publicity and regular maintenance.

Many similar projects have ended-up as white elephants.

Perakians have a right to demand the reasons for the state’s involvement in MAPS. They want to know how Zambry spent this money, and why he authorised the payment of millions of ringgits, despite being warned of the shortfalls.

Politicians, and in particular, the state government should not be running businesses. They should administer the affairs of the state and govern properly because they tend to make a mess of every business they touch.


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