A Critique of the ETP Part 3 (iii): Doubtful EPPs; doubtful achievements and due diligence

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‘Dud’, ‘doubts’ and ‘debt’ are three words written all over at least two Entry Point Projects (EPPs), punctuated only by question marks.

The investment cost for the Karambunai Integrated Resort in Sabah more than tripled from RM3 billion to nearly RM10 billion in 6 short months. At this price, it needs 2.8 million visitors per year to break even. That is more than the total number of travellers arriving at Kota Kinabalu airport in a year!

Tanjong Agas has REFSA aghast. Massive investment and construction is to be poured into this fishing village to build an oil and gas hub redolent of the success of Kertih and Gebeng. But will it turn out to be redundant? Kertih and Gebeng are the focus areas for oil, gas and petrochemical clusters in the Eastern Corridor Economic Region (ECER); Tanjong Agas, located in Pekan, the parliamentary constituency of prime minister Najib, is not.

Together, these two possible ‘dud’ projects alone account for 7% of  total ETP investments so far. And given the weak financial stature of their private sector developers, will taxpayers end up saddled with the bill? Already, the government’s proposed investment in Karambunai has soared 6-fold from RM100 million to RM600 million.

Read Part 3(iii) of our Critique of the ETP on why PEMANDU rates a ‘D’ for Execution. The selection of such possible ‘dud’ projects – projects with very little hope of success – as EPPs raises serious doubs about the due diligence process at PEMANDU.

Click here for an archive of our Focus Papers.

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