CHALLENGESCHALLENGES ANDAND OPPORTUNITIESOPPORTUNITIES ININ PLANPLAN IMPLEMENTATIONIMPLEMENTATION ININ THETHE PERSPECTIVEPERSPECTIVE OFOF MoWMoW

DATODATO ’’ SRISRI DR.DR. ABDULABDUL MUNITMUNIT KASMINKASMIN SECRETARYSECRETARY -- GENERALGENERAL MINISTRYMINISTRY OFOF WORKSWORKS MALAYSIAMALAYSIA

99 JANUARYJANUARY 20092009

This paper was prepared with the assistance of:-

IR KAMARUZAMAN HUSSEN, IR MOHD AZLAN MON JAMALUDDIN & 1 MR MOHD HEIKAL KAMARUDIN ContentsContents

1. IntroductionIntroduction to to Ministry Ministry of of Works Works (MoW)(MoW) 2. MoWMoW Strategic Strategic Direction Direction for for the the 9 9 th MalaysianMalaysian PlanPlan 3. CurrentCurrent Planning Planning Strategies Strategies in in the the MoWMoW 4. Issues,Issues, ChallengesChallenges && ActionAction TakenTaken 5. ConclusionConclusion

2 1.1. IntroductionIntroduction toto MoWMoW

3 1.1. INTRODUCTIONINTRODUCTION TOTO MoWMoW

4 1. INTRODUCTION TO MoW (continued)

Minister : YB Dato’ Ir. Mohd Zin b. Mohamed

Deputy Minister YB Dato’ Yong Khoon Seng

Secretary General: Y.Bhg. Dato' Sri Dr. Abdul Munit bin Kasmin

Address: Contact: Ministry Of Works, Jalan Sultan Salahuddin, 50580 , mailto:[email protected] Malaysia. Tel: (603)-2711 1100 5 Fax: (603)-2711 1590 / 1592 Website : http://www.kkr.gov.my 6 August 2008 LegalLegal FrameworkFramework ofof EstablishingEstablishing MoWMoW

List Related of Laws and Circulars 1. Federal Constitution 2. Minister ’s Function Act [Act 2] Federal Minister ’s Orders (no.2 )2008 3. General Circular No. 2, 1982 4. General Circular No.3, 1998 5. Government Contract Act 1949 (rev. 1979) [120 Act] 6. Federal Road Act 1959 [376 Act] 7. National land Code 1965 8. Federal Road Act (Individual management) 1984 [306 Act] 9. Road Transport Act 1987 [333 Act] 10. Delegation of Power Act 1956 [358 Act] Delegation of Power u nder Section 77, 84, 85, and 85A Road Transport Act 1987 11. Malaysian Highway Authority Act 1980 [231 Act] 12. CIDB Act 1994 [520 Act] 13. Chapter a, (P.U (A) 176/2005) Civil Officer Regulation (Appo intment, Promotion and Termination of Services) 2005 14. Letter of Appointment as Controlling Officer BNPK CR(8.15) 152 – 4 Jld.2 (20) dated 7 17 April 2008. FUNCTIONSFUNCTIONS OFOF MoWMoW (in accordance to the Functions of Works Minister)

1. To plan and implement road projects especially of Federal roads; 2. To coordinate and monitor the implementation of the road projects especially of Federal roads; 3. To coordinate and monitor divisions/agencies under MoW; 4. To provide advisory and support services to other agencies of Government; 5. To regulate construction, operation and maintenance of privatized highways; 6. To develop construction and related industries; 7. To enhance the skills of workforce in the construction industries. 8. Secretariat to National Industrialized Building System (IBS) technology 8 MoWMoW VISIONVISION

To be an outstanding organization in the infrastructure development of Malaysia especially in the construction of Federal Roads and assisting its agencies to elevate the construction and professional services industry to world-class

standards. 9 MoWMoW MISSIONMISSION

To ensure that the infrastructure development of Malaysia especially that of Federal Roads is planned, implemented and maintained efficiently and is of the highest quality as well as providing advisory and supporting services to its agencies in developing the construction and professional services industry. 10 OUTPUT OUTCOME/IMPACT

Integrated Federal Road planning and implemantation according to TO GENERATE THE schedule, scope, cost, specification and standard defined.  Maintenance of Federal Road and Building in accrdance to GROWTH IN concessionaires agreement. COUNTRY’S Actively involvement of Bumi’s contractors / suppliers in national ECONOMY & TO construction industry. INCREASE THE  Secretariat to National Industrialized Building System (IBS) PEOPLE’S QUALITY OF LIFE STANDARD

DIVISION ANNUAL ACTION PLAN JKR MoW ORGANIZATION STRATEGIC PLANNING (PSO) CIDB

LLM IMPLEMANTATION PSDC MONITORING PLANNING LJM

ASSESSMENT MAINTENANCE LAM

MoW MAIN ACTIVITY [BPJ, BPP, BKS, BPB] LJBM

Administration Human Information Finance and strategy Resources Technology Acaun Strategic Strategic Strategy Planning planning (ISP) Internal Audit Inter-relation between main activity, Strategy Survelliance agency International Relation Strategy supporting activity with agencies’ strategic strategy and Law Strategy and Professional Expertise planning in MoW 11

MoW SUPPORTING ACTIVITY FocusFocus OfOf MoWMoW

1. AllAll roadsroads whichwhich havehave beenbeen declareddeclared andand gazettedgazetted asas FederalFederal Road.Road. 2. TheThe declarationdeclaration shouldshould bebe inin accordanceaccordance toto FederalFederal RoadRoad ActAct 19591959 (Revised(Revised 1989)1989) [Act[Act 376]376]

12 AUTHORITYAUTHORITY OFOF MoWMoW

FEDERAL ROAD ACT 1959 (REVISED 1989) [ACT 376]

Section TERM METHOD

3 Power to declare roads, etc., to be By the order published in federal. the Gazette.

The Minister may after consultation with the Government of the State concerned, by order declare any road, bridge, ferry or other means of communication in any State to be Federal.

13 ThisThis ActAct givesgives MinisterMinister ofof WorksWorks

1.1. AnAn authorityauthority toto useuse FederalFederal FundFund givengiven toto thethe MinistryMinistry inin developingdeveloping FederalFederal Roads.Roads. 2.2. AnAn authorityauthority toto managemanage andand maintainmaintain FederalFederal RoadsRoads asas inin accordanceaccordance toto RoadRoad TransportTransport ActAct 19871987 [Act[Act 377]377]

14 AUTHORITYAUTHORITY OFOF MoWMoW (continued)(continued)

From ROAD TRANSPORT ACT 1987 (ACT 377] The Minister of Works is authorize to; 1. Determine Speed limits, Section 69. 2. To restrict use of vehicles on specified roads, Section 70. 3. Accommodate Pedestrian crossings, Section 75. 4. Erection of traffic signs, Section 77. 5. To erect refuges, subways and foot -bridges, Section 83. 6. To remove structures from roads, Section 84. 7. Construction of access and drains and laying of public utility installations to existing roads, Section 85. 8. Construction of structures for advertisement, etc, Section 85A. 9. Restriction of vehicles on bridges, Section 86. 10. To impose Rules, Section 88.

15 ExplanationExplanation toto thethe FEDERALFEDERAL ROADROAD ACTACT 19591959 (REVISED(REVISED 1989)1989) [ACT[ACT 376]376] && 19871987 [Act[Act 377]377]

1. The Act explains that the Minister Of Works is the owner of the Federal Roads; 2. Thus Ministry of Works (MoW) is responsible to plan, implement, maintain and develop all Federal Road using Federal Development Fund; 3. To maintain all Federal Road in accordance to Road Transport Act 1987 [377 Act]; 4. However MoW will continue its policy by appointing Public of Works Department (PWD) as his strategic implementation agency; 5. An official letter of the appointment will be issued.

16 TypesTypes ofof FederalFederal RoadsRoads

Types Of Roads Owner Road No.

1. Main Federal Road MoW 1, 3, 21, 22, 25, - 228, 800 – 803, (Sarawak) 500 - 503, (Sabah) 700 – 731 (Labuan)

2. FELDA Road MoW 1000 - 2748

3. Industry Road MoW 3000 - 3740

4. Access to Institutional MoW 250 - 479

5. Tolled Expressway MoW E1 – E 30 6. State Road State Govt. Denoted with state ’s alphabet followed by its own number; eg B15, A4 etc.

17 StatisticsStatistics

1. FederalFederal Roads Roads Under Under MoW MoW Jurisdiction.Jurisdiction. • MainMain FederalFederal RoadsRoads -- 10,67310,673 km;km; • FeldaFelda RoadsRoads –– 5,6455,645 km;km; • IndustryIndustry roadsroads –– 404404 km;km; andand • InstitutionalInstitutional roadsroads –– 385385 km.km. 2. TotalTotal ofof 17,10717,107 kmkm (2008).(2008). 3. AnotherAnother 1,2001,200 kmkm inin processprocess ofof beingbeing transferredtransferred toto FederalFederal jurisdiction.jurisdiction.

18 ExplanationExplanation toto thethe AppointmentAppointment LetterLetter asas ControllingControlling OfficerOfficer BNPKBNPK CR(8.15)CR(8.15) 152152 –– 44 Jld.2Jld.2 (20)(20) TheThe SecretarySecretary GeneralGeneral ofof MoWMoW is:is: -- 1. TheThe ChiefChief ExecutiveExecutive OfficerOfficer ofof thethe Ministry;Ministry; 2. TheThe FinancialFinancial ControllingControlling OfficerOfficer forfor thethe allocationallocation givengiven toto thethe Ministry;Ministry; 3. TheThe HeadHead forfor thethe DevelopmentDevelopment andand MaintenanceMaintenance projectsprojects onon thethe FederalFederal Roads.Roads.

19 MoWMoW ’’ss StrategicStrategic ImplementationImplementation AgencyAgency andand itsits RegionRegion CoverageCoverage

AgenciesAgencies RegionRegion CoverageCoverage

1.1. FederalFederal PublicPublic WorksWorks PeninsularPeninsular ofof DepartmentDepartment MalaysiaMalaysia 2.2. SabahSabah PublicPublic WorksWorks SabahSabah DepartmentDepartment 3.3. SarawakSarawak PublicPublic WorksWorks SarawakSarawak DepartmentDepartment

20 2.2. MoWMoW StrategicStrategic DirectionDirection forfor thethe 99 thth MalaysianMalaysian PlanPlan

21 DEVELOPMENT PLANNING PROCESS IN MoW

PLANNING MASTER MOW’s5 year Plan DEVELOPMENT PLAN Project List

Federal Fund Engineering Land Economy Environment Social Values Use Budget (EPU & Cabinet)

IMPLEMENTATION IMPLEMENTOR AGENCY - PUBLIC WORK DEPARTMENT (PWD) MONITORING

EVALUATION 22 12. Road Maintenance 13. Outcome study & 1. Road Network 2. 5-Years Malaysia 4. Pre-Budget 3. Economic & Inventory evaluation Strategic Planning Plan’s Development Plan Planning Unit Road Alignment 5. Budget approval Prime from Ministry of  Monitoring of repair Project Outcome  Strategic Planning Review decision Minister Project brief Finance works during defects- against planned targets for Roads Department liability period Road alignment  Policy Requirement Determination of Site Determination (Approval)  Approved projects list  Preparation of budget alteration & upgrading feasibilty study policies and projects Cost Estimation State road estimation for Bumiputera participation Identifying suitable  Approved road alignments Financial estimation declaration for maintenance & “leakages” projects List  Closing of Accounts Design improvement and projects and implementation upgrading works  Road inventory & Outcome report schedule 6. Project submission gazette to technical department for implementation

Process Divisions / Units / Agencies Involved 11. Completed Completed Project 1,2,4,13 Highway Planning Unit (HPU) 7. Preparation of Need 3,4,5,6,1 Statements handed over from JKR Development & Privatisation Division (BPP) to KKR 0 12 Maintenance Regulartory Division (BKS) 4,8 Finance Division (BK) dan PWD 8. Procurement 10. Monitoring 10,13 Bumiputera Development Division (BPB) procedures (Treasury 7,9 Public Works Department (PWD) Instructions) Physical progress  Financial Management  Site Problems Procurement  Utility Relocation  Contract Management process Internal appointed Design & Build  Traffic Management Agency to consultant design (or Turnkey)  Contractor Financial & issue LA, If contract management cost of ‘Leakage’ & Bumiputera contract Price consultation Participation < RM 20 m, Resolve land acquisition issues and Tender PWD; determination of roads document Letter Of Intent (LoI) preparation issued to contractor with > RM 20 m Treasury approval < RM50 j MoW Open Tender 9. Construction Tender Board Valuation 8a. Letter of of Tender  Handing Over Site Acceptance Selective Possession To (LoA) Issued Tender with Valuation & Contractor Treasury Treasury price Approval Letter of approval negotiation by Undertaking to the technical > RM50 j Land Authority department solve the land Treasury acquisition & Approval 23 decision of road Working Process in MoW alignment ConclusionConclusion

TypeType ofof WorksWorks andand ApprovalApproval Division/AgencyDivision/Agency Type of works Approving division / agency 1. Notification of implementing project MoW

2. Need statement MoW 3. Consultant MoW

4. Type of procurement MoW 5. Letter of Acceptance PWD (however for Contract cost > RM 20mil a letter of delegation of Power from MoW is required. 6. Project Implementation PWD 7. Project Monitoring MoW 8 Handing Over / Closing Account PWD 24 99thth MalaysiaMalaysia PlanPlan RoadRoad DevelopmentDevelopment ConceptConcept

25 HNDP Phase 1: Conceptual Development To Strengthen the West Coast Network and East Coast Network • The Existing FR1, FR5 and NSE for the West Coast and FR3 and East Coast Expressway for the East Coast should be further strengthen. • Development of Ring Roads and Bypass

To Improve and Strengthening the East West Movement • Enhance of Small Development Centre and provide alternative movement of traffic during major road mishap

To Improve Linkages and Support Growth of Regional Development • More accessibility to regional land development and new entry points

To Improve Linkage for Promoting Growth of the Central Corridor • Definitive clear road network hierarchy 26 PERLIS CONCEPTUAL REGIONAL HIGHWAY KEDAH CONFIGURATION PLAN

PULAU FOR PINANG PERAK

Summary of Projects (2006-2020)

SELANGOR Project Description Length (km) Road Upgrading 3.741 (61%) NEGERI and Widening SEMBILAN New Roads 2,379 (39%)

MELAKA Total 6,120 (100%)

27 99thth MalaysiaMalaysia PlanPlan emphasized:emphasized:

• To complete road network and to ensure better connectivity between urban growth centers; • Complete 8 th MP continuation projects; • Concept of development with human touch (people -centered development); • Enhanced road safety; • Improved facilities for road users; and • Promoting hinterlands road as central spine network.

28 3.3. CurrentCurrent PlanningPlanning StrategiesStrategies inin thethe MoWMoW (9(9 th MPMP MidMid TermTerm Review)Review)

29 Current Planning Strategies in the MoW

Central Spine Network

30 MTRMTR 99 th MalaysiaMalaysia PlanPlan emphasized:emphasized:

• SpecialSpecial attentionattention givengiven toto SabahSabah andand SarawakSarawak  ToTo completecomplete andand upgradingupgrading TransTrans BorneoBorneo roadroad network;network;  ProvidingProviding access access to to new new agro agro –– tourismtourism areasareas  ToTo provideprovide InnerInner CircularCircular RoadRoad inin SabahSabah

31 MTRMTR 99 th MalaysiaMalaysia PlanPlan emphasized:emphasized:

• InIn additionaddition toto thethe above,above, MoWMoW ’’ss strategystrategy willwill alsoalso include:include:  ToTo implement implement projects projects recommended recommended by by thethe Highway Highway Network Network Development Development Plan Plan (HNDP),(HNDP), 20072007

32 MOWMOW ’’SS DEVELOPMENTDEVELOPMENT PROGRAMPROGRAM ANDAND BUDGETBUDGET UNDERUNDER 99 th MPMP (After Mid Term Review) No of Ceiling No Program ’s Category Projects (RM billion) A 9th MP Project Continuation 542 19.92 1 Program Roads/Bridges 398 18.46 2. Program Building 145 1.11 3. Private Financing Initiative 1 0.35 B New 9 th MP Projects 19 0.44 1. Studies Projects – 13 0.06 Forward Planning 2. Safety Projects 3 0.25 3. Highways New Projects 3 0.13

GRAND TOTAL 562 20.36 33 MoWMoW ’’ss AchievementAchievement InIn ImplementingImplementing 99th MPMP ProjectsProjects (up to November 2008)

ProjectsProjects completedcompleted == 210;210; ProjectsProjects within within schedule schedule and and underunder planningplanning == 321;321; ProjectsProjects behindbehind scheduleschedule == 12;12; andand SickSick projectproject == ZeroZero (0)(0)

34 MOWMOW ’’ss AchievementAchievement (up to 15 December 2008)

YearYear AllocationAllocation ExpenditureExpenditure %% (MRY(MRY bn)bn) (MYR(MYR bn)bn) 20062006 5.115.11 5.065.06 99.199.1

20072007 4.994.99 4.954.95 99.399.3

20082008 4.824.82 4.484.48 93.093.0

TotalTotal 14.9214.92 14.4914.49 97.197.1

35 FORECASTFORECAST ONON MOWMOW ’’SS ALLOCATIONALLOCATION 20092009 -- 20102010

YearYear ForecastForecast AllocationAllocation (MYR(MYR billion)billion) 20092009 3.403.40

20102010 2.902.90

TotalTotal 6.306.30

36 4.4. Issues,Issues, ChallengesChallenges && ActionAction TakenTaken

37 ISSUESISSUES

 IssuesIssues duringduring projectproject implementation:implementation:  Failed in appreciating strategic and project planning;  Planning complete after all project approved;  Project approved without planning.  AllocationAllocation ofof budgetbudget –– notnot enough;enough;  Squatters;Squatters;  NegativeNegative impactimpact onon environmentenvironment issues;issues;

38 ISSUESISSUES (continued)(continued)

 TheThe residenceresidence disagreedisagree withwith thethe project.project.  DelayDelay inin landland acquisition;acquisition;  DelayDelay inin relocationrelocation ofof publicpublic utility;utility;  WeaknessWeakness in in tactical tactical implementation implementation –– incompetenceincompetence ofof supervisingsupervising officer;officer;  LackLack ofof laborlabor forces;forces;  WeaknessWeakness in in executing executing power power allowed allowed in in contract,contract, e.ge.g hesitatehesitate toto taketake action;action; andand  IncreaseIncrease inin priceprice ofof constructionconstruction material.material.

39 CHALLENGESCHALLENGES UNDERUNDER THETHE 99 thth MPMP

 ToTo complete complete all all the the projects projects as as planned planned withwith goodgood quality;quality;  ToTo ensure ensure implementation implementation within within the the cost cost providedprovided with with optimum optimum usage usage of of engineeringengineering values.values.

40 ACTIONACTION TAKENTAKEN

 ImprovingImproving planningplanning procedure;procedure;  Implementing Key Performance Index (KPI), / Benchmarking / ISO;  Appreciate role of EPU (indicative planning);  Appreciate role of Treasury (detailed plan);  ImprovingImproving strategic strategic partner partner responsibilityresponsibility inin implementation;implementation;  Increase the quality of the project management;  Enhance the capability in handling government contract;  Enhance the knowledge pertaining to implementation of project. 41 ACTIONACTION TAKENTAKEN (continued)(continued)

 ImprovingImproving the the capability capability of of the the developmentdevelopment officer officer in in MoW MoW which which involves;involves;  Project planning;  Project implementation;  Project monitoring.  ProvideProvide adequateadequate allocationallocation toto completecomplete thethe project.project.

42 ACTIONACTION TAKENTAKEN (continued)(continued)

 ImprovingImproving implementationimplementation machinerymachinery - Reducing bureaucracy; - Human resource development; - By improvements in contract management procedures such as increasing advance payment etc; and - Adequate man power.  ImprovingImproving thethe efficiencyefficiency ofof project;project; -- Using IBS technology.

43 ACTIONACTION TAKENTAKEN (continued)(continued)

 ToTo spurspur growthgrowth inin constructionconstruction sector:sector: • To reduce size of projects so more contracts are available; • To carry out projects through open tendering;  ToTo furtherfurther enhanceenhance capabilitycapability ofof contractors:contractors: • Training of contractor [by CIDB]; • Use of new technology [e.g. IBS]; and • Close monitoring of contractors performance by CIDB including the rating of contractors.

44 ACTIONACTION TAKENTAKEN (continued)(continued)

 ToTo monitormonitor PWDPWD performanceperformance withwith respectrespect toto ClientClient Agencies Agencies projects projects (over (over 6,000 6,000 projects);projects);  ToTo liaise liaise more more closely closely with with State State GovernmentsGovernments and and Agencies, Agencies, Utility Utility Companies/AgenciesCompanies/Agencies to to smoothen smoothen implementationimplementation ofof projects;projects;  ToTo support support PWD PWD in in terms terms of of capacity capacity buildingbuilding

45 5.5. CONCLUSIONCONCLUSION

46 5.5. CONCLUSIONCONCLUSION

 TheThe MoWMoW willwill continuecontinue toto playplay an an important important rolerole inin planningplanning thethe developmentdevelopment ofof thethe roadroad networknetwork of of Malaysia Malaysia to to ensure ensure maximum maximum impact;impact;  TheThe MoW MoW will will continuously continuously endeavour endeavour to to improveimprove the the project project delivery delivery system system to to ensureensure the the timely timely completion completion of of all all developmentdevelopment projectsprojects ;;  TheThe MoW MoW shall shall continue continue to to facilitate facilitate the the trainingtraining of of manpower manpower for for the the construction construction industry;industry;

47 5.5. CONCLUSIONCONCLUSION (continued)(continued)

 TheThe MoW MoW will will encourage encourage the the development development andand use use of of new new methods methods of of construction construction suchsuch asas IBS;IBS;  PrivatizationPrivatization and and PFI PFI will will continue continue to to play play a a majormajor role role under under 9 9 th MPMP and and may may be be expandedexpanded further;further;  TheThe MoW MoW shall shall continue continue to to source source for for projectsprojects abroad abroad on on Govt. Govt. to to Govt. Govt. basis. basis. Contractors,Contractors, too, too, should should actively actively explore explore opportunitiesopportunities abroad abroad on on their their own. own. (refer (refer to to CIDB);CIDB);

48 ReferencesReferences

 KKR – Strategic Organization Plan of MoW, 2008;  KKR – Panduan Mengenai Bidang Kuasa Menteri & Pegawai Pengawal Kementerian Kerja Raya, 2008;  KKR – Kajian Separuh Penggal RMKe9 KKR 2009 -2010, 2008;  KKR – Blue Print Pelaksanaan Rangkaian Jalan Raya Malaysia Dalam RMKe -9;  Kerajaan Malaysia – Akta Fungsi -Fungsi Menteri 1969; – Akta Pengangkutan Jalan 1987; – Akta Jalan Persekutuan 1959 [Akta 376]; – Pelembagaan Persekutuan, – Akta Perwakilan Kuasa 1956 [Akta 358];  MoF – Surat Perlantikan Pegawai Pengawal KKR, 2008;

49 THANKTHANK YOUYOU

50