RM 11.31 Billion HSBB Project - AWARDED UNTENDERED

RM 11.31 Billion High Speed Broadband (HSBB) awarded without Tender, even when there are many interested party.

Quotes :

".......the government finally awarded Telekom Malaysia Bhd (TM) the big-budget RM11.31 billion high-speed broadband (HSBB) project"

".....However, some industry players are questioning why HSBT was rejected just on this technicality as its proposal would save RM2.4 billion in taxpayers’ money."

" A third proposal to wire up the country with high-speed broadband (HSBB) infrastructure at only RM5bil has surfaced, compared with Telekom Malaysia Bhd’s (TM) RM11.3bil and High Speed Broadband Sdn Bhd’s (HSBT) RM18bil proposals."

"The selection can be via a transparent tender basis and the company should focus as a wholesaler. There is indeed a need for a second network infrastructure in the country as demand for broadband will continue to grow and cannot be met with only one player."

"For now, having only one player to offer broadband infrastructure will stifle the growth of many smaller players. This proposal, if accepted, would create a situation where there would be competition, not just at the network infrastructure level but also at the service level, said a source."

"But, where does Mohamed’s proposal stand since the Government had given TM a letter of award for the RM11.3bil HSBB project? It looks like HBST is out of the race as it did not meet its timeline to submit a proposal to the Government."

Malaysia Alternative Voices :
Why do such a such a BIG project goes untendered? Even when there a numerous parties interested at more competitive proposal

What Anwar Ibrahim says....

...................................there is now a proposal for a RM15.2 billion high speed broadband (HSBB) project to wire up 2.2 million so-called high economic impact premises.
Not many details have been released about the HSBB project since the plan was initially made known by Deputy Prime Minister Datuk Seri Najib Tun Razak last September. If this latest example of a mega project is approved, the expenditure will cost the public approximately RM 7,000 to wire each premise – a totally unjustifiable sum.

High Speed Broad Band (HSBB) in News

4 Aug 2008

New proposal aims to slash cost of building HSBB network by 80%
PETALING JAYA: A third proposal to wire up the country with high-speed broadband (HSBB) infrastructure at only RM5bil has surfaced, compared with Telekom Malaysia Bhd’s (TM) RM11.3bil and High Speed Broadband Sdn Bhd’s (HSBT) RM18bil proposals.

Developed early this year, the concept was presented only recently to the Malaysian Communication & Multimedia Commission, the Government and some industry players. At RM5bil, it does not cover the last-mile or fibre-to-the-home connectivity.

The aim of this proposal is to slash the cost of building a HSBB network by at least 80% from the other proposals and offer a wider reach of up to 80% of the population or about five million households. The speed for the HSBB using fibre is at 100 megabits per second.

This new proposal is not meant to derail TM’s HSBB project – it can co-exist. In fact, it opens up a whole plentora of opportunities for existing telecoms players to have neutral access to a broadband network. This means that mobile and WiMAX players need not build their own networks but just offer their services to the consumer using the neutral network as the backbone, and WiMAX, cellular, fibre or copper as the last-mile connectivity.

The man who came up with this idea is Dr Mohamed Awang Lah, who was instrumental in pioneering the Internet service in the country some 25 years ago. Although he is the chief executive officer of Jaring Communications Bhd, the proposal is entirely his own.
When contacted by StarBiz, Mohamed said: “I have made the proposal to the relevant authorities.’’

To him, the country needed a comprehensive programme to tackle the broadband issue on a long-term and sustainable basis. This should allow Malaysia to catch up and be more competitive with the other developed countries. As it stands, the broadband penetration in the country is only 5%, whereas Singapore – which has two broadband networks and a third set for bidding – has broadband penetration levels of over 80%.

“It can be privately funded or it can involve the Government via a public/private partnership. It also does not matter who runs the network – what is vital is that it should be owned and managed by people with the relevant knowledge and this should be a national kind of venture. We could possibly tap into the universal service provision fund, which stands at RM3bil currently,’’ Mohamed said.

A company could be set up to build and manage the network but the owners of the company should not be retail service providers, he said.

The selection can be via a transparent tender basis and the company should focus as a wholesaler. There is indeed a need for a second network infrastructure in the country as demand for broadband will continue to grow and cannot be met with only one player.
The proposal, which was looked at by some industry experts, should save the country a lot of money, in terms of infrastructure costs, and help create competition, which is greatly needed in Malaysia.
For now, having only one player to offer broadband infrastructure will stifle the growth of many smaller players. This proposal, if accepted, would create a situation where there would be competition, not just at the network infrastructure level but also at the service level, said a source.

But, where does Mohamed’s proposal stand since the Government had given TM a letter of award for the RM11.3bil HSBB project? It looks like HBST is out of the race as it did not meet its timeline to submit a proposal to the Government.

Mohamed said his proposal could ease some of the HSBB operator’s burden as there was a need to bring affordable broadband to every home within a reasonable period of time. To him, broadband should be a basic utility service, just like water and electricity, and the pricing of the service should be the same, irrespective of geographical locations.

3 Aug 2008

KUALA LUMPUR: After two postponements, the government finally awarded Telekom Malaysia Bhd (TM) the big-budget RM11.31 billion high-speed broadband (HSBB) project, virtually closing the door on a competing bid by a consortium powered by the Pahang state government.

The sum of RM11.31 billion is for the first phase of the project where the government would invest RM2.4 billion and Telekom the rest. The broadband project entails a second phase and would be implemented over 10 years.

“The project involves the access, domestic core and international networks to deliver an end-to-end HSBB infrastructure,” the telco said.

In May, TM was chosen by the government to implement the project. The contract was scheduled to be signed by July 1, but it was delayed as the government needed time to figure out where its portion of the funding would come from.

A new date for the signing was fixed for Aug 14, but it was again put on hold, due to the entry of Pahang government-backed High Speed Broadband Technology Sdn Bhd (HSBT) which proposed to implement the project using private financing, meaning no government funding.

HSBT, with a paid-up capital of RM1 million, is a special-purpose vehicle formed specifically to bid for the HSBB job. The Pahang government has a 20% stake in HSBT via its wholly owned subsidiary, Pahang Technology Resources. The rest of the company is owned by Bumiraya Resources Sdn Bhd.

Sources said that the government decided to award the job to TM only because HSBT failed to provide a detailed proposal to the Cabinet Committee on Broadband (CCB) as scheduled. “HSBT missed the deadline. So they are out of the race. The committee then rejected the proposal by HSBT and awarded the project to TM,” said a source.

However, some industry players are questioning why HSBT was rejected just on this technicality as its proposal would save RM2.4 billion in taxpayers’ money.

When contacted, a spokesperson for HSBT said that the company would proceed with its plan to ask the government to allow it to implement the project with private funding.

“What’s wrong with us proceeding with our plan and to provide open infrastructure? One thing we can be that TM can’t be, is to become a neutral infrastructure provider and will not compete with ISPs (Internet service providers),” the spokesperson said.

HSBT presented a lower-cost proposal on Aug 21, but it was told to submit a detailed proposal to CCB in a week. It was said to have presented a concept paper and the committee chaired by Deputy Prime Minister Datuk Seri Najib Razak wanted to look at its detailed proposal before making a decision.

Energy, Water and Communications Minister Datuk Shaziman Abu Mansor, senior ministry officials and Malaysian Communication and Multimedia Commission chairman Datuk Halim Shafie were among those at the meeting.

In its proposal, HSBT said it would build an open network valued at RM18 billion over 10 years in collaboration with several foreign partners and local government-linked companies. The proposal was presented by a 10-member team, led by Pahang Menteri Besar Datuk Seri Adnan Yaakob, who is also the chairman of Pahang Technology Resources.

HSBT technical and corporate strategy director Shukor Ahmed had said in early August that the main source of funding would be its strategic partners, while the rest would be raised from sukuk and other forms of funding. He added that some funds would also come from a Middle Eastern firm. The company has technology partners from Japan, South Korea and Sweden, who are able to deploy a network that offers higher speed, he had said.