Insufficient Equipment Delays Bakun Dam
Tan Sri Nik Mohamed Nik Yaacob, chief executive, admitted that the Bakun dam project was behind schedule at Sime Darby's AGM yesterday.

He said that the delay is partly due to insufficient equipment but is less than the six months reported elsewhere. He stressed that the project will be completed on time by September 2007.

He further said that the delay would eat into some of the profits of the project.

Now what conclusion can be drawn if the project is going to finish on time (inferring that there will be no additional overheads incurred) but the project is going to cost more and the lack of sufficient equipment is delaying the project?

It very much sounds as though somebody has under estimated the amount of equipment needed.

Highly Profitable Construction Industry
Whatever their problems, Malaysian construction companies seem very profitable in comparison with their Western counterparts.

A table of some major British construction companies' operating margins was recently published by a subsidiary of The Financial TImes. The margins seem so low in comparison:

3.3% Alfred McAlpine
2.9% Amec
2.4% Kier
2.2% Balfour Beatty
2.0% Carillon
1.7% Mowlem
1.5% Costain
1.5% Morgan Sindall

If only I knew the secret of local construction companies' success and could export it to the west.

Smelter Asia
Things are already starting to look tough for the Smelter Asia project even though it's four years before the scheduled opening of its aluminium smelting plant. The plant has a projected capacity of 500,000 tonnes which is much, much higher than the total demand for aluminium in Malaysia. The viability of the project must be highly dependant upon exports.

According to one of its government agencies, China currently has the capacity to produce over 5 million tonnes of aluminium annually. Plants in the "pipeline" will increase that to over 10 million tonnes per annum.

For its sake, I hope that Smelter Asia's cost of production is close to that of its Chinese competitors.

Contingency Galore?
Today's New Straits Times quoted the Deputy Transport Minister on progress on the double tracking project from Rawang to Ipoh. He said the project is 70 per cent complete, is on schedule, will be completed by December 2004 and operations will begin a year later.

If I've read that correctly that's 12 months between project completion and starting operations. That's a lot of contingency or is it?

Let's keep an eye on the project to see when operations start.

Last month,we have Mindef's project fiasco. Now, we have another interesting and juicy story of computer school labs that failed to be completed on time after two years of EoT.It was reported in the newspapers that the east coast projects have structural defects!May be more will be exposed later...

We have been doing projects for more than 100 years in this country of ours.Now, we are in the 8th Malaysian Plan.Surely, we have learnt something,haven't we??

Just re-examine our system, our people and our processes in project management.Do we have the the right thing in the right place?If not,then let's all go back to school.

Now ,malaysia is in the middle of her 8th Malaysian Plan. Thousands of projects have been approved and implemented worth billions of ringgits. By now, we should have a project management culture of our own.But do we have a culture of excellence in managing projects?

I hope the recent exposure by Army chief about "deviations" in implementing projects worth RM 114 millions will be a wake-up call to all those people in all sectors, especially the governments who are entrusted with public fund. This wake-up call will come to nothing if those who are involved in projects are NOT enabled with knowledge on how to go about managing their projects.

Yesterday, while I was waiting to buy book at Kinokuniya, I met the chairman of one government agency. He told me that he has instructed his agency to improve project management system since three years ago ,but nothing happened. I told him that his people just do not know how to go about doing that. Plain ignorant.Period.