Just Like 1MDB But Bigger? The Looming Horror Of 5DNB

Deputy Communications and Multimedia Minister Zahidi Zainul Abidin says the Finance Ministry insisted on giving the 5G spectrum to Digital Nasional Bhd despite protest from his ministry.

THE Finance Ministry (MOF) insisted on giving the 5G spectrum to Digital Nasional Bhd (DNB) despite protest from the Communications and Multimedia Ministry, Zahidi Zainul Abidin said today.

“We were instructed by MOF to give the contract to DNB without any consultations,” the deputy minister told Parliament today.
“We raised questions about the pricing as DNB will be selling to telecommunication companies (telcos) but DNB assured us that the price will be cheaper than 4G. That was their guarantee.

“It’s quite a miracle that DNB will be selling the 5G spectrum at a lower price to telcos but we had to agree,” said the Padang Besar MP.

The deputy minister was responding to Syed Ibrahim Syed Noh (Ledang-PH) on when DNB was going to brief Parliament on its plans for 5G.

Unlike other countries that let telcos set up their own 5G infrastructure, the government had decided to form a special purpose vehicle, DNB, to build the new spectrum.

Telcos had also complained of a lack of transparency on the project by DNB.
According to Zahidi, the ministry had wanted to consult with DNB but MOF steamrolled the decision and they had to accept it.

“We have, however, told DNB to work with Telekom Malaysia as they have the IT backbone. We didn’t see what DNB could do as it had nothing and had to start from scratch.

“DNB doesn’t even have any (telecommunication) poles,” said Zahidi.
Fahmi Fadzil (Lembah Pantai-PH) then asked how DNB secured the project when it had nothing.

“You have to ask MOF on the investments needed as we didn’t invest. Our work is communications but MOF wants to do our job.

“As such, we will let them do it and question them. We wanted to give the 5G spectrum to telcos as they already have the backbone and would be faster but DNB wanted to do it and said that the 4G infrastructure is incomplete as it was done by telcos.”

In July, DNB signed a contract with Ericsson to design and build the 5G infrastructures for RM11 billion. Neither DNB nor MOF has told the public how it plans to finance the project.

Our comment

If it looks like a duck, as the saying goes.

At the very time the appalling events of the 1MDB scandal are being retrospectively unravelled in court, horrified Malaysians are watching what looks to be a parallel set of circumstances developing in real time, before their very eyes.

The growing concerns over 5DNB have now been confirmed by this protest, from within the government itself, made by Deputy Communications and Multimedia Minister Zahidi Zainul Abidin speaking in Parliament.

According to Zahidi, everything that went wrong with 1MDB is being reproduced with this latest Ministry Of Finance pet project. Worse, the costs of 1MDB have been inflated multiple times with 5DNB. Is it that Najib’s successors are determined to learn his lessons, only bigger and better, as he ‘mentors’ them through his ‘financial expertise’ in running the country?

As the candid complaint of the Minister for Communications makes clear (after all this is not an UMNO project but part of their reluctant deal to keep on Zafrul) nothing has been conducted in the proper way relating to this eye-waveringly expensive and utterly questionable excuse for a government project. Just like 1MDB in other words.

Just like 1MDB, the whole process has been hijacked by an arrogant (and this time entirely unelected) fellow at the MOF, who has immediately placed the project without any tendering or consultation under the murky purview of a so-called special purpose vehicle (SPV) of his own choice.

This SPV has turned out to be an entirely new entity with no previous capital nor existing staff nor infrastructure. ‘Starting from scratch’ as the Minister put it: just like 1MDB.

The SPV moreover is run by flunkeys from outside the existing civil service, a number of whom are of questionable character given their previous records. Just like 1MDB.

Unnamed financial advisors are also discussed as floating in the background of the project and powerfully orchestrating it, with their own interests apparently in mind. Just like 1MDB.

And whilst the touted projections for the project are ludicrously ambitious, the specifics have been unclear. Efforts appear to have been concentrated on extracting the huge sums of money required for the project rather than on working out how any of it really should be spent. Just like with 1MDB, as the Appeal Court spelled out just yesterday in its ruling against Najib.

There is a reason for due process and transparency in government contracting. The rules are there to weed out bad ideas, identify weak projects, reject the wrong actors and prevent criminal looting.

When these rules are specifically ignored and over-ridden and vast sums are poured into opaque structures masked by relentless, mind-numbingly stupid and over-energetic advertising campaigns people have a right to be suspicious and concerned. It all happened with 1MDB and look where that took the country. Now the same is going on with 5DNB.

The Communications Minister was therefore honourable and right to complain that the role of his ministry and its professional staff and infrastructure has been sidelined rather than utilised for its proper purpose. He is right to insinuate a corrupt intent or at the very least an arrogant foolhardiness that needs reined in.

And it’s not just Malaysians who ought be wary. The only thing that looks, swims and quacks differently from 1MDB in this latest UMNO brainchild is that a major western company has stepped in to partner the project. How deeply have they scrutinised their Malaysian counterparts it is fair to ask?

Meanwhile, the costs are exponentially even higher than with the bogus development fund that ended with the largest asset seizure the world has ever seen. 5DNB has seen an initial RM15bn of public money ploughed in,plus now  a further RM11bn top-up to pay for Ericson to build infrastructure that existing telecoms companies were rivalling to invest in had they been allowed to collaborate instead. The latter route was advocated as the better and cheaper option by the Communications Ministry and all experts in the field but for reasons unknown,  Zahidi Zainul Abidin says the Minister of Finance brushed their advice aside.

If 1MDB is a mini-duck therefore 5DNB has all the proportions of a mega-duck.

Did Najib have a point yesterday when he complained that there are so many worse scandals than 1MDB in Malaysia to be wary of? Of course he did. But if no one faces punishment it is clear no lessons will be learnt.

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