Signs are emerging that all is not well with the recently-approved giant incinerator plant in Broga, Semenyih.

Tokyo-based Ebara Corporation was hired by the Housing and Local Government Ministry (project proponent) last February to design, build and commission the 1,500-tonne plant by 2007.

A consortium, comprising Ebara and its local partner Hartasuma Sdn Bhd, was appointed for the project located on a 270-ha site within a river basin gazetted by the Selangor government as an environmentally-sensitive area.

The Joint Venture Company's (JVC) contract with the Housing and Local Government Ministry includes a technology transfer programme aimed at turning local vendors into global players who are technically and financially competitive.

All knowledge on operational and maintenance procedures involving the fluidised-bed gasification and ash-melting technology Ebara has proposed must be transferred to locals by the end of the contractual period.

The contractor is also required to maximise the use of local materials and utilities for the project.

'Not pleased'

However, sources close to the RM1.5 billion deal said the government was 'not pleased' with the lack of framework from Ebara on how it planned to implement the technology transfer programme.

"The government is clearly upset with the way things are going, especially Ebara's unpreparedness in identifying local vendors for the technology transfer programme till now."

"Future meetings with Ebara have also been postponed until and unless some seriousness is seen about its contractual commitment," the sources told malaysiakini.

These became contentious issues at a technical committee meeting recently chaired by secretary-general of the Housing and Local Government Ministry Lokman Hakim Mohd Jasan.

Government officials and experts on technical matters, health and environment make up the committee.

Despite repeated attempts to clarify these issues, ministry officials have refused to respond.

One of the contractual terms is for the Broga plant to be ready for operation within 38 months of the commencement of actual work. The contractor is to hand over the plant to the government a year later.

Sources have questioned if the issues constitute a breach of contract.

"Is there a breach? If so, what happens to the contractor? The government must immediately terminate the contract and do the necessary if a breach has occurred.

"Strange that these issues should crop up now. The government should have ironed out all problems before awarding the project or approving the EIA report," they said.

In late May, the Department of Environment conditionally approved the project. Once the possession of site (POS) is granted, the contractor can begin the construction work.

"The POS will not be given anytime soon," said Local Government Department director-general Mohamad Saib when asked about the POS last week. He declined to comment further.

Numerous attempts seeking further clarification from top ministry officials were also futile.

Three more projects

Sources said the contractor was also bartering for three more local projects after Broga in exchange for its technology transfer.

"The government has refused to guarantee or commit to the demands and has instead told the contractor to transfer its core technology as agreed."

"Some industry players were still pushing for an alternative contractor to complete the Broga project.

"If the present deal falls through, the Japanese companies who lost the bid for this project should be considered as they are willing and capable of doing the same job on the specified terms."

In questioning Ebara's reluctance to execute the technology transfer plan, sources said the contractor wanted full control of the plant including operations and maintenance.

"But the contract requires the transfer of operations and maintenance of the plant to a local company, in this case, Hartasuma, or to staff from a third company.

"But then again, Hartasuma is retained merely to handle local bureaucracy on behalf of the Japanese partner."

Sources said this was an 'Ali Baba arrangement' (Bumiputera participation is merely token in order to secure contracts) because the contract has clearly stated that any sub-contractor hired by the JVC must be government-approved.

Hartasuma is said to have hired Ebara Environmental Engineering (M) Sdn Bhd (EEEM), fully-owned by Ebara, as a sub-contractor for preliminary works including soil testing for the environmental impact assessment study.

"But EEEM is not a government-approved sub-contractor. Furthermore, the government does not know of this internal arrangement.

"Why would Hartasuma want to engage a company whose core business is wastewater treatment for soil testing?"

Sources said EEEM subsequently sub-contracted the soil testing to another local company.

This also could not be verified with the ministry.

Cost marked up

Sources also claimed that the total project cost has been marked up considerably - more than half the amount.

"The industry standard to estimate the project value per incinerator unit used to treat one tonne of waste is RM300,000. This totals up to RM800 million to treat an estimated 1,500 tonnes (the Broga plant's maximum capacity) of waste.

"Work in reverse using the total cost of RM1.5 billion for Broga and you can see that it now costs RM1 million to treat one tonne of waste," sources explained.

"How can the government or contractor explain this sum?"

Sources said another thorny issue is over the use of local content in the project, especially hardware sourced within Malaysia.

"Ebara has proposed to use 15 percent local content but the government wants close to what was used for an incinerator in Singapore. For that plant, 70 percent of its content was fabricated and sourced in Malaysia.

"The government wants the same content breakdown for the Broga plant."

The local and international anti-incinerator lobby wants Malaysia to totally reject incinerator technology, arguing that alternative waste disposal methods are much cheaper, more effective and definitely safer.

The project has come under heavy criticism, both locally and internationally, since it was relocated to sparsely-populated Semenyih/Broga about two years ago.

The Semenyih/Broga No Incinerator pro-tem action committee, comprising local residents from nearby villages and housing estates trying to stop the project, has tried in vain to engage the government in a dialogue during the environmental impact assessment (EIA) study.