KINIGUIDE | Selangor DRT project - a look at who is involved and more

KINIGUIDE | In the past week, various parties have trained their guns on the Selangor government for alleged nepotism in the Demand Responsive Transit (DRT) programme.

The allegations centre on the selection of Asia Mobility Technologies Sdn Bhd (Asia Mobiliti) as one of two companies chosen for the trial project.

What are the allegations, who is involved, and what exactly is the project? This KiniGuide explores.

What is DRT?

Demand Responsive Transit combines traditional public transport with e-hailing technology.

In short, DRT lets consumers book public transport services like buses or vans through a mobile phone application.

This differs from e-hailing services like Grab where consumers book a private car. For DRT, the vehicle plies a specific radius and the ride is shared with other passengers, who will be picked up and dropped off along the way.

This transit type is favoured as a solution for first- and last-mile connectivity between public transportation hubs and destinations.

Is there a different name for DRT?

Yes, the Land Public Transport Agency (Apad) calls the service “Bus on Demand”.

When was it introduced in Malaysia and what are the criteria?

Apad put out a public notice for any company interested in registering to conduct proof of concept trials on Sept 1, 2022.

To date, only three companies have registered after meeting the proof of concept criteria set by Apad for the Bus on Demand programme.

Apad said the proof of concept period will run until Aug 31 this year, and registered firms can operate only in the zones approved by the agency.

The agency has also set criteria for the size, capacity, and age of vehicles which can be used.

The full criteria:

Who are the three companies and when did they register with Apad?

The three companies are BadanBas Coach Sdn Bhd, Asia Mobiliti, and Kumpool Sdn Bhd.

According to Apad, the companies started operating at different times and registered to do proof of concept projects at different zones.

Apad approved Asia Mobiliti’s registration on Dec 22, 2022 while BadanBas Coach received its approval on Feb 24, 2023. Apad said Kumpool started operating its project on Nov 30, 2023.

BadanBas Coach and Asia Mobiliti are operating in various parts of Selangor while Kumpool’s project is in Melaka Tengah.

Asia Mobiliti’s DRT service is called Trek, BadanBas Coach’s service is called Mobi, and Kumpool’s service goes by the company’s name.

Why is this issue controversial?

In the past weeks, politicians from Bersatu, MCA, Umno, PAS, and Urimai have trained their guns on the Selangor government for alleged nepotism in the DRT project.

This is because one of the two companies, Asia Mobiliti, selected for the nine-month DRT trial in Selangor belongs to Ramachandran Muniandy, the husband of Youth and Sports Minister Hannah Yeoh.

While Yeoh is not part of the Selangor government, she is part of the Pakatan Harapan coalition which governs Selangor.

Critics have also questioned the lack of an open tender, while some said the award was morally wrong due to conflict of interest.

In response, Prime Minister Anwar Ibrahim said he would let the relevant authorities investigate the allegations.

Premesh Chandran, director and former CEO of Malaysiakini, is also Asia Mobiliti’s co-founder. This KiniGuide will address this in a separate section.

What is the MACC’s position?

MACC chief Azam Baki said he found nothing wrong with the deal between the Selangor government and Asia Mobiliti, as it had gone through due process.

How and when were the two companies selected?

According to Selangor executive councillor Ng Sze Han, the companies were selected through a Request for Proposal process and not through a tender, because they were the only companies with the necessary Apad registration at the time.

“The decision to only approach Asia Mobiliti and BadanBas was taken because the state government was starting the proof of concept process of Bus on Demand, and only these two companies were licensed by Apad to participate in proof of concept (trials),” he said in a statement on May 29.

The Bus on Demand trial in Selangor is part of the Selangor Mobility policy, aimed at improving public transportation in the state.

Ng said Apad approved Asia Mobiliti and BadanBas’ proof of concepts on Dec 22, 2022 and Feb 24, 2023, respectively.

As such, the Selangor government issued Letters of Intent to the companies on June 15, 2023 and later, appointment letters on Sept 20, 2023.

Selangor Menteri Besar Amirudin Shari announced the companies’ appointments for the Bus on Demand trial period at the Selangor Smart City & Digital Economy Convention (SDEC) on Oct 20, 2023.

Is the Selangor government paying for everything in the proof of concept trial period?

According to previous news reports, Ng said the Selangor government is subsidising fares at RM3 per passenger, while the passenger forks out RM2 per ride.

Since the proof of concept trial period began, 40,674 passengers have used the service, he said.

He said RM2.1 million in passenger subsidies were allocated to Asia Mobiliti and BadanBas respectively for the entire trial period, to be disbursed in three tranches “to avoid abuse of state funds”.

Ng in his statement also said the Selangor government is paying for “marketing, promotions, technology, monitoring, and management costs” but it is not clear if the RM2.1 million covers these expenses.

According to the Selangor Budget 2024, RM5 million was allocated this year for the DRT project.

How long is the trial period and what happens after that?

The trial period started in November 2023 and will end in July 2024, a total of nine months.

The government did not respond to queries on what it intends to do after the trial period.

Is Selangor opening the proof of concept trial to other DRT providers?

Yes. Ng said Kumpool, the only other DRT service provider registered with Apad, submitted its proposal to the state government this month and it is being evaluated for the project’s next phase.

“We are confident the Request for Proposal assessment process and the decision to involve these companies were done properly… as well as in accordance with existing regulations and guidelines,” he said.

What is the Selangor government’s response to claims of nepotism?

Ng said the evaluation was done based on the results of Apad’s screening, when the agency registered the company to conduct Bus On Demand trials.

“Referring to why Ramachandran, the husband of Yeoh, was awarded a state contract, it is important to note that the selection committee’s evaluation was based on the company’s ability to meet preliminary vetting by Apad, which then gave the approval for the firm to join the proof of concept trial,” he said.

He added that the other company selected by Selangor, BadanBas, was evaluated in the same way.

What is Asia Mobiliti’s response to the allegations?

Premesh dismissed allegations of nepotism and argued an open tender was unsuitable because there were only two companies with the necessary Apad registration to participate in Selangor’s proof of concept trial.

“The core issue is that since only two companies had the necessary Apad licence to provide the DRT service, do you (i) call a tender and give one company a monopoly, or (ii) split the zones and let two companies compete during the nine-month trial period?

“The state govt chose the latter, with full transparency and accountability in place. For Asia Mobiliti, we are always happy to compete for tenders - win some, lose some,” he said in a post on LinkedIn.

He also said the criticism was less about Asia Mobiliti’s competency but an attack against “a politician doing good work, by attacking her husband”.

“A dirty game,” he said.

He also said the companies had made significant investments on their own to participate in the trial period, including in human resources and equipment, but did not state the amount invested.

Malaysiakini has also contacted BadanBas for details about their investments in the programme.

Is Malaysiakini linked to Asia Mobiliti?

Malaysiakini has no business links to Asia Mobiliti. However, both companies are partly owned by Premesh.

Premesh stepped down as CEO of Malaysiakini in February 2022 but remained as the company director.

Neither Asia Mobiliti nor Premesh dictate Malaysiakini’s editorial policies, while Malaysiakini’s corporate and editorial management teams are not privy to Asia Mobiliti’s dealings.

There was no monetary support or investment from Malaysiakini into Asia Mobiliti or vice versa.

Is Malaysiakini involved in the DRT project?

In short, no. This is despite Malaysiakini being listed as a partner on Asia Mobiliti’s website.

Asia Mobiliti’s DRT service Trek was demonstrated for the first time during a session held at the Malaysiakini office in September 2021.

The demonstration was presented to Selangor state government representatives including Bukit Gasing assemblyperson Rajiv Risyakaran.

Also present was then Menteri Besar Selangor Inc CEO Norita Mohd Sidek.

The demonstration also involved a test ride which departed from Malaysiakini’s office to what was proposed as the first pilot zone around the PJ New Town and Old Town areas.

At the same time, between 2020 and 2021, several articles about Asia Mobiliti were published as corporate announcements on Malaysiakini’s website.

The corporate announcements segment of the website is run by Malaysiakini’s subscription team and advertising arm FG Media without involvement from the portal’s editorial department.

“The promotional announcements were in the context of a partnership with Malaysiakini, to design the first pilot zone around the PJ New Town and Old Town areas.

“It would have included the Malaysiakini office in Section 51, linking the area to the Asia Jaya and Taman Jaya LRT stations, hence making the area more accessible for public transport users,” Premesh told Malaysiakini.

Given the non-official nature of the initial partnership, and to ensure there are no untoward perceptions about Malaysiakini’s editorial independence, the Malaysiakini management has requested for the company’s logo to be removed from the Asia Mobiliti website.

What do other corruption watchdogs say about Selangor and Asia Mobiliti’s response?

Center to Combat Corruption and Cronyism (C4 Center) said because only two companies were considered, Asia Mobiliti should have been aware of how the selection might be perceived.

The NGO rejected the response by Asia Mobiliti that an open tender could have led to a monopoly.

It also claimed the criteria for the selection was not disclosed openly, casting aspersions over the matter.

It also ticked off Azam for swiftly clearing the case of corruption, adding that the issue underscores the need for a better legal framework to deal with conflict of interest.

“A clearly defined scope must be established to clarify what constitutes a conflict of interest, with stipulations that restrict or outright prohibit actors with contentious relations to the dealings.

“There must then be full disclosure provided to the public for any proceedings flagged as having conflicts, allowing for better transparency and easing future investigations,” C4 Center said.

What about the other companies - who are they?

According to its corporate profile, BadanBas was established in 2001 and helmed by Mohd Nadzmi Mohd Salleh.

Nadzmi was formerly the chairperson of Konsortium Transnasional Bhd from 2005 to 2021 and is currently the executive chairperson of KLIA Express.

BadanBas itself is owned by Nadicorp Holdings Sdn Bhd, an investment holding company with a stable of 23 operating subsidiaries engaged in various activities.

According to NadiCorp’s profile, Nadzmi is listed as the company’s founder.

Meanwhile, Kumpool’s public profile states the company is a division of Causeway Link, one of the largest public bus companies in Johor Bahru.