Write-up: CEO Series 34: Mohd Nur Ismal, Chief Executive Officer of the Land Public Transport Commission
YCM CEO Series 34: Mohd Nur Ismal, Chief Executive Officer of the Land Public Transport Commission
22nd June 2011
Writing credits: Farhana Roslan
The below is the live-blog write-up on the CEO Series 34 session with Mr Mohd Nor Ismal, Chief Executive Officer of the Land Public Transport Commission (SPAD).
Mr Mohd Nor (MN) started off with outlining the three main items he was asked to come speak to YCM about; the journey of his career, SPAD and of course, the MRT.
When he graduated from university in the US, he took the path every graduate wanted to during the time, which was to become an investment banker. He decided Wall Street was too competitive, and so decided on Chicago. He started his career in CNA Financial Corporation, in an investment-banking job and spent 10 years of his career there, though he claims he made the mistake of staying in the place for too long. He did miss Malaysia and had the idea of returning home at the back of his mind, but he knew if he did, the hit on the compensation was going to be too much.
He decided the best way to go about this problem was to go back to business school. He went to Kellogg for his MBA. Upon leaving business school, there was a shift in the trend from investment banking to management consulting. So he went on from what he called a steady desk job to a career of talking to clients. MN claims this was a challenging experience, but a very fulfilling one; where people “look at you, pour their hearts out and expect you to solve their problems”. He calls it satisfying.
MN knew he had to return to Malaysia, so he did. Upon finding out that AT Kearney, the top tier management consulting firm he works for was expanding into Asia, he took the job offer without even thinking. He spent 3 years in Singapore serving a variety of clients from the Financial Services sector and even microelectronics. Most of the time he was in Singapore and Bangkok, too much so that the apartment in Bangsar that he had, was only stayed in 12 days in a year.
After sometime, MN resigned, and took 1 year off. He spent 6 months in Las Vegas, spending his time deciding whether he wants to return to Malaysia. Las Vegas didn’t work out, and so he returned home. He did not know what to do after, and so joined Accenture, only because they were the ones with most contracts in Malaysia at the time. Malaysia was going through a difficult time, and so he had had to travel, as far as even South Korea.
This was when several leaders on the DRB Hicom board asked MN to come on board. He claims this was the first time; he was playing a “defense” type role, joining a GLC corporation. He also joked that his experience was usually the “offence” player, but now he is playing defense for the government. This was when MN realized that he is already making good money, lived a comfortable life, and could afford to buy anything he wanted, but wanted something more out of his career.
Datuk Seri Mustapa Mohamed, who was then the Minister of Higher Education, asked MN to join him. He jokes “What did I know about education!?” But at the point of time, they were releasing a strategic plan for higher education. MN highlighted that he thought the contents of the master plan was less than what Malaysians deserve. He convinced the ministry to redo the whole plan, but also became extremely unpopular within the ministry along the way. The revised plan didn’t work out either. The minister than asked him to redo it again. That was when, with him on board, the MOHE came up with the National Action Plan for universities, which involved doing away with egalitarianism amongst universities and release institutions to chart their own paths.
MN then joined the team of Ministry of Transport, under Datuk Seri Ong Tee Kiat, where he claimed he “jumped into” the role. Again, he jokes, “What do I know about transport?” That was also when Datuk Seri Idris Jala was transferred onto his role at PEMANDU, and MN again was sourced into the team for 5 short months, to work on the urban transportation NKRA. Datuk Seri Idris Jala offered him a position in PEMANDU but MN was made to understand that that was against the PM’s wishes. He jokes “Oh, so the PM really does hate me that much.” It turns out that the PM had another job waiting for him. A job he claims, that “no one else wants.” MN knew from the start that this was going to be an impossible mission; there is little chance that everyone will be satisfied.
MN decided, whatever it is that is to happen during the period of his contract as SPAD chief, he told himself he wouldn’t care, as long as he can make at least a little change. This was when he admitted it was his colleague Annafi telling him that the commission was in need of manpower and personnel that he was here talking to YCM tonight. He says he thinks this is a good idea, standing in front of the brightest young Malaysians, sharing his story in hope that some of them would be moved by SPAD’s efforts and would want to find “higher meaning” to their career. He jokes, “so this is the end of my sales speech for today.”
MN started off rekindling how popular public transport was back in the 1980’s, before Malaysia started going through fantastic economic growth. People earned more and hence were able to afford their own cars. There were investments in the LRT, monorail, and the Intrakota buses (now Rapid KL). But, nothing has really changed since the 1990’s. We were back to the problem (inaccessibility) and dread blocks, which MN claims was starting to impair economic growth in the affected areas and the city. MN showed that the modal share of people using public transport declined significantly, with 34% usage in 1985, 20% in 1997 and 10-12% in 2008.
Because things were really bad, our beloved PM saw an opportunity, and agreed to include land public transport and MRT as one of the NKRA under the ETP, where the target modal share of users is 25% by 2012. MN was glad that we are on track with 17% modal share achieved last year.
MN highlights the current issues we face. If we are lucky enough to live near the LRT rail network, we could use it. It was made better slightly with the 4 train car sets introduced. KTM, he points out, is still a problem, but expects this to be better when the new longer train car sets are delivered. Buses, are highly unpredictable, taxis are “as you know…” he claims. Networks are unplanned, ad hoc and driven mainly by suppliers and players. The root cause; the way we govern public transport. MN claims that public transport has always been merely an afterthought. DBKL was much more concerned about structural planning, while the MOT did not have much jurisdiction over local councils. We need a holistic approach to address this; this was how the idea of a single authority to address all this issues, came about (SPAD). For those who might be swayed, MN tells the crowd how he only hear one of two things every time he meets people; either “I feel sorry for you I don’t envy you,” or “Great! You are in the hottest team in the government.”
Public transport is a key NKRA. ETP has a few mega projects under it, and the MRT is evidently at the center stage. Even though they were relatively new kids on the block, people tend to listen to them. Although, MN claims that they did not get much power until January this year, although they were formed more than a year ago. SPAD is to act as a centre of planning, enforcing, regulating. They didn’t have as much power as their Singaporean counterpart; because of the constitution, SPAD does not have jurisdiction over local governments. However, the minister in charge is the PM himself, and so SPAD ten to have a lot of influence. MN shares some of the SPAD’s job scope; from broad planning and drawing up the NPT policy framework and the public transport masterplan, enforcement on operators, “boring stuff” like standard setting, and operating call centers for consumer relations purposes, to the project management of the MRT itself. SPAD, he says, is data driven, and builds up its research capabilities as together with the public transport associations. MN disclaims that he does not want to sound too ambitious. Their biggest issue is they are still fighting for next year’s budget, resulting in them having to narrow down their targets next year. Safety, he notes, is a key area that SPAD needs to show major improvement in.
MN assures us that he knows our careers may have involved us having some very low days. He shares that, in his time since SPAD, when it was low, it was really low. He notes the recent NST article blaming the SPAD for the return of taxi touts, as another very low point in his time as CEO. However, the highs are also very high, he claims.
MN moves on talking about how the MRT is the biggest infrastructure project since Malaysian independence. With lesser intensity, is the public transport outside the city. They are playing this down a bit, since this part revolves about of money. He notes that the SPAD wants to be lead by data. They will not be moved, until the data tells them to. Also, they want to publish the data, so the public knows what they are doing. The SPAD also absorbed two government agencies; the department of railway from the MOT and the commercial vehicle licensing board. In terms of number, the SPAD dwarfs them. Now the SPAD is trying to operationalize their operations under it. Other aspects of include, the national framework, investments and allocation of them so that it would be an equitable manner. Right now, the main focus of SPAD is the Klang Valley, and then they will go region by region, starting from Johor, Penang and then Perak.
SPAD is also about to release the Urban Railway Transformation Plan, then taxis, buses, and terminals and networks. They are targeting to release all this by September 2012. MRT will be their centerpiece. MN shows a picture of the current situation of traffic in Malaysia. Part of the map shows read areas, which represents 300minutes of travel time to get into the city centre. If we do not do anything, the situation will reach a point where the whole map turns red (MN shows another photo of what it will be like in few years time).
But Why Is MRT So Exciting?
This is for what it is going to do to the economy. MN highlights Greater KL as the largest NKEA in the ETP; expected to contribute to GNI by US$12billion. What is central to the Greater KL in turn is the issue of mobility. If the picture is as the 2nd scenario (he refers to second photo, where the map turns all red), this US$12billion is not going to happen for Malaysia.
On its own merit, the MRT alone is expected to contribute US$3 to 4 billion in GNI in 10 years, creating 130,000 new jobs, and will multiply via multiplier effect into US$8 to 12billion in a year. The second major advantage is the effects it will have on property price appreciation. Increase in GDV is expected at RM300million a year. MN thinks even this is understated. A third advantage and the most exciting is the 20billion in time savings it will create, which will translate into a total of RM21billion a year that it will create in productivity, according to PEMANDU estimates. MN adds that we are banking on the success of ETP to generate knowledge workers. This is the point where he shows that 1 MRT coach is to carry enough people that 3 buses or 177 cars will carry, to illustrate the tremendous help the MRT will create.
MN takes a step back and disclaims that it is not that they are just too obsessed with the MRT. It is because of sheer distance and the capacity required. He claims that we need the biggest capacity, of more than 25000 people per hour per day (PPHPD). Secondary transport plans include the Bus rapid Transit (BRT).
MN explains that the MRT is expected to carry 1.2million people within the city centre, with daily ridership of 400,000. The alignment will be as long as 51.0km, with 9.5km of it is underground. There will be 35 stations, of which 8 is underground. There will also be park n’ rides, which will consist of 13 floor car parks. The first of 3 lines will be completed in 2016, and commissioned in 2017. He adds that the status of the alignment is sitting on the PM’s desk as he speaks and pending discussions with him, for the PM to make his final decisions, especially in areas where MN claims “people are very loud.” The details of these will be announced end of June 2011, and further details can be obtained at the SPAD website.
MN then went on to explain the people involved. They have been entrusted as the agency to supervise. Syarikat Prasarana Negara will be the asset owner, and will be doing the heavy lifting. He highlights that SPAD is the one with the ultimate authority, and to put simply, he jokes “If the government knocks my head 1st, and if I am alive after that, I will knock on Prasarana’s head.”
He then shares what they are doing; parking space will be ample, during construction traffic management will also be managed, it will not be hassle free he admits, but it will be minimized. Touch n’ Go will be like Oyster and Octopus and can be used across modes of transports and across operators. They will be developing a fantastic feeder service, to take people to the MRT stations, so that people who really need it will use the parking space. All in all, he assures that there is comprehensive effort to make sure that this is going to be a success.
MN then exhibits a slide on the stakeholders; MoF will be the funding co, there will be value management consultants but notes they will be using as little public money as possible on them, independent checking engineers. Meanwhile, SPAD will play the role of supervising agency, while Prasarana is the infrastructure co. Project Development Partners, the term coined to describe MMC-Garuda partnership that went under public scrutiny, is explained to be chosen for their experience in project management, track record, and financial capacity, above just execution. They will be made responsible for and incentivized to deliver earlier than expected or cheaper than budgeted. SPAD has also compared this project to the likes of Crossrail London, ODA Olympics, the Qatar Civil Aviation Centre, and the Korean High Speed Rail project.
MN notes that in the past, the government has tended to have a narrow view of just cost. If they could afford it, they went ahead with it. Now, they are looking at other aspects such as whether the project will present opportunities to further create value. They focus not only on rail but also property. They have looked at Hong Kong and predicted the values in dollar terms receivable from the project. The appreciation of the land will pay for the shortfall in development costs. There is a 5- 38% chance of increased value, when there are MRT facilities nearby. Because the lives are not initially interconnected, when they are, it will create tremendous values, he notes.
MN points out that these values are being looked at to offset the cost of development. He gives the example of how the Docklands Railway Network, and the Kowloon Station created value for the Canary Wharf development and Hong Kong Kowloon district respectively. MN finishes by suggesting the use of these values, to compensate the public money, and not just benefit the private developers, riding on these value creations.