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MINUTES OF 14th NAPSEC MEETING - Final

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					               MINUTES OF MEETING OF THE 14TH
       NATIONAL PROFESSIONAL SERVICES EXPORT COUNCIL
                          (NAPSEC)


Date                   :    21st December 2005 (Wednesday)

Time                   :    2.30 p.m. – 5.35 p.m.

Venue                  :    Bilik Mesyuarat Perdana
                            MATRADE, 7th Floor,
                            Wisma Sime Darby,
                            Kuala Lumpur

Chairman               :    Y.Bhg. Datuk Merlyn Kasimir
                            Chief Executive Officer, MATRADE


Members Present

Y. Bhg. Tan Sri Dato’ Ir. Md. Radzi bin Mansor
Board of Engineers Malaysia (BEM)

Y. Bhg. Dato’ I. Dorairajoo
Professional Services Development Corporation (PSDC)

Ir. Henry E. Chelvanayagam
Association of Consulting Engineers Malaysia (ACEM)

Tuan Haji Khuthubul Zaman Bakari
Bar Council Malaysia

Dr. Choe Tong Seng
National Pharmaceutical Control Bureau
Ministry of Health

Hajjah Ungku Anna Hj. Ungku Mohamed
Malaysian Professional Centre

Mr. Nik Mohd Hasyudeen Yusoff
Malaysian Institute of Accountants (MIA)




                                   1
Y. Bhg. Datuk Haji Zakaria Hashim
ZL Management Services Sdn. Bhd.

Dr. Chong Su-Lin
Association of Private Hospitals Malaysia (APHM)

Mr. Dan E. Khoo
Association of the Computer and Multimedia Industry Malaysia (PIKOM)

Member’s Representatives

Mr. Mohd Zain Mohd Dom
Ministry of International Trade and Industry (MITI)

Mr. Resham Singh
Export-Import Bank of Malaysia Berhad (EXIM Bank)

Mr. Raja Nushirwan bin Zainal Abidin
Ministry of Foreign Affairs

Mr. Khoh Joo Bee
Ministry of Works Malaysia

Dr. Norzari bin Hamat
Economic Planning Unit (EPU)

Ir. Choo Kok Beng
Institution of Engineers Malaysia (IEM)

Mr. Mohd Zaid Zakaria
Construction Industry Development Board (CIDB)

Mr. Mohamed Akwal Sultan Mohamad
Bank Negara Malaysia

Mr. Andrew Khoo
Bar Council Malaysia

Mr. Isaac Sunder Rajan
Malaysian Professional Centre

Mr. Razeman bin Kamarulzaman
Association of the Computer and Multimedia Industry Malaysia (PIKOM)


                                    2
Also Present

Mr. Noharuddin Nordin
Deputy Chief Executive, MATRADE

Mr. Zakaria Kamarudin
Director
Services and Product Promotion Division, MATRADE

NAPSEC Secretariat

Ms. Rusiah Mohamed

Ms. Hasziah Mat Yazid

Mr. Ahmad Shanizam Ab. Ghani

Mr. Mohd Hafiz Abdul Jalil

Absent with Apology

Y. Bhg. Dato’ Esa bin Mohamed (Chairman)
Board of Architects Malaysia

Y.Bhg. Datuk N. Arumugam
Malaysian Medical Association (MMA)

Y.Bhg. Dato’ Ooi Say Chuan
Ministry of International Trade and Industry (MITI)

Y.Bhg. Dato’ Syed Jamal Syed Jaafar
Ministry of Works Malaysia

Y. Bhg. Datuk Ir. Hamzah Hasan
Construction Industry Development Board (CIDB)

Y.Bhg. Dato’ Wan Mohamad Mukhtar Mohd. Noor
Board of Town Planners Malaysia

Ir. Prof. Dr. Ow Chee Sheng
Institution of Engineers Malaysia (IEM)




                                    3
Mr. Cheah Choong Kit
Ministry of Foreign Affairs

Ms. Mary Artylan Fernandez
Ministry of Finance

Ms. Harvinder Kaur
Economic Planning Unit (EPU)

Mr. Mohd Noordin Abbas
Export-Import Bank of Malaysia Berhad (EXIM Bank)

Mr. Marianus Vong Shin Tzoi
Bank Negara Malaysia

Ms. Tan Pei Ing
Institution of Architects Malaysia (PAM)

Ms. Wan Maimun Wan Abdullah
Institution of Surveyors Malaysia




                                    4
1.   INTRODUCTION

     1.1   The Chairman welcomed NAPSEC members and their
           representatives to the 14th meeting of the council.

2.   ADOPTION OF MINUTES OF THE 13TH NAPSEC MEETING

     2.1   The meeting adopted the minutes of the 13th NAPSEC
           meeting without amendments.

3.   MATTERS ARISING

     3.1   Construction Opportunities in Sri Lanka.

           3.1.1   The meeting was informed that to date, Malaysian
                   contractors have yet to receive any feedback from
                   Asian Development Bank (ADB) regarding the pre-
                   qualification of the Colombo-Katunaye Expressway.
                                                         Action: CIDB

     3.2   Construction Mission to Senegal.

           3.2.1   The meeting was informed that the Dhakar-Theiss
                   Highway project in Senegal would not be pursued
                   since the 12km strategic stretch of the highway had
                   been tendered out.
                                                       For information

     3.3   Construction Project in Iran.

           3.3.1   The meeting was informed that, through the
                   Malaysian Minister of Works, CIDB and its
                   consortium had submitted a letter to seek an
                   appointment with the Iranian Minister of Roads and
                   Transportation. The proposed date of 15 December
                   2005 was not agreed to by the Iranian as it was a
                   public holiday in Iran. An alternative date was given
                   for consideration. CIDB is working closely with the
                   Malaysian Embassy in Iran to obtain a new date for
                   the appointment.

           3.3.2   The objective of the proposed appointment is to brief
                   the Minister on the contents of the report and to

                                   5
              solicit feedback from him on the report submitted
              earlier.
                                                   Action: CIDB

3.4   Mission to Manila.

      3.4.1   The meeting was informed that there was no official
              feedback or response from ADB on the Asian
              Tsunami Fund.
                                                For information

3.5   Construction Projects in India.

      3.5.1   The meeting was informed that CIDB had submitted
              the first draft of the MOU to the Government of
              Punjab on 31 October 2005. To date, there has
              been no official feedback received on the contents
              as well as the date for the signing of the MOU from
              the Government of Punjab.
                                                      Action: CIDB

      3.5.2   The meeting noted that, up to November 2005,
              Malaysian contractors had secured 7 projects valued
              at RM2.75 billion. As two of the projects involved
              were in the construction of a Power Plant in
              Chattisgargh and a property development in
              Hyderabad, the scope of involvement of Malaysian
              construction companies in India had been expanded.

      3.5.3   The meeting was also informed that there has been
              no further development regarding CIDB’s meetings
              with the 4 Malaysian companies listed by the
              National Highways Authority of India (NHAI) in
              August 2005 as the “non-performing” contractors.
                                                For information

3.6   Y.A.B Prime Minister’s Visit to Pakistan.

      3.6.1   The meeting was informed that the National Highway
              Authority of Pakistan (NHAP) has approved CIDB’s
              request for the submission date of the 19 essential
              documents for the project study to be extended until
              31 December 2005.

                             6
      3.6.2   The technical and financial proposal of the
              Faisalabad – Khanewal Motorway (M4) project is
              being prepared by CIDB.
                                            For information

3.7   “International Initiatives in the ASEAN Region” by MIA.

      3.7.1   The meeting was informed of the initiative by MIA
              whereby information on the Malaysian accounting
              profession exports statistics based on the 15 firms
              within the focus group would be made available at
              the next meeting.
                                                     Action: MIA

3.8   “The 4th International Property Investment &
      Development Event (CITYSCAPE 2005), 17-19 September
      2005.”

      3.8.1   The meeting was informed that MATRADE had
              organised   Malaysia’s participation in the
              CITYSCAPE 2005 which was held from 17-19
              September 2005.

      3.8.2   The report of the event had been tabled in the last
              meeting and for CITYSCAPE 2006, MATRADE has
              confirmed its participation with the organiser.
              MATRADE invites Malaysian professional service
              providers to join MATRADE in this event.
                                                 For information

3.9   Professional Services Brochure: Sharing Malaysian
      Wisdom With The World.

      3.9.1   The meeting was informed that NAPSEC Secretariat
              had received some suggestions from Dr. Wan Mohd
              Mahidin bin Wan Kadir from the Ministry of Works on
              further improvement for the brochure.
                                                  For Information




                             7
     3.10 “East Asia Business Exhibition (EABEX ’05), 10-14
          December 2005”.

           3.10.1      The meeting was informed that the East Asia
                       Business Exhibition (EABEX '05) organized from
                       10-14 December 2005 was a success with a total
                       of 9,720 visitors of which 5,775 were local and
                       3,945 were foreign visitors.

           3.10.2      The meeting was also informed of the sales
                       generated for the services sector during
                       EABEX’05 at RM2,970,000 (RM60,000 were
                       immediate sales and RM2,910,000 were sales
                       under negotiation).
                                                    For information

     3.11 Proposed Singapore – Malaysia Joint Construction
          Mission to Turkey, 25-29 November 2005.

           3.11.1 The meeting was informed that CIDB together with 5
                  Malaysian companies had participated in the
                  Singapore – Malaysia Joint Construction Mission to
                  Turkey held from 25 -29 November 2005. Detail
                  information on the mission as per item 5.5.
                                                       For information

4.   EXPORT PROMOTION STRATEGY & ISSUES.

     4.1   “Export Services Financing and Key Challenges” by
           EXIM Bank of Malaysia Berhad.

           4.1.1    The meeting was informed that the EXIM Bank’s
                    financial assistance for the professional services
                    sector is mainly in the area of Export Services
                    Financing where contracts have been signed for
                    projects in various non-traditional markets like Saudi
                    Arabia, Qatar, India and Thailand.

           4.1.2    The meeting was informed        that EXIM Bank has a
                    facility called the Export of   Services Facility (ESF)
                    which principally looks at      financing the services
                    sector, not at any particular   sector but at the whole



                                    8
        wide range of the services sector as long as it
        involves the export of services.

4.1.3   Export of Services Facility provided by EXIM Bank
        finances services projects that can demonstrate a
        stream of foreign exchange earnings that is material,
        sustainable and represents a bankable risk.

4.1.4   Some examples of such projects include the tourism
        sector, medical sector, education sector, contract
        research sector, knowledge processing sector,
        entertainment (film) sector and information and
        technology sector.

4.1.5   Compared to other financing that’s available in the
        market, Malaysian companies will probably find more
        financing assistance in the commercial sector to
        finance companies from the services sector because
        of the traditional facilities like RCs and ODs.
        However, the collateral securitisation can pose a
        problem as it is difficult to finance a service project
        as compared to a manufacturing project.

4.1.6   The meeting was informed that EXIM Bank would
        consider financing projects that will provide service
        revenues to the country. However, being the first
        mover in the industry, the bank will have to look at
        example of services seriously and evolve with new
        techniques of appraisal and innovative forms of
        security.

4.1.7   The meeting was also briefed on the constraints
        faced by EXIM Bank. One of the main constraints is
        the lack of data in the services sector. Even in the
        case of well established sectors, while data on the
        overall sector may be available, data on the
        exchange earnings aspect is difficult to obtain. Even
        the reliability of data on certain sectors like tourism
        and films is not always validated. Thus, EXIM Bank
        needs to use its own internal research and planning
        specialist to investigate the sector and estimate its
        performance potential.



                        9
4.1.8   Other constraints that EXIM Bank has to cope with
        include the sustainability of the earnings potential
        and to ensure that the comparative advantage
        embodied in the venture will prevail for a reasonable
        period of time. Without such assurance, EXIM Bank
        cannot commit funds for a reasonable time horizon.

4.1.9   The meting was informed that as part of its internal
        budget, EXIM Bank promotes the professional
        services quite aggressively to ensure that the Bank
        achieves a certain portion in the exports of services.
        For 2006, EXIM Bank has allocated 30 per cent of its
        short to medium term financing including trade
        financing to do the promotional activities of exports
        of services.

4.1.10 The meeting further noted that EXIM Bank is being
       strengthened to aggressively assist in the financing
       of the exports of professional services including
       construction services. In assisting the professional
       services, the meeting suggested that EXIM bank to
       come out clearly with the risk factors that a company
       may encounter overseas rather than the capability to
       deliver. In having this list, companies will try to avoid
       the risks and operate their projects more soundly
       based on the Bank’s criteria. In addition, a guideline
       or a timeline on the process for an application should
       also be provided to the companies.

4.1.11 The meeting was informed that the professional
       services sector would actually like to see EXIM Bank
       comes out with special tailored made programmes
       and clearer rules and guidelines to cater for the
       professional services. The reason for the
       restructuring of EXIM Bank is to allow the bank to
       take more risk in providing financial assistance to the
       services companies. The meeting suggested the
       secretariat to make a follow-up with EXIM Bank to
       request for new initiatives or programmes tailored for
       the services sector in particular the professional
       sector.
                                          Action: EXIM Bank



                         10
4.2   “Outcome of the 6th WTO Ministerial Conference: Impact
      on Services, In Particular Professional Services” by MITI.

      4.2.1   The meeting was briefed on the 6th WTO Ministerial
              Conference held in Hong Kong on the 18 December
              2006. The Ministerial Declaration issued at the end
              of the conference indicates that the Ministers agree
              to a package where they could have negotiating
              modalities on all the sectors including the services
              sector.

      4.2.2   In the Ministerial Declaration, the services
              negotiations are referred to in paragraphs 25, 26 and
              27 as follows:

              a) Paragraph 25: The negotiations on trade in
                 services shall proceed to their conclusion with a
                 view to promote the economic growth of all
                 trading partners and the development of
                 developing and least-developed countries (LDC).
                 Paragraph 25 also stated the reaffirmation of the
                 objectives and principles stipulated in the GATS,
                 the Doha Ministerial Declaration, the Guidelines
                 and Procedures for the Negotiations on Trade in
                 Service and the Modalities for the Special
                 Treatment     for    Least-Developed         Country
                 Members in Negotiations on Trade in Services,
                 as well as Annex C adopted by the General
                 Council in 2004;
              b) Paragraph 26: Urging all Members to participate
                 actively in negotiations towards achieving a
                 progressively higher level of liberalisation of trade
                 in services;
              c) Paragraph 27: Intensifying the negotiations in
                 accordance with the above principles and the
                 objectives, approaches and timelines set out in
                 Annex C.

      4.2.3   Annex C as mentioned in paragraphs 25 and 27 is
              the qualitative guidelines or benchmarking for
              members in achieving a progressively higher level of

                              11
        liberalization of trade in services for the next round of
        negotiations.
4.2.4   The meeting was further briefed on the main features
        of Annex C:

        a) Objectives in paragraph 1 stipulate benchmarking
           in the form of qualitative guidelines when making
           market access commitments in all modes of
           supply;
        b) Paragraph 4 (a) of importance to Malaysia as it
           allows the application of Emergency Safeguard
           Measures (ESM) in services;
        c) Paragraph 4 (b) is contentious as it concerns with
           government procurement;
        d) Paragraph 4 (c) could be detrimental as it deals
           with subsidies provided by member countries;
        e) Paragraph 5 deals with disciplines on domestic
           regulation under VI:4 of GATS to be developed
           before the end of Doha Development Agenda
           (DDA);
        f) Approaches in paragraph 6, 7 and 8 allow for
           plurilateral negotiations to take place;
        g) Paragraph 9 on LCDs and 10 on technical
           assistance for all developing countries;
        h) Timelines provide dates set out in order to
           achieve a successful            conclusion of the
           negotiations:

            Outstanding the initial offer as soon as
             possible;
            Plurilateral requests to be submitted by 28
             February 2006;
            Second round of revised offers to be submitted
             by 31 July 2006;
            Final drafts schedules to be submitted by 31
             October 2006.

4.2.5   As the provisions for flexibilities cut across the
        Declaration and Annex C, it is important for service
        industry to reiterate them during negotiations. The
        flexibilities are:



                        12
        a)    Reaffirmation of the GATS objectives and
              principles. This is important as it explains
              about the respect of the national objectives;
        b)    Flexibities granted by the GATS Article XIX:2
              which allows open up of market based on the
              country’s readiness;
        c)    Particular attention to sectors and modes of
              supply of exports interest to developing
              countries.

4.2.6   In conclusion to the 6th WTO Ministerial Conference,
        services negotiations have entered a new phase.
        Qualitative benchmarks, plurilateral approach and
        with the set out timelines would put pressure on
        Malaysia’s services industry. However, Malaysia’s
        services industry may utilize the opportunity in next
        year’s negotiation to seek better market access in
        other countries.

4.2.7   While plurilateral approach would provide strength in
        numbers to push for Malaysia’s interest, Emergency
        Safeguard Measure’s (ESM) progress will remain
        slow and domestic regulation disciplines will
        encompass all services sectors.

4.2.8   In preparing for next year’s negotiations, Malaysia’s
        services industry needs to advise MITI on the
        following matters:

        a) The type of market access commitment required
           from Malaysia’s trading partners;
        b) The level of market access that Malaysia can
           provide taking into account the objectives listed
           in Annex C;
        c) The type of ESM that is required;
        d) The type of disciplines on domestic regulation
           that Malaysia can agreed to.

4.2.9   Services industry is also urged to consider
        plurilateral approach on sectors of export interest
        and advise MITI accordingly, collaborate with other
        countries of similar interest to pursue such approach
        with third parties and adhere to the given timelines.

                       13
                                                     For information

4.3   Development of Private Health Facilities and Hospital
      Related Services as Sources of Foreign Exchange
      Earnings” by APHM.

      4.3.1   The meeting was informed that in 2004, Malaysia’s
              earnings in terms of foreign patients revenue were
              RM105 million. However, this is an under reported
              revenue mainly because the reporting of patients
              data and financial information was not mandatory
              and APHM could only obtained data from the
              hospitals that were listed with the Association. From
              the observation made, Melaka received most of the
              foreign patients whom were mostly Indonesia.

      4.3.2   The foreign patients revenue of RM105 million was
              earned from 175,000 patients and this figure had
              actually doubled compared to year 2002 and 2003.
              As a comparison, in the same year, Singapore saw
              270,000 patients and earned RM1.1 billion where as
              Thailand received 1.1 million patients and earned
              RM2.2 billion. As an example, in Bangkok, Thailand,
              one hospital alone treated 3,000 patients per day
              and most of them were foreign patients. In this
              regard, Malaysia is far behind Singapore and
              Thailand but there is a vast potential for this sector to
              grow.

      4.3.3   The meeting was also informed that after two years
              of experience in participating in trade missions and
              exhibitions, APHM sees the potential of healthcare
              tourism in Malaysia in the following areas:

              a) Wellness and cosmetic surgery or wellness and
                 aesthetic plastic surgery;
              b) Acute care;
              c) Healthcare products (Pharmaceutical, Herbal
                 Medicine);
              d) Education.




                              14
4.3.4   The meeting took note that Malaysia should also
        strongly market the leisure and wellness paradigm
        consisting of the following:
        a) Health spa resorts which consist of promoting
            reflexology and aromatherapy, facial and skin
            enhancement and traditional and complimentary
            medicine;
        b) Cosmetic surgery;
        c) Medical screening to pick up hidden risk factors.

4.3.5   In the missions that APHM had participated, there
        had been many major requests, especially from
        Indonesia and India, for training of nurses and
        doctors. Apart from that, due to the shortages of
        nurses world wide, Malaysia is promoting nursing
        education and paramedic training. Some private
        colleges in Malaysia are now allowed to provide for
        this training.

4.3.6   Besides healthcare services, Malaysia is also
        offering specialised hospital management services
        which include planning, designing, commissioning
        and managing of healthcare facilities. Johor
        Corporation Group as an example has exported their
        services in this area by taking up projects in
        Bangladesh and Indonesia.

4.3.7   The meeting was informed that Malaysian hospitals
        do not have a coherent strategy when they go
        abroad for promotion. Each hospital will promote
        what ever they would like to promote and this has
        resulted to Malaysia not being recognised to be
        strong in any specific areas. Ministry of Health, in
        assisting APHM on this matter has informed that
        there would be two pilot hospitals from the public
        sector that would participate for promotion.

4.3.8   The meeting was informed that recently, a Corporate
        Policy and Health Industry Division in the Ministry of
        Health was formed to undertake the following tasks:




                       15
                   a) To develop and market the pharmaceuticals and
                      herbal products produced by the private
                      hospitals;
                   b) To promote healthcare and related educational
                      services;
                   c) To market Malaysia’s healthcare products.

           4.3.9   The meeting was also informed that the Ministry of
                   Health has provided some grants and funds to
                   assist private hospitals to participate in major
                   conferences and international healthcare exposition
                   as well as in organising the Malaysia International
                   Healthcare Expo to be held in Kuala Lumpur in June
                   2006. APHM would also collaborate with Tourism
                   Malaysia to bring in foreign visitors to the said Expo.

           4.3.10 The tagline for Healthcare Malaysia, “Malaysia Truly
                  Asia, Your Next Healthcare Destination Malaysia:
                  Your Perfect Prescription” together with its core
                  values is envisaged to bring Malaysia’s healthcare
                  services into a new era.

           4.3.11 The meeting suggested that as a marketing strategy,
                  Malaysia should develop and internationalise their
                  indigenous standards. This can be materalised by
                  emulating some of the benchmarks that have been
                  established in the market and in the long run, it
                  would benefit Malaysia.
                                                    For information

5.   TRADE REPORTS / MARKET ALERTS

     5.1   Specialised ICT Marketing Mission To Shanghai and
           Beijing, 24 – 28 December 2005

           5.1.1   The meeting was informed that MATRADE, in
                   collaboration with the Multimedia Development
                   Corporation (MDC) and the Association of the
                   Computer and Multimedia Industry, Malaysia
                   (PIKOM) had organised a Specialised ICT Marketing
                   Mission to Shanghai and Beijing from 24 – 28
                   October 2005 which was led by Y.Bhg. Datuk Merlyn
                   Kasimir, CEO MATRADE.

                                   16
5.1.2   The mission comprised 39 representatives from
        MATRADE, PIKOM and 27 Malaysian ICT
        companies. The programmes arranged during the
        mission include presentations on ICT industry in
        Malaysia at the Seminar on Malaysia-China ICT
        Industry in Shanghai and Beijing, individual business
        consultation sessions, visits to Software Parks in
        Shanghai and Beijing and visits to Shanghai Xuhui
        and District Software Base.

5.1.3   The meeting was also informed that the objectives of
        the mission, among others were to enhance
        cooperation and widen business networking between
        Malaysian participants and Chinese ICT providers as
        well as to establish business collaborations between
        Malaysian and Chinese ICT companies.

5.1.4   Some of the prospective collaborations between
        Malaysian and Chinese ICT companies that had
        been identified were:

        a) Harbour Network Limited in Beijing would be
           exploring the possibility of establishing a
           representative office in Malaysia;
        b) Representatives of the China Software Industry
           Association (CSIA) and the China Multimedia
           Industry Sub-Association would be visiting Kuala
           Lumpur for the purpose of looking into the
           prospect of establishing regional offices within
           the Multimedia Super Corridor;
        c) The Enterprise Resource Management (ERP)
           Sub-Association of CSIA would be visiting Kuala
           Lumpur and in conjunction with the visit, both
           MDC and PIKOM planned to jointly organise a
           forum on ERP that would involve the participation
           of local ERP solution providers.

5.1.5   The meeting was also briefed by PIKOM on the
        feedback received from the participants. Overall, the
        participants were satisfied with MATRADE’s
        arrangement of the mission. Together as a group,
        the mission has more credibility and gained more

                       17
              access compared if they were to organise it on their
              own. In addition, the mission members appreciated
              the efforts taken by the Secretariat to arrange for the
              individual business meetings both in Shanghai and
              Beijing.
      5.1.6   Malaysian ICT companies had been apprised of the
              potential of China’s ICT market and the level of
              technological advancement that China is currently
              pursuing in the ICT sector. They identified several
              potential areas for exporting into China as well as for
              forging synergistic ties with Chinese counterparts in
              certain niche areas where China is still lacking such
              as mobile content and technology, and enterprise
              resource planning (ERP).
                                                    For information

5.2   Visit by Construction Industry Development Board
      Malaysia (CIDB) to Kenya, 23-28 October 2005.

      5.2.1   The meeting was informed that CIDB had organized
              a construction mission to Kenya from 23-28 October
              2005. The nine-member delegation, comprised
              representatives from the Ministry of Works,
              Malaysian Highway Authority, CIDB and construction
              companies namely Muda Jaya Berhad and Plus
              Expressway Berhad.

      5.2.2   Led by Mr. Ir. Md. Amir Kassim, Director, Highway
              Planning Unit, Ministry of Works, Malaysia, the
              mission visited relevant Ministries and identified 4
              potential areas to be ventured by Malaysian
              companies:

              a)   Road/Highway concessions;
              b)   Housing development;
              c)   Power generation plants including IPP;
              d)   Airports and building development.

      5.2.3   As the outcome of the mission, the Ministry of Works
              of Malaysia had presented the Kenyan Head of
              Public Service, a draft           Memorandum of
              Understanding    (MOU)     which     outlayed     the
              Government of Malaysia’s interest in fostering closer

                              18
              economic ties with the Government of Kenya. The
              private sector companies, Muda Jaya Berhad and
              Plus Expressway Berhad had continued to follow up
              on their own ventures.
                                               For information
5.3   The 12th International Exhibition for the Oil, Gas &
      Petrochemical Onshore and Offshore Industries (OGS
      2005), 6-9 November.

      5.3.1   The meeting was informed that the Onshore and
              Offshore Oil, Gas & Petrochemical sector is one of
              the potential sectors for exports and MATRADE had
              been assisting Malaysian companies in promoting
              this sector.

      5.3.2   MATRADE participated in the 12th International
              Exhibition on Onshore and Offshore Oil, Gas &
              Petrochemical Industries (OGS 2005) from 7-9
              November 2005, in Dubai, UAE. A total of 7
              companies plus the Offshore Structure Fabricators
              Association of Malaysia (OSFAM) had participated in
              the exhibition.

      5.3.3   The meeting was also informed that this exhibition
              was held once in every 3 years. However, starting
              from next year (2006), it will be an annual event.
              MATRADE will continue to assist Malaysian
              companies participation in this exhibition.

      5.3.4   Overall, Malaysian participants were satisfied with
              the OGS 2005. The exhibition was a great platform
              for Malaysian companies to obtain first contact points
              in business opportunities especially for the oil and
              gas sector in the Gulf region. For repeated
              participants, the event was successful in re-
              establishing their presence in the Gulf States in order
              to strengthen their networking.

      5.3.5   All participants agreed that UAE offers a range of
              opportunities as the country emerged as a sourcing
              centre for all kind of products and services including
              the oil and gas related sector in the Middle East.



                              19
      5.3.6   As the outcome of the exhibition, Malaysian
              companies concluded RM9.438 million of actual
              sales and sales under negotiation.
                                                 For information

5.4   East Asia Business Exhibition (EABEX ’05), 10-14
      December 2005.

      5.4.1   The meeting was informed that EABEX’05 was held
              from 10 – 14 December 2005 in conjunction with the
              11th ASEAN Summit and the inaugural East Asia
              Summit at the Kuala Lumpur Convention Center.

      5.4.2   The exhibition was participated by 16 countries
              including the 10 ASEAN countries, China, Korea,
              Japan, Australia, India and New Zealand.

      5.4.3   The exhibition was divided into areas for
              International Country Pavilions and Malaysian
              Pavilion which consisted of a Lifestyle Area,
              Innovative Products, Product and Services Clusters,
              Malaysian Brand Names and Malaysian Corporate
              Pavilions. As a host to the exhibition, Malaysia
              occupied the largest area with 238 Malaysian
              companies took part in the exhibition.

      5.4.4   The four-day exhibition managed to attract 9,720
              trade visitors and unlike other exhibitions, this
              exhibition was opened only to trade visitors of which
              5,775 were local and 3,945 were foreign visitors.

      5.4.5   In conjunction with EABEX’05, MATRADE also
              organised Incoming Buying Mission (IBM) and one-
              to-one business sessions. These sessions had
              attracted buyers from 285 foreign companies with
              371 representatives from 36 countries. However, the
              buyers were mainly seeking to source for products.

      5.4.6   The services sector that had showcased their
              services in this exhibition include Construction and
              Professional Services, Higher Education, Healthcare,
              ICT and Banking and Insurance.



                             20
      5.4.7   Although many participants in the services sector
              were not able to conclude any sales during the
              exhibition, a total number of 2,473 enquiries was
              received for the services cluster. Services that have
              sales concluded include IDC services, portal
              development, security solution, corporate video,
              TVC, animations, leisure and hospitality solution and
              online 4,000 sites. Most of the companies that
              involved in these services were under MDC.
                                                   For information

5.5   Singapore – Malaysia Joint Construction Mission to
      Turkey, 25 – 29 November 2005.

      5.5.1   The meeting was informed that the Embassy of
              Turkey in Singapore had organized the Singapore –
              Malaysia Joint Construction Mission to Turkey from
              25 - 29 November 2005. Most of the mission
              members were members of the Singapore
              Association of Contractors. With the assistance of
              MATRADE Trade Commissioner in Singapore, 5
              Malaysian organisations and 1 representative from
              CIDB Malaysia were invited to participate in the
              mission.

      5.5.2   The main objectives of the mission were:

              a)   To learn about the construction business
                   environment in Turkey;
              b)   To explore the possibility and potential for the
                   involvement      of   Malaysian    construction
                   companies in Turkey and areas of collaboration
                   in third countries;
              c)   To source for construction materials;
              d)   To network with Turkish contractors and
                   construction related agencies and associations.

      5.5.3   The meeting was also informed that the participants
              were pleased with the hospitality, the briefing
              session and the business matching sessions
              arranged for them. In Turkey, unlike other Arab
              countries, English is widely spoken and the Turkish



                             21
              business community in general has an excellent
              command of spoken and written English.

      5.5.4    As Malaysia enjoys a good reputation in Turkey and
              recognised as a successful Islamic country, Turkish
              contractors are quite receptive to the idea of forming
              partnerships with Malaysian contractors.
                                                   For information

5.6   Construction Industries in Kenya.

      5.6.1   The meeting was informed that when the National
              Rainbow Coalition (NARC) government took over
              Kenya in January 2003, the state of Kenya’s
              infrastructure, especially roads was still in remote
              condition. Many roads that had been destroyed by
              the abnormally heavy El Nino rains had not been
              repaired. The new government felt the need to
              rehabilitate the roads in order to create a good
              environment      for   economic    activities.   The
              construction industry in Kenya consisted primarily of
              two key sub-sectors namely road and housing.

      5.6.2   During the budget presentation for the financial year
              2005/06 on 8th June 2005, Kenya’s Minister of
              Finance emphasized the need to develop the
              country’s physical infrastructure in order to attract
              more investment by the private sector for faster
              economic development.

      5.6.3   Under the Kenya’s Economic Recovery Programmes
              for 2003 - 2007, the government intended to improve
              road transportation condition through provision of
              durable quality standard roads within the strategy
              period.

      5.6.4   In view of the projects to be undertaken by the
              government, there has been an increase in demand
              for building materials due to the increased activity in
              the construction of commercial or office buildings
              and residential houses mainly in Nairobi.




                              22
      5.6.5   The meeting was also informed that Malaysian
              companies have potential in Kenya if they can supply
              building materials such as bitumen, cement, timber,
              glass, sanitary wares, pipes, plastic tubes and pipes,
              tiles, doors and fittings building steel and machinery.

      5.6.6   Currently, the Kenyan Roads Department has a total
              of 59 projects funded by the Roads Maintenance
              Levy Fund (RMLF). Out of these projects, 36 are on-
              going     road    construction  projects    covering
              rehabilitation, resealing and graveling works at
              various stages of completion. For the last 10 years,
              funding for road maintenance has solely come from
              the fuel levy fund. Malaysian companies are
              encouraged to participate in some of these projects.

      5.6.7   Malaysian companies are most suited in bidding for
              road concession due to their experience and
              expertise. Malaysian companies could bid for
              tenders for other roads to be identified for
              concession in the near future.

      5.6.8   The most effective way of entering the Kenyan (and
              African market in general) would be through
              establishment of good contacts on G-to-G basis.

      5.6.9   Projects funded by the World Bank are open to
              companies from all its members, while those funded
              by African Development Bank are open to
              companies from Africa and affiliate member
              countries.
                                                For information

5.7   Healthcare Services in Kenya.

      5.7.1   The meeting was informed that the Medical
              Education in East Africa took a major stride when
              Makerere University College in Uganda started a
              medical degree course in 1950 and in 1967 and the
              University of East Africa established a faculty of
              medicine at University College, Nairobi, which in
              1970 became the University of Nairobi. At present,
              alongside government services, missionaries and

                              23
        NGOs also provide health services at delivery points
        that range from dispensaries to hospitals.



5.7.2   The rapid growth in the number of public health
        facilities and medical personnel occurred in the first
        two decades after the independence. Kenya’s health
        policies and strategies are aimed at reducing
        incidence of disease and improving the health status
        of Kenyans. The Ministry of Health is the main
        provider of health services in the country.

5.7.3   The public healthcare delivery system is pyramidal,
        with the national referral facilities at Kenyatta
        National Hospital in Nairobi and Moi Teaching and
        Referral Hospital in Eldoret forming the peak,
        followed by provincial, district and sub-district
        hospitals, with health centres and dispensaries
        forming the base.

5.7.4   According to a survey in 2005, the number of health
        institutions increased by 4.6%. Kenya produces well
        trained medical personnel who are employable in
        most commonwealth countries and the majority
        (68.5%) of students in the 2004/2005 academic year
        were enrolled for the medicine course.

5.7.5   In Kenya, there are only 1 doctor for every 33,000 of
        rural population compared to one doctor for every
        1,700 urban residents.

5.7.6   Malaysia has excellent healthcare services to offer
        but unfortunately this is not known in Kenya.
        Vigorous promotion is therefore needed to convince
        Kenyans that Malaysia is an excellent centre for
        specialised healthcare. The best concept to promote
        Malaysian healthcare services would be through
        tourism. In addition, Malaysian healthcare providers
        could also consider setting up hospitals in Kenya
        offering specialised treatment, especially on heart
        and renal complications and corrective plastic
        surgery.

                        24
                                                   For information



5.9   Oil and Gas Services in the Gulf States.

      5.9.1   The meeting was informed that the six GCC states
              now control more than 45 per cent of the world’s
              recoverable oil wealth and produce nearly a fifth of
              the global crude supplies. Gulf States have been
              dubbed as the world’s oil basin.

      5.9.2   Main LNG producers in the GCC are:

              a)    Qatargas: 9.5 million tones; to exceed 40
                    million tones;
              b)    Rasgas: over 11 million tones, to exceed 30
                    million tones;
              c)    Adgas: 10 million tones;
              d)    Oman LNG: 6.6 million tones; to rise to 9.9
                    million tones;
              e)    Qatar firms and Gasco are also involved in
                    gas-to-liquids ventures.

      5.9.3   The UAE has invested over Dh 29 billion (USD 7.91
              bn) in the oil sector during 2000 – 2004. Abu Dhabi
              holds almost 90 per cent of the country’s oil reserves
              and accounts for approximately 50 per cent of the
              UAE’s oil revenues. Dubai’s oil production does not
              exceed 6 per cent of the country’s oil revenues,
              whereas in Sharjah this number is about 12 per cent
              and 4 per cent for Ras Al Khaimah.

      5.9.4   Qatar is leading in the region on foreign partners as
              it needs enormous funds for its costly gas projects.
              Exxon Mobil, Total and BP are well entrenched in the
              gas sector within their partnership agreements with
              Qatar’s two main LNG companies, Rasgas and
              Qatargas.

      5.9.5   Kuwait has nearly 10 per cent of the world’s
              recoverable oil reserves. The government is planning

                             25
        to re-invite foreign companies to invest in the
        development of the country’s northern oilfields close
        to the Iraqi border to expand the production capacity
        from 550,000 bpd to 900,000 bpd within a specific
        period of time. The project will be known as the
        Kuwait project.

5.9.6   The meeting was also informed that Oman has been
        seeking foreign partners when it decided to build its
        first LNG project. The country controls 49 per cent of
        the plant. The Omani government controls 51 per
        cent of Oman LNG while 30 per cent is held by Shell,
        5.5 per cent by Total, Fina, Elf and the rest by
        companies from Japan, South Korea and other
        countries.

5.9.7   Bahrain Petroleum Company (BAPCO) unveiled
        plans to upgrade its ageing oil refinery at a cost of
        around USD800 million. The project had been fully
        awarded by mid 2000. The plan is aimed at
        upgrading the refinery's major products and to
        improve efficiency to make BAPCO more
        competitive.

5.9.8   Linde AG, Germany's largest maker of industrial
        gases, signed a 400 million euro order to build a 1.2
        billion US dollars ethylene-making plant in the
        Iranian city of Assalouyeh on the Persian Gulf. Linde
        AG, which won the order from Iran's National
        Petrochemical Company (NPC), will build the plant
        together with South Korea's Hyundai Engineering
        and Construction Co. and Iran's Sazeh Consultants.

5.9.9   In Iraq, around 200 new wells are needed to
        maintain 3.6 million barrels per day production of oil
        and there are 13 storage tanks which need
        rehabilitation. The biggest project in the upstream
        industry is the development of 10 oil fields with a
        total output of 2.5 million barrels per day, which is
        expected to be initiated in the near future.
                                               For information




                       26
       5.9.10 Malaysian companies with skills and experience in
              oil and gas exploration and supporting advanced and
              improvised technology and technical know how,
              should invest and bid for new projects with the local
              companies in joint ventures on an independent scale
              depending on their worth and skills.
                                                   For information

5.10   Dubai Aviation Infrastructure.

       5.10.1 The meeting was informed that the Jebel Ali Airport
              City project will cover 140 square kilometres. It will
              include not just an airport, but also several smaller
              cities which will cater for the financial, industrial,
              service and tourism industry needs connected to the
              aviation industry and it will be surrounded by a
              strategic road network linking the airport to the
              different emirates and some of the Gulf Cooperation
              Council (GCC) countries.

       5.10.2 The first phase, costing US$547 million will include
              the Logistics City and one runway. The Jebel Ali
              Airport will be the world’s largest airport to be built at
              a cost of Dhs30 billion and Dubai is investing a total
              of US$36 billion in aviation infrastructure and
              expanded airline capacity.

       5.10.3 The existing Dubai International Airport after
              expansion will be able to handle a maximum of 70
              million passengers a year.

       5.10.4 Besides the new airport, the Jebel Ali Airport City will
              include:

               a)   Commercial City;
               b)   Dubai Logistics City;
               c)   Aviation City;
               d)   Science and Technology Park;
               e)   Residential City;
               f)   Exhibition City.

       5.10.5 Considering the scale of operations required for
              completing the projects, Malaysian companies


                                27
                 should provide their expertise and know-how in the
                 development of aviation infrastructure in the UAE.
                                                      For information



6.   MARKETING TOOLS

     6.1 Construction Marketing Mission to Bangladesh &
         Pakistan, February 2006.

        6.1.1 The meeting was informed that the Construction
              Marketing Mission to Bangladesh and Pakistan was
              initially to be held in December 2005, but it was
              postponed to February 2006 due to the monsoon
              season.

        6.1.2 Potential construction opportunities in both countries
              were presented by the officials of relevant Departments
              of the respective countries during the International
              Construction Week 2005 organised by CIDB in
              September this year.

        6.1.3 In preparing for the mission, a construction recce
              mission comprised of MATRADE officer in Chennai,
              India and CIDB officer was held in October 2005 but
              confined only to Bangladesh.

        6.1.4 MATRADE requested relevant professional bodies to
              disseminate the information to their members.
              Interested members can contact NAPSEC Secretariat
              for detail information on this mission.
                          Action: MATRADE, CIDB and All Members

     6.2 ICT Marketing Mission to Oman & Qatar, February 2006.

        6.2.1 The meeting was informed that the ICT Marketing
              Mission to Oman and Qatar will be held in February
              2006.

        6.2.2 MATRADE will work closely with PIKOM and MDC for
              this Mission.



                                28
         6.2.3 Relevant NAPSEC members were requested to
               disseminate the information to their members.
               Interested members can contact NAPSEC Secretariat
               for detail information on this mission.

         6.2.4 The meeting noted that WCIT 2006 will be held in
               Austin, Texas in May 2006. In conjunction to the event,
               PIKOM planned to organise an ICT Marketing Mission
               to Texas, USA in May 2006.
                                                    For information

7.   OTHER MATTERS

     7.1 SR9 Billion Contract for Shuaiba – 3 Plant Signed.

         7.1.1 The meeting was informed that Saudi Arabia launched
               privatisation of its desalination projects by awarding a
               SR9.1 billion contract to a consortium of Saudi and
               Malaysian companies to set up the Shuaiba-3 desal
               plant, the first independent water and power project
               (IWPP) in the country.

         7.1.2 The total cost of the four projects was estimated at
               SR30 billion. The private sector will contribute 60
               percent of their cost while the state-owned Public
               Investment Fund (PIF) will have 32 per cent stake and
               Saudi Electricity Company (SEC), 8 per cent of the four
               projects. The implementation of the projects will start
               with Shuaiba-3 while commercial operation will begin in
               early 2009.

         7.1.4 The meeting was also informed that the Shuaiba-3,
               which is to supply water to Makkah, Jeddah, Taif and
               Baha, is one of the world’s biggest co-generation
               projects for the production of water and electricity. The
               Kingdom would require nearly SR350 billion in
               investment for water and sewage projects and SR340
               billion for electricity projects during the next 20 year.

         7.1.6 The Shuaiba-3, located 110 km south of Jeddah on the
               Red Sea coast, is the Kingdom’s first privatized IWPP.
               Saudi-Malaysia Water & Electricity Company holds 60



                                  29
              per cent of the project, PIF 32 per cent and SEC 8 per
              cent.
                                                     For information



       7.1.7 The meeting suggested the NAPSEC Secretariat to
             organise a briefing session with the Malaysian parties
             involved in the project to provide a clearer view on how
             Malaysian companies could also participate in the
             project.
                                                  Action: MATRADE

8.   CONCLUSION

        8.1   The Chairman thanked NAPSEC members and the
              representatives for their attendance, views and
              suggestions. The meeting was adjourned at 5.35 p.m.




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