Pretty interesting Definitions

Good day everyone.

To kick start a brand new week and to ice-break your day, let's share some quotable definitions that may do it for you. Not that they will make or break everyone's day, but I'll just share them just as colleagues of mine share them to me:-

1Malaysia Amanah Rakyat Scheme, SARA

What a news!

Photo from www.sara1malaysia.com.my

Prime Minister Datuk Seri Najib Tun Razak launched the 1Malaysia Amanah Rakyat Scheme (SARA) on Thursday, Jan 12th 2012, aimed at helping those with a monthly household income of RM3,000 and below. Najib said the scheme had attractive features which had not been introduced before.

He said the scheme was a hybrid of a unit trust investment and loan product, capable of generating a consistent cash flow or monthly incentive.

“The limit is RM5,000 and it can be bought through savings or investment loans from selected financial institutions,” he said.

“We guarantee that investors would get RM134 monthly and for those who borrow, they only need to pay RM84 a month and still get RM50 in profit,” he added during the launch. - Bernama

This has became the headlines of major tabloids yesterday and today. So, let's digest the short announcement and see for yourself if you'd like to invest.

HOW DOES THIS SCHEME WORKS?

Eligibility

Everyone is eligible! So long as he/she satisfies the following requirements:

1. Malaysians aged between 18 and 58 years,
2. Household or single parents monthly income of RM3,000 or less,
3. Not declared bankrupt throughout the loan funding period,
4. Not a beneficiary of other Government special schemes managed by Amanah Saham Nasional Berhad (ASNB),
5. No other investments in ASNB unit trusts, OR, if there is, a combined aggregate investment must be RM10,000 or less in all ASNB products
   

From sara1malaysia website, distribution of funds is by way of

50% to Bumiputera,
30% to Chinese
15% to Indian
5% to Others
On how they formulated it that way, you make your own deduction.


How to apply?

Obtain Forms from participating banks starting from 30 January 2012. Currently there are 4 listed banks, namely: Maybank, CIMB Bank, RHB Bank and Bank Simpanan Nasional (BSN.


What documents are required?

The original and certified true copies of the followings:

• Identity card of applicant – 2 copies
• Identity card of spouse/s, if applicable – 1 copy
• Income verification document:
latest three months' pay slip or Bank Statements of applicants and/or spouse.

There are two options available to prospective investors:

1) Invest RM5,000 from your own pocket. You are guaranteed monthly dividend of RM134. If you opt not to withdraw your monthly dividend, you can expect return of RM13,000 after 5 years.

2) Invest RM5,000 through loan from bank. You are guaranteed monthly dividend of RM50, after deducting RM84 as minimum repayment to the bank. If you opt not to withdraw your monthly dividend, you can expect return of RM5,000 after 5 years.


BETTER THAN ASB?

You may be asking if this scheme is better than Amanah Saham Bumiputera (ASB). As a matter of fact, yes. Albeit certain limitation in terms of maximum amount of unit you can buy and the limited investment tenure. To compare, ASB's average return is about 8% to 10% annually and the scheme is open only to Bumis.

Let me explain.

Option one is investment from your own cash, with RM134 x 12 = RM1,608 return annually. This is equivalent to 32.16%. After 5 years, you would have accumulated RM8,040 of dividend which is 160.8%. Assuming that you left your investment untouched, you will get back about RM13,040 at the end of the tenure. Now, where in the world can you find such an investment scheme?

Option two is investment using borrowed cash (from bank), with RM50 x 12 = RM600 return annually. In mathematics sense, this is even better as percentage of return is high (infinity),
i.e. RM600/(zero investment) x 100%. In real sense, you get less simply because you did not put any money in your investment coffer.

In order for this too-good-to-be-true scheme to guarantee such return, the Government (to my understanding, and it is easy to see) will channel fund to the participating banks to enable it to source loans at 'competitive' rates, and hence the high rate of return to investors. In other words, a better way for the Government to dish out money compared to the one-time RM500 payout.

According to Bernama, dividend in SARA is guaranteed by a special purpose vehicle, Malaysian Development Holdings Sdn Bhd, a wholly owned subsidiary of Finance Ministry Incorporated.


WILL I GO FOR IT?

Hell, yes! Without hesitation. While I'm not eligible for this scheme, for the qualified you stand to gain handsomely either way. The return breaks all other previous records held by every unit trust in the country, at least for a 5-year period. The best is Option One but if you don't have the money, Option Two is still a steal!

This is limited to the first 100,000 applicants so, make up your mind and act fast. You've got nothing to lose.

Water Loss in Sabah THIRD Highest

The Association of Water and Energy Research Malaysia (AWER) carried out a non-revenue water (NRW) study in Malaysia and said that more than 1/3 of water treated at our plants is WASTED. National water loss averages were 36.6% in 2009 and 36.4% in 2010.

Water jetting out of a transmission main during pipe flushing/cleaning

In 2010, of the total revenue from water sector of close to RM4.1 billion (US$1.3bil), RM1.7 billion or nearly HALF of it is lost to NRW. The three top contributors to this loss are Selangor, Johor and Sabah:

Selangor: RM598.9 million, estimated loss of revenue
Johor : RM200.9 million
Sabah : RM175.4 million
Kedah : RM140.9 million
Pahang : RM132.9 million

In terms of VOLUME, the top five 'losers' are:

Selangor: 481mil m³
Pahang : 195mil m³
Sabah : 195mil m³
Kedah : 188mil m³
Johor : 161mil m³

In Sabah, the last 3 years of record shows that we continue to leak out money to the drain at alarming rate:

2008 - RM150.6 million
2009 - RM142.4 million
2010 - RM175.4 million
2011 - could well surpass Johor; RM200million. Wait & see!

(Source: AWER, Malaysia)

Sabah's current largest and most economical Water Treatment Plant: Moyog WTP

Sabah's largest waterworks (WTP) located in Penampang is designed for production of 165 million liter (MLD) of water per day and at overload mode it can go up to 180 - 190 MLD.

If the estimates by AWER is taken at face value, i.e. 195 million m³ water loss in 2010, we are talking about 3 WTPs of this size. Solve 30% of our NRW volume and we DO NOT need to construct any dam in Kaiduan for the foreseeable future. By reducing NRW, we are tackling several tricky issues namely - avoid destruction of greenery in Kaiduan Penampang, avoid relocating people from their ancestral lands, and patch a hole in the treasurer's pocket.

It is pointless to keep building new Water Treatment Plants to increase production but at the same time loss half of the treated water along the transmission and distribution pipes.

The action plan I've learnt through my working life is as simple as this:

1. Set the NRW reduction target. A detailed one if needed be.
2. Specify reasonable time frame. Speaking of which, 5 years is not reasonable at all!
3. Identify areas of concern (the people, the facilities, the environment, etc)
4. Prepare technical guidelines. Let the engineers work it out.
5. Work out capital and operational expenditures. Who says engineers and accountants can't agree on figures!
6. Check and analyse the plans. The accountants say 'audit', we say 'assess'.
7. People's participation. Let the public know about it and provide avenue for feedback.

There is a popular Malay saying "CAKAP TIDAK SERUPA BIKIN" or easier said than done. Of course, addressing the NRW issue will never be an easy task. But if we don't start somewhere, when will we ever get to the finish line?