Sand and sensibility

UNTIL last week, two of the world’s biggest casino companies were racing to complete their projects in Singapore.

The race ended last week when Resorts World triumphantly opened the doors to four of its six hotels and more than a dozen of its restaurants on Sentosa Island.

The other group is still slogging on the ground and it’s all a bit ironic as it’s called The Sands, and it has got no sand, except what it can barge in from Myanmar.

Even its second source is in jeopardy because sources say there is opposition from the regime in Vietnam.

Resorts World has no sand to its name, yet has a permit to get all that it wants from Johor.

The talk is that all the hotels are fully booked for the Chinese New Year but that’s mostly a feel-good kind of news because the hotels might have just one or two floors open for booking.

The winner of the race also had a few aces up its sleeve. Besides financial power, it also has to thank the ingenuity of some crooked elements in the Malaysian lorry transport industry.

One of the challenges of the construction business is the logistics of moving mountains of material from source to where it is needed.

Sand is about the most important building material because it’s the essential ingredient in concrete.

There’s plenty of sand in Kahang, Johor. Just scrape away the top soil and it’s grade one sand underneath.

How to get it to Singapore when, with the exception of the special permit for Resorts World, there is a ban on the export of sand?

That’s where the transport industry swings in.

With many layers of regulations and agencies – Road Transport Department, the Commercial Vehicle Licensing Board (CVLB), Royal Customs and Excise, Land and Mines – it just needs a few crooked transport operators to beat the system.

We first reported about the overloading of Malaysian sand trucks to Singapore last year in this column.

Last week, former Prime Minister Tun Dr Mahathir Mohamed claimed that about 700 trucks of sand had been sold to Singapore daily.

The Customs Department quickly rebutted that only five trucks of silica were exported daily to Singapore.

Both are not wrong. Silica is a very fine grade of sand which is melted to form the basic material for semi-conductors. There is no ban on the export of silica.

There is also no ban on the export of aggregate, the pebble-sized granite stones, used in the construction industry.

Perhaps Mahathir should ask how many trucks of aggregate are being trucked to Singapore daily. The answer might be 700.

According to the sand mining permit, the sand mine can only operate during working hours from 8am to 5pm.

“My members inform me that the two truck operators involved in this are loading up sand at night and leave for Singapore in the morning. We wonder if they have special dispensation from sand tax and CVLB/RTD regulations,” said Er Sui See, the president of the Pan Malaysia Lorry Owners Association.

What the truck operators do is to load the sand on the trailers and then put a layer of aggregate on top to hide the sand, claimed Er.

The export of sand from Malaysia to Singapore is an interesting study of how laws can pave the road to corruption.

It shows that when the government tries to use its legislative power to achieve a certain goal, it must know that if there are commercial interests and if the market distortion is too great, there will be those who will find gain in the arbitrage of the difference, legally or illegally.

The solution in this particular case is to allow the sale and the export of sand to Singapore but on terms that are favourable to Malaysia.

Install a tax on sand exports to Singapore. Scrap outdated transport laws so that all those who are qualified with the correct equipment can participate in the business.

With a few strokes of the pen, a few layers of corruption can be rolled back, the government can earn a new flow of revenue and the mainstream of the transport industry can participate.

(The Singapore government knows well the nature of the casino business. Notice that the casinos have not opened yet. It has stipulated that the project owners must complete 60 per cent of the hotels and the theme parks before the gaming licence is issued.)

On another level, the truck operators are supposed to send sand only to Resorts World but are also siphoning parts of the load to other project owners in Singapore.

That’s why it’s in the public interest to have transparent laws and use fiscal tools rather than laws which are selectively and arbitrarily enforced for personal gain.