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THE IJM STORY 9

The Birth of a Nation


and Three Companies

I
n 1959, Tunku Abdul Rahman declared: I am the happiest Prime
Minister in the world. Money was pouring into the country, business boomed,
new industries grew up and there was complete peace and harmony in the
country, he explained later in his book Political Awakening (Pelanduk, 1986).
Two years earlier in 1957, the Tunku had led the Federation of Malaya to
independence after 171 years of British colonial rule, starting with Penang in
1786, and became the nations first prime minister.
The future held a lot of promise for the citizens of the fledgling nation. First, there was the
Malayanisation programme that created wide-ranging jobs, especially in high ranking positions
in administrative and professional services following the departure of British officers. There
was a dire need for qualified Malayans to fill these positions. Education and training became
a top priority, with tertiary and technical education taking precedence as nation-building
became the rallying call of the young federation.
There was no better time for high achieving school leavers aspiring to become engineers,
especially civil engineers who were needed to implement public works projects. To pursue
an engineering degree, it became necessary for many to attend a foreign university. The
University of Malaya, the first university in the country, began with the establishment of the
engineering faculty in 1958, but it had only 40 places available. The rite of passage for most was
to attend the diploma programme offered by the Technical College in Kuala Lumpur before
travelling abroad. Upgraded from a technical school to a college in 1946, it forged a close-knit
community of students in the early years, many from relatively poor families fired by the
burning desire to realise their ambition to become engineers and rise above their current
Malaysias first prime minister station in life. This shaped the outlook and values of many Technical College graduates from
Tunku Abdul Rahman Putras
famous cheer Merdeka, the 1950s and 1960s, a few of whom later joined forces to start IJM Corporation in 1983.
Merdeka, Merdeka! to mark the
nations independence from
Great Britain on 31 August 1957.
10 THE IJM STORY THE BIRTH OF A NATION AND THREE COMPANIES 11

The main agent of nation building was the Public Works Department (PWD), which was
responsible for both federal and state projects. In the course of the implementation of the
first Malaya Plan (1955-60), the PWD suffered a shortage of planning staff, and it began to
engage with private sector consultants. Despite severe technical manpower shortages, the
nation continued to speed ahead with development projects aimed at narrowing the divide
between urban and rural Malaya; the latter had been neglected by the colonial administration.
Revenues earned on the back of rubber, tin and other agricultural exports were ploughed
back into building new roads, water supply networks, sewerage works, hospitals and clinics,
schools, power generation stations, transmission & distribution lines, and drainage and
irrigation works. Many of these projects received strong financial and technical support from Landmark buildings that
international agencies such as the World Bank and United Nations affiliates that championed celebrate the birth of a
new nation (left to right):
poverty reduction and self-sufficiency in Third World nations. smarts to work well under the direction of engineers and architects. They were essentially
Subang International

T
The countrys building industry flourished, and it attracted contractors of every stripe and tradesmen, who ran businesses that were paternalistic, clannish, frugal, and had an appetite Airport, Parliament House
colour. Historically, contractors were hardy and enterprising migrant Chinese with the street for the high-risk contracting world. Typically, these businesses consisted of the kepala who and National Mosque.
would assemble a team, usually family and clan members, who gained experience through an

echnical College: old school tie @work apprenticeship system.


Surprisingly, few of these tradesmen survived the colonial building frenzy during the tin
conducted by the Institution of Civil Engineers, and rubber boom of the 19th century and early 20th century. Those who did were late entries
United Kingdom. With this, they qualified as such as Low Yat and Lim Goh Tong who became contractors in the closing years of the British
pupil or graduate engineers.
colonial administration. Lim Goh Tong was a true pioneer, a contractor ahead of his time. His
The school became a college to meet the
growing demand for more competent technical
company, Kien Huat Construction secured the Kemubu Irrigation project in Kelantan that was
personnel, and it began by offering a 3-year funded by the World Bank. After the completion of this project, Lim moved all his resources
diploma in civil, mechanical and electrical to build the now famous Genting Highland Resort in Pahang. These early stalwarts of the
engineering, architecture, town and country Malaysian construction industry who earned their spurs in the colonial years proceeded
planning, land and quantity surveying. The to cultivate the patronage of the new leadership of independent Malaya to strengthen their
engineering diploma exempted its graduates
positions. In the heady days leading up to independence, Low Yat
from the Part 1 examination conducted by the
and his team worked furiously to build the 10-storey Federal Hotel
Institution of Civil Engineers since 1967.
Originally located in High Street (now Jalan along Jalan Bukit Bintang that was to be used to house foreign
Tun HS Lee), the college moved to its new guests and diplomats invited to attend Malayas independence The hallmarks of a successful
campus in 1955, a sprawling 18-hectare location celebrations. Another contractor, Lim Chong Hin constructed the traditional contractor in the early days of
in Jalan Gurney (now Jalan Semarak). Among Merdeka Stadium, the venue of the celebration, from where the the building industry were a Merc, a gun
the early undergraduates at this campus were Tunku officially proclaimed independence with his famous cheer:
the founding fathers of IJM Yap Lim Sen, Koon and a mistress.
Merdeka! Merdeka! Merdeka!
Yew Yin and Koh Boon Chor. Following in their Lim Yong Keat, co-founder of Jurutama Sdn Bhd
footsteps a few years later were Lim Choong
Other prestigious projects to proclaim the new nations
The old school tie was at work when Mudajaya to man and maintain infrastructure. Students
Construction Sdn Bhd and Jurutama Sdn Bhd who passed their examination were awarded Kong, Lim Yong Keat and Goh Chye Keat. sovereignty followed: the National Mosque, Parliament House,
were born. Most of the pioneers were alumni of the certificate of civil engineering that enabled It was the salad days of these young men, Subang International Airport, University of Malaya, to name a few. Meanwhile, Tan Chin Nam
the Technical College, which was upgraded to a them to pursue professional examinations raised in hard times and who valued hard won hearts, including that of the Tunku, when he built the countrys first low cost housing in
college in 1946 after having served as a technical conducted by the City and Guilds of London work. The ties of friendship sown during their Kampung Congo in Kuala Lumpur, making the prospect of home ownership among the poor
school since 1904. Institute in the United Kingdom. Successful college years became their point of reference for
a reality.
As a school, it served the needs of the British candidates could then proceed to sit for the future collaborations that ultimately led to the
Rural development projects, on the other hand, were a different ball game altogether.
colonial administration that needed personnel Part 1 and Part 11 professional examinations formation of IJM.
They tended to be driven by international aid agencies who preferred dealing with their
12 THE IJM STORY THE BIRTH OF A NATION AND THREE COMPANIES 13

The year 1966 marked the beginning of the own community of consultants. Heres the rub: local contractors expertise, Koon invited Technical College buddy and PWD engineer Koh Boon Chor into the
First Malaysia Plan (prior to this they were lacked the professional expertise to engage with them. They fold. The pooling of resources enabled Chye Hin to qualify as a sub-contractor for the Muda
barely spoke English, essential to deal with foreign consultants, Irrigation Project, a coveted World Bank-funded project of the Department of Drainage &
called Malaya Plans, beginning in 1955).
avoided paperwork, were disorganised by Western standards Irrigation that consisted of a variety of large and small civil engineering packages awarded
This is a new era where the Jabatan Kerja
and were often under capitalised. In short, they did not have the on an open tender basis.
Raya (JKR) was completely staffed by local professional competencies to meet international requirements. Chye Hin picked up a few lucrative packages, and proved that engineers could run
officers. This did not deter the contractors, who persevered, overcoming a construction company well, if not better. As a tribute to the successful completion of its
Source: Commemorating 123 Years of JKR (Jabatan
their limitations by hiring professional engineers. inaugural project, the company changed its name to Mudajaya Construction Sdn Bhd (a Malay
Kerja Raya, known as the Public Works Department
before 1965). For an engineer, one of the best places to work in the 1960s phrase that translates as success in Muda), with Koon Yew Yin and Koh Boon Chor as joint
and 1970s was the public service. Many had stepped into the shoes managing directors. They were a good match, the entrepreneurial and outgoing Koon squared
of departing colonial officers, positions that were accorded much off by the methodical technocrat Koh.
respect. In addition, the government adopted the British model for public works projects, Mudajayas new identity also served to distance the company from being associated with
which involved appointing a consulting firm to draw engineering designs for contractors the rough and tumble world of the Chinaman contractor. In all likelihood, the name change
whose function was to build only, supervised by the consultant. As a client, the government was also a strategic exercise in a Malaysia that was recovering from the 1969 race riots, the
engineer was often treated deferentially, even delicately. The salary structure was also worst in the nations record. In its aftermath, the New Economic Policy was launched in 1971,
attractive, with perks and lurks along the way. To work in the private sector was not an option and this affirmative action programme sent ripples of unease particularly among the Chinese
considered by many then. business community. Chye Hin must have found it timely to move beyond its communal name
Yet a few did, stepping out of the comfort zone and high status associated with government to project a more national image.
jobs for less pay in the construction business. Perhaps, it was the spirit of enterprise, the Yap, meanwhile, ventured into property development, enticed as a consultant to work on
desire for change, or from their commanding positions in the public service, these engineers a housing project for the newly established Ipoh Garden Sdn Bhd or IGB in 1964 by influential
could see that day by day that the grass was growing greener on the other side the annual entrepreneur Tan Chin Nam, a rising star both in Malaysia and Singapore. Yap delivered well,
public expenditure for construction was outstripping other economic sectors. The prospects and was appointed managing director, and started to take the company to new heights with
were likely to be bright for those who went private at the start of the construction curve. In trailblazing projects. In 1981, IGB became one of the earliest real estate companies to become
all probability, it is the combination of all these factors that prompted a few civil engineers, public listed in Malaysia.
later the founding fathers of IJM, to cross over to the private sector.
First among them to take the leap were Yap
Lim Sen from the Department of Drainage & In Kuala Lumpur, another professional construction company was being constituted by
Irrigation and Koon Yew Yin, a Public Works another group of Technical College alumni. They too vied to work on the Muda Irrigation
Department engineer whose credentials project, but the birth of their company was complicated.
included the construction of Merdeka This team was led by Lim Choong Kong, who had dabbled with construction jobs since
Stadium. Technical College mates, they joined he was a teenager, and gained insight into project management when he interned with
a consulting firm in Ipoh in 1962, before Wimpey Construction of London, one of the largest contractors in the United Kingdom, as
venturing into the construction industry, part of an industrial training scholarship. With his hands-on experience, Lim Choong Kong
reputedly not for the faint-hearted. As Yap was accepted for a Masters engineering programme at Southampton University. He was
puts it, We were Chinamen who did not want in the midst of it when he received news of the impending Muda Irrigation Project tender.
to work for people for a few RM100. We were Ever the entrepreneur, Lim Choong Kong took a break from his studies to bid for the Muda
not afraid to lose our pensions. Irrigation Project.
In 1965, Koon joined Chye Hin Construction His entry point was Soon Tat Construction, a sole proprietorship that belonged to Chow
Ltd in Ipoh that was founded by wealthy Soon Tat, a tailor. Chow Soon Tats tailoring shop in Jalan Bangsar was in the neighbourhood
tin miner Choong Chin Liang, who was its of the Drainage & Irrigation Department, whose officers were his regular customers. Through
Technical College Hostel in 1957 chairman. To boost the companys professional his friendship with them, Chow Soon Tat secured a Class A Contractors licence, and won a
14 THE IJM STORY THE BIRTH OF A NATION AND THREE COMPANIES 15

M uda, here we come! few contracts. When the Muda Irrigation Project was tendered,
Soon Tat won a few packages. However, one of the stipulations
of the contract was the employment of professional engineers.
Soon Tat Construction found it expedient to join forces with Lim
remaining shareholders then proceeded to change the companys name to Jurutera
Pertama Sdn Bhd, shortened to Jurutama Sdn Bhd in 1973. The name is an acronym of
Jurutera Pertama (First Engineers) to mark the entry of professional engineers into the
construction business. The partners deliberately omitted Construction from their name
Choong Kong, who had professional credentials as well as a few as they planned to grow beyond this function, and did. It was a difficult birth, but Jurutama
drainage & irrigation projects under his belt. rode on the goodwill and track record of the Soon Tat name to move forward, diversifying
Lim Choong Kong recognised the need to bulk up Soon Tat into manufacturing along the way.
Constructions engineering muscle, and he did exactly what Koon By the seventies, a clutch of reputable professionally-run construction companies
Yew Yin did at Mudajaya Construction: turn to friends from the emerged on the Malaysian scene. The building industry continued on the uptrend, with
Technical College. He found Goh Chye Keat, a PWD engineer projects continuing to grow in magnitude and contract value.
looking for a break in the private sector, and they made a fine Professional outfits such as Mudajaya and Jurutama shored up their portfolio of jobs and
pair, the enterprising Lim Choong Kong complemented by the capabilities. However, one thing irked them: they were always the bridesmaid, never the
engineering excellence of Goh Chye Keat. bride. Twenty years after the Muda Irrigation Project and diverse civil engineering projects
As the Muda Irrigation project drew to a close in the early later, they remained subcontractors of international companies, not main contractors. To
The Muda Irrigation Project is one of the biggest World Bank projects in 1970s, the sole proprietorship was converted to a private limited these professionals with internationally recognised engineering qualifications and World
post-independence Malaysia. Valued at US$45 million, it was approved company called Soon Tat Construction Sdn Bhd. Chow became the Bank project experience, this state of affairs was unacceptable.
for implementation in 1965 and completed in 1973. It involved the
main shareholder and Lim Choong Kong, the second shareholder.

R
construction of three dams, a tunnel connecting two reservoirs,
The company established its principal premises at No. 36, Jalan
ancillary structures and a system of irrigation canals in the states of
Kedah and Perak to facilitate double cropping of padi on 261,000 acres. Bangsar, Kuala Lumpur, and began tendering for new jobs.
The area was previously served by an irrigation system that supplied Ironically, Soon Tat Construction came undone by success, when
water for a single crop; the rest of the acreage was entirely dependent
on the monsoon rain. The project was designed to increase rice output,
it won the bid for the construction of the coastal bund for the
North Klang Straits Industrial Estate. It was a pyrrhic victory that
adical Restructuring with the New Economic Policy (1971-1990)
increase rural income and reduce Malaysias dependence on rice The New Economic Policy was launched of restructuring Malaysian society to correct Confidence gradually returned with the
posed one challenge after another.
imports. following the race riots of 13 May1969 that economic imbalances, so as to reduce and implementation of one Malaysia Plan after
Soon Tat won because its tender was cheaper; RM1.6 million exposed cracks in nation-building. It highlighted eventually eliminate the identification of race another that became regarded as a model for
Malaysian engineers who cut their teeth on the Muda Irrigation
compared to second bidder Chye Hins RM2.4 million. As a result that after more than a decade of independence, with economic function. the developing world by the United Nations
Project honed their project management skills and gained exposure
to new western technologies. Best of all, the project gave them the of the price disparity, the client Perbadanan Kemajuan Negeri while the Malays held the reins of political power, In Crossroads, A Popular History of Malaysia and other international development agencies.
grounding to be confident of their own ability to handle projects that Selangor (PKNS) had its reservations about Soon Tatts ability to the economy of the nation was in the hands of and Singapore (Times, 1999), Jim Baker writes: The success of the plans resulted in an ever-
were large, specialised and international. deliver. To safeguard its interest, PKNS raised the performance immigrant communities, especially the Chinese. The political leadership did not preclude enlarging economic pie, with rich pickings to be
The race riots were followed by the the Chinese and Indians from maintaining had by all Malaysians. This has been validated
bond from 5% as stipulated in the tender document to 30%.
dissolution of Parliament and emergency rule their cultural identities. It did not preclude by the fact that non-bumiputeras continue
Soon Tat Construction did not have the funds, and needed fresh
for two years. Malaysias image suffered, and Chinese and Indian political participation, to dominate the list of wealthiest Malaysians
working capital. The notion of eating humble pie and exiting from the project was too foreign investment inflows slowed. There was and it did not preclude the immigrants from published every year by the local magazine
shameful to consider. To resolve the crisis, a partnership was offered to senior engineer Goh a change of leadership, from Tunku Abdul prospering, but all these had to take place in Malaysian Business and Forbes Asia.
Chye Keat. Lim Choong Kong also invited Ong Yeng Tian, a resident engineer at the Muda Rahman to Abdul Razak Hussein, who became the context of Malay goals. The New Economic Policy was followed by
Irrigation project, to join the company as a partner. Also invited was his brother Lim Yong the second prime minister of Malaysia. In 1971, Still, the status quo was challenged and the New Development Policy (1991-2020) that
Keat, a Technical College graduate and PWD engineer who was then employed at United the latter launched the New Economic Policy it caused anxiety among the immigrant emphasised assistance only to bumiputeras with
that adopted a two-pronged approach for the communities. What unsettled them most was potential, commitment and good track record
Asbestos Cement. As partners/shareholders, each invested RM100,000.
radical restructuring of the Malaysian economy. the 30% bumiputera ownership of the corporate rather than the previous blanket measures to
Even so, Soon Tats money woes were far from over there were operational costs and The first prong was to reduce and eventually and business sector and the quota system in redistribute wealth and employment. The New
overheads to be borne, and cash flow issues and pay cuts became the order of the day. eradicate poverty by raising income levels education and employment, particularly in the Development Policy is part of the longer term
Accustomed to being a one-man show, Chow Soon Tat did not share the same approach and increasing employment opportunities government sector, which was now required to programme called Vision 2020 to transform
to business as his partners did. The inevitable happened within the first year a friendly for all Malaysians, irrespective of race. The reflect the national racial composition 60% Malaysia into a fully industrialised country and
departure by Chow Soon Tat who went on to start another construction company. The second prong aimed to accelerate the process Malay, 30% Chinese, 7% Indian and 3% others. quadruple per capita income by 2020.