Thursday, March 29, 2012

Pakatan to Expropriate MEX

Pakatan promises to buy back MEX if voted to power
By Clara Chooi Mar 28, 2012

KUALA LUMPUR, March 28 — Pakatan Rakyat (PR) pledged today to buy back the part publicly-funded Maju Expressway (MEX) from its concessionaire should they wrest Putrajaya in the coming polls, claiming the move would save over RM4.6 billion in taxpayers’ money.

In a statement signed by representatives from all three PR parties - Rafizi Ramli (PKR), Tony Pua (DAP) and Dr Dzulkefly Ahmad (PAS) — the leaders noted that it was one of PR’s Buku Jingga promises to restructure toll rates and the country’s many highway concession agreements, many of which they claim have over-benefitted Barisan Nasional (BN) cronies.

Speaking at a press conference in Parliament today, Pua, DAP’s publicity secretary, said it was more sensible for Putrajaya to buy back the highway with a maximum payment of RM400.9 million, instead of allowing Maju Holdings Sdn Bhd to profit from its sale.

He said that Maju Group executive chairman Tan Sri Abu Sahid Mohamed stands to make a clean profit of RM1.09 billion or 1,800 per cent of his initial investment of RM60 million from his sale of MEX to EP Manufacturing Bhd (EPMB) for RM1.7 billion.

“This profit is too high because the government has already used taxpayers’ money to fund 74 per cent of the highway’s construction cost,” he said.

This, added Pua, amounts to a whopping RM976.7 million.

“This money will not be returned to the public but will be a great profit for Abu Said,” he said.

Pua explained that according to EPMB’s March 16 Bursa Malaysia filing on its purchase of MEX, there is an “expropriation” clause attached to the concession agreement.

The clause, he said, allows the government to buy back MEX and terminate the concession with three months’ notice.

Pua added that the acquisition cost to the government would be a maximum of RM401 million which, according to the compensation terms, is the sum of the value of construction work less the government grants, liabilities, dividends or interest to shareholders, plus 12 per cent interest per annum on investments by shareholders.

“This RM401 million compensation is sufficient returns for the concessionaire which only needed an investment of RM60 million over eight years.

“This is in comparison with the RM3.2 billion that that concessionaire would have earned in projected net profits over the 25 years of its agreement. This profit will be reaped from toll payments from Malaysians of over RM5 billion,” Pua said.

“With the decision to buy back MEX, savings for the people would exceed RM4.6 billion.”

For the full article on The Malaysian Insider, click here.
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