Thursday, April 19, 2012

Did Dr Mahathir Forget He Awarded the MEX Concession?

It was reported in newspapers on Wednesday that Dr Mahathir criticised the sale of Maju Expressway by concessionaire owner Tan Sri Abu Sahid Mohamed for essentially selling “what is not his” and making a huge killing in profits as a result.

Tan Sri Abu Sahid Mohamed who owns 96.8% of the highway has only effectively forked out RM60 million for the project, but with the proposed acquisition by EP Manufacturing Bhd (EPMB), he would effectively be making a NET profit of RM1.09 billion.  That works out to more than an astronomical 1,800% return on investment in less than 8 years since construction began in 2004 for MEX.

The rape of Malaysian tax-payers which made a billionaire out of Tan Sri Abu Sahid Mohamed on this exercise alone is simply outrageous and unacceptable because out of his “profit”, RM976.7 million was paid for by Malaysian tax-payers.  The grant hence constitutes 74% of the total cost of construction for the RM1.32 billion highway.

According to Dr Mahathir, the Maju Expressway sale appears to be an exercise of making money from government assistance and Tan Sri Abu Sahid Mohamed should explain himself to the public.  “You sell what is yours, you don’t sell what belongs to others. It could be as bad as selling APs,” Dr Mahathir told reporters, referring to the frowned upon practice of well-connected Bumiputera businessmen making quick profits from nothing more than selling import licences granted by the government.

Dr Mahathir’s argument is twisted and illogical on the simple basis that it was he himself who had awarded this lopsided concession agreement to Tan Sri Abu Sahid in 1997 and subsequent revised the agreement and terms of the concession in 2003 prior to his retirement.

Dr Mahathir did not offer a government loan amounting to RM976.7 million to Tan Sri Abu Sahid which will require repayment to the Government.  Dr Mahathir had instead given Maju Expressway a grant of the same amount from the tax-payer’s coffers which by definition, did not require any repayment by the concession.

Hence it is extremely rich, coming from our former prime minister to chastise Tan Sri Abu Sahid for making astronomical profits from the government concession, when it is in fact the Dr Mahathir who gave to him on a silver platter!

Whether Tan Sri Abu Sahid sells the concession valued at RM1.7 billion or decides to keep it for the remainder of the concession period ending 2037, he will still be making that ridiculous amount of profit in return for his tiny RM60 million investment.  In fact, if he were to keep the concession, he is expected to collect more than RM7.6 billion in toll over the next 25 years.

Hence whether Tan Sri Abu Sahid sells his concession today to realise RM1.09 billion in profits or to keep it over the next 25 years and realise even more profit is moot.  The issue is simply, the BN government has chosen to award outrageously lucrative concession contracts to its cronies and this practice has continued today with the award of the West Coast Expressway, despite the so-called Economic Transformation Programme by Datuk Seri Najib Razak.

Dr Mahathir Mohamed’s crying over spilled milk smacks of hypocrisy and self-righteousness, because it was his Government who awarded these unfair contracts to its cronies enabling them to make ludicrous profits at the expense of the man-on-the-street.  If Dr Mahathir is sincere about not allowing the concessionaires to make these crazy profits, he should support Pakatan Rakyat’s position to expropriate MEX per the concession contract at only RM400 million to ensure that the people’s welfare is protected.
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