Perdana Menteri Dato’ Seri Najib Razak telah berjanji untuk menjalankan sistem tender terbuka dalam semua perolehan kerajaan untuk meningkatkan ketelusan dan mengurangkan rasuah. Akan tetapi kontrak kerajaan bernilai berbilion-bilion ringgit masih ditawarkan secara rundingan terus tanpa sebarang tender terbuka selepas pilihanraya umum ke-13.
Syarikat Malaysian Steel Works (Masteel) Bhd telah mengumumkan pada 31hb Mei 2013 melalui Bursa Malaysia bahawa mereka telah menghadiri satu mesyuarat dengan Jawatan Kerjasama Awam Swasta (UKAS) yang dipengerusi oleh Menteri Kewangan Kedua, Dato’ Ahmad Husni Hussain.
Dalam mesyuarat tersebut, anak syarikat Masteel iaitu Metropolitan Commuter Network (MCN) telah diberikan kebenaran untuk memuktamadan struktur pinjaman mudah sebanyak RM700 juta daripada pihak kerajaan untuk membina satu sistem rail yang baru di Iskandar Malaysia. Sistem rel ini akan melingkungi 20 stesyen termasuk Kulai, Gelang Patah, Nusajaya, Johor Baru dan Masai.
MCN merupakan satu syarikat usahasama di mana Masteel memiliki 60%, manakala syarikat KUB Bhd di mana UMNO mempunyai kepentingan, memiliki 40%.
Dalam satu temuramah dengan The Edge Malaysia bertarikh Jun 17, CEO Masteel, Dtauk Seri Tai Hean Leng telah menjelaskan bahawa MCN akan melabur sebanyak RM300 juta untuk melaksanakan projek ini dengan pinjaman “soft loan” RM700 juta daripada kerajaan. Mereka akan diberikan konsesi untuk menjalankan sistem komuter ini selama 37 tahun walaupun MCN akan dapat “break even” selepas 12 tahun.
Sebahagian daripada konsesi tersebut termasak sekeping tanah sebesar 14.3ha di Kempas, Johor yang akan diberikan kepada MCN untuk bukan sahaja membina depot, tetapi juga untuk membina bangunan komersil. Mengikut kata Datuk Seri Tai, “tanah ini adalah tanah pilihan kerana ia bersebelahan dengan Setia Tropicana”.
Kami ingin mempersoalkan asas pihak kerajaan telah memilih syarikat Masteel untuk projek rel ini secara rundingan terus. Mengapa pihak kerajaan tidak menjalankan tender terbuka untuk projek sebegini? Soalan juga tertimbul di mana apakah keperluan untuk menswastakan projek ini jika kerajaan perlu membiayai 70% daripada kos pembinaan melalui pemberian pinjaman mudah?
Tambahan lagi, syarikat Masteel bukan merupakan syarikat yang berpengalaman dalam bidang rel. Aktiviti utama Masteel adalah pembuatan dan pembekalan pelbagai jenis keluli di Malaysia. Syarikat tersebut yang hanya memperolehi keuntungan bersih RM24 juta pada tahun 2012 tidak pernah terlibat dalam kerja-kerja pembinaan dan pengoperasian rel. Adakah syarikat Masteel merupakan syarikat yang terbaik untuk melaksanakan projek RM1 bilion ini dengan bantuan kerajaan sebanyak RM700 juta?
Pihak kerajaan perlu menjelaskan rasional untuk meneruskan tawaran projek secara rundingan terus, terutamanya bila ia kerap-kali ditawarkan kepada syarikat-syarikat yang tiada berpengalaman dan tidak mempunyai dana kewangan yang mencukupi. Apatah lagi pihak kerajaan perlu memperuntukkan pinjaman yang cukup besar walaupun pihak konsesi akan dapat menerima pulangan modal dalam jangka masa singkat.
Pihak PEMANDU telah mengemukakan Pelan Transformasi Kerajaan (GTP) pada tahun 2009 untuk mempertingkatkan ketelusan dan akauntabiliti dalam segala perolehan kerajaan, demi mengurangkan pembaziran dan rasuah. Akan tetapi sampai hari ini, kita dapat melihat bahawa kerajaan hanya cakap tak serupa bikin.
Pada masa yang sama, Perdana Menteri Dato’ Seri Najib Razak sendiri telah berjanji supaya “reformasi” akan diteruskan jika BN dipilih semula sebagai kerajaan. Adakah kesemua ini merupakan janji-janji kosong di mana pihak kroni BN akan diberikan kepentingan dan kekayaan.
Showing posts with label Privatisation. Show all posts
Showing posts with label Privatisation. Show all posts
Wednesday, July 17, 2013
Monday, May 20, 2013
Selangor Voters Snubs Najib's Water "Promise"
In the interest of Selangorians, Datuk Seri Najib Razak must now instruct the new Energy, Green Technology and Water Minister, Datuk Maximus Ongkili to immediately press for the return of the water concessions to the Selangor state government
The battle for Selangor in the last General Election was fought on one crucial platform – the control of water in the state.
The Prime Minister, Datuk Seri Najib Razak who personally headed the BN machinery in Selangor campaigned vigourously in the state for the people to return BN into government to “solve Selangor’s water crisis”.
Pakatan Rakyat, led by Tan Sri Khalid Ibrahim offered his vision for water services in Selangor where the control is returned to the state government, the rights to water to her people. Pakatan Rakyat has argued vehemently that essential services such as the provision of water should not be conceded to private companies which the sole interest of maximising profits.
We can see the consequences reflected in Subang Jaya today where the residents have been suffering for the 4th day now without water supply due to Syabas incompetence and lack of maintenance. In the water concession agreement, the obligation of maintaining the treated water reservoirs, as well as replacing broken and old pipes lay completely with SYABAS. Their failure to fulfil their obligations have caused repeated water shortages all over the Klang Valley over the past few months.
Despite the massive onslaught by BN led by the Prime Minister himself, the outcome of the 13th GE in Selangor has proven Najib’s utter and complete failure in making any in roads in the state. Not only did Najib not manage to recapture Selangor, BN lost additional 8 seats, allowing Pakatan Rakyat to capture 44 seats and leaving BN with only 12. In terms of popular support, Pakatan Rakyat Selangor enjoyed a 4% increase in popular votes from 55.4% in 2008 to 59.4% in 2013 confirming that we have won over our doubters in 2008 with our policies and administration.
Datuk Seri Najib’s defeat meant that the people of Selangor has spoken, and that they have no confidence in the BN federal government in resolving the water crisis. It is also an outright rejection of the mega-project proposed by BN, the Langat 2 water treatment plant which is expected to cost in excess of RM8 billion, inclusive of the Pahang-Selangor tunnel as well as land acquisition costs.
Instead, the rakyat have insisted in no uncertain terms, that the privatised water concessions be returned to the state government. The people of Selangor have also agreed with the state government that there are other much more effective, efficient and cheaper measures which can be taken to increase the water supply in Selangor. They can also see that the current water crisis is caused by or is manufactured by the BN Government.
Given the urgency of the water crisis in Selangor, and the appointment of a new Energy, Green Technology and Water Minister, Datuk Dr Maximus Ongkili, we call upon the Prime Minister to instruct Dr Ongkili to exercise the powers vested in him under the Water Services Industry Act (WSIA) 2006 to enforce the return of the water concessions to the state government.
In fact WSIA 2006 empowers the Minister to make decisions in national interest which cannot be challenged in the court of law.
The determination of what amounts to national interest issues arising from the coming into operation of this Act shall be made by the Minister and such determination shall be final and binding upon all persons and shall not be challenged, appealed against, reviewed, quashed or questioned in any court.
Datuk Seri Najib Razak must accept the will of the people of Selangor to have the water concession returned to the state government. The failure to do so will mean that the Prime Minister is once again snubbing the needs and demands of the people, making a plain joke of his “people first” slogan.
The battle for Selangor in the last General Election was fought on one crucial platform – the control of water in the state.
The Prime Minister, Datuk Seri Najib Razak who personally headed the BN machinery in Selangor campaigned vigourously in the state for the people to return BN into government to “solve Selangor’s water crisis”.
Pakatan Rakyat, led by Tan Sri Khalid Ibrahim offered his vision for water services in Selangor where the control is returned to the state government, the rights to water to her people. Pakatan Rakyat has argued vehemently that essential services such as the provision of water should not be conceded to private companies which the sole interest of maximising profits.
We can see the consequences reflected in Subang Jaya today where the residents have been suffering for the 4th day now without water supply due to Syabas incompetence and lack of maintenance. In the water concession agreement, the obligation of maintaining the treated water reservoirs, as well as replacing broken and old pipes lay completely with SYABAS. Their failure to fulfil their obligations have caused repeated water shortages all over the Klang Valley over the past few months.
Despite the massive onslaught by BN led by the Prime Minister himself, the outcome of the 13th GE in Selangor has proven Najib’s utter and complete failure in making any in roads in the state. Not only did Najib not manage to recapture Selangor, BN lost additional 8 seats, allowing Pakatan Rakyat to capture 44 seats and leaving BN with only 12. In terms of popular support, Pakatan Rakyat Selangor enjoyed a 4% increase in popular votes from 55.4% in 2008 to 59.4% in 2013 confirming that we have won over our doubters in 2008 with our policies and administration.
Datuk Seri Najib’s defeat meant that the people of Selangor has spoken, and that they have no confidence in the BN federal government in resolving the water crisis. It is also an outright rejection of the mega-project proposed by BN, the Langat 2 water treatment plant which is expected to cost in excess of RM8 billion, inclusive of the Pahang-Selangor tunnel as well as land acquisition costs.
Instead, the rakyat have insisted in no uncertain terms, that the privatised water concessions be returned to the state government. The people of Selangor have also agreed with the state government that there are other much more effective, efficient and cheaper measures which can be taken to increase the water supply in Selangor. They can also see that the current water crisis is caused by or is manufactured by the BN Government.
Given the urgency of the water crisis in Selangor, and the appointment of a new Energy, Green Technology and Water Minister, Datuk Dr Maximus Ongkili, we call upon the Prime Minister to instruct Dr Ongkili to exercise the powers vested in him under the Water Services Industry Act (WSIA) 2006 to enforce the return of the water concessions to the state government.
In fact WSIA 2006 empowers the Minister to make decisions in national interest which cannot be challenged in the court of law.
The determination of what amounts to national interest issues arising from the coming into operation of this Act shall be made by the Minister and such determination shall be final and binding upon all persons and shall not be challenged, appealed against, reviewed, quashed or questioned in any court.
Datuk Seri Najib Razak must accept the will of the people of Selangor to have the water concession returned to the state government. The failure to do so will mean that the Prime Minister is once again snubbing the needs and demands of the people, making a plain joke of his “people first” slogan.
Tuesday, January 15, 2013
Najib Defends Syabas Despite Incompetence
Even in the light of sheer incompetence, Datuk Seri Najib Razak and Dato’ Sri Peter Chin continues to defend Syabas and blame the Selangor state government, placing the interest of cronies ahead that of the rakyat
It was the Barisan Nasional (BN) Government which started the privatisation of the water industry in Selangor in 1996. It was the BN Government which signed the concession agreement to allow Syabas to increase tariffs by 37% in 2009, a further 25% in 2012, 15% in 2015 and further increases every 3 years subsequently.
However, when Syabas failed to deliver its services to the residents of Kuala Lumpur and Selangor over the past month, the BN government has chosen to lay blame on the Pakatan Rakyat Selangor state government for failing to “approve” the construction of the Langat 2 Multi-billion ringgit water treatment plant. How is it Langat 2 which is only scheduled to be completed in 2014 at the very earliest, could have prevent the current water crisis in KL and Selangor is beyond our comprehension.
Despite the above, both the Prime Minister and the Minister of Energy, Green Technology and Water have chosen to defend and deflect criticisms laid on Syabas, clearly indicating that profit for BN cronies is more important than the sufferings of the man-on-the-street.
Datuk Seri Najib Razak has the cheek to say that he is “saddened to see people living in flats having to lift buckets of water to the upper floors.” However in the same breath, Najib claims BN is unable to resolve the crisis because the Selangor government “won’t give the development order” for Langat 2. As highlighted above, the current water crisis in Gombak, Ampang and Kuala Lumpur has nothing to do with Langat 2 and everything to do with Syabas’ inability to maintain its existing water supply services.
Similarly when Selangor Menteri Besar, Tan Sri Khalid Ibrahim once again suggested to the Federal Government that the Syabas concession be terminated for poor performance so that the state government can step into the management to rectify the shortcomings, the proposal was rejected outright by Peter Chin.
Peter Chin gave the ridiculous excuse that “the Selangor government cannot take over Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) for it violates the conditions stipulated in the water concession agreement. He said the water concession company was appointed to manage and administer water supply in Selangor in 2004 and the state government would liable if it were to terminate the contract.
The excuse by the Minister demonstrates the extent to which the BN Government is willing to tolerate transgressions by its cronies, even if the rakyat is suffering from extended water services disruption. It appears that even if Syabas was to default on all the terms of its concession agreement, the concession agreement cannot be terminated.
The Selangor state government wants to terminate the Syabas concession agreement to ensure that the quality of water services can be improved and the state will not suffer from such disruptions as a result of poor maintenance of its water treatment facilities. However, based on the concession agreement, the termination can only be carried out with the consent of the Federal Government.
Hence, the Syabas concession agreement can be terminated if Syabas failed to fulfil it’s part of the bargain. The only reason why the termination cannot proceed is because the BN government is dead against it and will protect Syabas at all cost.
It is clear that the BN Government is beyond redemption and is unable to change itself to prioritise the interest of the rakyat. While Najib espoused “transformation” in his speeches over the past 4 years, no “transformation” could be seen as BN’s privatisation cronies are not only fully protected by his administration, they have continued to prosper at the expense of the people.
Monday, September 03, 2012
Najib Must Disclose EDL Buy Back Compensation
The Prime Minister must practice full disclosure on the proposed acquisition of the Eastern Dispersal Link from Malaysian Resources Corporation Berhad (MRCB) to ensure the latter does not profit enormously from the exercise
We welcome the news from the Minister from the Prime Minister’s Department, Tan Sri Nor Mohamed Yakcop who announced that the Government intents to buy-back the Eastern Dispersal Link (EDL) from the concession holder.
This proves that the proposals by Pakatan Rakyat to acquire toll concessions is financially viable and will not “bankrupt” the country as accused repeated by Barisan Nasional (BN) leaders. As my colleague, PKR Strategy Director Rafizi Ramli has highlighted earlier, it also shows that BN is desperately copying policies from our Buku Jingga in order to dampen the support for Pakatan Rakyat.
However, the Government must be completely transparent in the buy-back exercise to ensure that they will not end up compensating Malaysian Resources Corporation Bhd (MRCB) with astronomical amount of profit.
Malaysians, especially Johoreans do not want to see a repeat of the aborted Gerbang Perdana “crooked bridge” project fiasco where the concessionaire was compensated RM257 million. This was despite the fact that they would only be paid RM100 million to build the bridge. That meant it cost the Government more money to stop the project halfway, than it is to actually complete it!
We do not want the Government to agree to buy-back the concession only to compensate for “loss of future profits” to MRCB – which effectively means the taxpayers’ money will be used to pay for toll upfront to MRCB.
We call on the Government to:
Given that the RM1.2 billion project (MRCB Annual Report 2011) was built with RM1,044 million of sukuk bonds, the shareholders’ contribution to the project is only approximately RM160 million. Assuming that the RM160 million was invested upfront in 2007 when the concession was awarded, the maximum total compensation payable to MRCB on top of their investment sum is 12% of RM160 million multiplied by 5 years or RM96 million.
Hence given the initial estimates, based on the presumption that the concession contract terms for expropriation by the Government is the same as previously declassified agreements, the maximum compensation the Government should agree to is:
RM1,044 million (sukuk)
+ RM160 million (shareholders’ capital and/or loan)
+ RM96 million (5 years’ interest on shareholders’ capital and/or loan)
= RM1,300 million
Therefore the Government must compensate the concessionaire in accordance to the 34-year concession agreement and not to unfairly compensate for more than what was specified in the agreement.
By paying MRCB anything more than RM1.3 billion, it will show that BN is abusing its powers to profit its crony companies and is failing in its fiduciary duty to protect and defend the interest of ordinary Malaysian taxpayers. The Prime Minister, Dato’ Seri Najib Razak promised that the “people’s interest comes first”, and there is no better time to prove it in the expropriation of the EDL concession.
We welcome the news from the Minister from the Prime Minister’s Department, Tan Sri Nor Mohamed Yakcop who announced that the Government intents to buy-back the Eastern Dispersal Link (EDL) from the concession holder.
This proves that the proposals by Pakatan Rakyat to acquire toll concessions is financially viable and will not “bankrupt” the country as accused repeated by Barisan Nasional (BN) leaders. As my colleague, PKR Strategy Director Rafizi Ramli has highlighted earlier, it also shows that BN is desperately copying policies from our Buku Jingga in order to dampen the support for Pakatan Rakyat.
However, the Government must be completely transparent in the buy-back exercise to ensure that they will not end up compensating Malaysian Resources Corporation Bhd (MRCB) with astronomical amount of profit.
Malaysians, especially Johoreans do not want to see a repeat of the aborted Gerbang Perdana “crooked bridge” project fiasco where the concessionaire was compensated RM257 million. This was despite the fact that they would only be paid RM100 million to build the bridge. That meant it cost the Government more money to stop the project halfway, than it is to actually complete it!
We do not want the Government to agree to buy-back the concession only to compensate for “loss of future profits” to MRCB – which effectively means the taxpayers’ money will be used to pay for toll upfront to MRCB.
We call on the Government to:
- Declassify and make public the EDL concession agreement so that Malaysians will know the complete terms of the agreement. There’s no reason why the Government cannot do this as past concession agreements have already been declassified by former Works Minister, Datuk Seri Mohd Zin Mohamed in 2009.
- Based on terms in past concession contracts, the Government is only required to pay for the “value of the Construction Works” of the Highway and “12% interest returns per annum to shareholders' capital and loan invested”.
Given that the RM1.2 billion project (MRCB Annual Report 2011) was built with RM1,044 million of sukuk bonds, the shareholders’ contribution to the project is only approximately RM160 million. Assuming that the RM160 million was invested upfront in 2007 when the concession was awarded, the maximum total compensation payable to MRCB on top of their investment sum is 12% of RM160 million multiplied by 5 years or RM96 million.
Hence given the initial estimates, based on the presumption that the concession contract terms for expropriation by the Government is the same as previously declassified agreements, the maximum compensation the Government should agree to is:
RM1,044 million (sukuk)
+ RM160 million (shareholders’ capital and/or loan)
+ RM96 million (5 years’ interest on shareholders’ capital and/or loan)
= RM1,300 million
Therefore the Government must compensate the concessionaire in accordance to the 34-year concession agreement and not to unfairly compensate for more than what was specified in the agreement.
By paying MRCB anything more than RM1.3 billion, it will show that BN is abusing its powers to profit its crony companies and is failing in its fiduciary duty to protect and defend the interest of ordinary Malaysian taxpayers. The Prime Minister, Dato’ Seri Najib Razak promised that the “people’s interest comes first”, and there is no better time to prove it in the expropriation of the EDL concession.
Saturday, August 11, 2012
Federal Government Support for Selangor Water Restructuring Mere Lip Service?
It was announced on Wednesday evening by the Special Cabinet Committee chaired by Tan Sri Muhyiddin Yassin that “the Selangor government can implement water supply restructuring scheme as long as it adheres to the Water Services Industry Act 2006, as well as all water concession agreements and laws in force.”
The statement also stated that “the committee has no plan to interfere with the state government's efforts to take over equity in the concession companies since it is a commercial transaction between the two parties that should be implemented on willing buyer-willing seller basis.”
While we will give the above statement of “support” the initial benefit of doubt, we call upon the Special Cabinet Committee to state concrete steps which the Federal Government will take, as an equal party to the water concession agreements as well as the rights of the water industry in Malaysia to ensure that the state can be successful.
In fact, the mere statement by the Federal Government that the restructuring transaction should be carried out “on willing buyer-willing seller basis” is already an interference to the concession agreement.
The concession agreements with the water concessionaires in Selangor – SYABAS, Syarikat Pengeluaran Air Sungai Selangor (SPLASH) and Konsortium ABASS contains clauses which specifically allows the state government to “expropriate” the concessions using a pre-determined and pre-agreed formula.
The only hurdle to the Selangor government exercising the mutually agreed clauses in the concession agreements is the consent of the Federal Government. If Tan Sri Muhyiddin Yassin is sincere in wanting the state government to take over the water industry, then we call upon the Cabinet to grant the consent to the expropriation exercise based on the pre-agreed compensation formula will be the fastest and easiest method to resolve the stalemate in Selangor.
If the Federal Government is not willing to grant a consent for the expropriation exercise, despite it being part of the concession agreements, then surely the Federal Government must agree to an international arbitration exercise to determine a fair valuation for the acquisition of these water companies by Selangor government. Tan Sri Khalid Ibrahim has mooted the proposal to submit to an international arbitration panel to determine the fair price for the acquisition of the four water companies in Selangor since 2010 but this proposal has been obstinately rejected by the Federal Government.
Similarly, Tan Sri Khalid Ibrahim has written letters to the Federal Government seeking the latter’s consent to terminate the concession agreement due to various breaches by SYABAS. However, the Federal Government had refused to accede to the state’s request, and has instead insisted during various restructuring negotiations for SYABAS or Puncak Niaga to lead the revamped water industry.
Instead of helping the state government in pressuring the return of the water concessions, the Federal Government did the exact opposite by bailing out these heavily indebted water companies. The Federal Government has “taken over” RM6.5 billion of the water debts to prevent the water companies from going into default insolvency. The bailout exercise of these water companies at the most crucial moment destroyed any incentive for these water companies to come to a restructuring agreement with the Selangor Government.
The above responses or the lack of response by the Federal Government to the State Government’s intent of taking back control of the water industry as per the spirit of the Water Services Industry Act (WSIA 2006) exposes the bad faith on the part of the Federal Government. They would either prefer SYABAS/Puncak Niaga to continue to lead the water industry in Selangor, or for the Selangor Government to pay through the nose to acquire these companies.
By taking the hands-off position and paying just lip service, there will be absolutely no reason for SYABAS and the other concessionaires to come to the table. Hence to demonstrate the Federal Government’s sincerity and good faith over this matter, it must announce its full support, particularly to accept the proposed international arbitration panel to decide on a fair price for the acquisition of the water concessionaires.
The statement also stated that “the committee has no plan to interfere with the state government's efforts to take over equity in the concession companies since it is a commercial transaction between the two parties that should be implemented on willing buyer-willing seller basis.”
While we will give the above statement of “support” the initial benefit of doubt, we call upon the Special Cabinet Committee to state concrete steps which the Federal Government will take, as an equal party to the water concession agreements as well as the rights of the water industry in Malaysia to ensure that the state can be successful.
In fact, the mere statement by the Federal Government that the restructuring transaction should be carried out “on willing buyer-willing seller basis” is already an interference to the concession agreement.
The concession agreements with the water concessionaires in Selangor – SYABAS, Syarikat Pengeluaran Air Sungai Selangor (SPLASH) and Konsortium ABASS contains clauses which specifically allows the state government to “expropriate” the concessions using a pre-determined and pre-agreed formula.
The only hurdle to the Selangor government exercising the mutually agreed clauses in the concession agreements is the consent of the Federal Government. If Tan Sri Muhyiddin Yassin is sincere in wanting the state government to take over the water industry, then we call upon the Cabinet to grant the consent to the expropriation exercise based on the pre-agreed compensation formula will be the fastest and easiest method to resolve the stalemate in Selangor.
If the Federal Government is not willing to grant a consent for the expropriation exercise, despite it being part of the concession agreements, then surely the Federal Government must agree to an international arbitration exercise to determine a fair valuation for the acquisition of these water companies by Selangor government. Tan Sri Khalid Ibrahim has mooted the proposal to submit to an international arbitration panel to determine the fair price for the acquisition of the four water companies in Selangor since 2010 but this proposal has been obstinately rejected by the Federal Government.
Similarly, Tan Sri Khalid Ibrahim has written letters to the Federal Government seeking the latter’s consent to terminate the concession agreement due to various breaches by SYABAS. However, the Federal Government had refused to accede to the state’s request, and has instead insisted during various restructuring negotiations for SYABAS or Puncak Niaga to lead the revamped water industry.
Instead of helping the state government in pressuring the return of the water concessions, the Federal Government did the exact opposite by bailing out these heavily indebted water companies. The Federal Government has “taken over” RM6.5 billion of the water debts to prevent the water companies from going into default insolvency. The bailout exercise of these water companies at the most crucial moment destroyed any incentive for these water companies to come to a restructuring agreement with the Selangor Government.
The above responses or the lack of response by the Federal Government to the State Government’s intent of taking back control of the water industry as per the spirit of the Water Services Industry Act (WSIA 2006) exposes the bad faith on the part of the Federal Government. They would either prefer SYABAS/Puncak Niaga to continue to lead the water industry in Selangor, or for the Selangor Government to pay through the nose to acquire these companies.
By taking the hands-off position and paying just lip service, there will be absolutely no reason for SYABAS and the other concessionaires to come to the table. Hence to demonstrate the Federal Government’s sincerity and good faith over this matter, it must announce its full support, particularly to accept the proposed international arbitration panel to decide on a fair price for the acquisition of the water concessionaires.
Friday, July 20, 2012
Speech @ "Tony Pua vs SYABAS" Dinner
* Note: Please refer to clarification statement below (13/11/13)
---
13 Nov 2013
I wish to clarify that:
In making and/or publishing the above, my statements therein were directed towards the implementation of Feed-in Tariff system implemented and administered by the Sustainable Energy Development Authority (“SEDA”);
My intention in making those statements was to question SEDA on issues relating to the Feed-in Tariff application and approval process.
While I had in my statements directed questions and comments against Suzi Suliana binti Mohd Sidek and her husband Todd Michael Morath (“Sun Energy Shareholders”) which may suggest that companies associated with them had obtained Feed-in Tariff approvals from SEDA by virtue of their relationship with Suzi Suliana binti Mohd Sidek’s father, Tan Sri Mohd Sidek bin Hassan (“Tan Sri Sidek”) and/or some form of undue or preference treatment, I now confirm as follows:
Contrary to what may have been suggested, I do not know of any evidence that suggests any foul play involving and/or any undue or preferential treatment to, and/or favouritism to the Sun Energy Shareholders and/or companies associated with the Sun Energy Shareholders by SEDA in the award of any Feed-in Tariff approvals whether by virtue of their relationship with Tan Sri Mohd Sidek bin Hassan or otherwise.
I also accept that I was mistaken and wrong in reporting that the Sun Energy Shareholders and business partners were awarded 32.4% of Feed-in Approvals of the total quota allocated to companies producing between 1MW to 5MW. In particular I recognize that:
(i) the persons mentioned by me as business partners of the Sun Energy Shareholders, namely Lim Boon Huay and Yap Kian Mun were merely incorporators of shelf companies and do not have any association or businesses with the Sun Energy Shareholders;
(ii) the Sun Energy Shareholders have no connection whatsoever with Semangat Sarjana Sdn Bhd, Kenari Pasifik Sdn Bhd Tiara Insight Sdn Bhd, Ambang Fiesta Sdn Bhd, Gaya Dunia Sdn Bhd and Rentak Raya Sdn Bhd; and
(iii) I did not state that the Sun Energy Shareholders’ ultimate and only business partner in respect of the Feed-in Approvals obtained was SunEdison, a global player in solar energy, which has significant experience and track record in solar power generation.
I did not contact the Sun Energy Shareholders, Tan Sri Mohd Sidek bin Hassan or Lim Boon Huay and Yap Kian Mun to verify or confirm my statements prior to or after making them.
I wish to repeat and re-emphasise that my statements were at all material times directed against SEDA on issues relating to the Feed-in Tariff application and approval process which I believe were made in the public interest in my capacity as a Member of Parliament, and clarify that I did not mean to disparage the character of or allege any wrong-doing by Suzi Suliana binti Mohd Sidek, Todd Michael Morath and/or Tan Sri Mohd Sidek bin Hassan.
For avoidance of doubt, I retract all insinuations of undue or preferential treatment, foul play and/or favouritism against Suzi Suliana binti Mohd Sidek, Todd Michael Morath and/or Tan Sri Mohd Sidek bin Hassan that may have been suggested in my statements.
In recognition of the above, I shall:
(i) qualify all my statements as published on the internet with reference to my clarifications herein which shall be appended as a note to the same; and
(ii) remove all comments made by visitors to my blog that concern Suzi Suliana binti Mohd Sidek, Todd Michael Morath and/or Tan Sri Mohd Sidek bin Hassan in relation to my statements.
Thursday, July 19, 2012
SYABAS: A Threat to National Security
Syarikat Bekalan Air Selangor Sdn Bhd (SYABAS) has become a threat to our national security by threatening 7 million consumers in Selangor, Kuala Lumpur and Putrajaya with water rationing where there is no shortage of water.
When SYABAS insisted on low water levels, visits by the Selangor State Executive Committee members Ronnie Liu and Xavier Jeyakumar to the various damns across the state yesterday proved that the dams are full and there is no shortage of raw water.
Now SYABAS has officially admitted yesterday that there is no shortage of raw water, but instead shifted the goal post to claim that there is now shortage of treated water.
This is essentially an admission that the SYABAS treatment plants are either operating inefficiently or there are not enough treatment plant capacity at existing water reservoirs.
SYABAS has to date been lobbying hard for the new “mega” Langat 2 treatment plant to be built, which will only be ready by 2014 at the earliest, but even then, the plant is meant to treat water sourced expensively from Pahang instead of the existing available raw water supply.
It is hence clear that the costly Langat 2 plant is not necessary. Instead, what is needed is a thorough review of the existing water treatment plants operated by the concessionaires – Puncak Niaga Sdn Bhd, Syarikat Pengeluaran Air Sungai Selangor Holdings (SPLASH) and Konsortium ABASS.
If required, Selangor Menteri Besar, Tan Sri Khalid Ibrahim has already promised build additional capacities at the existing treatment plants, and these measures will take less than a year to complete compared to the Langat 2 project.
The Menteri Besar has also highlighted the fact that Syabas has failed to reduce non-revenue water below the contractual threshold of 20 percent; owes nearly RM3 billion to its water treatment facility operators; and has failed to invest in facilities and infrastructure to fulfill its responsibility of supplying adequate water to the state.
The entire “water-rationing” threat is a ruse to frighten the people of Selangor into forcing the approval of the Langat 2 project which has nothing to do at all with the alleged low levels of treated water.
It is a fear-mongering tactic used by SYABAS which is 70% owned by Puncak Niaga, firstly to help Barisan Nasional win Selangor in the next general election in order to perpetuate their control over water rights in the state.
Secondly, it is an excuse to try and force the state government to agree to the RM3.94 billion Langat 2 project to source raw water from Pahang which is much more expensive than the existing raw water as well as other available means. The Selangor government has refused permission for the Langat 2 project as it is not only unnecessary as shown by the overflowing dams in the state, it will raise the cost of water supply to the people of Selangor and hence add to the burden shouldered by the Rakyat.
The privatization of SYABAS has resulted in the interest of the people of Selangor, Kuala Lumpur and Putrajaya being severely compromised. SYABAS can now act with impunity to threaten the security of the nation by holding the people and the state government to ransom. Such threats to our national security must be dealt with utmost urgency and without compromise. We call upon the Federal Government and Suruhanjaya Perkhidmatan Air Negara (SPAN) to immediately censure SYABAS for unilaterally threatening water rationing without prior consultation and review with the Selangor state government and other relevant authorities.
We also call upon the Federal Government to use the powers vested in the Minister of Energy, Green Technology & Water to complete the restructuring exercise of the water industry in Selangor in accordance to the spirit of the Water Services Industry Act (2006), which is to place water services under the control of the state government, to ensure that the rights of the people to quality and affordable water are fully protected. The BN government must stop pandering to its cronies and put the rakyat’s interest first.
When SYABAS insisted on low water levels, visits by the Selangor State Executive Committee members Ronnie Liu and Xavier Jeyakumar to the various damns across the state yesterday proved that the dams are full and there is no shortage of raw water.
Now SYABAS has officially admitted yesterday that there is no shortage of raw water, but instead shifted the goal post to claim that there is now shortage of treated water.
This is essentially an admission that the SYABAS treatment plants are either operating inefficiently or there are not enough treatment plant capacity at existing water reservoirs.
SYABAS has to date been lobbying hard for the new “mega” Langat 2 treatment plant to be built, which will only be ready by 2014 at the earliest, but even then, the plant is meant to treat water sourced expensively from Pahang instead of the existing available raw water supply.
It is hence clear that the costly Langat 2 plant is not necessary. Instead, what is needed is a thorough review of the existing water treatment plants operated by the concessionaires – Puncak Niaga Sdn Bhd, Syarikat Pengeluaran Air Sungai Selangor Holdings (SPLASH) and Konsortium ABASS.
If required, Selangor Menteri Besar, Tan Sri Khalid Ibrahim has already promised build additional capacities at the existing treatment plants, and these measures will take less than a year to complete compared to the Langat 2 project.
The Menteri Besar has also highlighted the fact that Syabas has failed to reduce non-revenue water below the contractual threshold of 20 percent; owes nearly RM3 billion to its water treatment facility operators; and has failed to invest in facilities and infrastructure to fulfill its responsibility of supplying adequate water to the state.
The entire “water-rationing” threat is a ruse to frighten the people of Selangor into forcing the approval of the Langat 2 project which has nothing to do at all with the alleged low levels of treated water.
It is a fear-mongering tactic used by SYABAS which is 70% owned by Puncak Niaga, firstly to help Barisan Nasional win Selangor in the next general election in order to perpetuate their control over water rights in the state.
Secondly, it is an excuse to try and force the state government to agree to the RM3.94 billion Langat 2 project to source raw water from Pahang which is much more expensive than the existing raw water as well as other available means. The Selangor government has refused permission for the Langat 2 project as it is not only unnecessary as shown by the overflowing dams in the state, it will raise the cost of water supply to the people of Selangor and hence add to the burden shouldered by the Rakyat.
The privatization of SYABAS has resulted in the interest of the people of Selangor, Kuala Lumpur and Putrajaya being severely compromised. SYABAS can now act with impunity to threaten the security of the nation by holding the people and the state government to ransom. Such threats to our national security must be dealt with utmost urgency and without compromise. We call upon the Federal Government and Suruhanjaya Perkhidmatan Air Negara (SPAN) to immediately censure SYABAS for unilaterally threatening water rationing without prior consultation and review with the Selangor state government and other relevant authorities.
We also call upon the Federal Government to use the powers vested in the Minister of Energy, Green Technology & Water to complete the restructuring exercise of the water industry in Selangor in accordance to the spirit of the Water Services Industry Act (2006), which is to place water services under the control of the state government, to ensure that the rights of the people to quality and affordable water are fully protected. The BN government must stop pandering to its cronies and put the rakyat’s interest first.
Sunday, July 15, 2012
"Tony Pua vs SYABAS" Fund-Raiser: Mission Accomplished!
The DAP would like to make an official announcement to declare that we have collected sufficient funds from our "RM1 for Water Rights: 100,000 Malaysians Support Tony Pua vs Syabas" Campaign! The campaign is an overwhelming success, and we will end the online fund-raiser today.
As at 4pm 13/7/12 (Fri), the online donation campaign has raised RM143,256, a remarkable achievement of small contributions from tens of thousands of Malaysians in less than a week.
The KL High Court has ordered Tony Pua to pay RM200,000 in damages plus interest plus costs. SYABAS is claiming RM80,000 for costs, but this is amount being negotiated.
The Party will be able to raise the balance of the required funds from our sell-out fund-raising dinner on 17/7/12 (Tue) Dewan Sivik MBPJ. The dinner has sold more than 100 tables.
Any excess funds from the collection will go into the DAP General Election Fund.
We would like to thank all Malaysians for the generous support and this only proves that is we act together, we can change the nation!
Background of this issue:
Selangor state government launched a campaign in 2009 to buy-back the privatized water concessionaires in order to provide quality water at affordable prices.
Tony Pua campaigned hard for the above and was sued for defamation by SYABAS. The High Court awarded RM200k in damages to SYABAS.
Hence we are calling for 100,000 Malaysians to contribute as little as RM1 each to support Tony Pua in his effort to battle with SYABAS and to continue to speak up for the Rakyat in this issue.
Tony has appealed the judgment to the Court of Appeal but he has been asked to pay the damages to SYABAS first. If the appeal is successful, the money collected in this campaign will be channeled to DAP General Election preparation fund.
Friday, July 13, 2012
Wednesday, July 11, 2012
Tuesday, July 10, 2012
SYABAS Insists on RM200k Payment by 16 July 2012
I would like to thank all supporters who have donated RM32,140 as at 10.30am on 9/7 (Mon) so far to help me fight for affordable water in Selangor.
SYABAS has demanded that I make the payment of RM200,000 plus interest and costs by 16 July last week, even when the case is pending appeal. I had immediately requested for a short 2 weeks extension to raise the money. However, I've been informed to day that my request was rejected, so technically, I have another 6 days to raise the money.
We'll also be holding a fund-raising dinner for the cause on 17/7 (Tue), so please share the details are here: http://www.facebook.com/events/437795402921104/.
Thanks so much for the support!
Saturday, July 07, 2012
100,000 Malaysians Support TonyPua vs SYABAS
Tony has been asked to pay up the RM200,000 damages for "defaming" SYABAS, awarded by KL High Court last month.
We are appealing the decision, but will have to cough up the cash this month. Hence we are starting a public mass fund-raising campaign calling for 100,000 Malaysians to donate RM1 each to support Tony Pua vs Syabas.
Click https://dapmalaysia.org/donate/ to donate online via internet banking or credit card; or you could donate direct to "DAP Malaysia" Maybank account: 5141 7814 5866.
Thank you so much for the support! Please share on Facebook, Twitter etc!
Sunday, June 17, 2012
Sale of Maju Expressway Scuppered?
No nod for Maju Expressway sale, Putrajaya tells Parliament
By Shannon Teoh June 14, 2012
KUALA LUMPUR, June 14 — The controversial RM1.7 billion sale of the Maju Expressway (MEX) appears to be scuppered for now after the federal government said it had not approved the sale of the concession held by Maju Holdings.
The Prime Minister’s Department said in a written reply to a parliamentary question by Petaling Jaya Utara MP Tony Pua (picture) yesterday that no permission has been given for the deal due to “several policy matters related to this highway concession that must be studied by the government.”
“The government has never given permission in relation to the proposal for the sale of the KL-Putrajaya Highway to EP Manufacturing Berhad (EPMB),” it said.
Maju Holdings had hoped to walk away with RM668 million in profit.
[Tony: It's RM1.09 billion in profit!]
But the DAP publicity chief told The Malaysian Insider that “while it appears the deal is off, the answer only says it has not but does not say it will not give approval.”
EPMB had in March entered into an acquisition agreement with Maju Holdings to acquire MEX for RM1.15 billion and also assume debts totalling RM550 million, valuing the deal at a total cost of RM1.7 billion.
This would allow Maju Holdings, controlled by Tan Sri Abu Sahid Mohamed, to walk away with a “whopping” return of RM668 million, taking into account that the construction cost of RM1.3 billion was offset by a huge government grant of RM976 million.
MEX is 96.8 per cent owned by Maju Holdings, in which Abu Sahid controls a 91 per cent stake.
The opposition had promised the same month to buy back the MEX concession if it took over federal power after a coming general election and later called the deal a “rape” of taxpayers perpetrated by Tun Dr Mahathir Mohamad while he was still prime minister.
Pua had said the concession agreement was awarded “on a silver platter” to Abu Sahid in 1997 and revised in 2003 just prior to Dr Mahathir’s retirement.
“The rape of Malaysian taxpayers which made a billionaire out of Abu Sahid... is simply outrageous and unacceptable because out of his ‘profit’, RM976.7 million was paid for by Malaysian taxpayers,” he said, referring to the grant which was worth 74 per cent of the RM1.32 billion construction cost.
Pua said it was the former Umno president who made the decision to offer the RM976.7 million grant instead of a loan, allowing Abu Sahid to cash out quickly.
By Shannon Teoh June 14, 2012
KUALA LUMPUR, June 14 — The controversial RM1.7 billion sale of the Maju Expressway (MEX) appears to be scuppered for now after the federal government said it had not approved the sale of the concession held by Maju Holdings.
The Prime Minister’s Department said in a written reply to a parliamentary question by Petaling Jaya Utara MP Tony Pua (picture) yesterday that no permission has been given for the deal due to “several policy matters related to this highway concession that must be studied by the government.”
“The government has never given permission in relation to the proposal for the sale of the KL-Putrajaya Highway to EP Manufacturing Berhad (EPMB),” it said.
Maju Holdings had hoped to walk away with RM668 million in profit.
[Tony: It's RM1.09 billion in profit!]
But the DAP publicity chief told The Malaysian Insider that “while it appears the deal is off, the answer only says it has not but does not say it will not give approval.”
EPMB had in March entered into an acquisition agreement with Maju Holdings to acquire MEX for RM1.15 billion and also assume debts totalling RM550 million, valuing the deal at a total cost of RM1.7 billion.
This would allow Maju Holdings, controlled by Tan Sri Abu Sahid Mohamed, to walk away with a “whopping” return of RM668 million, taking into account that the construction cost of RM1.3 billion was offset by a huge government grant of RM976 million.
MEX is 96.8 per cent owned by Maju Holdings, in which Abu Sahid controls a 91 per cent stake.
The opposition had promised the same month to buy back the MEX concession if it took over federal power after a coming general election and later called the deal a “rape” of taxpayers perpetrated by Tun Dr Mahathir Mohamad while he was still prime minister.
Pua had said the concession agreement was awarded “on a silver platter” to Abu Sahid in 1997 and revised in 2003 just prior to Dr Mahathir’s retirement.
“The rape of Malaysian taxpayers which made a billionaire out of Abu Sahid... is simply outrageous and unacceptable because out of his ‘profit’, RM976.7 million was paid for by Malaysian taxpayers,” he said, referring to the grant which was worth 74 per cent of the RM1.32 billion construction cost.
Pua said it was the former Umno president who made the decision to offer the RM976.7 million grant instead of a loan, allowing Abu Sahid to cash out quickly.
Wednesday, June 06, 2012
Tony Pua Ordered To Pay RM200,000 Damages to SYABAS
Dear friends & supporters,
I've been ordered by the Kuala Lumpur High Court Judge Amelia Tee Hong Geok Abdullah to pay RM200,000 damages to Syarikat Bekalan Air Selangor (SYABAS) for demafing the latter.
I'll make available the 49-page judgement later, but I was found to have defamed SYABAS for the following impugned words in a Chinese article published in Nanyang Siangpau in November 2009.
I would maintain that the above statement is not defamatory, and will instruct my lawyers to file an appeal in the Court of Appeal.
Thank you all for the support! ;-)
I've been ordered by the Kuala Lumpur High Court Judge Amelia Tee Hong Geok Abdullah to pay RM200,000 damages to Syarikat Bekalan Air Selangor (SYABAS) for demafing the latter.
I'll make available the 49-page judgement later, but I was found to have defamed SYABAS for the following impugned words in a Chinese article published in Nanyang Siangpau in November 2009.
"Tony Pua said... the Selangor State Government will aggressively launch a signature campaign to return water rights to the people of Selangor... He said, after the breakdown of negotiations for the Selangor state government's plan to take over the 4 concessionaires, [the Selangor state government] launched the signature campaign to return water rights to the people, to ensure the water tariff in the state of Selangor will not be increased by 37%.
... He said, if the water concessionaires have insufficient funds to repay its loan, it should return the water rights to the state government; if the water concessionaires are unable to replace water pipes, it should give up or exit the water business..."The bold text above are deemed to have defamed Syabas.
I would maintain that the above statement is not defamatory, and will instruct my lawyers to file an appeal in the Court of Appeal.
Thank you all for the support! ;-)
Saturday, April 21, 2012
More "Get-Rich-Quick" Highways
On 26 January this year, Kumpulan Europlus Bhd disclosed to Bursa Malaysia that West Coast Expressway Sdn Bhd (“WCE”), a 80% subsidiary company of the Company, has received an approval letter dated 26 January 2012 from the Public Private Partnership Unit of the Prime Minister’s Department for WCE to undertake the Proposed Privatization of the Construction of the West Coast Expressway.
The Concession from Banting in Selangor to Taiping in Perak will cover a distance of 316km with an estimated project cost is RM7.07 billion. The lucrative terms of the project included a concession period of 60 years; a “Government Support Loan” of RM2.24 billion at an interest rate of 4% per annum, and an interest subsidy, of up to 3% from commercial loans for a period of 22 years. What’s more the land acquisition cost of up to RM980 million for the Project will be borne by the Government.
The term of the new Concession agreement with WCE is a far cry from the original terms awarded in May 2007. However, because WCE had been unable to fulfil the terms and conditions of the original concession, these terms were re-negotiated. The result was an increase of 134.5% from the original RM3.0 billion and an extension of the concession period from 33 to 60 years. The soft loans and interest subsidies on commercial loans were all new sweeteners added to the agreement terms to ensure a lucrative project for the concessionaire.
In fact the anticipation and ultimate award of this concession has caused Europlus stock price to leap from a low of 88 sen in September to a high of RM1.36 after the above announcement in January. Today the stock is trading at RM1.24, still 41% above its lows last year. The low stock price before the award of the highway concession was unsurprising, given that Europlus made RM50.8 million in losses on less than RM28 million of revenue for its financial year ending January 2011.
However, despite being the single largest shareholder of Europlus, Tan Sri Chan Ah Chye announced that he has resigned as the President and Chief Executive Officer of the company. It was announced that “after working on the West Coast Expressway project for the last 16 years, now that the project has finally been awarded to Europlus’ 80%-owned subsidiary, West Coast Expressway Sdn Bhd, it is his desire to spend more time with his family and do things he has no time to do for the last so many years.”
The announcement came as a shock because it clearly signals the fact that Tan Sri Chan Ah Chye will soon be receiving a “golden handshake” for his 27.6% stake in the company, valued at RM178.1 million at current market prices. There is no conceivable reason for him to resign from all positions in the company if he were to maintain his shareholdings. I have received unconfirmed information that his shares will be acquired at more than 30% above the current market price amounting to approximately RM231 million.
The BN Government has once again chosen the fastest route to make instant multi-millionaires by awarding unbelievably lucrative concessions to its favourite business cronies. By just securing the contract Tan Sri Chan Ah Chye has seen his wealth rise by leaps and bounds with an immediate exit in less than 3 months after the award before the construction works even commence.
We have seen how Tan Sri Abu Sahid Mohamed, the owner of Maju Expressways (MEX) made a killing by disposing of his interest in the highway for RM1.7 billion and netting a net profit of RM1.09 billion, despite having invested only RM60 million. While the MEX was awarded by Tun Dr Mahathir Mohamed in 1997 (revised in 2003), the current concession is awarded by Dato’ Seri Najib Razak. The current Prime Minister is obviously taking a leaf out of his predecessor’s play book, making a complete mockery of his clarion call for “economic transformation”.
We call upon the BN Government to stop making instant multi-million profits for its cronies by withdrawing the award of the WCE concession to Europlus and to conduct and open, transparent and competitive tender for the award of the project to ensure that only the best companies offering the lowest construction price and shortest concession period are given the contract. Only then will the interest of tax-payers’ be protected and not fleeced like in all previous highway and privatisation contracts.
The Concession from Banting in Selangor to Taiping in Perak will cover a distance of 316km with an estimated project cost is RM7.07 billion. The lucrative terms of the project included a concession period of 60 years; a “Government Support Loan” of RM2.24 billion at an interest rate of 4% per annum, and an interest subsidy, of up to 3% from commercial loans for a period of 22 years. What’s more the land acquisition cost of up to RM980 million for the Project will be borne by the Government.
The term of the new Concession agreement with WCE is a far cry from the original terms awarded in May 2007. However, because WCE had been unable to fulfil the terms and conditions of the original concession, these terms were re-negotiated. The result was an increase of 134.5% from the original RM3.0 billion and an extension of the concession period from 33 to 60 years. The soft loans and interest subsidies on commercial loans were all new sweeteners added to the agreement terms to ensure a lucrative project for the concessionaire.
In fact the anticipation and ultimate award of this concession has caused Europlus stock price to leap from a low of 88 sen in September to a high of RM1.36 after the above announcement in January. Today the stock is trading at RM1.24, still 41% above its lows last year. The low stock price before the award of the highway concession was unsurprising, given that Europlus made RM50.8 million in losses on less than RM28 million of revenue for its financial year ending January 2011.
However, despite being the single largest shareholder of Europlus, Tan Sri Chan Ah Chye announced that he has resigned as the President and Chief Executive Officer of the company. It was announced that “after working on the West Coast Expressway project for the last 16 years, now that the project has finally been awarded to Europlus’ 80%-owned subsidiary, West Coast Expressway Sdn Bhd, it is his desire to spend more time with his family and do things he has no time to do for the last so many years.”
The announcement came as a shock because it clearly signals the fact that Tan Sri Chan Ah Chye will soon be receiving a “golden handshake” for his 27.6% stake in the company, valued at RM178.1 million at current market prices. There is no conceivable reason for him to resign from all positions in the company if he were to maintain his shareholdings. I have received unconfirmed information that his shares will be acquired at more than 30% above the current market price amounting to approximately RM231 million.
The BN Government has once again chosen the fastest route to make instant multi-millionaires by awarding unbelievably lucrative concessions to its favourite business cronies. By just securing the contract Tan Sri Chan Ah Chye has seen his wealth rise by leaps and bounds with an immediate exit in less than 3 months after the award before the construction works even commence.
We have seen how Tan Sri Abu Sahid Mohamed, the owner of Maju Expressways (MEX) made a killing by disposing of his interest in the highway for RM1.7 billion and netting a net profit of RM1.09 billion, despite having invested only RM60 million. While the MEX was awarded by Tun Dr Mahathir Mohamed in 1997 (revised in 2003), the current concession is awarded by Dato’ Seri Najib Razak. The current Prime Minister is obviously taking a leaf out of his predecessor’s play book, making a complete mockery of his clarion call for “economic transformation”.
We call upon the BN Government to stop making instant multi-million profits for its cronies by withdrawing the award of the WCE concession to Europlus and to conduct and open, transparent and competitive tender for the award of the project to ensure that only the best companies offering the lowest construction price and shortest concession period are given the contract. Only then will the interest of tax-payers’ be protected and not fleeced like in all previous highway and privatisation contracts.
Friday, April 20, 2012
PKFZ: PKA Does Not Need to Pay KDSB
It was disclosed by former Transport Minister, Datuk Seri Ong Tee Keat that the Port Klang Authority (PKA) has continued to pay Kuala Dimensi Sdn Bhd (KDSB) bondholders despite the fact that PKA has filed RM1.6 billion worth of claims against KDSB for breaches of contract, particularly for making excessive, dubious and fraudulent claims, some of which was for works never commenced. The last payment made was in June and July last year totally RM733.3 million.
PKA insisted yesterday it had paid holders of bonds issued by Kuala Dimensi Sdn Bhd (KDSB) to avoid breach of contract in light of on-going legal cases in the Port Klang Free Zone (PKFZ) scandal.
The defence is an outright lie because there is no contract term which requires payment by PKA to KDSB or its bondholders if the necessary construction works are not completed. In fact it is the reverse, where a criminal breach of trust offence has been committed if PKA continued to make the relevant payments despite discovering that the works have not been executed or the claims were fraudulent!
It makes absolutely no sense for the Government to insist on making the payment when the Government itself disagrees that work has not been carried out. The only possible reason for the PKA and the Minister of Transport, Datuk Seri Kong Cho Ha to insist on making the payment is to protect KDSB. This is to ensure that KDSB does not get into financial trouble with its bondholders.
This is because, as part of the bond agreement's security arrangements, KDSB has issued two letters of undertaking. The first is for the construction, development and completion of the project on a turnkey basis; and the second, is to cover any shortfall in the amount payable by PKA vis-a-vis payment obligations under the bond after taking into account the credit balance in the Escrow Account.
KDSB has also granted a “Power of Attorney to [the bondholders] as security to ensure that the development works are completed pursuant to the terms and conditions of the agreements which can only be invoked and exercised by [the bondholders] upon KDSB having defaulted under the agreements.”
Based on the above letters and power of attorney, it basically means that should the Government fail to make payment for the project to the bondholders due to incomplete works, the bondholders will then demand from KDSB any shortfall in the amount payable by PKA, and on top of that undertake legal action against KDSB for failing to complete the project and for the bondholders to take over the development works of the project.
These actions will obviously mean substantial losses of profit by KDSB, a company owned by Barisan Nasional (BN) backbencher's chairman, Datuk Seri Tiong King Sing.
PKA’s claim also contradicts the advice from its legal advisors during the tenure of Datuk Lee Hwa Beng as its chairman who specifically advised withholding the payments to ensure maximum recoverability in the event of fraud proven.
Hence to avoid the above outcome, Datuk Seri Kong Cho Ha has chosen to instruct PKA to make the payments which are “due” despite the on-going dispute and litigation, to ensure that one of the biggest beneficiaries of BN patronage projects remains an on-going concern.
PKA insisted yesterday it had paid holders of bonds issued by Kuala Dimensi Sdn Bhd (KDSB) to avoid breach of contract in light of on-going legal cases in the Port Klang Free Zone (PKFZ) scandal.
The defence is an outright lie because there is no contract term which requires payment by PKA to KDSB or its bondholders if the necessary construction works are not completed. In fact it is the reverse, where a criminal breach of trust offence has been committed if PKA continued to make the relevant payments despite discovering that the works have not been executed or the claims were fraudulent!
It makes absolutely no sense for the Government to insist on making the payment when the Government itself disagrees that work has not been carried out. The only possible reason for the PKA and the Minister of Transport, Datuk Seri Kong Cho Ha to insist on making the payment is to protect KDSB. This is to ensure that KDSB does not get into financial trouble with its bondholders.
This is because, as part of the bond agreement's security arrangements, KDSB has issued two letters of undertaking. The first is for the construction, development and completion of the project on a turnkey basis; and the second, is to cover any shortfall in the amount payable by PKA vis-a-vis payment obligations under the bond after taking into account the credit balance in the Escrow Account.
KDSB has also granted a “Power of Attorney to [the bondholders] as security to ensure that the development works are completed pursuant to the terms and conditions of the agreements which can only be invoked and exercised by [the bondholders] upon KDSB having defaulted under the agreements.”
Based on the above letters and power of attorney, it basically means that should the Government fail to make payment for the project to the bondholders due to incomplete works, the bondholders will then demand from KDSB any shortfall in the amount payable by PKA, and on top of that undertake legal action against KDSB for failing to complete the project and for the bondholders to take over the development works of the project.
These actions will obviously mean substantial losses of profit by KDSB, a company owned by Barisan Nasional (BN) backbencher's chairman, Datuk Seri Tiong King Sing.
PKA’s claim also contradicts the advice from its legal advisors during the tenure of Datuk Lee Hwa Beng as its chairman who specifically advised withholding the payments to ensure maximum recoverability in the event of fraud proven.
Hence to avoid the above outcome, Datuk Seri Kong Cho Ha has chosen to instruct PKA to make the payments which are “due” despite the on-going dispute and litigation, to ensure that one of the biggest beneficiaries of BN patronage projects remains an on-going concern.
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.
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.
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.
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.
Thursday, March 22, 2012
KLIA2: KongChoHa Remains Evasive
I have received yesterday evening, a response from the Ministry of Transport to my question raised in Parliament with regards to the construction cost of KLIA2.
I had asked the Minister of Transport, Dato’ Seri Kong Cho Ha on the reason for the shift of the airport from the originally proposed northern site (KLIA North) to the current western site (KLIA West) which is under construction. The shift of the site has caused the cost of construction to bloat because KLIA West was already identified as unsuitable for the construction of an airport due to it being a peat swamp.
The Minster only responded that the decision to shift the site was “based on KLIA Blueprint December 2008”.
The super-short reply from the Minister of Transport to my question in parliament leaves much to be desired, to say the least.
One could immediately read from the reply that the Minister has no interest in promoting accountability and transparency in the KLIA2 scandal which resulted in the cost of construction increasing from an initial RM1.7 billion to RM3.9 billion. The sheer nonchalance and lack of willingness to provide clarification shows that there is something to hide.
In addition to the above, I have received reliable information which says that the cost of the new “low-cost” terminal will continue to increase due to 2 additional factors:
a. The additional control tower which has to be built because the existing control tower cannot see the planes at the KLIA West site, has been shifted again at the request of the Department of Civil Aviation because the new site still could not have full view of the airport. As a result more cost has to be incurred to shift the “new” control tower and construction cost will further increase due to higher height requirements.
b. Earthworks on the construction site has found additional challenges as certain parts of the the peat swamp contain more water than had been anticipated. This will result in further cost increase and further delays in getting the airport ready. The KLIA2 has already been delayed from the original September 2011 completion date to a new April 2013 target completion date.
These are serious issues of governance which must be dealt with by the Minister of Transport and there is no question that heads must roll in the above fiasco which will ultimately cost the tax-payers more than RM2.2 billion in additional costs.
Dato’ Seri Kong Cho Ha had kindly scheduled for a dialogue with Member of Parliament of Lembah Pantai, Nurul Izzah Anwar and myself this morning at the Ministry of Transport. Unfortunately, the meeting was postponed at the last minute as the Minister had to attend an urgent function in Taiping.
We look forward to a rescheduled meeting with the Minister to provide more detailed answers since he is unwilling to do so in Parliament.
I had asked the Minister of Transport, Dato’ Seri Kong Cho Ha on the reason for the shift of the airport from the originally proposed northern site (KLIA North) to the current western site (KLIA West) which is under construction. The shift of the site has caused the cost of construction to bloat because KLIA West was already identified as unsuitable for the construction of an airport due to it being a peat swamp.
The Minster only responded that the decision to shift the site was “based on KLIA Blueprint December 2008”.
The super-short reply from the Minister of Transport to my question in parliament leaves much to be desired, to say the least.
One could immediately read from the reply that the Minister has no interest in promoting accountability and transparency in the KLIA2 scandal which resulted in the cost of construction increasing from an initial RM1.7 billion to RM3.9 billion. The sheer nonchalance and lack of willingness to provide clarification shows that there is something to hide.
In addition to the above, I have received reliable information which says that the cost of the new “low-cost” terminal will continue to increase due to 2 additional factors:
a. The additional control tower which has to be built because the existing control tower cannot see the planes at the KLIA West site, has been shifted again at the request of the Department of Civil Aviation because the new site still could not have full view of the airport. As a result more cost has to be incurred to shift the “new” control tower and construction cost will further increase due to higher height requirements.
b. Earthworks on the construction site has found additional challenges as certain parts of the the peat swamp contain more water than had been anticipated. This will result in further cost increase and further delays in getting the airport ready. The KLIA2 has already been delayed from the original September 2011 completion date to a new April 2013 target completion date.
These are serious issues of governance which must be dealt with by the Minister of Transport and there is no question that heads must roll in the above fiasco which will ultimately cost the tax-payers more than RM2.2 billion in additional costs.
Dato’ Seri Kong Cho Ha had kindly scheduled for a dialogue with Member of Parliament of Lembah Pantai, Nurul Izzah Anwar and myself this morning at the Ministry of Transport. Unfortunately, the meeting was postponed at the last minute as the Minister had to attend an urgent function in Taiping.
We look forward to a rescheduled meeting with the Minister to provide more detailed answers since he is unwilling to do so in Parliament.
Wednesday, March 21, 2012
MEX: Government Can Expropriate for RM400m
The MEX is the most clear-cut case of making tax-payers’ pay for the construction of the highway, and subsequently allowing a BN crony to milk the tax-payers further by charging toll, in this case, over a period of 33 years. There is no better example of how the BN Government and its cronies are conducting highway robbery in broad daylight.
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.
In EPMB’s announcement to Bursa Malaysia last Friday, the company has cited among the risk factors of the acquisition is the existence of an “expropriation” clause in the MEX Concession Agreement. The announcement read:
In layman’s terms, the compensation terms for expropriation is as follows:
a. “the value of construction works” (RM1.32 billion)
b. LESS “the aggregate amounts paid” by the Government (RM976.7 million)
c. LESS “liabilities and obligations assumed by the Government (Not determined)
d. ADD 12% interest per annum “accrued on moneys invested” by shareholders of the concession (RM60 million x 12% x 8 years since 2004 = RM57.6 million)
e. LESS “any net dividends or interest received by shareholders” (None)
The maximum cost of appropriation of MEX by the Government will hence be only RM400.9 million [RM1.32 billion – RM976.7 million + RM57.6 million] before taking into consideration any liabilities which the Government has to assume. If there are outstanding net liabilities which the Government has to undertake, then the cost of appropriation will be even less. This amount will more than adequately compensate the investment of Tan Sri Sahid Mohamed in the highway who will make very reasonable returns on his RM60 million investment.
In comparison, based on calculations made available in the announcement by EPMB, MEX has projected earnings of RM3.2 billion over the next 25 years of the concession agreement which will be milked from ordinary Malaysians.
Therefore it makes absolute sense for the Government to expropriate or buy back MEX instead of letting the highway continue to rob the man-on-the-street. Should the Government fail to expropriate the highway, the it will certainly make true the Malaysian BN dictum of “crony first, rakyat last”.
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.
In EPMB’s announcement to Bursa Malaysia last Friday, the company has cited among the risk factors of the acquisition is the existence of an “expropriation” clause in the MEX Concession Agreement. The announcement read:
Subject to giving three (3) months‟ notice, the Government may terminate the Concession Agreement by expropriating MEX or the Concession if the Government considers such action to be in the national interest or national security. Under such circumstances, MEX will be entitled to compensation from the Government.Based on the same clause applied to other highway concession agreements which were disclosed when they were declassified in 2008, the compensation terms for such expropriation would also be specified:
- the amount (if any) by which the Value of the Construction Works exceeds the aggregate of the amounts paid or the liabilities and obligations assumed by the Government… and all amounts as at the date of compulsory purchase or acquisition owing to the Government by the Concession Company.
- an amount equal to:
- the amount of interest which would have accrued on the moneys invested in or lent to the Concession Company by shareholders of the Concession Company as if the interest had accrued on such amounts from the relevant dates of payment to the date of payment by the Government on an accrual basis of 12%; less
- any net dividends or interest received by the shareholders of the Concession Company
In layman’s terms, the compensation terms for expropriation is as follows:
a. “the value of construction works” (RM1.32 billion)
b. LESS “the aggregate amounts paid” by the Government (RM976.7 million)
c. LESS “liabilities and obligations assumed by the Government (Not determined)
d. ADD 12% interest per annum “accrued on moneys invested” by shareholders of the concession (RM60 million x 12% x 8 years since 2004 = RM57.6 million)
e. LESS “any net dividends or interest received by shareholders” (None)
The maximum cost of appropriation of MEX by the Government will hence be only RM400.9 million [RM1.32 billion – RM976.7 million + RM57.6 million] before taking into consideration any liabilities which the Government has to assume. If there are outstanding net liabilities which the Government has to undertake, then the cost of appropriation will be even less. This amount will more than adequately compensate the investment of Tan Sri Sahid Mohamed in the highway who will make very reasonable returns on his RM60 million investment.
In comparison, based on calculations made available in the announcement by EPMB, MEX has projected earnings of RM3.2 billion over the next 25 years of the concession agreement which will be milked from ordinary Malaysians.
Therefore it makes absolute sense for the Government to expropriate or buy back MEX instead of letting the highway continue to rob the man-on-the-street. Should the Government fail to expropriate the highway, the it will certainly make true the Malaysian BN dictum of “crony first, rakyat last”.
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