During a forum on Budget 2018 earlier this week, Najib said that tolls should be abolished, adding that wherever possible he would look into unraveling the legacy problems caused by toll concession agreements.
Malaysians shouldn’t fall the empty promises of the Prime Minister whose track record has proven that he has zero commitment in abolishing these tolls.
It isn’t the first time Dato’ Seri Najib Razak promised to abolish tolls or lower toll rates. In Barisan Nasional’s manifesto for the 13th General Election, Najib promised the gradual reduction of intracity tolls within 5 years. Yet, 5 years on, not only has this promise failed to be delivered, he delivered the exact opposite.
In October 2015, 18 tolls operated by 11 concessionaires were allowed to increase their fares with some even going up RM2.30 overnight. These included toll routes such as the LDP, SMART Tunnel, MEX, AKLEH and NPE in the Klang Valley as well as the Senai-Desaru Highway in Johor and the Butterworth Outer Ring Road (BORR) in Penang.
In response to this, Najib turned around and said the the government had no choice but to allow the toll fares to increase because preventing it would require massive compensation payments. The Prime Minister went on to threaten Malaysians that taxes would have to be increased if the government were to abolish tolls.
The Prime Minister’s threats have proven true because when the government did remove certain tolls, they paid exhorbitant compensation equivalent to the amount of toll these concessionaires would have collected anyway!
When the Batu Tiga, Sg Rasau, Bukit Kayu Hitam and Eastern Dispersal Link (EDL) tolls were removed last year, the government will be paying RM2.2 billion for the first 3 tolls. For the EDL, the government will reportedly be paying a yearly compensation of RM70 million.
The above means, Najib “abolish tolls” or not, the BN government would always profit the concessionaires. Malaysians would either have to pay for the tolls directly, or pay for them via taxes paid to the Government.
Most hypocritically, the Prime Minister had only recent on 3rd December criticised Pakatan Harapan’s plan to eliminate highway tolls and reintroduce petrol subsidies will increase air pollution in the country. So did Najib temporarily change his mind to fish for votes in the impending General Election, just as he did in 2013?
Pakatan Harapan believes in the rule of law and the sanctity of the contract signed between the Government and the toll concessionaires. The provisions of the contracts allow for the Government to expropriate or buy back the concessions at cost, subject to a minimum return for the concessionaires for the past years of operations.
Barring exceptions, the agreements do not at any point in time require the Government to compensate these concessionaires for future profits. Why is the BN Government so adamant in ensuring these toll concessionaires are paid their future profits at the expense of Malaysian tax-payers?
All this is proof that Najib’s ‘promise’ to abolish tolls is just another empty promise by a Prime Minister and government desperate to hold on to power. Malaysians should not fall for these empty promises and should not forget the government’s own inability to deliver on the same pledge that it had made 5 years ago.
Showing posts with label Toll Concession. Show all posts
Showing posts with label Toll Concession. Show all posts
Saturday, February 24, 2018
Friday, November 03, 2017
Najib’s toll ‘freebie’ election goodie to cost Malaysians billions of ringgit
In an interview with TV3 Nightline, Second Finance Minister Datuk Johari Abdul Ghani said that PLUS would have to be compensated to the tune of RM102 million per year for abolishing the Batu Tiga and Sungai Rasau tolls and RM8 million for the Bukit Kayu Hitam toll. That’s a total of RM110 million per year just to PLUS. The compensation for the Eastern Dispersal Link (EDL) was said to be RM8 million, going to current concessionaire MRCB.
The above will cost the government RM118 million per year just to abolish these four tolls.
The concessions for all four tolls expire in 2038. Assuming if the compensation doesn’t increase over time, it will still cost a whopping RM2.36 billion. However, this compensation amount will be even higher when the compensation is calculated based on forecast toll usage in the future.
Whether the compensation is given out in cash or through extensions of the concessions, the person footing the bill will still be the rakyat. That’s RM2.36 billion that could be used to benefit all Malaysians and not just help BN win over voters in the 3 states of Selangor, Kedah and Johor.
Let’s not forget that the government has already compensated toll concessionaires before when they have announced halting toll rate hikes in past Budget speeches. Each one of these populist moves only ends up costing the government and Malaysians more and more. The Prime Minister’s toll ‘freebie’ is no freebie at all.
If the Government is serious about making tolls more affordable for Malaysians, they’d take Pakatan Harapan’s advice. The Pakatan Harapan manifesto has called for the abolition of highway toll in stages via the restructuring and renegotiation of the toll agreements with the concessionaires.
Nearly all of these agreements contain clauses which allows the Government to expropriate these highways based on agreed formulas. And in many circumstances, compensating toll concessionaires based on loss revenue as what the BN government is doing, costs a whole load more than just expropriating the highways outright.
For example, between 1990 to 2015, the compensation for Lebuhraya Damansara Puchong (LDP) already amounts to RM1.05 billion even though the actual cost of constructing the highway, including interest amounts to only RM1.3 billion. And there’s 13 more years to the concession period for compensation to be paid and for the concessionaire to make outrageous profits.
We call upon the Najib administration to stop fleecing Malaysians with not-at-all-free “free” tolls and concessionaires who continue to make astronomical profits at the expense of the rakyat.
The above will cost the government RM118 million per year just to abolish these four tolls.
The concessions for all four tolls expire in 2038. Assuming if the compensation doesn’t increase over time, it will still cost a whopping RM2.36 billion. However, this compensation amount will be even higher when the compensation is calculated based on forecast toll usage in the future.
Whether the compensation is given out in cash or through extensions of the concessions, the person footing the bill will still be the rakyat. That’s RM2.36 billion that could be used to benefit all Malaysians and not just help BN win over voters in the 3 states of Selangor, Kedah and Johor.
Let’s not forget that the government has already compensated toll concessionaires before when they have announced halting toll rate hikes in past Budget speeches. Each one of these populist moves only ends up costing the government and Malaysians more and more. The Prime Minister’s toll ‘freebie’ is no freebie at all.
If the Government is serious about making tolls more affordable for Malaysians, they’d take Pakatan Harapan’s advice. The Pakatan Harapan manifesto has called for the abolition of highway toll in stages via the restructuring and renegotiation of the toll agreements with the concessionaires.
Nearly all of these agreements contain clauses which allows the Government to expropriate these highways based on agreed formulas. And in many circumstances, compensating toll concessionaires based on loss revenue as what the BN government is doing, costs a whole load more than just expropriating the highways outright.
For example, between 1990 to 2015, the compensation for Lebuhraya Damansara Puchong (LDP) already amounts to RM1.05 billion even though the actual cost of constructing the highway, including interest amounts to only RM1.3 billion. And there’s 13 more years to the concession period for compensation to be paid and for the concessionaire to make outrageous profits.
We call upon the Najib administration to stop fleecing Malaysians with not-at-all-free “free” tolls and concessionaires who continue to make astronomical profits at the expense of the rakyat.
Tuesday, October 31, 2017
Najib’s toll freebie meant to entice Harapan supporters will only going to cost BN voters more
In Friday’s 2018 Budget speech, one of the big “goodies” that the Prime Minister announced was the abolishment of 4 tolls at Sg Rasau, Batu Tiga, Bukit Kayu Hitam and on the Eastern Dispersal Link (EDL).
On the surface, it looks like the Najib administration is hard pressed to replicate the Pakatan Harapan Alternative Budget which promised abolishing all highway tolls over time.
However, before Malaysians decides to rejoice, the first question that arises is how the government intends to compensate the existing toll concessionaires for their loss of revenue.
The Second Finance Minister, Datuk Johari Abdul Ghani very quickly burst the balloons by admitting that the government is looking at increasing the concession period for other tolls belonging to concessionaires as compensation.
This simply means that Malaysians will end paying toll fares for longer periods.
More specifically however, the tolls abolished were located in Selangor, a state which Dato’ Seri Najib Razak is only too eager to regain; and in Kedah as well as Johor, where BN is at the risk of losing with the twin threats of Tun Dr Mahathir Mohamad and Tan Sri Muhyiddin Yassin.
The 3 tolls at Sg Rasau, Batu Tiga and Bukit Kayu Hitam are owned by PLUS Malaysia Bhd. As a result, compensation for abolishing just three tolls will see the extension of its concession on any other highway under its management including the North-South Expressway, Seremban-Port Dickson Highway, Butterworth-Kulim Expressway, Malaysia-Singapore Second Link.
Very simply, the burden of the political move by Dato’ Seri Najib Razak to “free” the tolls in Selangor, Kedah and Johor will be “shared” by BN supporters in other parts of the country. It appears to make a lot more sense to demonstrate support Pakatan Harapan because then, the BN government will actually show more love for you.
That however, isn’t the whole story.
The EDL is currently owned by MRCB, who just so happens is desperately looking to sell the loss-making highway. MRCB also doesn’t own any other highway assets.
Hence the only way for the EDL toll to be abolished is for the Federal Government to fork out multi-billion ringgit compensation for MRCB. Therefore, Dato’ Seri Najib Razak must come clean as to how much tax-payers must fork out to pay for the EDL and how the compensation is calculated.
The rakyat’s biggest fear is the Najib administration bailing out highway concessionaires, further proving that BN’s intrinsic economic policy is to “privatise profits and socialize losses”.
On the surface, it looks like the Najib administration is hard pressed to replicate the Pakatan Harapan Alternative Budget which promised abolishing all highway tolls over time.
However, before Malaysians decides to rejoice, the first question that arises is how the government intends to compensate the existing toll concessionaires for their loss of revenue.
The Second Finance Minister, Datuk Johari Abdul Ghani very quickly burst the balloons by admitting that the government is looking at increasing the concession period for other tolls belonging to concessionaires as compensation.
This simply means that Malaysians will end paying toll fares for longer periods.
More specifically however, the tolls abolished were located in Selangor, a state which Dato’ Seri Najib Razak is only too eager to regain; and in Kedah as well as Johor, where BN is at the risk of losing with the twin threats of Tun Dr Mahathir Mohamad and Tan Sri Muhyiddin Yassin.
The 3 tolls at Sg Rasau, Batu Tiga and Bukit Kayu Hitam are owned by PLUS Malaysia Bhd. As a result, compensation for abolishing just three tolls will see the extension of its concession on any other highway under its management including the North-South Expressway, Seremban-Port Dickson Highway, Butterworth-Kulim Expressway, Malaysia-Singapore Second Link.
Very simply, the burden of the political move by Dato’ Seri Najib Razak to “free” the tolls in Selangor, Kedah and Johor will be “shared” by BN supporters in other parts of the country. It appears to make a lot more sense to demonstrate support Pakatan Harapan because then, the BN government will actually show more love for you.
That however, isn’t the whole story.
The EDL is currently owned by MRCB, who just so happens is desperately looking to sell the loss-making highway. MRCB also doesn’t own any other highway assets.
Hence the only way for the EDL toll to be abolished is for the Federal Government to fork out multi-billion ringgit compensation for MRCB. Therefore, Dato’ Seri Najib Razak must come clean as to how much tax-payers must fork out to pay for the EDL and how the compensation is calculated.
The rakyat’s biggest fear is the Najib administration bailing out highway concessionaires, further proving that BN’s intrinsic economic policy is to “privatise profits and socialize losses”.
Friday, October 16, 2015
Toll hikes due to outrageously stupid agreements Federal Government made with the concessionaires
The Minister in Prime Minister’s Department, Dato’ Seri Abdul Wahid Omar explained that “the government feels it should not continue to pay very high compensation to highway concession companies to keep toll rates from rising”.
He said the government had to pay RM510 million in compensation for the January to October period this year following the decision to postpone toll rate increase which should have been implemented in January.
“As such the Federal Government allowed concession companies to raise toll rates," he said.
The Minister himself admitted that the toll compensation paid by the Government is “very high”. Hence Dato’ Seri Wahid believes that this “very high” compensation should instead be shouldered by the man on the street. It does not matter that they are now already suffering from the compounded effects of the Goods & Services Tax (GST), the staggering ringgit depreciation and the significantly slowing economy.
Therefore the “very high compensation” argument is an extremely poor but oft-used excuse to subject ordinary Malaysians to higher toll rates.
And yet, Dato’ Seri Wahid had the cheek to say that the increase only covered highways in the urban areas with a maximum rate increase of RM1. And increase of “just” RM1 on the Damansara Sprint Highway meant a 100% increase in toll rate from RM1 to RM2! That effective means a doubling of revenue for the toll concessionaires!
He said the government had to pay RM510 million in compensation for the January to October period this year following the decision to postpone toll rate increase which should have been implemented in January.
“As such the Federal Government allowed concession companies to raise toll rates," he said.
The Minister himself admitted that the toll compensation paid by the Government is “very high”. Hence Dato’ Seri Wahid believes that this “very high” compensation should instead be shouldered by the man on the street. It does not matter that they are now already suffering from the compounded effects of the Goods & Services Tax (GST), the staggering ringgit depreciation and the significantly slowing economy.
Therefore the “very high compensation” argument is an extremely poor but oft-used excuse to subject ordinary Malaysians to higher toll rates.
And yet, Dato’ Seri Wahid had the cheek to say that the increase only covered highways in the urban areas with a maximum rate increase of RM1. And increase of “just” RM1 on the Damansara Sprint Highway meant a 100% increase in toll rate from RM1 to RM2! That effective means a doubling of revenue for the toll concessionaires!
Tuesday, October 13, 2015
The rakyat pays for the massive toll hikes as a result of BN's failed privatisation policies and broken promises
As if the rakyat isn’t sufficiently burdened by the newly introduced Goods and Services Tax (GST), the massive depreciation of the Ringgit which resulted in a corresponding increase in the cost of basic imported goods and a stuttering economy resulting from a confidence crisis triggered by the monstrous 1MDB scandal, the Government has approved toll rate hikes for 15 highways across the country.
The new rates will involve the Kajang Ring Road (SILK), SMART Highway, Highway Maju Expressway (MEX), Duta-Ulu Kelang Expressway (DUKE), KL-Kuala Selangor Expressway (LATAR), New Pantai Expressway (NPE), Sungai Besi Expressway (BESRAYA), Ampang Kuala Lumpur Elevated Highway (AKLEH), Guthrie Corridor Expressway (GCE), Kemuning-Shah Alam Expressway (LKSA) and Kuala Lumpur-Karak Highway (KLK), Damansara-Puchong Highway (LDP), Kajang–Seremban Highway (LEKAS), Senai–Desaru Expressway, SPRINT Highway and the Grand Saga Highway.
The rate increases are exorbitant and will cause a massive dent to the Malaysian road users. The users of Sprint Damansara Highway is faced with a 100% increase from RM1.00 to RM2.00. The Kajang commuters using the SILK highway will be confronted with a 80% hike from RM1.00 to RM1.80. The Maju Expressway which connects the Sg Besi Highway with Putrajaya will see a 75% hike from RM2.00 to RM3.50. Both the Ampang Elevated Highway and Kerinchi Link will also see 66.7% increase in toll rates.
Come Thursday, 15 October, Malaysian motorist will feel like they been run over by a speeding monster truck. The toll rates have been approved despite the fact that nearly all of these highways have been recording lucrative profits over the past few years. The increase in toll rates merely allow the crony toll concessionaires to reap astronomical profits at the expense of the man-on-the-street, with the consent of the Government.
The new rates will involve the Kajang Ring Road (SILK), SMART Highway, Highway Maju Expressway (MEX), Duta-Ulu Kelang Expressway (DUKE), KL-Kuala Selangor Expressway (LATAR), New Pantai Expressway (NPE), Sungai Besi Expressway (BESRAYA), Ampang Kuala Lumpur Elevated Highway (AKLEH), Guthrie Corridor Expressway (GCE), Kemuning-Shah Alam Expressway (LKSA) and Kuala Lumpur-Karak Highway (KLK), Damansara-Puchong Highway (LDP), Kajang–Seremban Highway (LEKAS), Senai–Desaru Expressway, SPRINT Highway and the Grand Saga Highway.
The rate increases are exorbitant and will cause a massive dent to the Malaysian road users. The users of Sprint Damansara Highway is faced with a 100% increase from RM1.00 to RM2.00. The Kajang commuters using the SILK highway will be confronted with a 80% hike from RM1.00 to RM1.80. The Maju Expressway which connects the Sg Besi Highway with Putrajaya will see a 75% hike from RM2.00 to RM3.50. Both the Ampang Elevated Highway and Kerinchi Link will also see 66.7% increase in toll rates.
Come Thursday, 15 October, Malaysian motorist will feel like they been run over by a speeding monster truck. The toll rates have been approved despite the fact that nearly all of these highways have been recording lucrative profits over the past few years. The increase in toll rates merely allow the crony toll concessionaires to reap astronomical profits at the expense of the man-on-the-street, with the consent of the Government.
Friday, July 05, 2013
Tan Sri Rozali Ismail Deserves RM33.4 million Pay-off?
Was the Puncak Niaga Minority Shareholders Watchdog Group joking when they claimed its Executive Chairman Tan Sri Rozali Ismail fully deserved the RM33.4 million in fees despite the company’s losses in recent years?
I nearly fell off my chair when I read in the news reports that the Puncak Niaga (PNHB) Minority Shareholders Watchdog Group (MSWG) chairperson, Muhammad Imran Abdullah claimed that its Executive Chairman, Tan Sri Rozali Ismail fully deserved his RM33.4 million payout.
He told reporters that "it was tabled at the PNHB's annual general meeting, we approved it” and added that “we are only concerned with our dividends and returns”, without elaborating further.
This group, which was interestingly formed coincidentally only 1 week ago, did not seem to notice that Puncak Niaga is under serious financial stress and has not performed well over the last 5 years.
On paper, PNHB recorded a net profit of RM233 million for the financial year 2012. However, it should be highlighted that PNHB achieved profitability only because it recognised a RM1,024 million “water tariff compensation” from the Selangor State Government.
This compensation is never agreed to by the state government because PNHB and its subsidiary, SYABAS has failed to fulfil its obligations under the water concession agreement. The failure includes but is not limited to SYABAS’s failure to repair and replace aging pipes, and consequently to reduce the percentage of non-revenue water in Selangor. In fact, the “compensation” is being disputed in court and hence should not be recognised as “revenue” for PNHB in the first place.
Without the compensation payment, PNHB would have made massive losses of up to RM791 million.
For the previous financial year 2011, PNHB made net losses of RM83 million, despite recognising RM458 million in “water tariff compensation”. Hence the total losses without the “compensation” would have been as high as RM541 million. The above figures are found in the PNHB Annual Report 2012, on pages 150 and 198 respectively.
http://www.puncakniaga.com.my/LinkClick.aspx?fileticket=9JfmWsBvRVE%3d&tabid=127#zoom=100&scrollbar=0
Going back further, PNSB made losses of RM92 million (2010) after recognising “water tariff compensation” of RM419 million (2010). The above figures are summarised in the Table 1 below.
Table 1: Puncak Niaga Holdings Bhd Profits & Water Tariff Compensation 2008-2012
2012 2011 2010
Net Profit/Loss after Tax 232,680,075 (83,130,994) (91,589,556)
Water Tariff Compensation 1,023,940,987 458,150,923 418,717,266
Estimated Net Loss without Compensation (791,260,912) (541,281,917) (510,306,822)
Therefore, without recognising the disputed and highly controversial “water tariff compensation” from the Selangor state government, the losses in PNHB in 2012 would have been RM250 million worse than in 2011.
As such, PNSB has been making consistent losses in recent year and only managed to eke out a profit in 2012 purely because of a massive increase of recognised “water tariff compensation” from less than RM500 million in prior years to a massive RM1,024 million in 2012.
Given such underlying performance in the company, does the MSWG really believe that Tan Sri Rozali Ismail fully deserves the RM33.4 million payoff? In fact under normal MSWG circumstances, they should logically be calling for the company’s top management to be axed, and not in this case, lucratively rewarded!
Or is the MSWG which was only hastily formed last week meant to serve the interest of PNHB’s largest shareholder, and its executive chairman in the light of an impending takeover of PNHB by the Selangor government?
The RM33.4 million payout to Tan Sri Rozali Ismail is a serious issue because it involves Puncak Niaga and its subsidiary, Syabas, which have been awarded monopolistic concessions by the Barisan Nasional governments to operate water treatment plants and to distribute water in the state of Selangor. Water is an essential basic utility for every single Malaysian and we are completely flabbergasted that these concessions have been abused to outrageously enrich inidividuals who are cronies of the BN regime.
Therefore Suruhanjaya Perkhidmatan Air Negara (SPAN) must investigate this payout immediately and take all necessary actions to protect the interest of Malaysians. In fact, the Ministry of Energy, Green Technology and Water must immediately stop all extraordinary and non-operational payouts in the water concessionaires pending the restructuring exercise, particularly if these companies still owe billions of ringgit to the Federal Government.
I nearly fell off my chair when I read in the news reports that the Puncak Niaga (PNHB) Minority Shareholders Watchdog Group (MSWG) chairperson, Muhammad Imran Abdullah claimed that its Executive Chairman, Tan Sri Rozali Ismail fully deserved his RM33.4 million payout.
He told reporters that "it was tabled at the PNHB's annual general meeting, we approved it” and added that “we are only concerned with our dividends and returns”, without elaborating further.
This group, which was interestingly formed coincidentally only 1 week ago, did not seem to notice that Puncak Niaga is under serious financial stress and has not performed well over the last 5 years.
On paper, PNHB recorded a net profit of RM233 million for the financial year 2012. However, it should be highlighted that PNHB achieved profitability only because it recognised a RM1,024 million “water tariff compensation” from the Selangor State Government.
This compensation is never agreed to by the state government because PNHB and its subsidiary, SYABAS has failed to fulfil its obligations under the water concession agreement. The failure includes but is not limited to SYABAS’s failure to repair and replace aging pipes, and consequently to reduce the percentage of non-revenue water in Selangor. In fact, the “compensation” is being disputed in court and hence should not be recognised as “revenue” for PNHB in the first place.
Without the compensation payment, PNHB would have made massive losses of up to RM791 million.
For the previous financial year 2011, PNHB made net losses of RM83 million, despite recognising RM458 million in “water tariff compensation”. Hence the total losses without the “compensation” would have been as high as RM541 million. The above figures are found in the PNHB Annual Report 2012, on pages 150 and 198 respectively.
http://www.puncakniaga.com.my/LinkClick.aspx?fileticket=9JfmWsBvRVE%3d&tabid=127#zoom=100&scrollbar=0
Going back further, PNSB made losses of RM92 million (2010) after recognising “water tariff compensation” of RM419 million (2010). The above figures are summarised in the Table 1 below.
Table 1: Puncak Niaga Holdings Bhd Profits & Water Tariff Compensation 2008-2012
2012 2011 2010
Net Profit/Loss after Tax 232,680,075 (83,130,994) (91,589,556)
Water Tariff Compensation 1,023,940,987 458,150,923 418,717,266
Estimated Net Loss without Compensation (791,260,912) (541,281,917) (510,306,822)
Therefore, without recognising the disputed and highly controversial “water tariff compensation” from the Selangor state government, the losses in PNHB in 2012 would have been RM250 million worse than in 2011.
As such, PNSB has been making consistent losses in recent year and only managed to eke out a profit in 2012 purely because of a massive increase of recognised “water tariff compensation” from less than RM500 million in prior years to a massive RM1,024 million in 2012.
Given such underlying performance in the company, does the MSWG really believe that Tan Sri Rozali Ismail fully deserves the RM33.4 million payoff? In fact under normal MSWG circumstances, they should logically be calling for the company’s top management to be axed, and not in this case, lucratively rewarded!
Or is the MSWG which was only hastily formed last week meant to serve the interest of PNHB’s largest shareholder, and its executive chairman in the light of an impending takeover of PNHB by the Selangor government?
The RM33.4 million payout to Tan Sri Rozali Ismail is a serious issue because it involves Puncak Niaga and its subsidiary, Syabas, which have been awarded monopolistic concessions by the Barisan Nasional governments to operate water treatment plants and to distribute water in the state of Selangor. Water is an essential basic utility for every single Malaysian and we are completely flabbergasted that these concessions have been abused to outrageously enrich inidividuals who are cronies of the BN regime.
Therefore Suruhanjaya Perkhidmatan Air Negara (SPAN) must investigate this payout immediately and take all necessary actions to protect the interest of Malaysians. In fact, the Ministry of Energy, Green Technology and Water must immediately stop all extraordinary and non-operational payouts in the water concessionaires pending the restructuring exercise, particularly if these companies still owe billions of ringgit to the Federal Government.
Thursday, July 04, 2013
RM33.4 million Golden Parachute for Tan Sri Rozali Ismail?
Is the outrageous RM33.4 million payout to Tan Sri Rozali Ismail a pre-emptive golden handshake in anticipation of the Selangor state takeover of water concessionaires in the state?
Right-thinking Malaysians are completely outraged by the shocking RM33.4 million remuneration package for the executive chairman of Puncak Niaga Holdings Bhd and its subsidiary, Syarikat Bekalan Air Selanagor, Tan Sri Rozali Ismail.
Malaysians are outraged because Tan Sri Rozali’s companies have been awarded monopolistic concessions by the Barisan Nasional governments to operate water treatment plants and to distribute water in the state of Selangor. Water is an essential basic utility for every single Malaysian and we are completely flabbergasted that these concessions have been abused to outrageously enrich inidividuals who are cronies of the BN regime.
As a comparison, the remuneration package of the Chief Executive Officer of Tenaga Nasional Bhd (TNB), the country’s biggest utility is only RM7 million. For the financial year 2012, TNB recorded a revenue of RM35.85 billion compared to only RM2.5 billion of Puncak Niaga Holdings Bhd.
What makes the RM33.4 million award to Tan Sri Rozali Ismail is the fact that Puncak Niaga is heavily laden with billions of ringgit of debt, and had to be bailed out by the Government repeatedly in the last few years.
Because Puncak Niaga and Syabas was unable to repay their RM1.3 billion and RM2.9 billion respectively and these debts were “taken over” by the Federal Government in 2011 in order to prevent these companies from defaulting. Based on the 2012 Puncak Niaga financial statement, the Group has RM937 million in near-term loans and borrowings, and RM4,719 million in non-current loans and borrowings.
What is more, Puncak Niaga carries in its books a RM304 million debt to the Government due to soft loans given the its group of companies to carry out its concession obligations in the state of Selangor. This does not include the fact that the Federal Government has also provided grants amounting to RM726 million to Syabas, including the latest RM120 million granted in January this year.
For the Selangor residents, the excessive remuneration package for Tan Sri Rozali is rubbing salt on the people’s wounds as Syabas has failed to consistently provide quality water supply and services to its consumers particularly over the past 2 years. This year, Syabas has admitted that it has received a staggering 4,186 complaint calls daily since the start of the year as a result of constant water disruption, usually relating to poor pipe and reservoir maintenance.
We would like to question the company and the Federal Government if this RM33.4 million payout is a pre-emptive “golden handshake” payment to the Executive Chairman of Puncak Niaga in anticipation of the impending Selangor state government’s take over of water concessionaires in the state.
Since the last general election where the people of Selangor voted overwhelmingly in favour of Pakatan Rakyat despite BN using “water” as its key campaign message, it appears that the Federal Government may concede to the wishes of the people to return to water management rights to the state government. The Selangor Menteri Besar, Tan Sri Khalid Ibrahim has announced in the Selangor State Assembly earlier this week that he has received a letter from the Prime Minister Datuk Seri Najib Razak that the latter has finally agreeed for the state to take over water concessionaires, although details are still lacking at this point of time.
We call upon Suruhanjaya Perkhidmatan Air Negara (SPAN) to investigate this payout immediately and take all necessary actions to protect the interest of Malaysians. In fact, the Ministry of Energy, Green Technology and Water must immediately stop all extraordinary and non-operational payouts in the water concessionaires pending the restructuring exercise, particularly if these companies still owe billions of ringgit to the Federal Government.
At the same time, the Selangor State Government must deduct all inapppropriate and “unapproved” expenses, such as this RM33.4 million “durian runtuh” for Tan Sri Rozali Ismail by these concessionaires from the proposed acquisition cost of these companies. Cronies of Barisan Nasional must not profit unfairly beyond what they have already earned to date, at the expense of the rakyat, especially under Pakatan Rakyat’s watch.
Right-thinking Malaysians are completely outraged by the shocking RM33.4 million remuneration package for the executive chairman of Puncak Niaga Holdings Bhd and its subsidiary, Syarikat Bekalan Air Selanagor, Tan Sri Rozali Ismail.
Malaysians are outraged because Tan Sri Rozali’s companies have been awarded monopolistic concessions by the Barisan Nasional governments to operate water treatment plants and to distribute water in the state of Selangor. Water is an essential basic utility for every single Malaysian and we are completely flabbergasted that these concessions have been abused to outrageously enrich inidividuals who are cronies of the BN regime.
As a comparison, the remuneration package of the Chief Executive Officer of Tenaga Nasional Bhd (TNB), the country’s biggest utility is only RM7 million. For the financial year 2012, TNB recorded a revenue of RM35.85 billion compared to only RM2.5 billion of Puncak Niaga Holdings Bhd.
What makes the RM33.4 million award to Tan Sri Rozali Ismail is the fact that Puncak Niaga is heavily laden with billions of ringgit of debt, and had to be bailed out by the Government repeatedly in the last few years.
Because Puncak Niaga and Syabas was unable to repay their RM1.3 billion and RM2.9 billion respectively and these debts were “taken over” by the Federal Government in 2011 in order to prevent these companies from defaulting. Based on the 2012 Puncak Niaga financial statement, the Group has RM937 million in near-term loans and borrowings, and RM4,719 million in non-current loans and borrowings.
What is more, Puncak Niaga carries in its books a RM304 million debt to the Government due to soft loans given the its group of companies to carry out its concession obligations in the state of Selangor. This does not include the fact that the Federal Government has also provided grants amounting to RM726 million to Syabas, including the latest RM120 million granted in January this year.
For the Selangor residents, the excessive remuneration package for Tan Sri Rozali is rubbing salt on the people’s wounds as Syabas has failed to consistently provide quality water supply and services to its consumers particularly over the past 2 years. This year, Syabas has admitted that it has received a staggering 4,186 complaint calls daily since the start of the year as a result of constant water disruption, usually relating to poor pipe and reservoir maintenance.
We would like to question the company and the Federal Government if this RM33.4 million payout is a pre-emptive “golden handshake” payment to the Executive Chairman of Puncak Niaga in anticipation of the impending Selangor state government’s take over of water concessionaires in the state.
Since the last general election where the people of Selangor voted overwhelmingly in favour of Pakatan Rakyat despite BN using “water” as its key campaign message, it appears that the Federal Government may concede to the wishes of the people to return to water management rights to the state government. The Selangor Menteri Besar, Tan Sri Khalid Ibrahim has announced in the Selangor State Assembly earlier this week that he has received a letter from the Prime Minister Datuk Seri Najib Razak that the latter has finally agreeed for the state to take over water concessionaires, although details are still lacking at this point of time.
We call upon Suruhanjaya Perkhidmatan Air Negara (SPAN) to investigate this payout immediately and take all necessary actions to protect the interest of Malaysians. In fact, the Ministry of Energy, Green Technology and Water must immediately stop all extraordinary and non-operational payouts in the water concessionaires pending the restructuring exercise, particularly if these companies still owe billions of ringgit to the Federal Government.
At the same time, the Selangor State Government must deduct all inapppropriate and “unapproved” expenses, such as this RM33.4 million “durian runtuh” for Tan Sri Rozali Ismail by these concessionaires from the proposed acquisition cost of these companies. Cronies of Barisan Nasional must not profit unfairly beyond what they have already earned to date, at the expense of the rakyat, especially under Pakatan Rakyat’s watch.
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.
Tuesday, January 08, 2013
WCE Concession Revision: Not Good Enough!
The revision of the West Coast Expressway agreement proves the power of Pakatan Rakyat checks and balances but still falls short of ensuring that the interest of the man-on-the-street are fully protected
Exactly a year ago in January 2012, I had called upon Datuk Seri Najib Razak to justify how the cost of the West Coast Expressway (WCE) increased by 134% from RM3.015 billion to RM7.07 billion while its concession period also nearly doubled extended from 33 to 60 years between 2007 and 2012.
The concessionaire, Kumpulan Europlus (KEURO) Bhd who failed to carry out the project in 2007 was further given new additional benefits where the Government will grant WCE a RM2.24 billion soft loan at 4% interest and an interest subsidy, of up to 3% from commercial loans for a period of 22 years. The land acquisition cost amounting to RM980 million will also be borne by the Government.
However, despite the barrage of criticisms from myself and other Pakatan Rakyat leaders, Datuk Seri Najib Razak who oversees the privatisation department remained completely silent. He failed to explain the increase in the burden to the government to support the private concessionaire, and more importantly, he failed to carry out his transformation promise of “transparency, open-tenders and accountability”.
The “good” news however, was that further negotiations was carried out between the concessionaire and the Government. The outcome was that the cost of the highway was “shrunk” by 26.4% to RM5.2 billion, even though this is still 72.5% higher than the original RM3.015 billion. In addition, the Government also scrapped the 3% interest subsidy for commercial loans taken by the concessionaire. The Edge Financial Daily also reported that there will be an early termination clause if the concessionaire generates higher than expected returns and was about to recoup its cost earlier.
The above “improvements” to the contract was only possible because of the scrutiny by Pakatan Rakyat, “saving” the people of billions of ringgit in tax-payers funds.
However, despite the improvement, the new deal still falls far short of what would be in line with the promises made by the Prime Minister under the Government Transformation Programme (GTP).
First of all, the RM5 billion ringgit contract is still directly negotiated with a company which generated only RM19.8 million and RM27.7 million in revenues in its financial year 2012 and 2011 respectively. The company’s cash pile stood at a miserable RM1.03 million, bare 0.2% of the required capital to carry out the project. Without a competitive tender, there is absolutely no way of telling if the Rakyat are still substantially over-paying for the highway, especially when it’s awarded to KEuro, a company without the necessary track record.
Why did Najib not take the past 12 months to carry out an open and competitive tender to obtain the best value for tax-payers’ monies? What is so specialy about this RM19.8 million company that the Government must die-die give them the contract?
Secondly, the Government has failed to be transparent in the award because it has steadfastly refused to disclose the terms of the agreement. The terms of the agreement are crucial as it will determine the benchmarks set for the cost of the highway, the toll rates to be charged, the details of the proposed profit-sharing formula as well as the rate of return defined for the early termination clause. As the saying goes, the devil is in the details. Without the above details, there is no way of telling if the Government is signing another agreement loaded in the favour of the concessionaire as it has done in the past or if the rakyat are substantially protected.
A Pakatan Rakyat government will promise to not only carry out open, competitive and transparent tenders for all procurement and privatisation projects, we will ensure that all contracts with concessionaires are made publicly accessible for thorough scrutiny.
When the Penang state government awarded the Penang People’s Park and Subterranean Penang International Convention Exhibition (sPICE) public-private partnership project 15 months ago, it was awarded via open and competitive tenders. However, what made the Pakatan Rakyat government shine was the fact that the concession agreement was public.
Hence we call upon the Najib’s so-called “transformation government” to learn from the Pakatan Rakyat state governments as well as our manifesto to ensure open and competitive tenders for all projects as well as declassifying all government concession and procurement contracts to ensure transparency and eliminate corruption and abuse of power.
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.
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