I was speaking at a forum organised by the Associated Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM) this morning with regards to the "Declassified Highway Concession" contracts. I won't bore you with many of the details which I have already written about, but I thought this particular exchange with a member of the audience was most witty ;-)
Someone asked, given the unreasonableness of the terms of these highway concession contracts, isn't it possible that someone challenge their validity in the courts? To a lay man like me, that certainly sounds plausible. No?
But my colleague who was speaking at the same forum, a lawyer and MP for Serdang, Teo Nie Ching, responded that the unreasonableness of the terms of these contracts can only be challenged for their validity in court for 2 possible grounds.
The first, was if the contracts were signed under duress a-la the alleged resignation letters signed by the Perak assemblymen. Well, this is clearly no go, for the Government couldn't have justified itself in court that they signed these unfair terms "under duress" (they're the Government, for goodness sake!). So that's out.
But the second, was more interesting. You could challenge the validity of the unreasonable terms, and hence the contracts, if you could prove to the courts that they were signed when you are of "unsound mind".
The floor cracked up laughing when Nie Ching asserted that, it might just work for not many would deny the fact that the BN Government (and its ministers) are of "unsound mind" especially in the light of the their many perplexing decisions, and worse, their subsequent flip-flops and U-turns! ;-)
Anybody want to volunteer giving it a shot? ;-)
Saturday, February 28, 2009
Buy Up PLUS: Yes or No?
Frankly speaking, I quite like the new Works Minister, Dato Mohd Zin Mohamed. He's the only Minister I know to date, that actually replies to every small query which was raised within any of my speeches. And when Parliament's not in session, his office will mail the answer(s) to me. I was frankly speaking, impressed. And honestly, I think (for whatever reasons), he does try to improve things within his very very limited means and scope.
But you'll certainly have to help me here with the cryptic answer he gave in a short interview with Malaysiakini after announcing the embarrassing 24-hour U-Turn of the toll rates increase for several highways.
But you'll certainly have to help me here with the cryptic answer he gave in a short interview with Malaysiakini after announcing the embarrassing 24-hour U-Turn of the toll rates increase for several highways.
Why can’t the government buy up the highways?So what say you? I can assure you that based on the declassified contract agreements, the Government can certainly afford to "expropriate" many of these toll concessionaires. But I didn't understand his "operating as an integrated entity" bit, but if it's any consolation, he hasn't yet rejected our very constructive PLUS buy-back proposal ;-)
That is the principle of privatisation to nationalisation. We have to look at the financial capabilities of the government, what would be total liability, who are the shareholders. It is not also technical parameters but financial parameters we would have to address.
Are you looking into it?
I’m just defining the parameters we have to address...it is a question if whether we want to stick to privatisation vis-a-vis nationalisation.
What do you think of DAP’s proposal for the government to buy up Plus highway?
Anyone can come up (with such plans). What Tony Pua should do is not look at Plus as a standalone. The whole concession is operating as an integrated entity.
Are you rejecting his proposal?
I didn’t say that.
Friday, February 27, 2009
BN Rubs Salt On Our Wounds
At a time when Malaysians are facing the greatest economic challenge, when 100,000 Malaysians are expected to be out of a job by the end of the year as projected by the Minister of Human Resources, the Barisan Nasional Government has decided to increase toll rates from 5 to 25% for 5 toll concessions, while at the same time still pay compensation amounting to RM277 million to these toll concessionaires! The act is clearly a case of rubbing salt onto the wounds of anxious and suffering Malaysians.
In announcing this, Works Minister Datuk Seri Mohd Zin Mohammed said the increase was “minimal” and hoped the public understood that the increase was “stipulated in the concession agreements” that the government had signed.
Firstly we will like to reiterate that the increase was by no means minimal. For PLUS itself, even a 5% increase in toll rates will increase toll revenue by as much as RM120 million in 2009. This doesn't yet take into consideration the fact that the Government is likely to have to compensate PLUS for the other 5% which has yet to be increased, which may be an additional RM100 million. It is an insult for to all Malaysians to say that RM220 million to be incurred by road users and tax-payers “minimal”, especially in times of economic hardship, and shortfall in Government revenues.
In fact, we would like to ask the Government if the compensation sums being paid to concessionares are part of the “economic stimulus packages” to help turnaround our economy, badly affected by the global economic crisis.
Secondly, while the toll rate increase is indeed “stipulated in the concession agreements”, there were also other clauses stipulated in the agreements such as the “expropriation” clause which the Government has chosen to blatantly ignore. This selective compliance to the legal agreements smacks of a government favouring the interest of cronies instead of those of the people.
The DAP Ops Restore team has demonstrated using many examples over the past 2 months how expropriating these highways as per the terms “stipulated in the conession agreements” are more economical and cost effective for both the Government and the road users. But the Government continues to turn a blind eye to these constructive proposals.
Just yesterday, the team have outlined a detailed proposal on how the Government can “take back” PLUS Expressways Bhd without costing tax-payers a single cent and without unfairly penalising minority shareholders (they are to be offered 15% premium to the current share price) which will result in a toll-free North South Expressway by 2016.
Why does the Government who owns directly 65% of PLUS Expressway, continue to choose the route of unfairly “taxing” road-users and tax-payers (if compensation is paid) instead of taking appropriate actions to help the people?
It should also be noted that PLUS Expressways is extremely profitable. PLUS made RM1.31 billion in net profits before tax, which translates into an enormous net profit margin of 57.3% in 2007!
The privatisation policies a-la Barisan Nasional have brought an enourmous burden on all Malaysians and have profited only Barisan Nasional crony businessmen. If Prime Minister-elect, Datuk Seri Najib Abdul Razak wants to commence his term on the right note, then we call upon him to take back these highways, and other unfairly privatised projects to relieve the burden of the rakyat, especially in these difficult times.
In announcing this, Works Minister Datuk Seri Mohd Zin Mohammed said the increase was “minimal” and hoped the public understood that the increase was “stipulated in the concession agreements” that the government had signed.
Firstly we will like to reiterate that the increase was by no means minimal. For PLUS itself, even a 5% increase in toll rates will increase toll revenue by as much as RM120 million in 2009. This doesn't yet take into consideration the fact that the Government is likely to have to compensate PLUS for the other 5% which has yet to be increased, which may be an additional RM100 million. It is an insult for to all Malaysians to say that RM220 million to be incurred by road users and tax-payers “minimal”, especially in times of economic hardship, and shortfall in Government revenues.
In fact, we would like to ask the Government if the compensation sums being paid to concessionares are part of the “economic stimulus packages” to help turnaround our economy, badly affected by the global economic crisis.
Secondly, while the toll rate increase is indeed “stipulated in the concession agreements”, there were also other clauses stipulated in the agreements such as the “expropriation” clause which the Government has chosen to blatantly ignore. This selective compliance to the legal agreements smacks of a government favouring the interest of cronies instead of those of the people.
The DAP Ops Restore team has demonstrated using many examples over the past 2 months how expropriating these highways as per the terms “stipulated in the conession agreements” are more economical and cost effective for both the Government and the road users. But the Government continues to turn a blind eye to these constructive proposals.
Just yesterday, the team have outlined a detailed proposal on how the Government can “take back” PLUS Expressways Bhd without costing tax-payers a single cent and without unfairly penalising minority shareholders (they are to be offered 15% premium to the current share price) which will result in a toll-free North South Expressway by 2016.
Why does the Government who owns directly 65% of PLUS Expressway, continue to choose the route of unfairly “taxing” road-users and tax-payers (if compensation is paid) instead of taking appropriate actions to help the people?
It should also be noted that PLUS Expressways is extremely profitable. PLUS made RM1.31 billion in net profits before tax, which translates into an enormous net profit margin of 57.3% in 2007!
The privatisation policies a-la Barisan Nasional have brought an enourmous burden on all Malaysians and have profited only Barisan Nasional crony businessmen. If Prime Minister-elect, Datuk Seri Najib Abdul Razak wants to commence his term on the right note, then we call upon him to take back these highways, and other unfairly privatised projects to relieve the burden of the rakyat, especially in these difficult times.
Thursday, February 26, 2009
PLUS Toll Free by 2016?
Well, if Pakatan takes over the Government.
Just as we had a press conference yesterday to provide the Government with a proposal to make PLUS toll free by 2016, in a most timely manner, our Government decides that a toll rate increase for PLUS (and 4 other highways) are most appropriate today.
But before I make my comment on the toll rate increase as announced by the Works Minister today, coming so soon after the celebratory toll booth "demolition" at Sungei Besi Highway and New Pantai Expressway, here's our concrete proposal on how we can have a toll-free PLUS by 2016 without costing the Government a single cent!
The DAP Ops RESTORE Team calls upon both the Works and Finance Ministers to make the entire North-South Highway and its related concessions such as the ELITE, Butterworth-Kulim (BKE) and the Second Link Highways under PLUS Expressways Bhd completely toll free by 2016.
Following our team's consultations to date with our legal experts, investment bankers as well as the general public, we have developed a comprehensive, practicable and creative programme to return the highways to the people in the least possible cost, and shortest possible time without compromising the integrity of the financial markets.
Our proposal will:
Just as we had a press conference yesterday to provide the Government with a proposal to make PLUS toll free by 2016, in a most timely manner, our Government decides that a toll rate increase for PLUS (and 4 other highways) are most appropriate today.
But before I make my comment on the toll rate increase as announced by the Works Minister today, coming so soon after the celebratory toll booth "demolition" at Sungei Besi Highway and New Pantai Expressway, here's our concrete proposal on how we can have a toll-free PLUS by 2016 without costing the Government a single cent!
The DAP Ops RESTORE Team calls upon both the Works and Finance Ministers to make the entire North-South Highway and its related concessions such as the ELITE, Butterworth-Kulim (BKE) and the Second Link Highways under PLUS Expressways Bhd completely toll free by 2016.
Following our team's consultations to date with our legal experts, investment bankers as well as the general public, we have developed a comprehensive, practicable and creative programme to return the highways to the people in the least possible cost, and shortest possible time without compromising the integrity of the financial markets.
Our proposal will:
- Impose no further increase in North-South Highway toll rates
For example, a return KL-Penang journey will remain at RM86.60 today instead of RM115.30 in 2015 and RM168.80 by 2030. - Create RM14 billion savings for Malaysians from 2009-2015
This will be the amount saved either (i) by Malaysians using the highway because of no further toll rate increases or (ii) in terms of compensation which would have to be paid by the Government to PLUS Expressways. - Continue to collect toll only until 2015
- Incur no additional cost for the Malaysian Government or Malaysian tax-payers
- PLUS is listed on Bursa Malaysia at a price of RM2.88 per share and a market capitalisation of RM14.4 billion (24th February)
- The Government of Malaysia, via Khazanah owns 65% of PLUS.
- PLUS has outstanding net debt amounting to RM8.5 billion
- The Government should make a General Offer (GO) to acquire all minority shareholders of PLUS with a generous 15% premium at RM3.30 per share, costing RM5.25 billion thus ensuring that minority shareholders are protected.
- The cost of acquisition, added to the RM8.5 billion net debt of PLUS will amount to RM13.75 billion.
- This cost will be funded by issuing Malaysian Government Securities (MGS) at 3% interest (or less), costing RM413 million per annum. Total repayment will amount to RM16.2 billion over 6 years.
- At the same time, PLUS should generate at least RM20b in net positive cashflow the 6 years to 2015 without further toll rate hikes and a conservative 3% pa traffic growth.
- Therefore by 2015, the government can completely repay the MGS and still have RM3.8 billion excess which could be used to build a better public transportation system throughout the country.
- RM14 billion saved by Malaysian consumers will reduce the cost of living for the average Malaysian in times of economic difficulties we face today.
- RM14 billion saved will also redirect expenditure to other more productive sectors of our economy by increasing domestic consumer demand.
- The reduced toll rates and its subsequent abolition will substantially reduce the cost of doing business in Malaysia, increase logistical efficiencies and ultimately make Malaysian companies more globally competitive.
- Best of all, the plan will stimulate demand and make available substantial funds for public infrastructure development without the Government having to increase the precarious budget deficit further.
Wednesday, February 25, 2009
Supporting PAS?
I'll be honest. After nearly a year in a coalition partnership with PAS, have I managed to satisfy myself that I'm completely comfortable with PAS and all their principles and philosophy? No. There are issues of politics which I'm not so happy with in Selangor PAS, and there are of course issues which I've blogged often in relation to narrow views of "morality" (e.g., rock concerts are immoral) that pops up every now and then.
However, have there been a greater understanding of PAS as a political organisation, as well as much improved relationship with some of the leaders within PAS? Absolutely. I'll go so far as to say that I'm proud to be sitting on the same side of Parliament with some of these PAS leaders, whom I've grown to have tremendous amount of respect for.
As an example, I am completely impressed by PAS Member of Parliament for Shah Alam, Khalid Samad (for those who may not know, he's also Datuk Shahrir Samad's younger brother). If he is my MP, I'll give my vote to him any time, irrespective of who is challenging him from Barisan Nasional, be it UMNO, MCA or Gerakan. I can also say with utmost certainty that he will be one of the PAS candidates whom I'll be personally campaigning hard and actively for, in the next general elections - whenever and wherever he chooses to stand.
Checkout for example, one of his recent column contributions to The Malaysian Insider, entitled "A Question of Morality". It's certainly no ordinary piece, if you were to have a stereotypical impression of PAS leaders.
On differences on morality:
However, have there been a greater understanding of PAS as a political organisation, as well as much improved relationship with some of the leaders within PAS? Absolutely. I'll go so far as to say that I'm proud to be sitting on the same side of Parliament with some of these PAS leaders, whom I've grown to have tremendous amount of respect for.
As an example, I am completely impressed by PAS Member of Parliament for Shah Alam, Khalid Samad (for those who may not know, he's also Datuk Shahrir Samad's younger brother). If he is my MP, I'll give my vote to him any time, irrespective of who is challenging him from Barisan Nasional, be it UMNO, MCA or Gerakan. I can also say with utmost certainty that he will be one of the PAS candidates whom I'll be personally campaigning hard and actively for, in the next general elections - whenever and wherever he chooses to stand.
Checkout for example, one of his recent column contributions to The Malaysian Insider, entitled "A Question of Morality". It's certainly no ordinary piece, if you were to have a stereotypical impression of PAS leaders.
On differences on morality:
For Pas we have a clearly defined set of right and wrong, moral and immoral and although it may have similarities with some universal values, there are some huge differences particularly in that of the “personal arena”. What Pas and Islam see as immoral may be something quite acceptable in the eyes of other cultures. Take the question of drinking wine, for example. Similarly, there are items which Islam accepts, which to other cultures is not quite as acceptable. The easiest example here would be polygamy.And on over-zealousness:
Actually it is this kind of zealousness which the non-Muslims fear from Pas and this is where we must emulate the spirit of the Islam more accurately. We should not become zealous moralists who wish to enforce their moral code on others. As I always say, preach, reason and argue with them in the best of ways. Never give them the impression that we wish to impose something on them irrespective of how noble the intentions. That was the way of the Prophet and that too must be our way.Read of course, the full article for context. With enlightened leaders such as Khalid Samad, I certainly see no reason why the Pakatan Rakyat "shotgun" coalition cannot withstand the test of time. Instead, I can possibly imagine that the coalition partners can increase their mutual respect for each other with better understanding, which will ultimately deliver a better and brighter Malaysia in time to come. ;-)
Jed Yoong Faces Police Harrassment
A sometimes controversial blogger, and often a critic of Tony Pua, Wong Chun Wai and many others, is currently being harrassed by the Police. Honestly, I'm not a fan of Jed Yoong but I respect her right to freedom of speech and I never once attempted to stop her from say her piece.
But then again, I'm no fan of the Malaysian police either, who has a tendency to beat up citizens who light up candles for a cause in a peaceful manner, and take on (or ignore) investigations at the whims and fancies of their political masters. Clearly, Jed is now being investigated for sedition for one of her blog pieces, due to police reports filed by some UMNO ultras in Petaling Jaya.
Without dwelling on the merits of her case, the police investigation against her shows the bias of the force, for a similar report I made against "Kelab Penyokong Maya Umno" last year was never investigated despite my statement being taken.
The police attempted to intimidate bloggers last year, for example with the high profile arrest of Nathaniel Tan, and it appears that they'll only continue to exert such pressure on bloggers, possibly increasingly so, after Najib takes over as the new Prime Minister.
Anyway, below is the press statement issued by Jed Yoong to all press.
PRESS STATEMENT FOR IMMEDIATE RELEASE
February 25, 2009 WEDNESDAY
Inspector Mohd Riduan Abd Majid (Office Phone No.: 03-26163989 / H/Phone No.: 019-9890484) from the Bukit Aman Commerical Crime Department's Cyber and Multimedia Crime Investigation Unit emailed me this morning, saying:
"I want to continue a statement recording with you. There are several questions to ask, so it will make your statement very clear. Hope you to come at JSJK Bukit Aman this evening at 5pm or 6pm. I will make it fast."
I've agreed to go in at 7pm this evening (Wednesday, Feb 25, 2009).
On Monday (23/02/2009), I went to the Bukit Aman Commerical Crime Department's Cyber and Multimedia Crime Investigation Unit and gave my statement to Inspector Riduan from about 6pm -- 10pm after he called and emailed me on the same day. I was unrepresented by a lawyer as, when asked, Inspector Riduan says he doesn't need one.
Under tremendous pressure, with my handphone taken away from me, facing two officers and one or two that came in and out, I felt I had no choice but to give and sign a statement against my wishes in order to ensure my safety. Riduan at many points refuse to allow me to give me the answers that I want and changed my statement many times to fit his preferred answers. I was also not allowed to see the police report and had no idea why I was being interrogated. However, the police were courteous and professional at all times and I am happy to cooperate with the police who are merely doing their jobs.
Following that, at about 10pm, as instructed by the police, I brought four policemen (ASP Hazizi Bin A Samad, Insp Mohd Faizal B Zainal, Insp Zurina Bt Alias and KPL 128548 Zawahid Bin Nik) to my family's house. I led the way with Insp Zuraina in the car while the others followed my car.
Before entering my house ASP Hazizi informed me that he is entering the premises and seizing my computers under the Sedition Act, which I am being investigated under. They came in drew floor plans of my house, took photos, recorded videos and confiscated my laptop, its power cable, a desktop CPU, a router and a modem. At all times, the police were professional and courteous.
The next day (Tuesday, February 24, 2009), I lodged a police report at the Brickfields police station/IPD about the the items confiscated as I am concerned that the data in the items would be tampered with as I am not the only one using the computers (which are not password protected) and I did not check the data before I handed over the items to the police.
I feel that I am being set up by the police and my rights has been violated as I've not been shown the police report, my statement taken from me under conditions in which I feared for my safety, items seized from my house and I've not been advised by the police to get legal representation.
If I have broken any laws, I wish to say that it is unintentional and there is no malice involved, what more an intent to incite hatred of any sorts. I am merely expressing my opinion using modern technology in the 21st century.
I feel that the country's laws are not equally applied to everyone but used to silent dissent, in particular ordinary bloggers with no political backing.
My blog is not particularly influential, compared to mainstream newspapers like Utusan, The Star, Sin Chew, etc, and other news outlets like TV3. These media have the potential to easily incite hatred and cause racial riots. In my view, in many cases, the Malay-vernacular press have published many articles that can be said to incite racial hatred, for instance, Utusan's frontpage yesterday that claimed DAP Hina Islam? (DAP Insults Islam?) ( http://www.utusan.com.my/utusan/info.asp?y=2009&dt=0224&pub=Utusan_Malaysia&sec=Muka_Hadapan&pg=mh_01.htm )
Hence I strongly feel it is ludicrous and absurd to say that I can even influence anyone what more incite racial hatred or any sort of hatred towards anyone. If anyone is hateful, they will be so without reading my blog. I am not God.
I also wish to say as a Malaysian, I am loyal to King and Country. In many posts I've always expressed my gratitude towards the country for allowing my family to have a happy prosperous live, especially under the Barisan government led by Dr Mahathir Mohamad. If I've offended anyone with my honest feelings based on facts, it is not my intention to do so. In the 21st century, rulers of all kind should be open to feedback because after all they are not gods that are are beyond reproach.
It would be much appreciated if the media will carry my statement or send reporters to the Bukit Aman Commercial Crimes Unit tonite. I will be there from 7pm and am not sure what time this second interrogation will end.
I've lost my handphone and can only be contacted via email now till I get a new handphone later today.
Thanks.
Jed Yoong Yui Foong
熊玉鳳
But then again, I'm no fan of the Malaysian police either, who has a tendency to beat up citizens who light up candles for a cause in a peaceful manner, and take on (or ignore) investigations at the whims and fancies of their political masters. Clearly, Jed is now being investigated for sedition for one of her blog pieces, due to police reports filed by some UMNO ultras in Petaling Jaya.
Without dwelling on the merits of her case, the police investigation against her shows the bias of the force, for a similar report I made against "Kelab Penyokong Maya Umno" last year was never investigated despite my statement being taken.
The police attempted to intimidate bloggers last year, for example with the high profile arrest of Nathaniel Tan, and it appears that they'll only continue to exert such pressure on bloggers, possibly increasingly so, after Najib takes over as the new Prime Minister.
Anyway, below is the press statement issued by Jed Yoong to all press.
PRESS STATEMENT FOR IMMEDIATE RELEASE
February 25, 2009 WEDNESDAY
Inspector Mohd Riduan Abd Majid (Office Phone No.: 03-26163989 / H/Phone No.: 019-9890484) from the Bukit Aman Commerical Crime Department's Cyber and Multimedia Crime Investigation Unit emailed me this morning, saying:
"I want to continue a statement recording with you. There are several questions to ask, so it will make your statement very clear. Hope you to come at JSJK Bukit Aman this evening at 5pm or 6pm. I will make it fast."
I've agreed to go in at 7pm this evening (Wednesday, Feb 25, 2009).
On Monday (23/02/2009), I went to the Bukit Aman Commerical Crime Department's Cyber and Multimedia Crime Investigation Unit and gave my statement to Inspector Riduan from about 6pm -- 10pm after he called and emailed me on the same day. I was unrepresented by a lawyer as, when asked, Inspector Riduan says he doesn't need one.
Under tremendous pressure, with my handphone taken away from me, facing two officers and one or two that came in and out, I felt I had no choice but to give and sign a statement against my wishes in order to ensure my safety. Riduan at many points refuse to allow me to give me the answers that I want and changed my statement many times to fit his preferred answers. I was also not allowed to see the police report and had no idea why I was being interrogated. However, the police were courteous and professional at all times and I am happy to cooperate with the police who are merely doing their jobs.
Following that, at about 10pm, as instructed by the police, I brought four policemen (ASP Hazizi Bin A Samad, Insp Mohd Faizal B Zainal, Insp Zurina Bt Alias and KPL 128548 Zawahid Bin Nik) to my family's house. I led the way with Insp Zuraina in the car while the others followed my car.
Before entering my house ASP Hazizi informed me that he is entering the premises and seizing my computers under the Sedition Act, which I am being investigated under. They came in drew floor plans of my house, took photos, recorded videos and confiscated my laptop, its power cable, a desktop CPU, a router and a modem. At all times, the police were professional and courteous.
The next day (Tuesday, February 24, 2009), I lodged a police report at the Brickfields police station/IPD about the the items confiscated as I am concerned that the data in the items would be tampered with as I am not the only one using the computers (which are not password protected) and I did not check the data before I handed over the items to the police.
I feel that I am being set up by the police and my rights has been violated as I've not been shown the police report, my statement taken from me under conditions in which I feared for my safety, items seized from my house and I've not been advised by the police to get legal representation.
If I have broken any laws, I wish to say that it is unintentional and there is no malice involved, what more an intent to incite hatred of any sorts. I am merely expressing my opinion using modern technology in the 21st century.
I feel that the country's laws are not equally applied to everyone but used to silent dissent, in particular ordinary bloggers with no political backing.
My blog is not particularly influential, compared to mainstream newspapers like Utusan, The Star, Sin Chew, etc, and other news outlets like TV3. These media have the potential to easily incite hatred and cause racial riots. In my view, in many cases, the Malay-vernacular press have published many articles that can be said to incite racial hatred, for instance, Utusan's frontpage yesterday that claimed DAP Hina Islam? (DAP Insults Islam?) ( http://www.utusan.com.my/utusan/info.asp?y=2009&dt=0224&pub=Utusan_Malaysia&sec=Muka_Hadapan&pg=mh_01.htm )
Hence I strongly feel it is ludicrous and absurd to say that I can even influence anyone what more incite racial hatred or any sort of hatred towards anyone. If anyone is hateful, they will be so without reading my blog. I am not God.
I also wish to say as a Malaysian, I am loyal to King and Country. In many posts I've always expressed my gratitude towards the country for allowing my family to have a happy prosperous live, especially under the Barisan government led by Dr Mahathir Mohamad. If I've offended anyone with my honest feelings based on facts, it is not my intention to do so. In the 21st century, rulers of all kind should be open to feedback because after all they are not gods that are are beyond reproach.
It would be much appreciated if the media will carry my statement or send reporters to the Bukit Aman Commercial Crimes Unit tonite. I will be there from 7pm and am not sure what time this second interrogation will end.
I've lost my handphone and can only be contacted via email now till I get a new handphone later today.
Thanks.
Jed Yoong Yui Foong
熊玉鳳
Offer to Water Concessionaires Sabotaged
As highlighted in the earlier blog post, the Selangor Government's offer to acquire the assets and concessions from the privatised water companies in the state was sabotaged by the Federal Government in a most shocking manner, and it certainly reeks of another mega bailout for failed privatisation projects.
The Selangor Members of Parliaments involved in the above acquisition exercise issued another statement yesterday to the above effect, as follows:
Federal Government Sabotaged Offer by Selangor Government to Acquire Water Assets and Concession in the State
The Selangor state government made an offer to 4 privatised water service providers – Puncak Niaga Sdn Bhd (PNSB), SYABAS, SPLASH and ABASS to acquire their water assets and concessions on the 13th February 2009.
The combined RM5.71 billion offered was made with the objective to deliver the lowest possible water tarriffs for the residents of Selangor and Kuala Lumpur. At the same time, the offer was consistent with, and guided by the terms and conditions specified in the concession agreements signed willingly by all parties involved. It was a comprehensive offer because it encompasses the audited asset value of all water-related assets as well as a very fair and reasonable return to the capital invested by the respective concessionaires.
However, before the concessionaires are able to respond to the state government's offer by the 20th February, we are shocked that the Ministry of Energy, Water and Communications, via Dato Teo Yen Hua, CEO of National Water Services Commission (SPAN) announced on the 18th February that the Federal Government will proceed to negotiate directly with the water concessionaires.
Instead of supporting the state's offer, SPAN intentionally threw a spanner in the works to sabotage the Selangor state's attempt at delivering the lowest possible water tarriffs to her people.
For with an alternative competing offer which will not only encompass higher cash valuation but also more lucrative terms and conditions from the Federal Government, SPAN has single-handedly destroyed any likelihood of a positive response from the concessionaires to the state government.
Therefore with SPAN's interference, it was not surprising that the concessionaires rejected the state government's offer on 20th February, last Friday. We will like to call upon the Minister to explain the actions of his Ministry for sabotaging the efforts of the Selangor State Government.
We will like to reiterate our position that if the offer from the Federal Government to acquire these assets and concessions at the same or lower price than what the Selangor state government has offered, we will not only agree to letting the Federal Government lead the negotiations, but also provide the Ministry with our full support and co-operation.
If however, the Ministry offers the concessionaires a much higher cash value for its assets as well as lucrative license terms for them to continue as the water operators in the state, the Minister must explain why he is forsaking the rights and interest of 7.3 million population of Selangor and Kuala Lumpur.
We will also like to emphasize to the Minister that under the law, particularly the Water Services Industry Act 2006, as well as the terms of the current concession contracts, the Selangor state is a counter-party to all previous and future agreements. Hence the attempt by the Federal Government to unilaterally negotiate with the concessionaires is illegal and will be subjected to future dispute and complications.
Therefore, we call upon the Federal Government to respect the rights of the State and let the Selangor Government proceed with the negotiations with the concessionaires in the interest of the people of Selangor and Kuala Lumpur.
The Selangor Members of Parliaments involved in the above acquisition exercise issued another statement yesterday to the above effect, as follows:
Federal Government Sabotaged Offer by Selangor Government to Acquire Water Assets and Concession in the State
The Selangor state government made an offer to 4 privatised water service providers – Puncak Niaga Sdn Bhd (PNSB), SYABAS, SPLASH and ABASS to acquire their water assets and concessions on the 13th February 2009.
The combined RM5.71 billion offered was made with the objective to deliver the lowest possible water tarriffs for the residents of Selangor and Kuala Lumpur. At the same time, the offer was consistent with, and guided by the terms and conditions specified in the concession agreements signed willingly by all parties involved. It was a comprehensive offer because it encompasses the audited asset value of all water-related assets as well as a very fair and reasonable return to the capital invested by the respective concessionaires.
However, before the concessionaires are able to respond to the state government's offer by the 20th February, we are shocked that the Ministry of Energy, Water and Communications, via Dato Teo Yen Hua, CEO of National Water Services Commission (SPAN) announced on the 18th February that the Federal Government will proceed to negotiate directly with the water concessionaires.
Instead of supporting the state's offer, SPAN intentionally threw a spanner in the works to sabotage the Selangor state's attempt at delivering the lowest possible water tarriffs to her people.
For with an alternative competing offer which will not only encompass higher cash valuation but also more lucrative terms and conditions from the Federal Government, SPAN has single-handedly destroyed any likelihood of a positive response from the concessionaires to the state government.
Therefore with SPAN's interference, it was not surprising that the concessionaires rejected the state government's offer on 20th February, last Friday. We will like to call upon the Minister to explain the actions of his Ministry for sabotaging the efforts of the Selangor State Government.
We will like to reiterate our position that if the offer from the Federal Government to acquire these assets and concessions at the same or lower price than what the Selangor state government has offered, we will not only agree to letting the Federal Government lead the negotiations, but also provide the Ministry with our full support and co-operation.
If however, the Ministry offers the concessionaires a much higher cash value for its assets as well as lucrative license terms for them to continue as the water operators in the state, the Minister must explain why he is forsaking the rights and interest of 7.3 million population of Selangor and Kuala Lumpur.
We will also like to emphasize to the Minister that under the law, particularly the Water Services Industry Act 2006, as well as the terms of the current concession contracts, the Selangor state is a counter-party to all previous and future agreements. Hence the attempt by the Federal Government to unilaterally negotiate with the concessionaires is illegal and will be subjected to future dispute and complications.
Therefore, we call upon the Federal Government to respect the rights of the State and let the Selangor Government proceed with the negotiations with the concessionaires in the interest of the people of Selangor and Kuala Lumpur.
Monday, February 23, 2009
Bailout a-la TARP
The US mega US$800 billion Troubled Assets Relief Programme (TARP) has been subjected to ridicule for its failure of reviving the US economy. But these pictures (which I have received via email) were certainly the best (most ticklish) "commentary" I've seen to date. Enjoy.
Umm... the next picture is still in the process of being taken... ;-)
What happens next?
Umm... the next picture is still in the process of being taken... ;-)
Sunday, February 22, 2009
Love Affair With Air Asia
There's enough vitriol spewed over the last few weeks in Malaysian politics to make one nauseous. Well, it's a Sunday, so I thought I should have a change in pace and blog about my love affair, well, one with Air Asia. (So don't expect to find me caught on camera a la CSL ;-))I wrote an article a few weeks back which was published in The NutGraph (which they re-titled "Loving Air Asia")
I have the greatest admiration for Datuk Seri Tony Fernandes, and I'm not abashed to loudly proclaim the fact that I'm a fan of Air Asia, and what it has done not only for travel in Malaysia, but for the entire region. A former colleague of mine once told me, if there's anyone who deserved his datukship, its Tony Fernandes.Now, I know there are many out there who have negative sentiments against Air Asia, some of whom are my Pakatan Rakyat fellow Members of Parliament, especially over the recent issue of the still-born Labu "KLIA East" airport. But if you read my story, you'd know that my "love affair" is personal. I further believe that since I don't hold back much when "whacking" things I find distasteful (e.g., Barisan Nasional), I should also do the same for things which I really like, even if its against the grain. You can read the full story at The NutGraph here.
Air Asia's mantra of “Now Everyone Can Fly” has really taken millions places, many of whom have never flown before. The airline is of course not without criticism, one of the most ticklish was the perversion of its motto to “Now Everyone Can Wait” for the frequency of flight delays, particularly in its early years. I've often been a victim of Air Asia delays myself, but it's a price and risk I'm willing to pay, in exchange for the affordability it affords me in travelling. After all, I've also suffered delays on trips with either the Malaysian Airline System (MAS) or the world renown Singapore Airlines (SIA).
I do have a part II to the above story, focusing a little more on the KLIA-East but given all the other urgent and critical things happening around us today, you may still have to wait a little before the second part sees the light of day ;-)
I'm also a big big fan of Tony Fernandes as a real entrepreneur, and I'll put him right up there with the best in the region. In fact, anyone with real ambitions to become an entrepreneur in Malaysia (I for one, had only half-ambitions, prefering early retirement ;-)), should emulate his "gung-ho" spirit. Unlike many of our country's pseudo-pretend-entrepreneurs who rely on government concession and oblique guarantees to become multi-millionaires, Tony made it big with no government guaranteed passenger traffic, protected air routes, monopoly license or government underwritten loans.
His "politics" could of course do with some improvements (speaking at Shahrizat's campaign trail(?!) Faint!) but everyone makes an honest mistake now and then ;-) After all, I was sympathetic to Pak Lah at the start of his reign, and Jeff Ooi, my fellow compatriot today, even campaigned in 2004 for BN!
For everyone's information, I don't own any shares in Air Asia although I watch over its performance. I have Tony Fernandes' handphone number, but we're not drinking buddies. I don't fly free on Air Asia although they sponsored a ticket each to Macau and Bali for my Charity Golf Tournament in October last year (Tony, I'm sure you can do better than that!!) And Tony is certainly no crony of Tony's for there's nothing I can offer except to buy air tickets at bargain basement prices. ;-)
Friday, February 20, 2009
Bailout of Water Concessionaires Begins
Almost as if on cue, the Federal Government has dismissed the Selangor state government's attempts to return the rights of cheap water and efficient water supply to the people of Selangor and Kuala Lumpur.
Two days ago, National Commission of Water Services (SPAN), on behalf of the Ministry of Energy, Water & Communications, surprised the state and the public by declaring that the Federal Government will unilaterally proceed to negotiate with the water concessionaires in the state directly, by-passing the state.
The CEO of SPAN, Dato Teo Yen Hua (one of those behind the failed original water privatisation exercise which screwed Malaysians throughout the country in the first place) gave some flimsy excuse of an alleged non-existent deadline which was missed by less than week, acting almost like a lackey for the concessionaires.
This came while the state government was still waiting for a response from the respective concessionaires on our earlier buy back offer. In fact, the SPAN U-turn trespasses the constitutional rights of the state and the Menteri Besar, Tan Sri Khalid Ibrahim rightly rapped SPAN and demanded that Dato 'mischievous' Teo declare his interest in the matter.
It was a clear attempt at sabotaging the state negotiations as the concessionaires will clearly reject the offers by the state as they know that the Federal Government will definitely pay much more money to take back their concessions!
Unsurprisingly, as if on cue, these concessionaires rejected Selangor's offer today (Puncak Niaga & Syabas here, Gamuda & Kumpulan Perangsang here) while obviously twiddingly their thumbs and licking their lips for a much more lucrative offer from the BN Government to line their pockets.
As highlighted in my earlier post, the Minister in this case has near absolute powers to determine the outcome of the restructuring exercise. It now appears that he will not use these powers to protect the rights and interests of the rakyat, but instead abuse it only to enrich and bailout the water concession cronies. The country is getting raped twice, right before our very eyes.
Two days ago, National Commission of Water Services (SPAN), on behalf of the Ministry of Energy, Water & Communications, surprised the state and the public by declaring that the Federal Government will unilaterally proceed to negotiate with the water concessionaires in the state directly, by-passing the state.
The CEO of SPAN, Dato Teo Yen Hua (one of those behind the failed original water privatisation exercise which screwed Malaysians throughout the country in the first place) gave some flimsy excuse of an alleged non-existent deadline which was missed by less than week, acting almost like a lackey for the concessionaires.
This came while the state government was still waiting for a response from the respective concessionaires on our earlier buy back offer. In fact, the SPAN U-turn trespasses the constitutional rights of the state and the Menteri Besar, Tan Sri Khalid Ibrahim rightly rapped SPAN and demanded that Dato 'mischievous' Teo declare his interest in the matter.
It was a clear attempt at sabotaging the state negotiations as the concessionaires will clearly reject the offers by the state as they know that the Federal Government will definitely pay much more money to take back their concessions!
Unsurprisingly, as if on cue, these concessionaires rejected Selangor's offer today (Puncak Niaga & Syabas here, Gamuda & Kumpulan Perangsang here) while obviously twiddingly their thumbs and licking their lips for a much more lucrative offer from the BN Government to line their pockets.
As highlighted in my earlier post, the Minister in this case has near absolute powers to determine the outcome of the restructuring exercise. It now appears that he will not use these powers to protect the rights and interests of the rakyat, but instead abuse it only to enrich and bailout the water concession cronies. The country is getting raped twice, right before our very eyes.
Thursday, February 19, 2009
Promised LRT Extensions Delayed
Charts courtesy of The Malay Mail
Another broken promise by the Barisan Nasional government. Only Malay Mail published the story on the delay to the promised extension to the Kelana Jaya LRT line to Subang Jaya.
The trains Klang Valley commuters have been waiting for to alleviate their misery will be delayed — yet again.To our Minister of Transport, Datuk Seri Ong Tee Keat, how come no announcement? What has happened to all which have been promised in the Budget 2009 for public transportation? What happened to the RM35 billion public transportation fund, and the Public Transport Commission promised by the Prime Minister himself?
Word from transport industry sources is that planned additional lines and stations for the light rail train (LRT) network is now projected to be ready only in 2013 — three years later than originally planned.
Below is a letter from Moaz Ahmad from the Association For The Improvement Of Mass Transit’ (TRANSIT) on the issue.
LRT delay to 2013 (at least) is not a surpriseI'll make the call again. If the Federal Government is unable to sort out our public transportation system throughout the country, for goodness sake, delegate the responsibilities to the respective state and local governments.
The quiet announcement of the delay of the opening of the LRT extension to at least 2013 probably did not come as a surprise to many Malaysians. After all, the LRT extensions have been promised, promised, and promised again. Malaysians keep on believing these promises hoping that things are going to happen because of the confident announcements coming from the cabinet and the Prime Minister's office.
One has to wonder if the recent switch of the Defense and Finance portfolios may have something to do with the delays. When Dato' Seri Abdullah became Prime Minister he reviewed many of the projects initiated by Tun Dr. Mahathir and shelved some of them (such as the double tracking and electrification). Would it be much of a surprise if Dato Seri Najib want to do a similar review?
There are also many mixed messages and "behind-the-scenes" events that make it clear that Prasarana, the National Infrastructure Company, will not be able to complete the LRT until 2013 (if not later). Prasarana's former CEO, Shaipudin Shah Hasan, resigned suddenly on September 19, 2008 - the day after attending the National Summit on Urban Public Transport and talking about plans for the extensions of the LRT. The Finance Ministry has announced that there is a plan to integrate Prasarana and RapidKL into a single company - but the Land Public Transport Commission may change things even more after it is created. On the ground, it has been reported that contractors are conducting soil tests in Subang Jaya - but Prasarana has not appointed a primary contractor or finalized their proposal for the LRT extensions.
Even more interesting are these points. It is almost funny to hear that Prasarana is unsure that it can secure the RM5billion in funding for the LRT extension. Remember that Prasarana is owned 100% by the Finance Ministry. How can it be that a company owned by the Treasury of Malaysia cannot secure RM5 billion in funding for an LRT project?
Also, if the government is planning on the extension, why is a contractor engaged by Prasarana asking to arrange a meeting with residents of Subang Jaya and USJ to share ideas for an integrated public transport network? Do they have a plan or not? And if they have a plan, why is it not public and open for discussion?
Prasarana once conducted a survey of households in the Klang Valley to determine their preferred uses and modes of transportation but they have not made the results of this survey public or engaged in any public discussion about the way people use public transport and other modes. They have not prepared or explored any alternatives beyond LRT extensions to show that the benefits of the proposed LRT extensions will justify the massive costs of construction.
They have provided no clear information to show that the proposed extensions are absolutely vital to suburban communities like Subang Jaya and USJ and Putra Heights. They have not examined any other corridors though it is known that urban Kuala Lumpur is in desperate need for at least 5 more lines.
Finally, they did not even have the courtesy to send a representative to a dialogue initiated by the ADUN of Subang Jaya last year.
This dismal "track record" (pardon the pun) makes it clear that there is a long way to go to improve public transport in Malaysia. It also makes it clear that the public should not easily accept and not question plans or promises from the government. If we really want to see improvements to public transport then we must have open public discussion, public consultation ... and active public participation.
Sincerely
Moaz Yusuf Ahmad
klangvalley.transit (at) gmail (dot) com
http://transitmy.org
Investors' Faith in Barisan Nasional
Further to my blog post last night with regards to a letter I have received defending the interests of investors and bondholders in the water concessionaire issue, there was a comment which highlighted that these investors and lenders who 'invested' blindly (without sight of the concession agreements) should not be protected.
Actually, chances are the bondholders do have "special access" to these supposed OSA agreements and documents (its only when opposition politicians get their hands on them, there's a problem ;-)).
But more importantly, these "investors" invested on the basis that the BN Federal Government would always act in the interest of the concessionaires as most of whom are cronies to UMNO. Hence, in all probabilities, many of them invested based on "faith".
Nobody expected the result of the March 8 elections last year and the subsequent focus of the Pakatan governments to give the people a "new fair deal".
Should the investors (or their advisors) then, be compensated for their blind faith in the BN government, at the rakyat's expense? You tell me.
(Remember the days when people invested and lent heavily in UEM, Time and Renong because they believed that BN will always back and bail them out - should these investors and lenders be compensated not only for their losses but also additional profits? BN bailed out UEM, Time and Renong alright, they rescued their cronies - remember Halim Saad? but left everyone else high and dry)
Actually, chances are the bondholders do have "special access" to these supposed OSA agreements and documents (its only when opposition politicians get their hands on them, there's a problem ;-)).
But more importantly, these "investors" invested on the basis that the BN Federal Government would always act in the interest of the concessionaires as most of whom are cronies to UMNO. Hence, in all probabilities, many of them invested based on "faith".
Nobody expected the result of the March 8 elections last year and the subsequent focus of the Pakatan governments to give the people a "new fair deal".
Should the investors (or their advisors) then, be compensated for their blind faith in the BN government, at the rakyat's expense? You tell me.
(Remember the days when people invested and lent heavily in UEM, Time and Renong because they believed that BN will always back and bail them out - should these investors and lenders be compensated not only for their losses but also additional profits? BN bailed out UEM, Time and Renong alright, they rescued their cronies - remember Halim Saad? but left everyone else high and dry)
Wednesday, February 18, 2009
Selangor Water Concession Buy-Back Offer: A Response
I received the following response below from HYS, who believes that our approach to the take over of water assets and concessions in Selangor victimises bondholders and shareholders. I will not respond in detail, as I believe the answer is already in the statement made earlier on the basis of our acquisition.
My short reply is, shareholders and bondholders enter into agreements eyes wide open. Should a concessionaire decides to so over-leverage itself, raising more money than it ever needed to operate the business relative to its actual equity investment, should the Government (i.e., Malaysian tax-payers) be made to bear the brunt of the bailout?
The politely written letter is as follows:
So what do you think?
My short reply is, shareholders and bondholders enter into agreements eyes wide open. Should a concessionaire decides to so over-leverage itself, raising more money than it ever needed to operate the business relative to its actual equity investment, should the Government (i.e., Malaysian tax-payers) be made to bear the brunt of the bailout?
The politely written letter is as follows:
According to respective company's announcement, the Selangor Government offer to acquire their respective water business without taking over the debt.Just to comment a little further, it's a little like the bailout of Malaysian Airlines (MAS), which got into deep financial trouble in the early 2000s due purely to excesses and weak management, and was unable to pay back its bondholders - should the Government have step in as it did and pay double the value of MAS, at the expense of the tax-payers?
Personally, I find it not fair to the shareholders of the company and the lenders.
The initial investment in the business was financed by equity holder through the company's share and lenders via debt. The purchase consideration offered by the State Government is below the sum of company's market capitalisation and net debt. Eventhough the management of the company would love to support the State Government's Proposal, they still need to take care the stake holders' wealth.
If the companies are being forced to sell the assets to the State Government, the implication to the malaysia stock market's sentiment is unpredictable. The lenders may end up holding huge NPL.
Hope I make my point clear.
So what do you think?
Forum: Can We Have Our Highways Back?
A gentle reminder for the forum (in English) tonight.
This will be our first public consultation and dialogue on Malaysia's highway toll concession agreements since they were "declassified" for public viewing about a month ago. For members of the public who wish to find out more details of our findings, as well as for the professionals with additional information, please join us for an evening of sharing and brainstorming.
The details are as follows:
This will be our first public consultation and dialogue on Malaysia's highway toll concession agreements since they were "declassified" for public viewing about a month ago. For members of the public who wish to find out more details of our findings, as well as for the professionals with additional information, please join us for an evening of sharing and brainstorming.
The details are as follows:
"Can We Have Our Highways Back?"The panel speakers include:
Venue: Crystal Crown Hotel, Petaling Jaya
Date: 18 February (Wed)
Time: 7.30pm
- Sdr Lim Kit Siang, DAP Parliamentary Leader
- Sdr Tony Pua, MP Petaling Jaya Utara
- Sdri Teo Nie Ching, MP Serdang
- Sdr Tommy Thomas, Corporate & Constitutional Lawyer
- Sdr Teh Chi Chang, Economic Advisor to DAP Secretary-General
Don't Rape the Country Twice!
I've blogged on "We Want Our Water Back Too!" two weeks ago. The Selangor state government has since issued offer letters to the concessionaires to take back the water concessions.
The four Selangor members of parliament [Charles Santiago (Klang), William Leong (Selayang), Dzulkifli Ahmad (Kuala Selangor) and myself] who are involved in the Water Review Panel issued the following press statement today. Additional comments are available at The Malaysian Insider, Malaysiakini and The Star.
Call Upon the Minister of Energy, Water & Communications to support and endorse the Selangor Government's Offer to Acquire the water assets and concession in the state
The water privatisation exercises in Selangor was started in the early 2000s by the Mahathir administration, where hugely lucrative concessions were granted to politically-linked private companies with neither the skills or experience in the water industry, nor the necessary equity funds to operate these businesses. As a result, the residents of Selangor and Kuala Lumpur were forced to pay high prices for the water supply, unreasonable penalties as well as often poor service quality.
In view of the clear unsustainability and failure of the privatisation exercise, where some of these concessionaires are facing serious concerns in repaying its bonds and water tariffs are scheduled to increase beyond tolerable range, the Federal Government has embarked on an exercise to nationalise the water-related assets nationwide under the new Water Industry Services Act (WISA) enacted in 2006.
The people has suffered once already when the assets were forcibly piratised by the Government. We will like to call upon the Minister not to rape the country twice by buying back these water assets and concessions at inflated prices. Doing so will only provide the basis to the dictum that the Barisan Nasional government privatises profits and nationalises losses.
The Selangor members of parliament who sits in the Selangor Water Review Panel call upon the Minister, who is granted wide-ranging powers under WISA, to not only support, but help execute Selangor's fair and reasonable offer to acquire the water assets and concessions in the state. The offers to the concessionaires were made last week on Friday, 13th February.
The offer made by the Selangor Government was made on the basis of one-time book value of the water-related assets in the concessionaires as at 31st December 2007, and a fair and reasonable return to the actual equity invested by the concessionaires since the industry was first privatised. It should be noted that the offer made by the Selangor state government is guided by and in compliance with the terms and conditions willing signed by all parties in the concession agreement. Therefore contrary to press reports in the last few days, the acquisition offer is neither a cynical offer which is too low, or without basis.
It should be noted that all investment analysts have been using the “discounted cashflow model” which results in significantly higher valuation for these concessions. However, the “discounted cashflow model” is just a technical term for paying the concessionaires its future profits, which in itself is a totally unreasonable proposition, and defeats the purpose of the Governments' water restructuring exercise.
If we were to acquire McDonald's today, it will be fair to put a value to its future profits as it's a wholly private enterprise. However, we are acquiring government concessions in this case – which means that the Government should not be paying for future profits for licenses and rights which it has itself granted!
The Minister is granted wide-ranging powers under the WISA (2006) Clause 191(5) where:
The four Selangor members of parliament [Charles Santiago (Klang), William Leong (Selayang), Dzulkifli Ahmad (Kuala Selangor) and myself] who are involved in the Water Review Panel issued the following press statement today. Additional comments are available at The Malaysian Insider, Malaysiakini and The Star.
Call Upon the Minister of Energy, Water & Communications to support and endorse the Selangor Government's Offer to Acquire the water assets and concession in the state
The water privatisation exercises in Selangor was started in the early 2000s by the Mahathir administration, where hugely lucrative concessions were granted to politically-linked private companies with neither the skills or experience in the water industry, nor the necessary equity funds to operate these businesses. As a result, the residents of Selangor and Kuala Lumpur were forced to pay high prices for the water supply, unreasonable penalties as well as often poor service quality.
In view of the clear unsustainability and failure of the privatisation exercise, where some of these concessionaires are facing serious concerns in repaying its bonds and water tariffs are scheduled to increase beyond tolerable range, the Federal Government has embarked on an exercise to nationalise the water-related assets nationwide under the new Water Industry Services Act (WISA) enacted in 2006.
The people has suffered once already when the assets were forcibly piratised by the Government. We will like to call upon the Minister not to rape the country twice by buying back these water assets and concessions at inflated prices. Doing so will only provide the basis to the dictum that the Barisan Nasional government privatises profits and nationalises losses.
The Selangor members of parliament who sits in the Selangor Water Review Panel call upon the Minister, who is granted wide-ranging powers under WISA, to not only support, but help execute Selangor's fair and reasonable offer to acquire the water assets and concessions in the state. The offers to the concessionaires were made last week on Friday, 13th February.
The offer made by the Selangor Government was made on the basis of one-time book value of the water-related assets in the concessionaires as at 31st December 2007, and a fair and reasonable return to the actual equity invested by the concessionaires since the industry was first privatised. It should be noted that the offer made by the Selangor state government is guided by and in compliance with the terms and conditions willing signed by all parties in the concession agreement. Therefore contrary to press reports in the last few days, the acquisition offer is neither a cynical offer which is too low, or without basis.
It should be noted that all investment analysts have been using the “discounted cashflow model” which results in significantly higher valuation for these concessions. However, the “discounted cashflow model” is just a technical term for paying the concessionaires its future profits, which in itself is a totally unreasonable proposition, and defeats the purpose of the Governments' water restructuring exercise.
If we were to acquire McDonald's today, it will be fair to put a value to its future profits as it's a wholly private enterprise. However, we are acquiring government concessions in this case – which means that the Government should not be paying for future profits for licenses and rights which it has itself granted!
The Minister is granted wide-ranging powers under the WISA (2006) Clause 191(5) where:
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.Therefore with the powers vested in the Minister, Dato' Shaziman Abu Mansor, a newly minted Minister since the last elections, we call upon the Minister to do the right thing and act to ensure that the rights and welfare of Selangor people and that of all Malaysians.
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