Tuesday, January 06, 2009

RM18 Billion Profit Not Too Much?

Just got this in my mailbox, thought its worth a blog post. Have a read and share your thoughts ;-)

Dear Tony Pua,

I am a Malaysian Chinese businessman. I have read your article about LDP. Why do you think 14.2 times return on capital over 30 years is too much? If you look at the PAT figures, the real profit only comes from Year 2016 onwards.

I think most people look at figures without relative thinking. That means when you see RM18.865 billion, you will think, that’s a lot of money and it is not fair for this money to be given to a single individual, a company or a group of people. The cost is only RM1.327 billion. 30 Years is not that long. And then, do a reverse calculation and finds that the Return on capital is 14.2 times over 30 years. It must be too high!

People who do this type of calculations do not really understand and comprehend the numbers. They don’t know who much billion is. What it can buy and how the money looks like because they never have that kind of money. Only the rich truly understands the number.

Let’s take a look at the numbers where small people can easily understand. Say for example you are 20 years old and you come out with a capital of RM10,000.00 to start a web, consulting, SEO type of businesses. You bought a notebook, a printer, rent a small office, etc. 30 years with 14.2 times return on capital means at the age of 50, you have earned RM142,000.00 with your start up capital 30 years ago. That translate to RM4,733.33 profit per year and RM394.44 profit per month. Now, do you still think the return is really that high?

Not many companies can come out with RM1.327 billion of investment. Even those who have that kind of money many not be too keen to invest since the return is really slow and have lots of uncertainties. For example, DAP in this case, is an uncertainty to them. All countries needs companies to invest money, but you cannot stop them to make money. If DAP continues to stop businesses from making money, and count beans all the time, the economy will continue to fall. Nothing is fair in this world. You and I cannot complain because we do not have RM1.327 billion in our pocket.

Malaysia is really not business friendly anymore. We see government officials constantly saying things like “profiteering, indiscrimatly increase prices, excessive profiteering, unscrupulous traders”, etc. It is as if they are tying to brand businesses as evil. Companies are not supposed to make money, but help the “rakyat”. The economy cycle is still the same. First, companies must be rich. When companies are rich, employees gets more pay and government get more taxes. Companies, employees and government will all spent more in the economy.

But, in order to be politically correct, politicians want government to save money, companies to make less “excessive” profits, but at the same time want the rakyat which are mostly employees to have more disposable income. Do you really think bosses pay employees based on performance? I think they pay employees based on how much profit they made.

Hey, you were the CEO of a listed company in Singapore. I am sure these are no rocket science to you.

[Unsigned]

45 comments:

Anonymous said...

I believe this chap is looking from the point of view of the rich businessman. Small investment on business with profit over 30 years certainly sounds small. And of course business's objective is to maximise your profits and minimise your cost.

But here you point out the excessive profits from PLUS and they are providing basic people needs and not any luxury items.

So when PLUS gain excessive profiting from the normal people like us then this is sure CANNOT!!

Victor Tan said...

This chinese businessman is definitely one of the cronies as he is leaving his e-mail unsigned. And being a crony, does not take much to make money, that is why his mathematics is flawed.
Firstly, if you can get such a concession, you can easily get borrowings to finance the construction. And as such, it is not 14.2 times reutrn but an infinite return. You are making money out of nothing. You just make sure that the project is completed on time.
Secondly, by using small values as example does not really reflect the quantum, try a profit of RM50million/month by dividing RM18billion over 30 years.The Penang State Government monthly budget is not even close to this value.
Thirdly,if every sen spent by the Government is directly channeled towards the economy and not part of it towards cronies, then Malaysia will truly be a prosperous country.
This chinese businessman crony may have lost his cronyism as more opposition is now in parlimant and is sulking. From his comments, we can see that he is not a businessman but a crony because a businessman knows where to look for business but a crony steals from the PEOPLE.

Anonymous said...

Excellent analysis on rates of return, never mind that it veers towards ranting towards the end.

re: Malaysia not being business friendly

Yes and no. The entrepreneurial climate has changed from "soft-"oriented to "hard-"oriented opportunities. E.g. a soft-oriented climate: Indonesia. E.g. a hard-oriented climate: Singapore.

Still plenty of opportunities in both countries, depends on your background that's all.

Anonymous said...

14.2x return of profit over 30 years equates to a compounded return of just 9.3% annually. Is that too much? I dont think so considering there's some risk to it although I must agree it's not much. But just look at the SILK highway concessionaire. Almost went bankrupt.

Few will disagree with me that return on many property investments can return 9.3% annually. If we can obtain loans for these investment properties, isnt it the same like the toll companies borrowing money for their highway construction?

Dear Tony, I hope you wont spend too much time squabbling over the toll or power concessions. We need to move on. PKR has done too much auditing and witch hunting. We havent seen much progress or outcome since the tsunami (especially in Selangor) but we are still hopeful.

Let's move on to create value for the economy and country. Dwelling in the past doesnt help especially since it's not all that bad.

Would you prefer to live in Kelantan, where there is little wastage or corruption but people still lead a very simple and down to earth life and drive on 1-2 lane roads, or would you prefer to live in Selangor, where there may be some wastage and corruption but people still live a reasonably wealthier life and drive on the toll highways?

Would you rather live in Sabah where there is no power concession (or maybe very few) and face electricity cutoffs almost weekly, or would you rather live in Selangor where people complain even if the face cutoffs once a year?

Corruption and wastage is bad but the past is the past. Move on and make sure it doesnt happen again. Really hope you will put your energy and intellect to good use to create more economic value for the people and country.

Bentoh said...

DAP doesn't call themselves Socialist Democratics for no reason... LOL~

18b profit is not much...

but did the businessman ignored the fact that:
1) Government got to repay the cost plus 12% "interests" to take over the ownership, i.e. COMPLETELY safe and secure backdoor...

2) 18b profit is NOT TAXABLE by government...

3) Government compensation for not earning enough...

4) Failure to serve its purpose, to reduce the time for one to reach from a place to another, doesn't come in any form of penalty...

Business friendly? This is overly business friendly I say... or rather... Cronies friendly... ;)

Maybe the difference between DAP's ideal and BN's governance is that... Doing business is tough because there could be no backside-covered and sure-win contracts or doing business is tough if you do not have any UMNO-big-gun friends...

Patriotic1994 said...

Hmm... I think this author forgot about small pie versus big pie. Size does matter. The 14.2 is only a ratio.

Imagine my salary is RM14,200 a month and you RM1,000 a month. I could spend 14.2 more expensive items than you. I could have 14.2 more car than you. I could travel 14.2 times more places.

Man, it is like earning EURO dollar times 2, and live in Malaysia.

Is that comparison correct?

Unknown said...

Anon 11.48,

It's actually 10.3% compounded.

But it doesn't work like that does it?

The investment is RM1.327b, and every year you get an average net profit return of 47% (RM627,000) on capital over 30 years, that's not excessive?

Capital has been invested, loans have been secured, interest capitalised, hence all profits are net, and cannot be "compounded" or that would be double counting. ;-)

(e.g., you are not using the yearly profits to invest in additional length to the road to generate future profits under the concession, hence as such the yearly profits should not be compounded)

Tony

Anonymous said...

Hi Tony,
Thanks for your reply. Not sure how you got 10.3% but 1.093^30 is 14.2.

Dont think it's right to take the average return. The return increases as traffic volume and toll rate increases over the year. As you commented, "“Between 1997 and 2006, it was supposed to have made a profit of RM1.22bil, nearly the construction cost". That's more like RM120m a year for the first 10 years, which is about 9% annually of the construction cost of RM1.33b. Shareholders should also expect profits to grow at least at the inflation rate to be justifiable.

You may be right on the point on double counting but that's quite subjective because you will then need to know the exact loan amount to judge whether it's reasonable. A 50% loan would mean that return is roughly 9.3% x 2 = 18.6% return. In my opinion, still not too high for the risk taken.

Worth noting is that LDP's sister highway, SPRINT, traffic is below forecast. I know government compensate them a bit for not raising the toll but yet it is still losing money. And we have the SILK highway that is almost bankrupt.

Is LDP being singled out because it is so successful? Should we go after the government instead for not providing enough free roads although we pay our taxes? All new major roads seem to be toll roads.

I know Jeff Ooi likes to go after power concessionaire like YTL Power but why are we after them? We cant be hunting everyone who got good deals and blame cronism. They have concessions over the world. In fact, I think most Malaysians are proud of YTL. Just look at their property launches.

Why dont we move on and work on how to prevent such incidences from happening again by having good policies to prevent cronism and ensure future concessions are more favourable to the govt.

Fight for these policies and the urban middle class will appreciate it because ultimately, this will determine our country and future much more than the 30c (20% discount?) we save each time we go on the LDP. Alternatively, encourage users to get some of the shares. That would save a lot of futile effort and let us concentrate on how to move the country up the value chain although I know it may not be easy to get everyone to understand and hence, not a populist decision...

Anonymous said...

Sorry Tony. I made a mistake in calculations. Please help me amend if possible. If loan is at 50%, return should be somewhere in the region of 12%. 9.3% for the 50% and 9.3%-7% interest borrowings for the borrowed 50%.

Anonymous said...

What the chap said make good sense, but it is not applicable in this matter. What the company did is a riskless venture: either raises toll price or the government has to reimburse any losses. It then makes no difference who will build the infrastructure. Such a venture only benefits the cronies, while at the same time letting the rakyat carry the risk. Whether the venture will be successful or not, the rakyat gains nothing despite being the risk taker.

WY said...

whether it is 9.3% or 10.3% over a period of 30 years, one must not forgets the following points:

1) these highway concessionaires-business are almost profit-guaranteeed by the government - otherwise compensated. If so, i believe every single malaysian would love to invest in such a scheme, for we re only getting 3%+ from our banks and EPF (if any).

2) the nature of the tender-award means the cost of 1.4billions is not necessarily the lowest. It is pretty understandable that the cost is inflated.

3) Last i check, Madoff scam in USA also claimed to provides 10-12% over the past 20odd years. Malaysian business have much better deal here than most fund managers out there.

4) in anycase, Malaysian govt could have raised that same initial capital by raising 30-year bonds with flunctuating rate, and STILL be 50-60% cheaper than current structure.

5) not to mention, half of these highway concessionaires don't even provide the supposedly added expertise in highway design and management. most of them were just cronies companies' subsidiaries. Blah.

Anonymous said...

Ya Lo! TNB is another enigma in privatization. It made poor decision in acquiring IPP thus creating a loss due to poor planning and then report no profit and ask consumers to increase tariff. Where got sense?

KoSong Cafe said...

There is no argument over whether we need to be business friendly.

But if a very lop-sided contract is signed in favour of the concessionaire and yet you do not find it unfair, then it is not worth discussing any further.

Why is the NSE contract under OSA for so many years, if not for undue biasness towards the ruling party which even Dr. M had confirmed before? Can you imagine this situation in Britain or USA?

Even now, the supposedly declassified document for public viewing is done in parts, selective disclosure? Can you blame the public if they believe this is so?

Can anyone fault YB Lim Guan Eng for open tenders in Penang? Only those who have had unfair advantages will cry foul.

Whether you use IRR or any other methods of calculation, we should let those who are capable of carrying out big contracts to do so if they can do it at the lowest price.

I am sure most people would agree that if not for the corruption, wastages and leakages, Malaysia would have been much stronger financially than Singapore.

KoSong Cafe said...

Sorry Tony, your 47% is out by '000! Understandable.

Anonymous said...

The issue of concession should be look at the services provided and reasonableness of the rate charged. It should not be look at purely "anti-privatisation" as DAP usual approach.

What's the point of "We Want Our Highwah Back"? Firstly do you have the money? Secondly and the most importantly, can you able to manage to operately it efficiently? I doubt so, look at the State Administration after Pakatan took over since 8 MArch 2008.

Instead of harping based on anti-privatisation, you will do more good work by assesing the level of services and the obligations and responsibilitiea of the concessionaires and whether the concessionaires have COMPLY with all the termn as per the agreement to ensure the rates charges and compensation paid are in accordance to those terms in the concession agreement. What is the point to "celebrate" when you discover that you can buy back the concession in the agreement.


Any business entity is established to make profit, don't you think so? But make sure the profit made is proper and reasonable. Get it?


That why it is so important for you the look into the obligations and responsibilities of the concessionaire so that you can assess whether the rates and compensation paid has been in accordance to the agreeement. You will get "BINGO" and then score point if you find that the concessionaire did not comply and then you can call for breach. Does this make sennse to you.?

When you sold your listed company, what return did you get? So, don't harp of this if you know the answer and why you get the that kind of returns.

Again, make profit from business, but make sure make it properly and with integrity and fairness

Anonymous said...

In other words the email writer is saying monopoly is okay.
Please note that building highway infrastructure is not purely for commercial gains. There are many businesses which requires to set priority for the welfare of the society.
A government privatizes some big projects because it deems that privately run will be more efficient because of availability of expertise in many areas.
Because it requires enormous capital layout for such projects, the government undertakes to 'guarantee' the company does not lose out. Such comfort allows the company to take such risk or rather their risk has been considerably minimized. The only cause for losses is blame themselves because of mismanagement. In terms of viability of business no need to worry of the returns.
In some business where risk is higher the profit margin is usually higher - otherwise who wants to take that risk?
In this case for the LDP the agreement is protecting the contractor. How to lose? Therefore, they cannot be profiting unreasonably.
Many entrepreneurs have no experience in building highways but given the opportunity for such contract to come by anyone would definitely take it up.
There are many ways of making a fair profit in businesses but PLEASE DO NOT ROB THE PEOPLE PARTICULARLY THE POOR!!!

Anonymous said...

Based on, say 5% discounting factor (since it is an almost risk free project venture and the government provided soft loan), the net present value of the entire 30 years concessionaire will come to about RM8 Billion, even after taking into account if the company have to put up the RM1.327billion construction cost without any funding. The RM8 Billion is an "INSTANT" profit, it is a super-super deal.

In this kind of deal, usually the company will need to invest only 10-20% of the construction cost, the funding is readily available for the balance amount. Same for IPP venture.

So, you put in 20% (=RM260 million ), and instantly you make RM8 billion. Would you want to go into this kind of business?

Anonymous said...

This Chinese businessman is a pariah!

Too many twisting facts.

1)Relativity of proportionality. Patriotic1994 has clarified succinctly. Ya! only RICH people understand what's 1,000,000.00, No?

2)Risk? What risk? Victor Tan, Investor & WY Kam gave good pointers.

3)SPRINT & SILK r ill-conceived business plans! Those concessionaires thought that their have their gooses cooked! NO, they r wrong. Not all tolls concessions r like PLUS owned NSHW or LDP.

4)Nobody is anti-privatisation IFF the processes r OPEN & TRANSPARENT. Under such conditions all T&C will be guided by market competitions. The end-users will be the beneficiary, just like the current mobile phone market in M'sia.

5)'Any business entity is established to make profit' - BUT based on the RIGHT sanctity of laws. In this case there is NO such sanctity as the T&C r closed door negotiations. The govt, which represent the public users have ignored the benefits to the end users, & go to bed with the selected concessionaires. Under such conditions, what kinds of the obligations and responsibilities of the concessionaire can one expect? The worms r crawling out from the opened can now, as the documents revealed. So how to get "BINGO"?

6)The wrong MUST be RIGHTED! And buying back the concessions as stipulated in the agreements r the FIRST moves. As this is for the PEOPLE there will be money for the buy-back through financial creativity. The efficiency of the management will fall in line if good people r put in place to run the operation. There can't be ONLY ONE Idris Jala in M'sia!

Anomie

Ooi Beng Hooi said...

The letter seems make sense from business point of view.

But how can the author of the mail who seems to have analytical thinking miss out a very important point here.

(衣,食,住,行) Translating from Chinese, clothes, food, accomodation and transport are men basic necessities. All these plus medical services shall be made affordable to the public, especially the poor ones.

That's the reason why the prices of some food items are controlled and general hospitals charging low fee, so should be the toll.

Don't forget Malaysia has very high vehicle ownership and we are not using the road for free. Besides income tax, we are paying road tax as well. Why shall the people be burden with unreasonable highway toll rates?

Anonymous said...

"Would you prefer to live in Kelantan, where there is little wastage or corruption but people still lead a very simple and down to earth life and drive on 1-2 lane roads, or would you prefer to live in Selangor, where there may be some wastage and corruption but people still live a reasonably wealthier life and drive on the toll highways?"

Is this an attempt to justify prevalent conditions emenating from corruption and cronyism?

If it is, it's bloody pathetic.

Anonymous said...

That's how the businessman manipulated the government servant with the backing of politicians.
The government servant either confused or promised of something, will then brief the honorable minister of project viability, the minister say yes and proceed to make the rakyat suffer.
Nobody is stopping business people from making money but the question is how much and why, how they get it and why?
Aiya!!! YB tired already la.....

Anonymous said...

missed the woods for the trees

he must have got it all wrong! or it is just me?

It is not about the profit, or 14 times return, the question is - why don't the government profit from it instead of allowing a private company profiting from it since profitability is guaranteed by the government, which doesn't make any sense. It would be better to allow the EPF to profit from it, or some government arm... just like singapore... the money should be channeled back to the people, not to some cronie's pocket so that their children can have a high life in UK with chicks around their arms.

Ian CHEONG said...

My 2 sen worth.

I'm not FOR or AGAINST the Toll concessionaires. I believe that the PREVIOUS govt just didn't have sufficient mettle to create so many highways within 10 years!

Just returned from Singapore last month. They don't have tolls but ERP, which is an EFFECTIVE way of controlling traffic jams. Loads of cars there too, but no visible excessive traffic snarls!

So the question is: ARE our Tolls assisting our URBAN transportation in alleviating jams or CREATING more jams? (Are they part of the problem or part of the solution?)

My heart saddens when I see the tolls choc-o-bloc with traffic, and yet the users have to succumb to the average 10 km/h!

I don't mind paying even RM 5 in tolls if the flow is smooth.

Currently the best bang for the buck toll is somehow by the only concessionaire that does not want to have their agreements "publicised". Can anyone tell me they have encountered a jam on the MAJU (Putrajaya) Expressway?

One should also evaluate (if possible) the mental toil one suffers from all this traffic burden. You can also calculate the amount of petrol / fuel wasted during this jam (and is compounded DAILY!)

So, even if one concessionaire "profits" with financial benefits, the COUNTRY as a whole "loses" by wasting millions of manhours on the road, and the UNNECESSARY and UNECONOMICAL use of precious fuel and thus the result is a ZERO END GAME!

To conclude: my suggestion, if it is ever raised in the parliament:
Maintain the concessionaires, but apply pressure to them by having them commit to some form of community responsibility. (Similar to the pressure exerted upon Sime Darby on the IJN privatisation issue)

I take Dubai as an example. They have a few ridiculous tolls too. Not that they needed the money (perhaps now they do!) But, they have toll free roads from 10pm to 6am to encourage free access on the tolled roads during the day.
We could implement this too!

Some tolls just don't have any proper TOTAL SOLUTION planning.

E.g. NPE from Sunway to Bangsar.
To enter NPE from Sunway, the traffic snarls in front of Pyramid during peak hours because of the lousy designed BOTTLENECK at the turn-off to the LDP. It's smooth sailing until the Angkasapuri exit. Once you exit, you still get stuck at the antiquated 2 lane Jalan Bangsar in front of TNB! So much for time savings!

A similar description can be made for LDP from Sunway toll all the way to Bandar Utama!

As for those highways with lower traffic (SILK), why not just lower the fees and have variable rates? It's just a matter of reprogramming the computers!
For high density toll plazas, have discounted fees for the RAKYAT:
E.g. Peak hours - all tolls reduced to 50 sen. Midnite to 6am: Toll free. Other times: Usual rates.

Anyone disagree with me on this?

Anonymous said...

Tony:

It is interesting that in all the comments posted, including yours and the anonymous chinese businessman, no one has touched on the concept of risk.

Whether the highway concecessionaires are pocketing too much or too little - one needs to examine returns they are getting in relation to the risks they took.

Until that is done, all are just speculating.

Anonymous said...

No matter how many times of the return or how much is the profit, these are all robbery company "大道/大盗". The government is helping them to rob rakyat hard earn money.

Anonymous said...

Pakatan has taken over Selangor, and all the opportunity are wide open for the state to take over the Syabas water concession, up till now what happen?

Tony,
It's not so simple as you would envisage. Doing a one or ten million transaction is different from doing a hundred or billion deal.

All privatisation have noble intention, the problem is always the operator after it was given the conceession. It's about proper management and operations and this YB should be looking into it, not about taking back or buying back.

Look at IJN issue, no one can denied that IJN give good service, so for the babarian to privitize it, is not simple, the entry barrier is high.

Just hope that the Pakatan Rakyat team to acceralate the learning curve, time is short, in 4 yours time, if nothing visible , then chances is high, Pakatan maybe voted out next election.

Many people out there are getting impatience with the performance of Pakatan so far, 'cakap rhetorik banyak, hasil kurang. Get it!

Anonymous said...

Hi YB Tony,

Based on the Chinese Businessmen comments, analysis and way he calculate, what is your comments?
Based from my point of view, the calculation is extremely logical and is NOT "pariah" as someone describe.

I also not agree that someone mention that the businessman "twisting" the fact because when there is fact figure based on formula, no way you can twist it.

Personally, I wish YB can pin point out which point is caclulate wrongly.

Anonymous said...

Anoymous 10:01 PM,

Tony Pua has already posted about how excessive profits are earned by the toll concessionary in his posting dated at 1:01 am today.

Scroll up and read it.

Then judge for yourself who is pariah and who is not.

Anonymous said...

I think many people misintepreted the fact that the govt wont compensate toll operators if their volume does not reach their targets. The govt does not. SPRINT and SILK make losses and everyone just keeps quiet. PLUS and LDP are successful and we harp on it. Is it fair to penalise successful businesses when no one is interested in asking govt to bailout SILK or SPRINT? If like this, susah to do business in Malaysia la. Untung banyak people complain. Mesti rugi then everyone quiet

Anonymous said...

Is this an attempt to justify prevalent conditions emenating from corruption and cronyism?

If it is, it's bloody pathetic.<<<

No it's not. Point is we should spend time moving forward, studying the govt policies to make sure we dont award any lopsided contracts anymore. No point trying to punish those when fault lies with govt. Besides, the shareholders now could be totally different from those who have made the money.

Anonymous said...

"Mesti rugi then everyone quiet"

That is the point! One of the comment mention about YTL, what's wrong with YTL? Just because they make $ then the politician start linking them to bla bla bla and start shooting at them?

"how excessive profits are earned by the toll concessionary in his posting dated at 1:01 am today"
When people run a company, do you think people do not have operation cost? Hire operator don't need cost? If change everything to Touch'n'go OR smarttag. Then our dear "YB" from PR sure complain that UEM make big portion of $ from there again.

What is your comments dear YB? What do you think sir?

Anonymous said...

"I think many people misintepreted the fact that the govt wont compensate toll operators if their volume does not reach their targets."

It is clearly written that compensation is paid for losses incurred.

Read it up before you post such misleading information again.

Anonymous said...

"No it's not. Point is we should spend time moving forward, studying the govt policies to make sure we dont award any lopsided contracts anymore. No point trying to punish those when fault lies with govt. Besides, the shareholders now could be totally different from those who have made the money."

Moving forward and tackling current problems and malaise are two seperate issues. Ignoring exsting matters just because it's done and dusted does not make it go away so your so-called reasoning is flawed.

You must be one those toll concessionary fellows who are waxing rich from kickbacks from UMNO.

Anonymous said...

"That is the point! One of the comment mention about YTL, what's wrong with YTL? Just because they make $ then the politician start linking them to bla bla bla and start shooting at them?"

YTL and other IPPs are sold ridiculously low prices natural gas in comparison with market prices.

Thanks to UMNO and crony politics.

Like that also dunno ah?

You must be one of those dumb UMNO goons or perhaps a YTL person on the take.

Anonymous said...

"When people run a company, do you think people do not have operation cost? Hire operator don't need cost? If change everything to Touch'n'go OR smarttag. Then our dear "YB" from PR sure complain that UEM make big portion of $ from there again."

Not when the toll concessionary earns 47% return on net profit.

Typical UMNO response. Always masuk pocket before anything else.

vikraman said...

Statements like those contained in the letter to Tony above serve to only confuse the public. Economics shouldn't be explained by non-economists! Does the writer of the letter know ANYTHING about the Law of Diminishing Returns?! His statement that the ROI of 14.2 being very low is not applicable to this example especially when the company (in this case LDP) has no risk. (Remember the guaranteed profits clause!!) has no permanent financing obligation, (Their 1.327 billion is a soft loan by the government) and in fact EVERYTHING to gain.

If the government gives you the capital, the government guarantees the profits and the government takes up all the risk, is it just me or does it seem rather unfair that the concessionaire makes all the profits?

I'm not against free market economics. In fact i'm an avowed libertarian from a fiscal perspective but in this case this highway was all the way a government enterprise so the government should profit from it!

Anyway, look at the shareholders of all the major highway concessionaires la.. WHO IS THE MAJORITY STAKEHOLDER?? UMNO and MCA!!! Now you know why the concessionaires are GUARANTEED profits from TAXPAYER money!

Anonymous said...

"Anyway, look at the shareholders of all the major highway concessionaires la"

How about those highway which lose money?
If lose means confirm non-BN shareholders?

I found that the people who comments on the post have a very "interesting" view.

Anonymous said...

"How about those highway which lose money?
If lose means confirm non-BN shareholders?

I found that the people who comments on the post have a very "interesting" view."

The subject matter is the LDP which has GUARANTEED profits and is virtually riskless to the toll concessionary.

Hence, the outcry on biased toll contracts between the govt and the toll concessionary.

There is inherently nothing interesting about it except to point out that a gross injustice has been done.

It's obvious that you are one of those UMNO/ BN stooges who's in the take on this and has NOTHING substantive to argue your way out of a paper bag, much less against facts as posted in this blog.

Anonymous said...

The highway that lose money will be bailed out by government, e.g. Seremban-PD highway, with no financial lose to the original owner - Melewar group.

Unknown said...

mr rich businessman,

real profit had already started! a special dividend amounted to hundreds of millions, being excess cash flow, have been given to the shraeholders last year. Thats 2008 and its 8 years earlier than what you said.
By the way, toll concessionaires dont look at profits only. ITS NET CASH INFLOW!
And how many people wtih 1.0 billiob prepared to invest in LDP toll? For your info, there will be a long line of investors queuing from taman tun to I utama salivating over a risk-free projcect. Anytime, i take it with minimum 14% return with guarantees from the govt.

Anonymous said...

In the first place, why were the public roads privatised? Who are the directors behind the toll companies? Why is the gov not capable of operating or maintaining the roads? If the gov can't do that, how can they run a country? Profits from the tolls should be channelled back to the public, not to a few (directors or proxies). Moreover, toll booth operators are a watse of man-power. Tolls are also causes of pollution, jams & watse of land. Tolls are usually in developing countries but not in developed countries...why?

Anonymous said...

A genuine businessman profits & contribute to society. Not only looking at the point of profiting. Unfortunately, in today's world, there is probably only 10% or even less genuine businessmen, let alone business entities (just look at the companies listed in the KLSE stock market...). Someone once described to me how the Chinese word for business man is conceptualised - unfortunately, I don't read Chinese but the concept or the combination of the various Chinese characters that define a businessman is very deep in the true Chinese language. Similarly, government officials in Chinese languag carry 2-mouths in the characters (this could also mean 2 tongues...haha), therefore, meaning even over 2000 years ago, the officials in the Chinese courts were already very good at spin-doctoring.

Apart from providing smooth traffic flow after midnight, all tolls esp in Klang Valley is a nightmare. So my question to Transport Minister - what is your solution & stop harping or challenging DAP or Pakatan about Hu-dud this & Hu-dud that? We all know Hu-dud what already. As far as non-Muslims are concerned, PAS is the lesser devil than BN - do we hear of any non-Muslims complain in Kelantan? It is immature of any political party to even bring about religious issues into politics - to threat the people. Leave religion out of politics.

We have already seen so many pseudo-Hudud laws fully abused by BN to their advantage. When that happened, where was MCA's 2-mouth worth of words? or even MIC.

Anonymous said...

We should back to the basic rather than focus on contracts .....
Who is the major shareholders for PLUS?
Answer is Khazanah Nasional Berhad
Direct Holding 23.67% and Indirect Holding 40.21% via UEM. and EPF 10.17% Holding.(Latest shareholder report published by PLUS Expressway Berhad on 30 April 2008)
Who own Khazanah Nasional Berahd and EPF? :)

Anonymous said...

1, there's no risk as the govt guaranteed profit.
2, if you study biz admin, the first thing they tell u is to maximize profit for the company. give back to society? that's branding exercise. but every biz is doing it - maximize profit. tragedy of the commons?

Anonymous said...

yang kaya semakin kaya,
yang miskin terus merana