Wednesday, April 01, 2009

MCA: Yes, Please Buy PLUS!

It took a while for the official statement to come out since the highway contracts were declassified in January, but MCA has finally issued an one with regards to the Party supporting the "buy-back" programme for PLUS. See the reports in The Sun and Malaysiakini.

The gist of the proposal is roughly similar to the one presented by DAP's Ops Restore, which was also highlighted in Parliament by Sdr Lim Kit Siang. The Finance Ministry has already responded verbally as well as in writing that the proposal is being evaluated.

The key difference between the DAP and MCA proposal is the treatment of the highways after the buy-back by the Government. We have proposed that it be owned as a Government entity, while MCA has proposed a "socially responsible commercial entity" which continues to give some returns to the Government and EPF. We proposed that the outstanding loans be repaid in full over 6 years, while MCA's proposal will repay these loans at a slower pace over 13 years.

While I find the concept of a "socially responsible" commercial entity at best a difficult concept to make practical, at worst an oxymoron, MCA' proposal is nevertheless much better than the current situation we have based on the existing contract. Hence if their proposal is accepted and tabled in parliament or in public by the Barisan Nasional Government, we will give our full support to the exercise.

Of interesting note though, I find it curious that the examples and figures cited were a little too eerily similar to ours...

MCA said that
...the toll rate is currently set at 14.96 sen per km and by 2038, the toll rate is expected to double to 29.16 sen per km. As such, a trip from KL to Penang costing RM86 one-way would cost RM168 by 2038.
In our published statement earlier, we said that
...a return KL-Penang journey will remain at RM86.60 today instead of RM115.30 in 2015 and RM168.80 by 2030.
And yes, they got the figures wrong. It's RM168.80 by 2030 not 2038. In 2038, the toll rate for a return trip to Penang will be RM247 (!).

Also, MCA suggested
Assuming a share price of RM3.50 to RM4 per share is offered for the acquisition of the remaining shares, the total acquisition price would be between RM4.55 billion and RM5.2 billion.
Wah, based on the current price of less than RM3.00, that's a huge premium offered, between 20% to 38%! Under normal circumstances, a 15% premium will more than suffice.

But as I mentioned earlier, we shouldn't be picky. DAP will fully support MCA's buy-back proposal in principle and we'll even go to the extent of doing a joint committee with them, should it make it more likely for the buy-back to happen.


ken said...

I support Gov take over toll company, because for long term it will help to mitigate our burden. Second, privitization will boost economy during recession. Instead of putting money on such crony company why don't return the money to people, at least we can use the money to buy other goods and reduce the transportation cost.

But i bet BN gov will not approve this proposal, Najib will protect the budget deficit because the idiot took this as an economy indicator to prove he is the great PM.

Unknown said...

MCA, what this party know well?
Bekin Malu la, apa lagi!

Anonymous said...


MCA knows how to come up with a nice proposal that DAP also agree with...

Shock! Surprise!


bla bla bla said...

Good job Tony and DAP for the PLUS buy-back proposal.

I think if MCA is sincere in pushing for the PLUS buy-back for the benefit of the people, MCA President should come out to say something.

True Fiction said...

OK, so people see light at the end of the tunnel.
But what about the crux of the issue? The root cause.
Are you going to let this buy back cover up the people* who failed to do their job in the first place? Are you going to let this nationalisation smother any potential learnings from past mistakes?

Are we going to bury our mistakes again? I have a funny feeling that will be the case.

*people who negotiated and approved the North South Expressway (AND other even more one-sided) concession(s) on behalf of the Government

marcus63 said...

tony, weighing the pros and cons of this mca proposal, tks for your magnanimous decision to ride with it. in politics, there is no absolute right or wrong. it is always the middle path that sastisfy both sides. and this is also a good sign towards bipartisan politics as compared to the barisan vs pakatan stand.
however, it is still too premature to celebrate because the mca has yet to get its approval from its political masters, umno. notice that the mca top leadership has yet to give it the thumbs up. this proposal was sent out to gather public feedback, and in the process win some gummy points. but the leaders are still hiding behind umno's skirt, still no balls between their legs ha...

Anonymous said...

When MCA says "socially responsible private entity" it means friends and family of MCA. Just ask Ling & gang...they know exactly how do it.

l藍海 said...


Khun Pana aka johanssm said...

I do not think mca is serious on this. Lets us treat it as mca's way of "contributing" to their bn buy-elections .
As mca have all the chances and time to revise those contracts long time ago as they are holding the transport folio.
Tony, please do not be too happy with their proposal.
This is nearly the same story with Syabas .The feds keeps on rejecting giving lower water rates to consumers.

KoSong Cafe said...

Don't celebrate yet. If government is serious about it, you can expect a proposal from Umno before it goes to Parliament, to show who is boss as well as take credit for being magnanimous. Win-win formula - win now and win after.

Anyway, Tony and team have done a great job in making it seem probable to get them to consider.