Yup! We're Responsible!

When I saw the above picture in the Star (and later the real thing on site) two days ago, I had a great laugh. The Star captioned it "General Elections Coming...", but I thought it was an open admission that they are the parties responsible for the unreasonably high toll rates Malaysians have to pay to pass the toll booths, which in this case is located at the SPRINT Highway. ;)

It'd be a real joke when BN actually decides to put up their election banners around the highways and toll booths - "Satu Lagi Projek Barisan Nasional". ;)

Oh, and in case you are wondering, the posters were put up by Masterskill College of Nursing & Health, apparently to celebrate the nation's 50th birthday. But for those living in the Klang Valley, particularly in the Damansara area, you'd find that this college has a tendency to "curry favour" the nation's leaders with banners with their faces across the town.

How these banners reflect the quality of the college is of course, anybody's guess ;)

My "Maiden" Speech

Well, there certainly wasn't much glory or prestige about the "maiden" speech, because when I was finally given my turn to speak, I had only 5 minutes to do so. Jeff who sat next to me, gave up altogether 'cos by the time it reached him, it was 2 minutes. It's really frustrating, because to be called to speak, you have to keep standing whenever someone else completes his speech and hope that the Speaker will call your constituency. And I certainly found DAP MPs, on a general basis, to have received less opportunities to speak compared to the other opposition MPs.

And having prepared my speech fairly early on, I've been standing and sitting for practically 4-5 days. I can understand the fact that senior backbenchers and party leaders are often given preference, but it's really frustrating because, you will find MPs (both sides) who aren't in the Dewan very often, who didn't prepare their speech, gets called upon much earlier (when the time frame to speak was 15-20 minutes), when they happen to be in the Dewan.

Oh well, to get recorded into the Hansard, I just picked 3 sections from my speech below to read (literally) and it certainly wasn't pretty 'cos I was probably reading at Rocket speed. Hopefully, I'd get better luck and opportunity during the supplementary budget debate which is coming up in about a week's time.

Anyway, my original speech which I had intended to deliver is below for those interested, and the sections I squeezed into 5 minutes were on Manufacturing, Toll & Other Concession as well as Open Tenders.

Ekonomi

Mengikut statistik kerajaan, ekonomi Malaysia berkembang sebanyak 6.3% pada tahun yang lalu. Sepatutnya, perkembangan 6.3% amat membanggakan.Akan tetapi ekonomi Malaysia mempunyai ciri-ciri istimewa, adakah perkembangan sebanyak 6.3% memberi gambaran yang benar mengenai ekonomi Malaysia?

Kini, ekonomi Malaysia amat bergantung kepada pendapatan yang dibawa oleh industri gas dan minyak mentah dan juga lain-lain komoditi seperti minyak kelapa sawit, getah dan lain-lain tanaman komersil. Oleh kerana harga minyak mentah dan juga komoditi ekspot Malaysia telah meningkat dengan dahsyat sekali pada tahun-tahun yang lalu, ianya telah mengakibatkan kenaikan hasil dan menjadi punca terutama perkembangan ekonomi.

Misalnya, industri gas dan minyak mentah membawa sebanyak 37% pendapatan kerajaan pada tahun lalu berbanding dengan hanya lebih kurang 25% pada tahun 2004. Hasil petroleum adalah macam keuntungan daripada belian nombor ekor 4D, dan kerajaan tidak boleh bergantung kepadanya kerana ianya akan kehabisan satu hari.

Apabila faktor kenaikan harga minyak mentah, komoditi ekspot dan juga produk industri berkaitan dikecualikan dari pengiraan perkembangan ekonomi, saya yakin perkembangan ekonomi tidak melebihi 3 atau 4%. Ini bermaksud, kebanyakan rakyat Malaysia yang bekerja di sektor-sektor lain yang lebih “labor-intensif”, tidak dapat menerima manfaat daripada perkembangan ekonomi pada masa ini.

Manufacturing Industry

Pada tahun 2006, industri pembuatan berkembang sebanyak 7.3%. Akan tetapi tahun lalu, ianya hanya berkembang 3.1%. Dalam belanjawan negara 2008, Perdana Menteri mengumumkan bahawa sektor pembuatan akan dijangka berkembang 3.8% tahun ini. Akan tetapi, gabenor Bank Negara baru sahaja mengumumkan bahawa sektor yang amat penting ini, hanya akan berkembang sebanyak 1.8%.

Ini adalah perkembangan yang amat merisaukan kerana sektor pembuatan adalah sektor yang sangat penting bagi Malaysia. Bukan sahaja sektor pembuatan menyumbangkan sekurang-kurangnya 31% kepada GDP negara kita, ia merupakan sektor yang membawa pekerjaan kepada 30% pekerja Malaysia. Jikalau ianya tidak berkembang, pandangan ekonomi masa depan kita memang kurang cerah./Mundur

Berbanding dengan Malaysia, walaupun Singapura kekurangan tanah dan sumber semulajadi, kos yang jauh lebih tinggi, sektor pembuatan berkembang sebanyak 7.3% pada tahun lalu, dan 13.2% pada penggal pertama tahun ini.

Walaupun kedua-dua negara menimpa keadaan ekonomi global yang kurang memuaskan, terutamanya disebabkan oleh dengan izin, liquidity cruch caused by subprime loan crisis, Singapura dapat terus maju dengan lancar, di mana Malaysia nampaknya ketinggalan.

Oleh sebab itu, kerajaan mestilah memberi tumpuan yang sepenuhnya untuk memulihkan kembali industri pembuatan di Malaysia. Antara langkah-langkah yang diperlukan termasuk memberikan insentif cukai yang lebih menarik kepada industri kecil dan serdehana (SMI) berbanding dengan negara-negara jiran seperti Hong Kong dan Singapura di mana cukai syarikat tidak melebihi 18%.

Selain daripada kerajaan menumpukan perhatian ke perlaksanaan koridor-koridor yang baru, yang sebenarnya merupakan projek hartanah, kerajaan perlu menumpukan perhatian ke aspek menarik pihak usahawan dalam dan luar negeri yang dapat membawa kilang yang membuat produk-produk berteknologi tinggi, yang kini tidak mencukupi di Malaysia. Jika Malaysia terus bergantung kepada industri pembuatan di mana “value-add” rendah, industri pembuatan kita tidak akan maju, dan perkembangan akan terus merosot.

Inflation

Kerajaan juga selalu menitikberatkan bahawa kadar inflasi pada tahun lalu hanya 2% sahaja. Kami dapat memahami kekecewaan rakyat jelata kerana angka 2% tersebut tidak mencerminkan keadaan sebenar. Kadar tol melonjak sebanyak 60% pada tahun lalu, dan sebanyak 50% tahun ini. Harga petrol dan barangan berkaitan pun telah naik sebanyak 20 sehingga 30%. Mengikut siasatan media, harga makanan dan barangan kegunaan biasa telahpun meningkat sebanyak 15 sehingga 25%.

Yang paling utama, kerajaan perlu merombak pengiraan kadar inflasi yang tidak lagi selaras dengan keadaan sebenar, dan tidak mengambil kira kesengsaraan rakyat jelata. Perangkaan kadar inflasi masih mengambil kera harga barangan yang dikawal walaupun itanya tidak lagi dapat diperolehi di pasar awam. Pengiraan perlu mencerminkan keadaan sebenar supaya langkah-langkah yang tertentu dapat direkacipta dan dilaksanakan untuk mengurangkan beban masyarakat.

Kerajaan dialu-alukan supaya mengambil tingkah membebaskan pasaran, meningkatkan taraf persaingan supaya harga barangan dapat diturunkan serendah mungkin. Misalnya, kuasa mengimpot beras bagi konsumer dan kuasa mengimpot simen bagi pihak kontraktor hanya dipegang oleh 2-3 syarikat sahaja, dan dapatlah mereka menguasai harga pasaran di Malaysia.

Toll & Other Concessions

Apa lagi kerajaan memberi konsesi tol dan konsesi IPP kepada syarikat-syarikat kroni secara rundingan terus telah meyebabkan keuntungan yang tersangat lumayan kepada syarikat konsesi. Yang dibebankan adalah pembayar hasil kepada kerajaan dan sekali lagi, rakyat Malaysia jelata.

Apa lagi baru-baru ini, kita diberitahu bahawa konsesi yang ditawarkan kepada syarikat KLIA Express oleh kerajaan, memberi kuasa untuk syarikat tersebut mengutip “cukai” daripada setiap pelanggan penerbangan di KLIA, tidak kira sama ada pelanggan tersebut menggunakan perkhidmatan Express. Ini adalah perkembangan yang amat membimbangkan.

Dulu sekurang-kurangnya, hanya pengguna tol yang dikenakan “tax”, walaupun “tax” tersebut tidak saksama, kini, kita mendapati kerajaan memberi kuasa kepada syarikat untuk “tax” rakyat yang langsung tidak menggunakan perkhidmatan? Adakah polis akan menyiasat kes ini sebagai kes rompakan “daylight robbery”?

Saya harap dengan sesungguhnya, kerajaan akan mengambil kira beban yang ditanggung rakyat kita dan berunding semula kontrak-kontrak yang berat sebelah ini, dan jikalau syarikat berkaitan kurang ikhlas dalam rundingan tersebut, kerajaan perlu mempertimbangkan cadangan membeli konsesi tersebut mengikut kos pembinaan lebuhraya dan plan tenaga.

Subsidy

Saya berasa lega bahawa Menteri Dalam Negeri dan Hal-Ehwal Pengguna menyatakan Yang Berhormat akan merombak semula sistem kawalan harga dan juga sistem subsidi sekarang yang kurang memberikan manfaat kepada rakyat yang kurang keupayaan dari segi kewangan.

Akan tetapi, sebelum subsidi dikurangkan, kerajaan perlu mengambil 3 langkah yang penting sekali:

Pertama, seperti yang diulaskan, kerajaan perlu mengubahsuai kontrak-kontrak jenis “daylight robbery” supaya harga tol, elektrik dan lain-lain dapat direndahkan.

Kedua, sebelum harga petrol dinaiki, sistem pengangkutan awam perlulah dinaiktarafkan supaya bagi rakyat, terutamanya rakyat dikawasan bandar, ada cara perjalanan alternatif seperti sistem bas yang “reliable” dan sistem LRT yang berleluasa.

Ketiga, kesemua subsidi yang dijimatkan melalui potongan subsidi akan disalurkan secara terus kepada golongan masyarakat yang memerlukan wang tersebut. Cara yang boleh digunakan termasuklah melalui peruntukan ke akaun EPF bagi pekerja-pekerja bergaji rendah, yang akan pada masa yang sama mendekati hasrat MTUC untuk mendapatkan “fair wage”, ataupun gaji yang berpatutan.

Adalah dialu-alukan supaya kerajaan mempertimbangkan cadangan DAP untuk memperuntukkan grant sebanyak RM3,000 kepada individu yang layak dari segi pendapatan, apabila subsidi dikurangkan kerajaan untuk mengurangkan beban rakyat Malaysia.

Negara Singapura dan Hong Kong, dua-dua negara yang langsung tidak ada sumber semulajadi seperti minyak, gas, balak, tanah untuk tanaman komersil seperti minyak sawit, dapat mengendalikan polisi grant tunai kepada rakyat mereka yang kurang berupaya dari segi kewangan. Malaysia sebagai antara sebuah negara yang terkaya dengan sumber minyak di seluruh dunia, patut mengikut teladan yang baik dimana nasib rakyat diutamakan, apatah lagi minyak yang digali Petronas adalah minyak kepunyaan semua rakyat Malaysia.

Open Tenders

Pada masa awal pentadbiran Perdana Menteri, Yang Amat Berhormat berjanji dihadapan pihak peniaga bahawa “open tender” ataupun tender terbuka akan menjadi sistem perolehan terutama dalam pentadbiran Yang Amat Berhormat. Pada masa itu, tahun 2003-2004, saya amat menyokong Yang Amat Berhormat.

Akan tetapi, dan amat dikesali, perutusan Yang Amat Berhormat tidak dilaksanakan, malah, trend tender semakin tertutup dan rundingan terus menjadi sistem terutama.
Misalnya, Jambatan Pulau Pinang Kedua yang telahpun ditawarkan kepada syarikat UEM tanpa sebarang tender. Bukan sahaja kontrak membina jambatan diberi secara terus, kontrak ditawarkan sebelum harga pembinaan ditentukan!

Adakah seorang makcik yang membeli sayur di pasar membeli sayur sebelum tawar-menawar harga? Tidak! Adakah Yang Berhormat semua akan membeli sebuah kereta jika harga kereta tersebut naik serta-merta selepas tempahan diberikan? Bolehjadi makcik-makcik dapat memberikan kursus dan taklimat kepada pihak kerajaan mengenai cara rundingan harga yang berkesan.

Akan tetapi, nampaknya cara perolehan kerajaan menunjukkan ciri-ciri “Malaysia Boleh”. Semasa kontrak ditawarkan kepada syarikat UEM pada tahun 2005, YAB Perdana Menteri mengumumkan bahawa kos membina jambatan dianggarkan RM2.5 bilion. Akan tetapi, pada akhir tahun 2006, rakyat diberitahu kos pembinaan telah naik ke RM3.5 bilion.

Tapi sekarang, sebelum projek dimulakan, rakyat diberitahu bahawa kos telah naik sekali lagi ke RM4.3 bilion, ataupun 72% daripada harga asal. Akan tetapi, lagi – pihak media telahpun mendapat angin bahawa UEM sekarang meminta kos dinaikkan setinggi RM4.8 billion! Sampai Bila nak henti?

Jikalau UEM tidak lagi memulakan pekerjaan, ataupun meminta kenaikan harga yang melampau, kita harap kerajaan akan membubarkan kontrak pembinaan tersebut, dan membuka semula pilihan pembinaan jambatan dengan secara terbuka, kompetitif dan juga transparen.

Hanya dengan cara ini, rakyat Malaysia boleh menikmati kos pembinaan yang berpatutan, tol penggunaan jambatan yang rendah dan pada masa yang sama, pihak pembina dan pembangun dapat meningkatkan taraf persaingan mereka dan tidak lagi bergantung kepada “handout” kerajaan.

Higher Education

Jika mengambil kira jangka masa yang panjang, ekonomi Malaysia tidak akan maju tanpa mutu pendidikan, terutamanya pengajian tinggi dipertingkatkan secara dengan izin “quantum leap”.

Walaupun di Malaysia, nisbah jumlah universiti berbanding dengan bilangan penduduk, jika dibandingkan dengan pulau yang kecil di selatan Selat Johor adalah lebih daripada dua kali ganda, mutu institusi pengajian tinggi amat mengecewakan.

40 lebih universiti, tiada satu dapat memasuki kedudukan “Top 200”. Ini perkara yang amat memalukan. Singapura hanya ada 3 buah universiti tempatan, akan tetapi ia mempunayai 2 buah universiti dalam 50 buah universiti yang terunggul. Kenapa?

Sebabnya ternyata kepada semua orang, kecuali kerajaan nampaknya. Tanpa pihak akademik ataupun pensyarah yang bertaraf dunia, kita tidak akan mencapai matlamat mempertingkatkan mutu universiti. Apa gunanya kerajaan tidak melaksanakan sistem yang lebih kompetitif, sebaliknya melindungi akademik yang kurang berkualiti, jikalau yang rugi besar sekali adalah penuntut-penuntut di institusi pengajian kita.

Bila kualiti akademik rendah, mutu pendidikan pun kurang sempurna, dan tentulah siswazah setelah habis pengajian, kurang berupaya mendapatkan pekerjaan, siapa yang salah?

Apa lagi, sistem IPTA yang sedia ada sekarang, untuk mencapai matlamat DEB memang bertujuan meningkatkan taraf pendidikan kaum bumiputera. Saya sokong. Akan tetapi, apabila, sistem masuk universiti tidak kompetitif, tambah lagi mutu akademik yang tidak mencukup, yang rugi ialah kaum yang kerajaan ingin menolong.

Oleh itu, saya bercadang dengan iklas, supaya universiti-universiti di Malaysia diberikan kebebasan untuk melantik naib-canselor yang bertaraf dunia tidak kira bangsa, agama dan juga kewarganegaraan.

Sekarang zaman globalisasi, kalaulah, kita dapat belajar dengan “sifu” ataupun guru yang berarif, patutlah kita berbuat demikian demi masa hadapan belia Malaysia. Bagilah peluang kepada naib-canselor ini untuk merombak semula sistem pentadbiran and pengajaran di universiti kita demi mencegah qualiti universiti terus merosot.

Lower Education

Pada masa yang sama, kalau pelajar yang dilatih oleh sistem pendidikan kebangsaan tidak mempunyai kualiti yang mencukupi. Kementerian telahpun membuat pengajian lebih kurang tiap-tiap penggal parlimen dan membuat cadangan-cadangan merombak semula sukatan pelajaran dan sistem peperiksaan.

Akan tetapi, kerajaan boleh merombak semula sukatan pelajaran dan melaksanakan jenis-jenis sistem peperiksaan, kalaulah kualiti pendidik dan guru-guru tidak mencukupi, apa sistem pendidikan ataupun peperiksaan juga tidak akan berkesan menaik taraf kualiti pelajar di sekolah-sekolah menengah dan rendah di Malaysia.

Saya berpendirian bahawa pendapatan guru-guru di Malaysia terlalu rendah, dan langsung tidak menarik bagi bakal-bakal guru yang berkualiti. Di Singapura, seorang siswazah berperingkat “Honours”, gaji permulaan adalah sebanyak S$2,822, akan tetapi, bagi peringkat yang sama di Malaysia tidak melebihi RM1,500.

Saya bercadang supaya kerajaan mengaji semula skala gaji perguruan di Malaysia, dan mengadakan kelas dan skala gaji yang ekslusif bagi bidang pekerjaan pendidikan kerajaan. Pendidikan adalah satu sector yang amat penting untuk mengekalkan masa depan belia dan membina “human capital”, dengan izin, yang akan menjadi enjin pembangunan negara yang terutama sekali. Oleh itu, kelas yang ekslusif ini adalah amat diperlukan dan berpatutan untuk menarik bakal perguruan yang terunggul di Malaysia.

Crime

Ramai Yang Berhormat telahpun membahas menenai kes jenayah sekian meningkat dan amat serius. Selepas memenangi pilihanraya kawasan PJU, lebih kurang 40% aduan kepada saya adalah mengenai kes jenayah di kawasan saya dan juga di sekeliling.

Sewaktu rakyat Malaysia menunggu lebih ramai lagi rekrut polis baru dilatih untuk melawan jenayah, kita semua berharap Kementerian Dalam Negeri dan juga pihak Polis Diraja Malaysia akan serta-merta mengubahsuai struktur tanggungjawab anggota-anggota polis supaya lebih ramai lagi diberi tanggungjawab melawan jenayah, dan bukan membuat kerja pentadbiran (administrative) ataupun kerja bahagian khas.

Saya harap dengan sesungguhnya, kritik-kritik yang dibawa ke dewan yang mulia ini dan juga cadangan-cadangan yang diumumkan dapat diberikan pertimbangan yang sepenuhnya oleh kerajaan, selepas mengalami tsunami politik pilihanraya besar ke-12.

Sekian, terima kasih.

Mahkota Cheras - Selangor Government Must Act

The state of Mahkota Cheras controversy has deteriorated into a farce when the Federal Reserve Units (FRU), equipped with water cannons and all, were deployed by the Grand Saga Highway concessionaire to construct a barricade across a road which has been proven by the Hulu Langat Land Office in a letter dated April 22, 2008 as belonging to the state.

While it is comforting to note that the Menteri Besar, Tan Sri Khalid Ibrahim has acknowledged, as per the Star report yesterday that “the residents had the right to use the access road without having to pay toll”, it is disappointing that he had not taken a stronger stand on the issue, and in fact had not dealt with it much earlier when the FRU was first deployed, or even before that.

This has resulted in the situation clearly getting out of control, with a fracas between the residents and the FRU units in the wee hours of the morning 2 days ago (see video here), and a Member of Parliament lying in the hospital at this point of time, having been assaulted by the police.

It is critical that the new state government demonstrate political will and determination to stand for what is right and just, without fear or favour, instead of wavering in uncertainty or adopting a “we will look into it” or “we will have to discuss further” culture which is reminiscent of the previous Barisan Nasional government. It is of great concern that Tan Sri Khalid Ibrahim had qualified his statement on the “right of use” by saying that the state government must also take into consideration that the toll is the source of revenue for the company.

With the state ownership of the land no longer in dispute, the local government, in this case the Kajang Municipal Council (MPKj), must take all necessary actions to prevent illegal structures from being constructed on state land.

If an enforcement officer does not hesitate to compound a car parked temporarily but illegally on a state road, why should MPKj decline to take action, via compounds and summons, against the parties who are erecting a permanent structure in the middle of the road? In fact, any party who persist in constructing illegal barriers, in the face of compounds issued, must be charged in the court of law.

As the old adage that we members of the opposition is so fond of using, “justice must not only be done, but seen to be done”. The rakyat will be understandably discontented if the government enforces the law against the man on the street, while allows room for negotiation and delay when commercial interests are involved.

It is hence critical that the Menteri Besar of Selangor demonstrate much greater urgency in the matter, without letting the situation deteriorate further than it already has via inertia. If the first night's deployment of the FRU against residents who wanted the law upheld has not injected such urgency, then we certainly hope that the second night's deployment would have.

The new state government is being given certain leeway to perform by the people of Selangor. However, it will quickly lose its goodwill if the people's interest are not given priority.

Toll Review

I complained about the fact that none of my questions were scheduled to be heard in Parliament during question time because the highest for this period was at No. 20. However, it was much to my surprised yesterday evening, to find one of my questions scheduled to be answered at No. 6 today. ;-)

The question was to the Minister of Works:

[Berapakah] pendapatan, keuntungan kumulatif syarikat-syarikat konsesi tol dan adakah Kerajaan akan mengambil langkah tertentu untuk merunding semula ciri-ciri kontrak yang tidak seimbang dan membebankan orang ramai.

The official reply was:

Untuk makluman ahli yang berhormat sehingga Disember tahun 2007 terdapat 22 buah lebuhraya bertol yang sedang beroperasi di bawah pengawasn Lembaga Lebuhraya Malaysia.

Sehingga tahun 2007, jumlah keseluruhan pendapatan dan keuntungan kumulatif bagi syarikat-syarikat konsesi lebuhraya berkenaan semenjak diswastakan sehingga kini adalah seperti berikut:

(i) Jumlah keseluruhan pendapatan kumulative ialah RM27.6 bilion
(ii) Jumlah keseluruhan keuntungan kumulatif RM3.5 bilion

Untuk makluman ahli yang berhormat, kerajaan sentiasa meneliti perjanjian-perjanjian konsesi lubuhraya sedia ada bagi memastikan perjanjian itu tidak berat sebelah serta tidak membebankan pengguna lebuhraya.

Unfortunately, when the answer was given orally, the numbers didn't "sink" in, but now on relooking at the numbers, it doesn't seem to make sense as PLUS on its own already made much more than the RM3.5 bilion above. So I'll have to recheck my own figures again.

However, the Minister did point out that a Toll Review Mechanism is being put in place, and he admitted that the contracts which provides abnormal profits to some of these concessions will be renegotiated - a first-time admission, I believe. He also announced plans to differentiate toll policies between those in urban areas, and those which were inter-state.

I also heard from the reporters that the Minister announced to the press that the study will be announced in 3 months.

While the numbers announced were a little suspect, it is encouraging that the Minister in appearance at least, seems to be more cognizant of the discontent amongst Malaysians with the rising toll rates, especially in the fact of inflationary pressures from all aspects, after the political tsunami of March 8th. Comparatively, the previous Minister would just wave away all complaints and suggestions.

I also posted a supplementary question, which I did so probably too nervously (first time in Parliament lah...) as follows:

Terima kasih ke atas jawaban yang diberi oleh Menteri Kerja Raya yang baru yang menggalakkan, yang kita semua harap akan membawa satu pentadbiran yang baru atau dengan izin, "paradigm shift" berbanding dengan institusi yang lama.

Adakah Kementerian Kerja Raya bercadang supaya PLUS, syarikat konsesi Lebuhraya Utara Selatan akan diberikan hak untuk meningkatkan kadar tol pada tahun ini ataupun tahun depan, selepas cadangannya untuk menaiki kadar tol ditangguh pada awal tahun ini.

Dan kalau terus ditangguh, berapakah jumlah gantirugi yang kerajaan perlu bayar kepada syarikat PLUS yang ternyata telah mendapat keuntungan yang lumayan sekali?

The Minister replied that the postponement was for 1 year, but as he went off-tangent on some other policies, he didn't answer the second part of my question (amount of compensation), and subsequent request was not heard by the Speaker. Well, will have to wait for the next opportunity then. ;-)

But it does appear, for now at least, that the BN government is slowing waking up from its slumber, and all the pressure applied by the opposition and the rakyat, may just bear some fruit. ;-)

See also the latest report posted in The Star, and here in Malaysiakini on the Minister's response.

"Excessive Profits"

We have always been griping that the Government compensates the toll concessionaires too much, or the toll rates are set at unreasonably high levels. But no one is really in the know as to how much these toll concessionaires make in terms of profits, not exactly anyway, even though many of these companies are listed entities.

So when I got my hands on a copy of the Lebuhraya Damansara-Puchong (LDP) concessionaire, Litrak's stock exchange listing prospectus issued in November 1996, I (figuratively) fell off my chair.

Here's a little background about listing prospectuses. They are issued firstly not only as information with regards to the prospective company, but also a document to protect investors from unscrupulous businessmen. That means that all information contained in the prospectus must be fair and true, with all statements and forward projections verified and validated by lawyers, accountants, market researchers as well as regulators. Non-compliance or provision of information found to misleading or untrue will land the various parties, including the directors of the company itself into hot soup.

Within the prospectus itself, there is no other piece of information more important than earnings projections, for it is the key benchmark by which investors can make reasonable evaluation on the worth of the company. Companies seeking listings without earnings certainty, need not make such forecasts or projections. Hence, when Litrak made their 30 year earnings projection based on their LDP concession agreement, you can be certain that it was almost as good as gold.

Well, lets get to the juicy details:

Cost of building LDP: RM1.327 billion

The total capital cost of construction of the Highway is currently estimated at RM1.327 billion inclusive of capitalised interest of RM142.3 million.

Projected Profit after Tax (PAT) over 30 year concession period: RM18.865 billion

Projected PAT 1997-2006: RM1.222 billion
Projected PAT 2007-2015: RM3.826 billion
Projected PAT 2016-2029: RM13.817 billion

Yes, you've read it right. Over a short period of 30 years, Litrak is practically guarateed of RM18.7 billion profits, relative to an initial cost of RM1.3 billion. That's more than 14.2 times return on capital. The LDP concession agreement signed by our elected Barisan Nasional government virtually guaranteed “excessive profits at the public's expense”.

Even if the Government had funded the construction of LDP by issuing generous high yielding treasury bonds at 5% rate, the overall cost of construction taking into account interests payable would only have amounted to no more than RM5.75 billion.

More than RM10 billion of our hard-earned tax payers' monies are literally siphoned off for the benefit of the few politically connected. There was no open or competitive tenders made for the concession rights..

And this is only for a single highway project. Can you imagine the cumulative impact of the tens of highway concessions in this country? Is it "excessive (guaranteed) profits"? You decide.

SYABAS v PBA

The Selangor State Government has promised that if we were to take over the operations and maintenance of the water concessions in Selangor, we will be able to immediately offer a 10% reduction in water tariffs, while longer term improvements in efficiency will easily bring about a 25% reduction in tariffs within 5 years. Instead a bailout is now in progress for these private water concessionaires.

Here's a clear illustration of why it can easily be done by comparing what the people of Selangor pays for water today, relative to our friends in Penang.


The above shows clearly that at the people of Selangor are being fleeced for its water for at every stage, Syabas charges more than double the rates charged by Perbadanan Bekalan Air (PBA) Pulau Pinang! 

In fact, if you use only 38m³ of water a month, in Penang you'd be paying the rate of RM0.42, while in Selangor, you'd be paying a whopping rate of RM2.00, or nearly 5 times the price!  Or in absolute terms, you'll be paying RM11.96 in Penang, but it's an incredible RM32.85 in Selangor and KL!
What's more, PBA is very profitable (check the accounts) despite the lower water rates. It made RM31.3 million last year on revenues of RM187.8 million, or a very decent net profit margin (after tax) of 16.7%.  Therefore Syabas which supplies much more water than Penang, should have the economies of scale to offer even lower prices than Penang!

Hence for the Selangor state to promise that we can cut the fat in Syabas to reduce rates by 25% within 5 years is "chicken feet"!

However, when asked by The Star, the Minister immediately dismissed our pledge:

How can the state reduce the tariffs? To avoid the hike, it would have to compensate the concessionaires and this could amount to RM38 million a month. If we take over the assets, it would be much lower than the 31% [scheduled] tariff hike.

The Minister misses the point, whether intentionally or otherwise.

The whole idea about asking the Federal Government to support Selangor's takeover offer is so that we can get out of the crony contract signed by the previous Minister, which allowed Syabas to increase rates in 2009 by up to 37%, or a monthly RM38 million compensation in exchange.

If Selangor government takes over the assets and concession, we will then be able to offer not just a token "lower tariff hike" but actually be able to cut rates by 10% immediately, and more after working off the fats in the system.

Puncak Niaga Executive Chairman's Pay Package

Puncak Niaga Holdings Bhd (PNHB) Executive Chairman, Tan Sri Rozali Ismail gets paid RM5.1 million in director's fee/salary as per the 2007 Puncak Niaga Holdings Berhad annual report.  It's well within the Top 10 highest paid directors in Malaysia.

According to Malaysian Business, he's also the 33rd richest man in Malaysia, after successfully securing the water privatisation deals in Selangor, under its subsidiaries, Puncak Niaga Sdn Bhd and SYABAS Sdn Bhd.

When asked by reporters about his pay package, he had only this to say, "...If they want professionals to run the company, they will have to pay." Ooooh....ouch!

Now he wants the Federal Government to pay much more for "his" water concession which was granted to PNHB for a song (he rejected Selangor Government's offer), while at the same time, also asking the Government to take over all the companies' bond and loan obligations amounting to RM4.1 billion in total due to ever increasing cashflow problems. (Note: PNHB incurred a quarterly loss (for the first time?) for its most recent Oct-Dec 2008 results.)

Well, looks like in Malaysia, even if you get monkeys to run companies, you will still have to pay.

RM64 Billion Toll Compensation For PLUS

RM63.83 billion.

That's the approximate amount which needs to be paid in terms of compensation PLUS Expressways Bhd between 2008 to 2038 (when the concession ends), should the Government for one reason or other decide to maintain the tariffs at the current rate. That works out to an shocking average of RM2.1 billion a year, and an incredible strain on taxpayers and the Government's finances.

For 2008, the Government has agreed to pay (or have paid) PLUS more than RM731 million in toll compensation (compared to RM698 million in 2007) . With toll rate hikes of 10% scheduled every 3 years, this amount will just keep increasing over the next 30 years.

For example, a Kuala Lumpur - Penang return trip costing RM86.60 today will cost an exhorbitant RM247 by 2038, if the tariff structure is fully complied with. And based on existing compensation terms in the agreement, the Government will have to pay for all loss of revenue from actual traffic volume, which is estimated to increase by 5% annually.

Of course, in between, the Government may just decide to raise the toll rates or alternatively, perpetually extend the toll concession with PLUS. But given the highly charged political scenario where the Barisan Nasional government has little political capital or credibility, the frozen rates may just be extended ad infinitum. Rates will never be raised in the 2 years before general elections, they will also not be raised when there is a change of prime ministers, or even before critical by-elections or for any other reasons.

Of course the compensation figure has yet to take into account the RM112 billion in actual toll which will be collected from the road users over the next 30 years based purely on current toll rates, and an annual 3% increase in traffic volume. The type of returns guaranteed for PLUS, relative to its RM5.9 billion cost of construction is just absolutely mind-boggling. Worse, PLUS isn't even the only highway concession in the country enjoying such lucrative returns (or compensations)!

The BN government has obviously dug a deep deep hole for themselves, and are now stuck between the devil and the deep blue sea, with their past excesses fast catching up on them.

But for PLUS at least, there's an "easy" way out. DAP has proposed that the Government "privatises" PLUS Expressways from Bursa Malaysia with RM13.75 billion which will be more than paid for within 6 years of operations. This means that the Government and hence tax-payers do not have to fork out a single additional cent.

Come on BN, for the sake of the people, let go of your ego and pride and do something right for once! ;-)

"Unsound Mind"

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? ;-)

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.

Why can’t the government buy up the highways?

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.

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 ;-)

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.

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:

• 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
  

Background information:

• 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
  

We call upon the Government to take the following actions:

1. 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.
   
   
2. The cost of acquisition, added to the RM8.5 billion net debt of PLUS will amount to RM13.75 billion.
   
   
3. 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.
   
   
4. 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.
   
   
5. 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.
   

Not only will the execution of the above proposal bring joy to all Malaysians with a toll-free North South Expressway, the exercise will fit perfectly with the upcoming “mini-Budget” by the Finance Minister:

• 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.
  

Hence, the DAP Ops RESTORE Team would like to reiterate our call to both the Finance and Works Minister to include the above proposal in the proposed mini-budget set to be announced by the Finance Minister on the 10th March for the benefit of the Government and all Malaysians.

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.

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.

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)

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:

According to respective company's announcement, the Selangor Government offer to acquire their respective water business without taking over the debt.

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.

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?

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:

"Can We Have Our Highways Back?"
Venue: Crystal Crown Hotel, Petaling Jaya
Date: 18 February (Wed)
Time: 7.30pm

The panel speakers include:

• 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
  

All are welcome. For background information, please feel free to browse the articles here.

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 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.

Taman Medan Toll Plaza Abolished

First of all, we will like to express our sincere thanks to the Works Minister, Datuk Seri Mohd Zin Mohamed for giving Malaysians a Valentine's Day present by abolishing the Kuala Lumpur-bound toll plaza at PJS2 on the New Pantai Expressway (NPE) with immediate effect.

The Minister said removing the toll was also meant to soften the effects of economic uncertainties for the residents of PJS 1 and 2.

However, before Malaysian's decide to pop the champagne bottle for the celebratory dinner marking the possible start to a review of all other toll plazas and toll rates across the country, we will like to call upon the Minister to disclose the compensation paid to the concessionaire for the abolition.

As reported vaguely in The Star today, analysts have disclosed that the concessionaire will be compensated.

In addition, the Minister must disclose the yearly compensation involved relative to the toll revenue collected by the concessionaire annually since 2004.

If the compensation approximates or exceeds the value of the toll revenue collected by the concessionaire, then this Valentine's Day present is not a real present, but is paid for by the rakyat themselves. If such is the case, then it will demonstrate the lack of sincerity of the Barisan Nasional government in restructuring the unfair toll concessions in Malaysia.

If however, there is no compensation paid, or the amount is small, the full credit must be given to the Minister for finally listening to the grievances of the people and we'd provide full support to the Minister to do the same for all other toll roads in Malaysia, particularly those which continue to provide poor service and causes traffic congestion to road users while making extraordinary profits.

'Bad Boy' Samy

I'm not a bad boy, Datuk Seri Samy Vellu, the Works Minister who is under the spotlight would like to tell you.

"Many people think I'm a bad boy as if I decide on the tolls, as if I put people in trouble, that I go for blood and all that. I'm a minister of the government and I implement the decision made by the Cabinet. It's not my decision to raise the toll or to reduce it," said the agitated minister.

So, maybe Datuk Seri Samy Vellu really isn't a bad boy, for surely Will Smith did a much better job at being one. In this case, Datuk Seri Samy Vellu is just a clueless, hapless hatchet man and spokesperson for the UMNO-led Barisan Nasional (BN) government. Of course, the Works Ministry title is just a convenient facade to give the impression that he actually has executive powers.

But then, he went on to "lash out at certain quarters" who said they would buy up the toll companies if they were in his position. Datuk Seri Samy Vellu said that he the toll companies were taken over, "it would cost the government nearly RM500 billion".

Now, not only is Datuk Seri Samy Vellu clueless and hapless, he probably failed his Mathematics (badly) as well. If the overall construction cost of all the 5 highways affected by the unreasonable toll hikes added up to RM4.13 billion, how is it that the Government would need to pay some RM500 billion for the highways?

Is Datuk Seri Samy Vellu and the BN Government out of their minds? Or are we that stupid?