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Samy Vellu should explain why the government agreed to such unfavourable toll concessionaire agreement with Lingkaran Trans Kota Holdings Bhd (Litrak) that allows an after-tax profit of RM18,865 million when the total capital cost for the Lebuhraya Damansara-Puchong (LDP) toll is only RM1,327 million
by Lim Guan Eng
(Petaling Jaya, Friday): The people have finally succeeded in compelling the government and Works Minister Datuk S. Samy Vellu to bow to public pressure to make public the toll concessionaire agreement with Litrak for the LDP. DAP had strongly opposed the government's abuse of the Official Secrets Act (OSA) to prevent the terms and conditions to be fully disclosed to the public and even investigating 4 opposition leaders (including DAP's NGO Bureau chief Ronnie Liu) for revealing the toll agreement.
Following the agreement of Samy to recommend to Cabinet to declassify and make public such toll agreements, DAP urges the government to stop all investigations on the four opposition leaders and publicly apologise to them for all the trouble caused on them when they were only doing their public duty. Whatever the rationale employed by Samy to claim that the toll concessionaire agreement was an OSA document, the key details of the agreement was already fully disclosed to the public as early as 12 November 1996 in the prospectus by Litrak seeking an Initial Public Offering (IPO) in the then Kuala Lumpur Stock Exchange.
If the government wishes to investigate the four opposition leaders, justice requires that the police investigate the directors of Litrak, the bankers who were privy to such secrets local bankers Arab-Malaysian Merchant Bank Bhd and foreign banker Barclays de Zoete Wedd Ltd. Any failure to do so would not only demonstrate double-standards and selective persecution by the government.
Samy Vellu should also explain the rationale of agreeing to such an unfavourable toll concessionaire agreement that benefits Litrak at the expense of the public. For an initial capital cost of RM 1,327 million, inclusive of capitalised interest of RM 142.3 million, this 30 year concession agreement allow Litrak to a profit before tax of RM 27,066 million and an after-tax profit of RM 18,865 million. To get a profit after tax of RM 18,865 million from an initial capital outlay of only RM 1,327 million is a fantastic return of investment of 1,322%. In other words by 2029, Litrak would earn more than 13 times what it put in.
This gives rise to the crucial question, if it is so profitable a business venture, why does the government not undertake to build the highway itself? In fact by buying over the LDP highway at the cost price of RM 1,327 million, the government can reduce the toll rate to a nominal price and yet recover its cost.
The refusal by the government to adopt this logical and rational economic approach has only driven the public to conclude that the government is only intent on enriching certain cronies of BN at the expense of the public. DAP challenges Samy to explain why Litrak can earn more than 13 times its investment at the same time when the government is fully guaranteeing Litrak against the risks of losses.
* Lim Guan Eng, Secretary-General of DAP