Media statement by Lim Guan Eng in Kuala Lumpur on Sunday, 29^th January 2012: 

PM must explain the public benefit of the RM7.07 billion 60-Year concession to Europlus is in the public interest 

Prime Minister Datuk Seri Najib Tun Razak must explain the public benefit of the RM7.07 billion 60-year concession to Kumpulan Europlus Bhd(Europlus) for constructing a 316 km highway from Banting to Taiping and whether the RM 2.24 billion soft loans, 3% interest subsidies for commercial loans for 22 years and RM 980 million grant for land acquisition cost is in the public interest. Europlus had announced that it had received an approval letter to construct the 316 km highway from the Public Private Partnership unit of the Prime Minister’s Department.

DAP is curious why the Federal government had still not make any announcement on such an important highway concession which violates the basic principles of public accountability and transparency. Before the government signs this agreement with Europlus, the Prime Minister must ensure that the following 7 questions why Europlus was given such a good deal are fully answered.

1. Was there an open tender, and if no why not. If yes, who were the other parties and why were their bids rejected?

2. Why was Europlus chosen when they have no proven track record in build-operate-transfer(BOT) of highway concession and its principal owners have a troubled history of problematic housing development projects?

3. How can the government grant such a long concession period of 60 years, which is the longest in Malaysian history, second only to Malaysia's 100 year agreement to supply water to Singapore in the 1960s?

4. What was the rationale of granting a soft loan of RM2.24 billion from 2013 at 4% interest and also offer an interest subsidy of 3% from commercial loans for 22 years? Both interest subsidies which may cost the Federal government RM4 billion assuming a principal loan of RM6 billion.

5. Why should the government pay RM980 million for land acquisition cost if this is a privatised project?

6. Why is the cost for the 316 km highway at RM7.07 billion or RM22.3 million per km more than double the cost of building a similar highway in India at RM10 million per km?

7. If this newest toll concession is the alternative to the already congested North South Highway, why stop at Taiping? Why is the Europlus concession not extended to Penang which is even more heavily congested? This is unfair not just to Penangites but also Kedahans.

For the Prime Minister's Department to grant a 60 year concession period means, that generations of Malaysian will be compelled to pay toll, from me to my great grand-children. This is unacceptable and giving such a long concession only benefits the few, allowing the toll operators to earn mega profits of Pharaonic proportions at the expense of 28 million ordinary Malaysians.

Malaysians can no longer tolerate another North-South Expressway(NSE) scandal, where the toll operator is given a 50 year concession period until 2038 even though they have reaped profits many times over their investment outlay. The NSE costs RM6 billion to build and as at 31.12.2010, the toll operator has already received RM24.3 billion, landing a cool RM18.3 billion in profits.

Why should the NSE operator be allowed to continue to collect till 2038 and hike up toll rates when they have earned such massive and Pharonic-like profits of RM18.3 billion, 3 times the construction cost? Enough is enough! That is why PR is pressing for the abolition of tolls on the NSE in view of the pharonic like profits earned by the toll operator.

Is the RM7.07 billion Europlus highway concession deal another scandal in the making? Malaysians do not want another NSE scandal. The Prime Minister must fully answer the 7 questions to ensure that public benefit is assured and public interest is protected in this Europlus RM7.07 billion 60-year concession deal.

*Lim Guan Eng, DAP Secretary General & MP for Bagan