We call on the Malaysian Government to draw up stricter and enforceable terms and conditions for privatization projects so that it can only appoint those who are truly capable of implementing and managing the projects as concessionaires


Media Statement
by Dr Tan Seng Giaw

(Kuala Lumpur, Saturday): After privatizing 471 projects since 1982, it is high time that the Malaysian Government review and improve enforceable terms and conditions in the appointment of concessionaires for privatized projects. These will expedite the process of negotiations and appointments of trustworthy consortia unlike the weaknesses seen previously. For instance, there were serious flaws in the appointment of Indah Water Konsortium (IWK) for the nationís sewage system and the North South Highway (PLUS), resulting in re-nationalization and the loss of hundreds of millions.

On 7 July, 2003, the Selangor Government signed an agreement on the  RM2.5 billion water projects with KDEB. After spending hundreds of millions on developing water facilities such as the Semenyih and Sungai Selangor dams, privatization of water projects causes concern. That KDEB is the investment arm of the Selangor government makes the people more conscious of the need for transparency. Is KDEB the only credible consortium?

On 11 July, 2003, KDEB president Datuk Zabir Bajuri announced that its two subsidiaries KPS and KHSB will implement the contracts stated above.

The two companies have been restructured and will be listed in the Kuala Lumpur Stock Exchange on 22 July, 2003. They are the two pillars of KDEB, replacing SAP Holdings Bhd and Brisdale Holdings Bhd. What has happened to the latter that necessitates replacement?

In the last 20 years, the Government says that it has saved RN125.2 billion from privatizations. How much will it save from appointing KDEB as concessionaire to water projects. We have heard that the privatization projects for water services are estimated to be worth RM10 billion, 60% going to Puncak Niaga Holdings Berhad and 40% to KDEB.


*  Dr Tan Seng Giaw, DAP National Vice-Chairman and MP for Kepong