http://dapmalaysia.org Forward Feedback
Datuk Samy Vellu should resign to uphold the principle of ministerial responsibility and public accountability for lying that the contents in the highway concessionaire agreements will be made public
by Lim Guan Eng
(Petaling Jaya, Tuesday): Works Minister Datuk Samy Vellu should resign to uphold the principle of ministerial responsibility and public accountability for lying that the contents in the highway concessionaire agreements will be made public. Malaysians are shocked by Samy’s written reply to Parliamentary Opposition Leader Lim Kit Siang yesterday that the Government has decided that it is not appropriate for all highway concessionaire agreements to be made public.
This contradicts Samy’s promise on 18 February 2007 that the agreement between the Government and highway concessionaires would be revealed as the Prime Minister had agreed in principle to make the documents public. It is completely illogical for Samy to explain now that all concessionaire agreements were part of the Government’s secret documents and came under the Official Secrets Act(OSA). Why use the OSA now as a shield when it is only secret now but not such a state a secret in February this year that the government was willing to declassify it?
Samy is also lying that the government may be sued by highway companies as these documents contain a confidentiality clause whereby consent has to be first obtained from a concessionaire company before the agreement can be made public. If there is such a confidentiality clause, then it is clear that the concessionaire companies should be taken action under the contract and charged under the OSA because they had revealed such information years ago when submitting their prospectus for listing.
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. Why was it not OSA in the IPO prospectus in 1996 but OSA 11 years later when it is to be made public?
This means that 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 were also guilty of breaching the OSA. 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 allows Litrak to 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 make profits and yet 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.
Not only Litrak highway but the government building all the highways or even buying it over from the concession companies at cost is the cheaper option. Apart from the RM 23.7 billion in toll collections from the public, the government had also paid compensation of RM 38.5 billion to the toll concessionaires for deferring toll hikes. In other words toll concessionaires had received a combined sum of a shocking RM 62.2 billion from the public and government, far exceeding any expenditure incurred by them.
With RM 18.9 billion construction cost and RM 8.1 billion of interest and maintenance cost, total cost is only RM 27 billion. Even if we account for loan interests and operational costs, the RM 27 billion is far below RM 62.2 billion revenue of toll concessionaires by RM 35 billion.
The people have a right to know why the government did not build the highways themselves or allowed toll hikes when such unfair toll concessions are against national interest where the total amount of toll collections and government compensation paid of RM 62 billion far exceeds the RM 27 billion construction cost. Are these obscene extraordinary profits by a few companies at public expense the reason why the government is trying to hide in not making the highway concession agreements public?
Malaysians have no more confidence in Datuk Samy Vellu as Works Minister. Either he resign or asks to be transferred to another Ministry if the government is to restore confidence in public integrity and moral credibility of its Ministers. Should he not resign or leave the Works Ministry, then Samy can expect to see public protests against him before the end of the year.
* Lim Guan Eng, Secretary-General of DAP