Posted: 29 Jan 2012 06:33 AM PST
DAP rakes Putrajaya over RM7b highway deal
By Debra Chong January 28, 2012
KUALA LUMPUR, Jan 28 — The DAP has blasted the Najib administration for awarding a lucrative RM7 billion highway deal, to be tolled for a record 60 years, to a company known principally for making and selling granular and powder-activated carbon.
Public-listed Kumpulan Europlus Bhd (KEuro) told Bursa Malaysia late on Thursday it had also won a RM2.24 billion government soft loan and a three per cent interest subsidy on commercial loans for a period of 22 years, on top of Putrajaya paying RM980 million in land acquisition cost to join Banting in south Selangor a total 316km to Taiping in north Perak.
Industry observers have described the new highway project as the closest alternative to the congested North-South Expressway.
"This deal reeks of cronyism and this does not bode well for Najib's transformation programme," the opposition party lawmaker Tony Pua (picture) told The Malaysian Insider, speaking of Prime Minister Datuk Seri Najib Razak's New Economic Model (NEM) to make the country a high-income nation by 2020.
The PM has been seeking to burnish his credentials as a reformer and so spur Malaysia's growth as a global an investment hub.
In the filing to Bursa Malaysia, KEuro disclosed that its subsidiary, West Coast Expressway Sdn Bhd (WCE), has received an approval letter dated the same day from the federal government to build and operate the Banting-Taiping highway for the next 60 years estimated to cost RM7.07 billion.
It said the 224km of the highway will be tolled compared to 92km that will be toll-free.
The public-listed company also disclosed receiving a RM2.24 billion government soft loan starting from next year and an interest subsidy of only three per cent on commercial loans for a period of 22 years to build the highway apart from the government bearing the estimated RM980 million in land acquisition cost for the highway project.
"This is shocking! Why [did they get] such good terms?" Pua asked.
"Taxpayers are being doubly abused. First, they will have to pay for the construction of the road and then will be asked to pay for the use of the road," he said.
The DAP publicity chief pointed out that KEuro's president and chief executive Tan Sri Chan Ah Chye was also onboard the controversial housing developer Talam Corporation Bhd, and that both companies had fallen into debt in the past.
"Despite that, it has continued to win support from the Najib administration and got a sweetheart deal in order to see through the project," Pua said.
"Why is the government giving it to him [Chan]?" he asked, noting that Chan owns a controlling 27.58 per cent in KEuro, with the second major shareholder at 22.7 per cent going to multi-industry giant IJM Corporation Bhd.
Pua said that KEuro had made only RM15 million in revenue and RM5 million in profit in the first nine months of last year after racking up RM24.1 million in losses on revenue of RM20.5 million in 2010.
"Now they are awarded a highway that is expected to cost RM7.07 billion to build. It's a property developer with records of abandoned housing projects. It has no experience in building highways that I can recall," Pua said, clarifying that IJM has, but not KEuro.
"Here we are in Pakatan Rakyat putting in our common policy framework to restructure and remove tolls while the BN government is putting on their agenda privatisation policies that impose additional tolls on ordinary Malaysians and prioritise their cronies."
Pua urged the government to call off its deal with KEuro, which he said had yet to be signed; and to open the project to competitive tender so that the public will not be burdened by tolls for 60 years.
"It's the longest [toll concession] ever, longer than with PLUS," the Petaling Jaya Utara MP said.
Pua, who is among the opposition Pakatan Rakyat (PR) bloc's economic experts, related that the West Coast highway project had been mooted and first approved during the administration of Tun Dr Mahathir Mohamad — Najib's mentor — but had stalled in the late 1990s.
"Because of the Asian economic crisis, Europlus could not raise the money to build the highway," he said.
He added: "It's an old deal that should have been terminated when Europlus first failed to build the highway."
KEuro is described as an investment holding company in stock exchange records and its businesses are organised into three divisions, namely manufacturing and trading of industrial products, construction, and leasing, management services and investment holding.
Posted: 28 Jan 2012 04:00 PM PST
The Prime Minister appears particularly shaken by the promises made by Pakatan Rakyat to improve the livelihood of ordinary Malaysians by restructuring and renegotiating unfair contracts the BN government has signed with its cronies which has enabled the latter to make billions of ringgit in profits every year at the expense of the rakyat.
Dato' Seri Najib Razak went to the extent of accusing the moves by Pakatan Rakyat, which will include abolishing and reviewing highway tolls, as "short-term" measures which are "recipe for economic disaster".
Before making such wild and unfounded allegations, the Prime Minister should perhaps do better to first look into his own reflection in the mirror, especially in the manner which the wealth of the country has been pillaged by BN leaders and its crony businessmen.
As admitted by none other than his own Minister in the Prime Minister's Department, Datuk Idris Jala, should existing economic policies continue, Malaysia will become a bankrupt nation by 2019. How is it that a country which is overflowing with natural resources, ranging from tin to rubber, from palm oil or crude oil, and from timber to gold, can risk becoming "bankrupt" is beyond belief. The only reason for this bankruptcy risk is none other than the 50 years of economic management by the BN government.
Malaysia's federal government debt-GDP ratio has increased to 53%, particularly in the recent years. We have accumulated RM462 billion of debt as a result of 14 consecutive years of budget deficits.
What is more alarming, Global Financial Integrity, a watchdog based in the United States revealed that Malaysia lost RM150 billion in illicit outflows in 2009, and has accumulated more than RM1 trillion since 2000. And yet despite the expose, Dato' Seri Najib Razak has failed to address the issue beyond "setting up a committee" to look into the matter.
Instead the Prime Minister chose to criticise the policy position of Pakatan Rakyat to restructure and where possible completely abolish toll in an exercise which will only benefit ordinary Malaysians burdened with higher cost of living. A Pakatan Rakyat government will not only restructure just highway tolls, we will also restructure all existing unfair privatisation agreements such as the Independent Power Producers, water concession companies and other unfair privatisation contracts.
Najib has chosen not to implement fair policies for its tax-payers but instead to protect the astronomical profits of its corrupt leaders and politically-connected cronies. The PLUS highway for example was built at the cost of only RM6.9 billion but it makes PLUS net profit of more than RM1.3 billion in 2011 alone. Despite the sky-high earnings which will only increase annually due to more cars on the road and higher toll rates, the BN government has extended the concession period of the highway toll to the year 2038, or another 27 years of merciless profits at the expense of ordinary Malaysians.
It is under the "capable" economic management of BN leaders that today, we are embroiled in billions of ringgit of financial scandals in projects such as the RM12.5 billion Port Klang Free Zone, the new RM3.9 billion "low-cost" airport, the RM9 billion acquisition of naval patrol vessels or the now infamous RM330 million "cows and condos" quagmire.
The Pakatan Rakyat governments have ruled Penang, Selangor and other states for more than 3 years now. We have proven that not only can we govern despite the lack of experience, we can administer the states better than BN did over the past 50 years. We have successfully reduced corruption and improved efficiency, resulting in record financial reserves levels, lower debts and institutionalised welfare benefits for the man-on-the-street.
We have proven that our policies do not destroy the economy but have made Selangor and Penang the top investment destination for foreign investors.
It is BN, if given the opportunity to continue ruling the country which will continue to impoverish the rakyat to enrich the cronies with vested interest via lucrative contracts and privatisation concessions.
|You are subscribed to email updates from Philosophy Politics Economics |
To stop receiving these emails, you may unsubscribe now.
|Email delivery powered by Google|
|Google Inc., 20 West Kinzie, Chicago IL USA 60610|