Create laws to review lopsided highway contracts

STAR, 19 February 2009
By Florence A. Samy

PETALING JAYA: An “Unfair Public Contracts Act” should be passed in Parliament to set aside or review lopsided contracts, including those for highway projects that have not benefitted the people.

Lawyer Tommy Thomas said only such an Act would make it compulsory for such contracts to be revised.

“The Act should give legal power to an independent public contracts commissioner. He should be allowed to access and review all public contracts and supporting documents, be given the power to subpoena and have a team of experts to aid him,” he said when speaking at a public dialogue entitled “Can we get back our highways?” Wednesday night.

“The commissioner must then certify in his judgment whether the contract is unfair, and he should also be given the power to set aside or renegotiate the contracts and provide compensation where it is due,” he added.

There should also be relevant guidelines on compensation, limiting them depending on past profits, he added.

Panellist and Petaling Jaya Utara MP Tony Pua said that it was contractually possible for the Government to buy back certain highways such as the Lebuhraya Damansara Puchong (LDP) at a reasonable figure as stated in the declassified concession agreement.

“For the LDP agreement, there is an expropriation clause where the Government can terminate the agreement by giving the concessionaire three months’ notice.

“LDP cost RM1.33bil to build, but they stand to make RM18.8bil by 2019 according to profit projections based on their listing prospectus,” he said.

He added that at the end of last year, the Government paid a total of RM628mil in compensation to the concessionaire Lingkaran Trans Kota Sdn Bhd (Litrak).

“The toll rates are expected to increase to RM3.10 in 2016. Even if the Government absorbs some of the cost and we pay RM2.60, it is still the taxpayers’ money that has to be used to pay the compensation,” he added.