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.

More questions over toll deals

STAR, 6 January 2009

KUALA LUMPUR: Confusion reigned at the library in the Works Ministry on the second day after toll agreements in the country were declassified.

Politicians and reporters, who had turned up as early as 7.30am to get access to the documents although the library opened at 9am, were dismayed to find that much of the contents were either too technical, incomplete or that they just had no time to digest the information.

With public viewing in the morning restricted to only five people at one time for a maximum of two hours and one document each, reporters had to rely on information supplied by politicians, who were given priority to read the agreements.

As at lunchtime, only one reporter had managed to read an agreement relating to the New Pantai Express­way but complained that she could not fully understand the content or compensation formula.

In the evening, however, 15 people were allowed in at one time after Works Minister Datuk Mohd Zin Mohamed gave the directive to the library to expand the facility.

Busy reading: Visitors to the library going through the toll agreements at the Works Ministry in Kuala Lumpur Monday.

There was also grumbling after some of the reporters, who had turned up early for their turns to look at the documents, got bumped down in the queue after politicians made an earlier booking with the library,

Among the “incomplete” documents were the deals for the SMART Tunnel, which only came with the first 118 pages without any appendix or schedules, and the Shapadu toll agreement, which was only 16 pages long. None of the agreements also carried with any subsequent exemption or additional clauses.

Petaling Jaya Utara MP Tony Pua, who led a DAP delegation, said the Damansara-Puchong Highway was making excessive profits and called for the Government to stop compensating the operator.

The highway operator had initially set its toll rate at RM2.10 but reduced it to RM1.60 in the last adjustment in 2007.

“Under the agreement, the toll charge will rise to RM3.10 in 2016. In its financial prospectus, the highway operator has stated that the construction cost was RM1.327bil and that the 30-year projected profit was RM18.865bil.

“Between 1997 and 2006, it was supposed to have made a profit of RM1.22bil, nearly the construction cost. So, their collection to date has more than paid for the highway and what they are collecting for the next 20 years, is excess profits,” he said, adding that to allow Kesas to raise toll charges by more than 10% every two years until 2022 was also excessive.

Pua called on the Government to nationalise the highways to lighten the financial burden of the people and keep toll charges minimum.

Serdang MP Teo Nie Ching said the agreement with Penang Bridge almost guaranteed profit for its highway operator, adding that this was unfair because the bridge had been opened since 1985 whereas the agreement only started from 1993.

Future agreements will be made public, says ministry

STAR, 6 January 2009

KUALA LUMPUR: All future toll concession agreements signed between the Government and highway operators will be made public.

Works Minister Datuk Mohd Zin Mohamed said this as the Govern­ment decided to declassify 22 out of the 23 toll concession agreements beginning last Friday.

However, as at 4pm on the second day of public viewing yesterday, only 17 toll agreements were available at the Works Ministry’s library.

The agreements were for the Damansara-Puchong Highway (LDP), Guthrie, Sprint, Besraya, Ampang-Kuala Lumpur Elevated Highway, SMART Tunnel, NNKSB, Metramac, Kesas, Grand Saga, Lebuhraya Pintas Selat Klang Baru, NPE, MTD, Penang Bridge, SILK, BORR and Shapadu.

Only Maju Expressway, which operates the Kuala Lumpur-Putrajaya highway, has not given its consent for its toll agreement to be declassified.

Zin said PLUS, the New Klang Valley Expressway and other toll agreements would be made available to the public from noon yesterday.

“If it’s not (ready) in time for today, the public can view it tomorrow,” he assured.

Asked if any future toll agreement would be made public, Zin said the Government had taken the first step in declassifying the documents.

“That is the way in future,” he said.

Asked about suggestions that the expressways should be nationalised, Zin said the Government “was not looking at the option at the moment”.

On certain highway operators already making profits due to high traffic volume, Zin said it was time such companies looked into “giving something back in return.”

“That’s why we are seeking an understanding on this concession agreement so that the ones who have really shown good returns on their investments reflect their corporate responsibility and give discounts and rebates like what PLUS has done.

“This is the moment for any concessionaire that feels it can give back to the stakeholders, to look into it,” he pointed out.