Wong: Contracts Contrary To Privatisation Spirit

By KOK SU CHIN, Sin Chew Daily

MCA Youth Legal Affairs & Parliamentary Legislation Research Bureau Chairman Wong Nai Chee said the various highway privatisation contracts signed by the government since late 1980s had been contrary to the privatisation spirit.

He said those in the prime minister's department economic planning unit responsible for negotiations on the contracts back then had the obligation to explain to the public.

He said the concept of privatisation mooted by former British prime minister Mrs Margaret Thatcher in late 1970s was meant to help the private sector raise funds, absorb losses and loan risks while cutting back on red tapes and corporatising engineering projects, thus providing high quality services to the public by imposing reasonable charges.

"The private sector would then hand over the completed projects to the government several years later, allowing the government to harness public funds to maintain the infrastructure. And this is the spirit of privatisation."

Wong said during an exclusive interview with Sin Chew Daily that the legal affairs bureau discovered after conducting initial inspection on the five highway contracts Tuesday that:

1. The government was to bear the risks of highway concessionaires' loans. In the case of LDP, the highway concessionaire applied for the loans but the government had to bear the risks.

2. To some extent, the government was to ensure that highway concessionaires were making profits. The government had to compensate the highway concessionaires if they were not allowed to increase toll rates.

He said the two points above had clearly shown that our highway contracts had gone against the original spirit of privatisation, i.e. the private sector did not have to bear the risks of loans, but the government.

He added that if the highway concessionaires were cash-rich, experienced, capable and financially sound, they did not even need the government to bear the risks or make profit assurances.

"In general, the five highway contracts we have seen do not have the basic characteristics of privatisation. The contracts have very powerful elements of government-sponsored companies assured of profits by the government."

He said if the highway concessionaires had made losses, there would only be one reason to explain it–poor management and misjudgement of vehicular volume.

"It is not hard to see that in many areas, highways have been designed in such a way that local residents are forced to use the tolled highways. Therefore, more and more people will be using highways. Under such circumstances, highway projects should be profitable."

On the signing of the highway contracts, Wong said representatives from the prime minister's department economic planning unit conducted the "bargains" and negotiated the conditions and details with highway concessionaires. Now that the highway contracts have been declassified, those involved in the negotiations should stand out and explain to the public.

"We want to know under what conditions, and under what spirit did we sign such contracts. We need some clear explanations. Of course we also know that some of the people involved in the negotiations back then are now retired, but where political duty is concerned, they should still explain to the public.

He nevertheless refused to speculate whether the contracts had incorporated elements of cronyism, but said understandably there would be all kinds of guesses after the contracts have been made public.

"In legal perspectives, if someone thinks he has the evidence, he has the right to report to the Malaysian Anti-corruption Commission (MACC) so that investigations could be initiated." (Translated by DOMINIC LOH)