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Sakmongkol ak 47

Friday 15 October 2010

Khazanah pakat with EPF?

It's now public knowledge. Khazanah and EPF which already own Plus and its highways are buying it back. In other words, they are taking it private.
This immediately contradicts what Azman Mokhtar has been saying recently. That Plus highways belong to the rakyat and the decision on what to do with Plus, isn't Khazanah's alone. Meaning it's also the government's call.
So make that call. Do it transparently.
I am sure we are going to be told- Khazanah and EPF will keep Plus on our behalf. We will manage it properly, rakyat have no fear.
If that is the case, then we the rakyat order you to lower the toll rates. Since Plus is making a revenue of around RM 2.1 billion a year and a hefty profit margin, please return some of the profit to the rakyat in the form of lower rates. It's not that you will suffer losses. It's just that you make lower profits.
In any case, you have guarantees of compensation from the government. You receive around RM 800 million a year. Maybe, we will now use the Jala caveat- reduce the compensation as it can contribute to making this country go bankrupt.
In buying Plus out, Khazanah and EPF must still explain the rationale and justification for this purchase. The price is of course better than Syed Mokhtars RM 15 billion but only about half what Asas Serba offers. Which part of Asas Serba's offer are not good to Khazanah? Is it because the people behind Asas Serba is led by Halim Saad who has close relations with the man Nor Mohamad hates- Daim Zainudin?
Can the owners of Plus now offer a moratorium on toll rates as suggested by Asas Serba or even reduced toll rates by so much percentage as proposed by Asas Serba?
Were there political pressures rejecting all the other offers? Didn't Nor Mohamad Yaakob said that it cost the government more than RM 200 billion to build and operate Pus. Why is he silent now that the government is only getting about RM 23 billion?


OneMalaysian,  15 October 2010 at 16:49  

Dear Sakmongkol

I think the government should hold a proper consultation with all interested parties as to what to do with PLUS – take it private or not, and if so at what price. This review committee/panel must include a representative number of opposition MPs.

There are options as to what government should do with PLUS. The obvious one is to take it private, let managers run it with current terms and toll rates and pay high dividends to EPF and Khazanah. This merely is an income transfer scheme from the motoring public to a pension fund (we are all stakeholders) and the government (through Khazanah). But the involvement of Khazanah is not desirable because that should not be its role, that is, to buy into a riskless asset. It should use its capital and clout to seed new ventures that are too large for Malaysian corporations, that is, to partner local businesses that want to grow big. But EPF’s ownership should be welcome if the price is right.

Another option is to have a special purpose vehicle own PLUS, some kind of highway development authority that can be partially privatized, much as PLUS now is, but its major role in the decades ahead is to use some of its revenue to build more roads and highway. PLUS highways will serve as the cash cow to enable this to happen. This SPV’s role therefore is to build motoring infrastructure. The government through some agency (both EPF and Khazanah will qualify) must hold the majority shares and only float say 30-40% on the market. In this way we need not allow any more silly, rip-off concessions to private companies on easy preferential terms.

As for Syed Mokhtar and Asas Serba, we do not know what all their terms are, so we cannot comment on the prices that they offer. But just remember they are there to get the best possible terms (price, etc) for themselves. This is a no-brainer, guaranteed business that can be easily financed because PLUS is essentially a monopoly. We should not allow such an enterprise to be sold on preferential terms to private interest. Let these clever people innovate and be creative to start NEW businesses, instead of just eyeing ripe, riskless ones owned by the people (through the government).

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