Privatisation – not just weakness but deviation even betrayal

Finance Minister II Nor Mohamad Yakcop admitted in Parliament yesterday to weaknesses (kelemahan) in the government’s privatization programme. I had to correct him, as there were not only weaknesses but also deviation (penyelewengan) and even betrayal (pengkhianatan).

I had interjected during Nor Mohamad’s winding up of the policy debate on the Supplementary Estimates (2005) Bill when he disputed my figure of RM38.5 billion as compensation which the government had to pay highway concessionaires over the last two decades for not being allowed to increase their toll rates, saying that it was much lower.

I pointed out that I had not concocted the figure of RM38.5 billion as government compensation to highway concessionaires in the past two decades, as I had quoted the Works Minister, Samy Vellu. I showed to the House The Star report last Friday (23.9.05), which carried the heading “Government paid RM38 bil to toll operators”, which said:

“KUALA LUMPUR: The Government has paid out RM38.5bil over the last two decades as compensation to highway concessionaires after they were not allowed to increase their toll rates, Works Minister Datuk Seri S. Samy Vellu said.

“He said RM1.76 bil was paid in cash while the balance were for matters like exemption of interests for loans supported by the Government, tax dividends and extension of the concession period.”

I expressed astonishment that two Cabinet Ministers could come to the House with different figures on the same matter, with the Finance Minister II saying that the figure of RM38.5 billion compensation to highway concessionaires in the past two decades was “not very correct”. I asked Nor Mohamad to give in the next few days the exact sum of total compensation which had been paid out for this purpose in the past two decades.

I also made the following points in my intervention:

Firstly, Nor Mohamad’s claim that the government was considerate in not approving toll rate increases to ensure that the people will not be burdened with higher toll rates. This claim is not tenable, as the government is not really kind-hearted or charitable as in the final analysis, the RM38.5 billion which had to be paid as compensation to 20 highway concessionaires in the past two decades had to come out of government coffers, which really meant the taxpayers’ money!

Secondly, that it was gross irresponsibility and negligence on the government’s part, particularly the Minister responsible for Works portfolio (i.e. Samy Vellu who had headed this Ministry for 20 out of his 26 years in the Cabinet), landing the people and country with such a crippling burden. PLUS’ North-South Expressway concession for instance has not even reached its half-way life-span, as it has been extended to 50 years from the original 25 years. If the people, through the government, had to pay RM38.5 billion in compensation in the past 20 years, would the total bill come to hundreds of billions of ringgit by the time of the next 30, 40 years – as North-South Expressway concession, for instance, would only expire in 2038.

Thirdly, end the culture of secrecy by making public all the highway concessions and privatization contracts in keeping with the Prime Minister’s pledge for an open and accountable government. The Malaysian public and all national stakeholders have the right to know their contents to establish whether their rights and that of future generations had been properly safeguarded or sold down the drain.

Fourthly, the establishment of a Parliamentary Select Committee on privatization to review all the highway concessions and privatization contracts to ferret and highlight their weaknesses, deviations and betrayals to prevent the mortgage of the rights and interests of generations of Malaysians as a result of exploitative, one-sided and unfair privatization programmes.

Although Nor Mohamed conceded that in future the government needed “sharper pencils” when perusing highway concessionaires, this assurance is unsatisfactory and inadequate as it is like promising to lock the stable door after the horse has bolted – without any guarantee that the stable door would in fact be locked for the future.

Although it is almost two years since the accession of Pak Lah as the new Prime Minister pledged to lead an open, accountable, transparent and people-oriented administration, the government’s commitment has not gone much beyond rhetoric and lip-service.

This is why even a Minister like Nor Mohamad who is supposed to be a technocrat and not the usual party politico in Cabinet is unable to provide the needed leadership for reforms and good governance by giving positive answers to the two proposals to end the culture of secrecy with regard to highway concessions and privatization contracts and the establishment of an all-party Parliamentary Select Committee to review all past privatizations and monitor future ones.

The first serious steps towards government reforms have still to be taken when another month would mark Pak Lah’s second anniversary as Prime Minister.