Disclose EDL deal before buy-back, gov't told

The government has been urged to declassify the Eastern Dispersal Link (EDL) concession agreement before buying back the highway project from the concessionaire.

Petaling Jaya Utara MP Tony Pua (right) said this would ensure that Malaysian Resources Corporation Bhd (MRCB) is not compensated more than what is stated in the terms of agreement.

"The government must be completely transparent in the buy-back exercise to ensure that they will not end up compensating MRCB with astronomical amount ...,” Pua said in a statement.
 
"We do not want the government to agree to buy back the concession only to compensate for ‘loss of future profits’ to MRCB - which effectively means the taxpayers’ money will be used to pay for toll up front to MRCB.”

Pua cited the bad experience of the Gerbang Perdana ‘crooked bridge’ project, for which its concessionaires were compensated RM257 million after the project was cancelled. This was despite the fact that they would have only been paid RM100 million for completing the bridge.

Based on past declassified concession contracts, Pua said the norm for a takeover is for the government to compensate the construction cost on top of 12 percent interest per annum on shareholders' investment in the project.

"Given that the RM1.2 billion project was built with RM1,044 million of sukuk bonds, the shareholders' contribution to the project is only approximately RM160 million.

"Assuming that the RM160 million was invested up front in 2007 when the concession was awarded, the maximum total compensation payable to MRCB on top of their investment sum is RM96 million (12 percent of 160 million over five years).”

Therefore, he said compensation should not exceed the total price of the sukuk bonds, shareholders' investment and interest over five years.

"By paying MRCB anything more than RM1.3 billion, it will show that BN is abusing its powers (for the) profit (of) its crony companies and is failing in its fiduciary duty to protect and defend the interests of ordinary Malaysian taxpayers.

"Prime Minister Najib Abdul Razak promised that “the people’s interests comes first”, and there is no better time to prove it than in the expropriation of the EDL concession.”

Takeover praised

MCA national organising secretary Tee Siew Kiong, in a separate statement, lauded the planned takeover as prove that the government is keeping its promise of putting the people's interests first.

"The acquisition of the EDL by the government can further assist in developing the economy. (It) shows the government’s commitment to making Iskandar Malaysia an international metropolis,” said Tee who is also Pulai Sebatang state assemblyperson.

"At the same time, the acquisition (will) also greatly help the tourism industry and the locals, (and will) save unnecessary (use of) time and resources."