24th August 2018
AES CONTRACTS: AN INGNOMINIOUS DERELICTION OF DUTY
It is now nearly a week since Transport Minister Anthony Loke exposed the shocking news on the lopsided contract regarding the two concessionaires for the Automated Enforcement System (AES), and the acquirement of the assets of the two companies with RM555 million paid from the Armed Forces Fund Board (LTAT). Since then there has been much grouses from among veterans and serving personnel. Sentiments of frustration have grown louder but not a squeak is heard from any current member of the LTAT Board of Directors (BOD). It is surprising that a former chairman of the BOD has to make a statement late on 23 Aug, which raised more questions than answers.
To get the perspectives right, the transport minister on 20 Aug said the followings:
1. The contract signed by the BN administration in 2012 with two concessionaires, Ates Sdn Bhd and Beta Tegap Sdn Bhd had been lopsided; hence the new government has decided to cancel the contract and decided to refund RM 555 million, the amount paid by LTAT.
2. Two tiers payment was involved. First, the government had to pay RM16 to the concessionaires for each summon issued, irrespective if the summon was collected. The RM300 summon was to be divided equally, RM150 each to the company and government.
3. So far 47 cameras were installed at RM250,000 each.
4. During the five years period, there were 3.1 million or 80% of unpaid summonses amounting to RM435 million. However, the two concessionaires had already profited RM129 million.
According to former LTAT Chairman, Admiral Mohd Anwar Mohd Nor (Rtd), LTAT was invited by the government to take over the two companies and started operation in 2015, after due diligence and with the view to earn double digit profits and provided employment opportunities for veterans.
Patriot would like to ask the following questions:
1. What kind of due diligence was there for acquiring the two companies with assets predominantly only 47 cameras at RM555 million, or RM11.8 million a camera, when the previous companies paid only a quarter million each?
2. With such high rate of non-performance summons, how could relying on the RM16 per summon issued ever help to recover the vast sum of capital outlay?
3. LTAT paid the RM555 million to whom, which company, person and what amount?
4. How many veterans have been employed since 2015?
Indeed, calling it appalling the original contractual agreement inked in 2012 is an understatement. The term ‘stupidity’, as mentioned by our Prime Minister concerning the previous administration negotiating contracts and deals with foreign entities, is more befitting. However, this stupidity applies to negotiation with local companies too. LTAT is unwise to enter late with a huge pile when the original concessionaires have already made their pile, unless of course there is another agenda.
The current LTAT BOD must speak up immediately or take responsibility for the whole ignominious dereliction of duty and resign. Patriot reiterates the call for full investigation over the AES issue starting from the time of the initial contract in 2012 and when the LTAT was involved.
Patriot is unable to comment what LTAT has done so far in terms of employment opportunities and welfare for the armed forces personnel and veterans. It is up to the members of LTAT BOD to ask themselves whether they have done enough. The real test of their good testimony lies in the tens of thousands of veterans not having to live in a pathetic state of ever having to ask for welfare.
BG Dato Mohamed Arshad Raji (Rtd)
President, Persatuan Patriot Kebangsaan