Friday, April 3, 2009

Dr M: Don’t Bail Out Failed Banks

By CHOI TUCK WO


LONDON: Tun Dr Mahathir Mohamad has called for the closure of banks that caused the global financial crisis instead of bailing them out.

The former prime minister lambasted the West for pumping in billions of dollars to resuscitate these “failed institutions”.

He said they should be allowed to go under as bankers were rewarding themselves with fat bonuses rather than be punished for their inefficiencies.

“Let’s start new banks. We don’t need to have banks with those names anymore as they are a disgrace,” he said in his talk ‘The Alternative G20 Agenda: Real Financial Fairness’ at the Royal Commonwealth Society here on Wednesday.

More than 200 people attended the event on the eve of the G20 summit.

In his usual hard-hitting style, Dr Mahathir said there should be no attempt by governments to rebuild institutions which have failed.

“If they must dole out money, give it to the people who suffered actual losses due to the banks’ failure, but not to the bankers,” he said.

He questioned the logic of rewarding bankers who caused the economic crisis, saying those who created trouble were normally put in prison.

Dr Mahathir also took a dig at hedge funds, saying their borrowings should be limited and not be 20 or 30 times more than the investments.

“Imagine if a hedge fund were to borrow US$30mil and trades on US$20mil based on a US$1mil investment, the profits would be far bigger than that of the original investment,” he said.

He said a stop should be put in creating money out of nothing, adding everyone must come clean instead of obtaining false wealth through shuffling papers. “Most of the wealth comes from playing around with money. You can sell currencies and make tons of money,” he said, adding they were not derived solely from producing goods and services anymore.

He called for a review of the international monetary, financial and banking system which had suffered a systematic collapse due to gross abuses.

Dr Mahathir said the global community could elect people to represent the differing economies and work together in curbing financial abuses.

“If we’re going to be fair – real financial fairness – we should give everybody a say in the formulation of a new banking, financial and monetary system.”

G-20 Leaders Blacklist Malaysia As One Of 4 Tax Havens

LONDON: Four nations were blacklisted as uncooperative tax havens after G-20 leaders declared the age of banking secrecy was over and said they would no longer tolerate shady havens draining away badly needed tax revenue.

At the request of the Group of 20 summit of rich and developing nations, the Organization for Economic Cooperation and Development named the Philippines, Uruguay, Costa Rica and the Malaysian territory of Labuan as the worst offenders, saying they had refused to adopt new rules on financial openness.

Leaders also said Thursday that nations that refuse to exchange tax information could in the future face tough sanctions - including the withdrawal of financing by the World Bank or International Monetary Fund.

"The time of banking secrecy has passed," French President Nicholas Sarkozy said following the summit. "Everyone around the table wants an end to tax havens. Everyone knows we need sanctions."

The announcement reflects mounting concern that banking secrecy in tax havens has helped to worsen the economic crisis by disguising the true value of some global assets.

Anti-poverty activists say such places provide corrupt officials places to stash illicit funds, often depriving poor nations of needed resources.

The OECD has divided countries into three categories: those who comply with rules on sharing tax information, those who say they will but have yet to act and nations which have not yet agreed to change banking secrecy practices.

Switzerland and Liechtenstein, which both have strong banking secrecy traditions, said last month they would adopt international rules on tax cooperation and were ready to comply with G-20 demands.

Liechtenstein, Switzerland's tiny Alpine neighbor, said it has already met with British officials to prepare for the new standards. Monaco said earlier that it would be more transparent with foreign tax authorities.

In return they were spared the fate of being blacklisted but were left in a gray area of countries that still have to implement their commitment to accept new information-exchange standards. China supported the blacklisting, but would not agree to have two territories, Hong Kong and Macau, classified as uncooperative tax havens.

Potential sanctions for transgressors include extra audits of those who use tax havens and curbs on tax deductions claimed by businesses using the territories.

In their communique, leaders said they may consider further penalties in their bilateral relations with tax haven territories. German Chancellor Angela Merkel said Brown and President Barack Obama played a key role in pushing for a crackdown on tax havens.

At least 35 offshore tax havens, from Britain's Channel Islands to the Cayman Islands in the Caribbean, are under increasing pressure to provide more information to international authorities to prevent people from evading taxes or hiding income by shifting money to such places.

Stephen Timms, financial secretary to the British Treasury, said a culture of banking secrecy had worsened global economic problems.

"That lack of transparency - that opaqueness - has contributed to the severity of the problems we are seeing in the world economy at the moment," he said. - AP

Najib Sworn In As Malaysia's Sixth Prime Minister

KUALA LUMPUR: Datuk Seri Najib Tun Razak was sworn in as Malaysia’s sixth prime minister Friday, taking over from Datuk Seri Abdullah Ahmad Badawi who stepped down after leading the country for over five years.

Najib 55, took his oath of office before Yang di Pertuan Agong Tuanku Mizan Zainal Abidin at Istana Negara.

Dressed in a black baju Melayu complete with sampin, Najib arrived at the palace, accompanied by his wife, Datin Seri Rosmah Mansor. Together they entered the Balairong Seri at 10am, followed by Abdullah and his wife, Datin Seri Jeanne Abdullah.


Najib signing his letter of appointment as Prime Minister.

A total of 319 guests, including former prime minister Tun Dr Mahathir Mohamad and his wife, Tun Dr Siti Hasmah Mohd Ali, attended the historic event.

The ceremony, steeped in tradition, began when Tuanku Mizan and Raja Permaisuri Agong Tuanku Zahirah entered the throne room at 10.05am and the national anthem was played by the Malaysian Armed Forces band.

After taking his oaths of office, loyalty and confidentiality, Najib signed the four instruments of appointment, followed by the reading of the doa selamat.

The instruments of appointment were then signed by Court of Appeal President Tan Sri Alauddin Mohd Sheriff as witness and handed over to Chief Secretary to the Government, Tan Sri Mohd Sidek Hassan.

At the same ceremony, Abdullah was conferred the nation’s highest award, the Seri Maharaja Mangku Negara (SMN), while Jeanne received the Seri Setia Mahkota (SSM) by Tuanku Mizan. Both awards carry the title Tun.

The handing over of the prime minister’s duties from Abdullah to Najib is scheduled to take place at 4pm at the Prime Minister’s Office in Putrajaya.

Najib was born in Kuala Lipis, Pahang, on July 23, 1953, and is the eldest son of the late Tun Abdul Razak Hussein, the nation’s second prime minister, and Tun Rahah Mohd Noah.

His appointment is most significant in the country’s history in that this is the first time that a prime minister’s son is holding the post.

His leadership capability began to surface when he was elected Pekan Umno division Youth head in 1976 and he went on to become the country’s youngest Member of Parliament at the age of 22 when he won the Pekan seat unopposed in a by-election following his father’s death.

He then went from strength-to-strength in politics and Government to reach the pinnacle as Umno president and Malaysia’s prime minister. - Bernama

Highlights Of Pak Lah Premiership

2003
OCT 31: Datuk Seri Abdullah Ahmad Badawi takes over as Malaysia’s fifth prime minister.

DEC 11: The controversial RM14.5bil railway double-tracking project is postponed.

2004
JAN 6: Datuk Seri Najib Tun Razak is named Deputy Prime Minister.

MARCH 21: After the shortest campaign period in history, Barisan Nasional wins a landslide victory in the 11th General Election, taking 198 out of 219 parliamentary seats. Barisan also recaptures Terengganu from PAS.

MARCH 27: Abdullah announces his first Cabinet with 14 new faces and three new ministries: Natural Resources and Environment, Federal Territories and Higher Education.

APRIL 23: Abdullah launches the five-year National Integrity Plan (NIP) aimed at promoting an accountable and corrupt-free society.

JULY 18: Abdullah wins the Umno presidency unopposed.

SEPT 10: Abdullah presents his first Budget as head of the Government and Finance Minister.

SEPT 23: Abdullah launches the Islam Hadhari (Civilisational Islam) concept in his opening address at the Umno general assembly.

OCT 31: Pak Lah completes his first year as Prime Minister and identified his biggest challenge: the need to change the mindset of the people in implementing projects and decisions.

DEC 26: Several states are struck by the Indian Ocean tsunami that was triggered by a massive earthquake off the coast of Sumatra. Pak Lah cancelled his leave to return to the country.

2005
FEB 2: Abdullah talks of building Malays into “towering” personalities. He said the towering Malays would be well-rounded people who have developed a high intellect and value system, a successful career, good economic standing and a well-respected culture and religion.

APRIL 24: Malaysia and Singapore sign a Settlement Agreement, bringing an end to the dispute over the republic’s land reclamation in the Straits of Johor.

MAY 13: The Royal Commission to Enhance the Operation and Management of the Royal Malaysia Police recommends that an Independent Police Complaints and Misconduct Commission be set up to oversee the force and deal with misconduct.

JULY 21: Malaysia removes its currency peg to the US dollar for a managed float against a basket of trade-weighted currencies.

OCT 20: Abdullah’s wife Datin Paduka Seri Endon Mahmood, 64, dies after a long battle with breast cancer.

2006
APRIL 12: Malaysia cancels the bridge to replace the Causeway.

OCT 22: Abdullah and Dr Mahathir meet for a face-to-face meeting for the first time since the latter’s controversial criticism of the Prime Minister’s policies.

NOV 4: The South Johor Economic Region, officially named as Iskandar Development Region, was launched at Danga Bay in Johor Baru.

2007
JAN 16: Abdullah launches the National Education Blueprint 2006-2010, a comprehensive fiveyear plan that aimed to level the playing field in education for all Malaysians.

FEB 7: A special task force called Special Task Force to Facilitate Business, or Pemudah, to smooth out kinks in the government delivery system and cut red tape, is formed.

MARCH 31: Abdullah tables the RM220bil Ninth Malaysia Plan in Parliament.

MAY 21: Abdullah announces a pay increase of between 7.5% and 35% for the country’s more than one million government employees effective July 1.

JUNE 9: Abdullah marries Datin Seri Jeanne Abdullah.

JULY 30: Abdullah launches the RM177bil Northern Corridor Economic Region.

AUG 27: Abdullah launches the National Higher Education Strategic Plan and the National Higher Education Action Plan 2007-2010 aimed at producing better quality graduates.

SEPT 25: The Government announces the formation of an independent panel to check the authenticity of a video clip purportedly showing lawyer Datuk V. K. Lingam brokering the appointment and promotion of judges with a senior judge.

OCT 29: Pak Lah launches the East Coast Economic Region in Kuala Terengganu.

NOV 25: The Hindu Rights Action Force holds a demonstration, forcing the police to use tear gas and water cannons to disperse the crowd.

2008
FEB 11: Abdullah launches the Sarawak Corridor of Renewable Energy in Bintulu.

FEB 13: Parliament is dissolved to pave the way for the 12th general election. Nomination day was fixed for Feb 24 and polling day on March 8.

MARCH 8: Barisan gets its worst election results in history, losing five states to the Opposition and its two-thirds majority by winning only 140 parliamentary seats out of 222.

MARCH 10: Abdullah is sworn in as Prime Minister for a second term.

MARCH 14: Datuk Dr Md Isa Sabu is announced as the new Perlis Mentri Besar. Former MB Datuk Seri Shahidan Kassim had been Barisan’s choice.

MARCH 18: Abdullah unveils a smaller Cabinet.

MARCH 22: Datuk Ahmad Said is announced as the new Mentri Besar of Terengganu instead of Datuk Seri Idris Jusoh, which was Barisan’s original choice.

APRIL 17: Abdullah announces a proposal to form a Judicial Appointments Commission and the giving of goodwill ex-gratia payments to six judges who were sacked during the 1988 judicial crisis.

MAY 9: The findings of the Royal Commission on the controversial Datuk V.K. Lingam showed that the clip was authentic. It identified former Chief Justice Tun Ahmad Fairuz Sheikh Abdul Halim as the person talking to Lingam on the telephone.

MAY 23: The International Court of Justice rules that Singapore has sovereignty over the disputed Pulau Batu Puteh while Malaysia owns Middle Rock.

JUNE 6: Abdullah announces costcutting measures, aimed at saving RM2bil.

JULY 10: Abdullah announces that he will step down as Prime Minister in June 2010 and hand over power to Najib.

SEPT 10: Then Umno vicepresident Tan Sri Muhyiddin Yassin calls on Abdullah to rethink his transition plan to step down by 2010 as the timeframe was too long.

SEPT 17: Abdullah and Najib swap portfolios as part of the transition plan. Abdullah is the new Defence Minister while Najib has taken over the Finance portfolio. Sabah Progressive Party president Datuk Yong Teck Lee also announces that his party is pulling out of Barisan Nasional but will not be joining Pakatan Rakyat.

OCT 8: Abdullah says he will step down as Prime Minister and Umno president in March and support Najib to take over.

DEC 17: The Dewan Rakyat passes the Judicial Appointments Commission Bill.

2009
MARCH 1: The Malaysian Anti- Corruption Commission (MACC) comes into being.

MARCH 10: The Government unveiles a fiscal stimulus package amounting to RM60bil, the largest ever, with an aim to prevent the country from slipping into a recession.

MARCH 23: The Witness Protection Bill is passed by the Dewan Rakyat.

APRIL 2: Abdullah has an audience with Yang di-Pertuan Agong Tuanku Mizan Zainal Abidin to seek consent to resign as Prime Minister and for Najib to take over.

Source: TheStar

Pak Lah, We Thank You

The Stars Say . . .


Today, a new chapter begins for Malaysia, and for Datuk Seri Abdullah Ahmad Badawi.

A man who does not care too much for pomp and pageantry, Pak Lah’s stewardship of the country as Prime Minister from Oct 30, 2003 until he officially stepped down yesterday, will be judged differently in the years to come.

The media may be a chronicler of instant history but it is the historian who will have the perspective to look at both the positive and negative sides of Pak Lah’s ledger.

Pak Lah will be the first to admit that he has his flaws.

“Leaders are mere mortals,” he once said. “And mortals are imperfect.

“In seeking to better himself, man needs to be advised and to accept criticism. Therefore, advice and criticism should be constructive and rational, and offered with honesty and sincerity,” he said.

No one will dispute that the democratic space for open discussion of many issues rose many notches under Pak Lah.

Spurred on by the proliferation of new media technology, Pak Lah became the first Prime Minister to openly have to endure relentless attacks on both his policies and his personality.

Not all was sincere or honest. In fact, many bordered on slander and destruction.

But Pak Lah, being the man of the people, did not do what lesser leaders might have done. He kept the space open.

Pak Lah ascended to the highest political office in the land knowing full well that Malaysians had not had a change of leadership for 22 years. The shadow of the previous administration loomed large but his message struck a chord among the people.

He went to the people in 2004 for a mandate and we gave him an overwhelming landslide. It was to be the high point of his political career.

But the vagaries of politics are such that when he went back to the people in March 2008, the verdict turned the other way. It was, as he puts it, the lowest point of his political career.

Although there were many factors beyond his control, quite a number were probably the direct result of the actions of the administration he led.

The hope envisioned by his promises was a little too late in coming.

It is a testimony to the democrat in him that Pak Lah accepted the verdict of the people. Though the political landscape has changed tremendously, and remains hot to this day, he never resorted to any extra-constitutional measures to move things to his advantage.

It would be wrong to judge Pak Lah solely on his years as Prime Minister. He is, in fact, a man born to serve the country and he did. Pak Lah’s service to the nation is long and extensive.

As a politician, Pak Lah never used racial and religious issues to stoke the fires that cause disunity among the people. He was just too nice and too much of a statesman to want to play to the gallery.

He always put nation above self. And he never wavered from trying his best to be truly a Prime Minister for all Malaysians.

Yes, today marks a new chapter for the country. This is a defining moment in our history. It is also a poignant moment for Pak Lah.

Now that the burden of office that he has served so sincerely for the past 1,918 days has been lifted, we want to wish him well.

We pray he will enjoy good health and a peace that transcends all that the world can promise.

We, the people, thank you, Pak Lah.

Wednesday, April 1, 2009

Stronger Ringgit Seen By Year-End

Move by US to print money will increase supply and weaken the greenback

KUALA LUMPUR: The ringgit is expected to strengthen to 3.50 against the US dollar by year-end from between 3.60 and 3.65 currently.

According to Maybank Investment Bank Bhd chief economist Suhaimi Ilias, the US dollar is expected to weaken as the US government would have to find means to finance its huge fiscal deficit this year.

“It is highly likely they would have to print money, which is what they have started to do.

“The increase in supply would weaken the US dollar,” he said on the sidelines of the Financial Planning Seminar organised by Permodalan Nasional Bhd yesterday.

Meanwhile, the local banking sector is expected to weather the crisis without incidence, as stress tests conducted recently showed that it is fundamentally sound, according to Suhaimi.

“Our banks registered healthy profits and are well capitalised,” he added.

However, he expects non-performing loan (NPL) ratio to increase to 7% to 8% this year from 4% last year.

“This forecast figures are not bad, given the current situation, compared with over 20% NPL ratio registered during the 1997 economic crisis,” he said.

On a positive note, Suhaimi noted that electrical and electronic manufacturing companies in Penang had indicated that the plunge in orders since October last year appeared to have levelled off last month.

He also said Malaysia’s economy would likely recover from technical recession by the fourth quarter of this year, backed by the speedy implementation of the fiscal stimulus package introduced by the Government recently.

“I would expect the decline in the economy to be the worst in the first quarter of this year. In the second and third quarters, even if the economy were to contract, it would be at a smaller pace,” he said.

He also expected the overnight policy rate (OPR) to fall by another 50 basis points by April 30. The OPR is currently 2%.

Source: TheStar

Malaysia Faces Risk Of Prolonged Slowdown

KUALA LUMPUR: Malaysia’s economy is not facing the risk of further downside in growth but rather the risk of a prolonged slowdown, said ANZ Banking Group Ltd chief economist for Asia Paul Gruenwald.

“We are not worrying about things getting worse, we worry about when the recovery will come,” he said, pointing out that the Malaysian economy would recover only after the economies of advanced nations had revived.

He expected the US and European economies to recover in late 2009 or early 2010.

Speaking after his talk on The Economic Outlook For Malaysia and The Asian Region In 2009 yesterday, Gruenwald projected the country’s gross domestic product (GDP) to grow by 1% and 2.5%-3% this year and in 2010 respectively.

He said this year’s slow growth would be supported by domestic consumption, as the manufacturing and export sectors would continue to be weak.

“However, we don’t expect a growth trend, which will be 4% to 5%, until the end of 2010 or early 2011,” he said.

On whether China’s economy would be able to save Asian countries, Gruenwald said even if China could restore its growth to 8%-9% this year, the benefit to the rest of the region was likely to be limited.

“Exports from the rest of Asia to China appear equal to those to the US. However, if you factor in China’s role in the processing trade, exports to China from the rest of the world look modest,” he said.

He added that China comprised half of Asia’s GDP and most of the country’s economic growth came from investment, domestic consumption and exports.

With the collapse of demand from the US and Europe, the only pillar left supporting Asia’s growth was consumption, he said.

Gruenwald said the US dollar would remain on an uptrend as the global economic crisis continued, but the momentum should slow down as uncertainty dissipated.

“We are going to see general Asian currencies weaken against the US dollar. When the crisis is resolved and recovery begins, we will see the US dollar start to depreciate.

“Until that time, (we expect) the peak of 3.8 for the ringgit in the third or fourth quarters of this year,” he added.

Source: TheStar

Market To Remain Weak

By Fintan Ng


KUALA LUMPUR: The local bourse will remain weak ahead with volatile trading.

In the region, the Bank of Japan’s Tankan business survey showed confidence among the country’s biggest manufacturers fell to minus 58 in the first three months to March compared to the previous quarter, which fell to minus 24.

In South Korea, the ministry of knowledge economy said today that the country’s exports fell for a fifth straight month in February on weak demand from the US and Japan while imports dropped 36%.

HwangDBS Vickers Research Sdn Bhd said in a report that investors would have to exercise judgement on whether what they see or hear “is for real or just a false event”.

OSK Research Sdn Bhd analyst Shin Kao Jack said the market would remain bearish in the near-term. “We’re still eyeing the 835-point level as the immediate support followed by the 800/801-point level,” he added.

Meanwhile OSK Research head Chris Eng said the market would remain volatile in April with early strength on the handover of the Prime Minister’s position giving way to uncertainty after the three by-elections and selling pressure ahead due to the new rights shares of Maybank and TM International.

At 9.15am, the KLCI was 0.48% higher at 876.77 while Singapore’s Straits Times Index was down 0.21% to 1,696.40.

Tokyo’s Nikkei 225 rose 1.76% to 8,252.02, Taipei’s Taiex Index gained 1.40% to 5,283.87 while Seoul’s Kospi Index added 1.11% to 1,219.65.

Meanwhile, at Bursa Malaysia, 61 counters were up, 25 were down and 53 others were traded unchanged. There were 29.05 million shares traded with a total value of RM24.81 million.

Among bank stocks, Maybank was 8 sen higher at RM3.94 while BCHB added 10 sen to RM6.95. Resorts was up 3 sen to RM2.17 and Genting added 6 sen to RM3.74.

Plantation stocks IOI Corp was up 4 sen to RM3.84, Sime was unchanged at RM5.70 and KL Kepong gained 10 sen to RM10.70.

TNB was up 5 sen to RM6.15 while Tanjong rose 30 sen to RM13.50.

Nymex crude oil was down US$1.25 to US$48.1 per barrel.

Spot Gold was US$1.83 higher at US$921.04 per ounce.

The ringgit was quoted at 3.649 to the US dollar.

Selangor Plans Legal Action If Water Tariff Raised

PETALING JAYA: The Selangor state government intends to seek legal action if the Cabinet today decides to increase the water tariff.

The state claimed that the necessary pre-requisites for a tariff increase by Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) under the concession agreement were unfulfilled.

“Material deficiencies were found in the last audit, the cumulative effect of which undermines the validity of the request by Syabas,” the state said in a press statement yesterday.

Complaints of Syabas’ “highly unsatisfactory” services were sent to the Ministry of Energy, Telecommunications and Water, together with a request that the concession agreement be terminated, it said.

However, the minister has yet to take action against Syabas and, instead, indicated that a licence would be issued to the concessionaire to continue its operation.

“This decision not only goes against the declared intention of the Federal Government to restructure water services in Malaysia but also the public interest,” it added.

It was reported that the ministry would propose to the Cabinet today on the tariff increase – as much as 31% for consumers in Selangor, Putrajaya and Kuala Lumpur.

Source: TheStar

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The Water Tariff hike is definitely going to burden the people if allowed. The chain reaction is unavoidable since we use water daily.

Cabinet To Decide Wed On Water Tariff Hike

By YEOW POOI LING


Minister will present Syabas proposal on hike to Cabinet

PETALING JAYA: The Cabinet will decide tomorrow whether the water distributor concessionaire in Selangor and Federal Territory of Kuala Lumpur can raise water tariff by as much as 31% on the same day as provided for in the concession agreements.

Energy, Water and Communications Minister Datuk Shaziman Abu Mansor said he would be presenting a proposal to the Cabinet on Syarikat Berkalan Air Sdn Bhd’s (Syabas) request for the tariff increase.

“The ministry has to present its opinion to the Cabinet on the proposed tariff hike and the quantum of increase that should be given to the concessionaire. The Cabinet will then decide,” Shaziman said after launching the France Asia Trade Forum yesterday.

This is despite the fact that the minister himself has the powers to either delay or give the nod for the tariff hike. Under section 114 of the Water Services Industry Act 2006 (WSIA2006), the minister is empowered to decide on water issues based on national interest.


Datuk Shaziman Abu Mansor showing the booklet

The original date for the increase in water rates was Jan 1 but this was postponed to April upon the state’s request pending negotiations over sale of water assets in Selangor to the Government under the national water restructuring exercise.

At the same function, the minister issued a booklet that stated the distribution of water for Selangor after the takeover of water assets by national water asset company Pengurusan Aset Air Bhd (PAAB) would remain status quo, with Syabas given a licensing from the regulator.

The other three water concessionaires – Puncak Niaga Sdn Bhd (PNSB), Syarikat Pengeluar Air Selangor Sdn Bhd (Splash) and Konsortium Abass Sdn Bhd – would be allowed to operate on authorisation basis.

The respective water operators for Malacca, Negri Sembilan and Johor also maintained their operations after PAAB took over their assets.

The Selangor government has till today to finalise the consolidation of the state’s water sector.

But it is unlikely to make any headway as the four concessionaries have not taken up its offer. Selangor had earlier offered RM4.6bil for the assets and RM1.1bil for the concessions.

PAAB is now in negotiations directly with the concessionaires in Selangor.

Shaziman said the federal government would not “force” the state to migrate to the new regime.

“If the state is unwilling, it would have to comply with the terms in the agreement signed between the federal, state and the concessionaires, which included the tariff increase,” he said.

Should the tariff increase be rejected by the state, it would have to bear the compensation cost as stipulated in the agreement, he added.

It was estimated that the compensation could amount to RM38mil a month.

Shaziman said the ministry was still open to work with the state to resolve the present issue.

“In fact, there is a proposal from the state on the matter and we have asked them to send a team to provide further details. If the proposal is beneficial to the people, we will accept it.

“So far, we have not received any response from the state,” he added.

Selangor Water Review Panel member Tony Pua told StarBiz that the state’s proposal remained similar with the past, which was to seek approval to lead the negotiation with the concessionaires pertaining to the water restructuring.

He said the potential tariff increase was questionable given that audit reports had revealed that Syabas failed to comply with several concession terms, including awarding contracts via open tender.

“Why keep the service provider when it has a poor track record in the last four years and broken some terms in the past?” Pua said.

MCA: Govt Can Acquire PLUS Stock To Avoid Triennial Toll Hike

KUALA LUMPUR: The MCA has proposed that the Government acquire shares in PLUS Bhd in the interest of the people, said party spokesman Wong Nai Chee.

By acquiring shares in PLUS, Wong said the Government would be able to establish policies and measures to ensure that the people were not burdened.

“The once-every-three-years toll hike can be avoided and any increase would be based on operational needs rather than contractual needs,” he told a press conference at Wisma MCA here yesterday,

He said the toll rate was set at 14.96 sen per kilometre and by 2038 the rate was expected to increase to 29.16 sen per kilometre.

“Toll charges from Kuala Lumpur to Penang, which cost RM86 one way, will increase to RM168 by 2038,” he said, adding that the MCA Youth’s Legal Affairs and Parliamentary Research Bureau had embarked on a project to study all the highway agreements.

He said a team in the party led by vice-president Datuk Seri Liow Tiong Lai would have a dialogue with the Works Ministry on the issue soon.

From the financial aspect, Wong said PLUS had been generating a profit of RM400mil to RM600mil yearly from 2004 to 2007.

“The Government compensated PLUS RM295mil and 307mil in 2003 and 2004 respectively. And for the year 2007 and 2008, the Government paid RM680mil and RM730mil in compensation respectively,” he said.

Source: TheStar

Call On The Works And Finance Ministers For A Toll-Free North-South Expressway By 2016 And Save Taxpayers RM14 Billion

Media Statement by DAP Ops RESTORE Team in Kuala Lumpur on Wednesday, 25th February 2009

The DAP Ops RESTORE (Restructure Toll Rates & Equity) Team would like to congratulate the Works Minister for first having declassified most of the highway toll concession agreements, and followed up with the removal of two toll plazas at the New Pantai Expressway (NPE) and the Sungei Besi Highway in the past two weeks.

We call upon the Works Minister to declare the compensation promised to these concessionaires for the abolition of the toll, for if the compensation involved is equivalent to the toll that would have been collected, then the joy for Malaysians will be short-lived.

In addition and more importantly, DAP Ops RESTORE Team calls upon both the Works and Finance Ministers to make the entire North-South Highway and its related concessions such as the ELITE, Butterworth-Kulim (BKE) and the Second Link Highways under PLUS Expressways Bhd completely toll free by 2016.

Following our team's consultations to date with our legal experts, investment bankers as well as the general public, we have developed a comprehensive, practicable and creative programme to return the highways to the people in the least possible cost, and shortest possible time without compromising the integrity of the financial markets.


Our proposal will:

- Impose no further increase in North-South Highway toll rates

- For example, a return KL-Penang journey will remain at RM86.60 today instead of RM115.30 in 2015 and RM168.80 by 2030.

- Create RM14 billion savings for Malaysians from 2009-2015

This will be the amount saved either (i) by Malaysians using the highway because of no further toll rate increases or (ii) in terms of compensation which would have to be paid by the Government to PLUS Expressways.

1. Continue to collect toll only until 2015

2. Incur no additional cost for the Malaysian Government or Malaysian tax-payers


Background information:

- PLUS is listed on Bursa Malaysia at a price of RM2.88 per share and a market capitalisation of RM14.4 billion (24th February)

- The Government of Malaysia, via Khazanah owns 65% of PLUS.

- PLUS has outstanding net debt amounting to RM8.5 billion


We call upon the Government to take the following actions:

1. The Government should make a General Offer (GO) to acquire all minority shareholders of PLUS with a generous 15% premium at RM3.30 per share, costing RM5.25 billion thus ensuring that minority shareholders are protected.

2. The cost of acquisition added to the RM8.5 billion net debt of PLUS will amount to RM13.75 billion.

3. This cost will be funded by issuing Malaysian Government Securities (MGS) at 3% interest (or less), costing RM413 million per annum. Total repayment will amount to RM16.2 billion over 6 years.

4. At the same time, PLUS should generate at least RM20b in net positive cash flow the 6 years to 2015 without further toll rate hikes and a conservative 3% pa traffic growth.

5. Therefore by 2015, the government can completely repay the MGS and still have RM3.8 billion excess which could be used to build a better public transportation system throughout the country.


Not only will the execution of the above proposal bring joy to all Malaysians with a toll-free North South Expressway, the exercise will fit perfectly with the upcoming “mini-Budget” by the Finance Minister:

- RM14 billion saved by Malaysian consumers will reduce the cost of living for the average Malaysian in times of economic difficulties we face today.

- RM14 billion saved will also redirect expenditure to other more productive sectors of our economy by increasing domestic consumer demand.

- The reduced toll rates and its subsequent abolition will substantially reduce the cost of doing business in Malaysia, increase logistical efficiencies and ultimately make Malaysian companies more globally competitive.

- Best of all, the plan will stimulate demand and make available substantial funds for public infrastructure development without the Government having to increase the precarious budget deficit further.

Hence, the DAP Ops RESTORE Team would like to reiterate our call to both the Finance and Works Minister to include the above proposal in the proposed mini-budget set to be announced by the Finance Minister on the 10th March for the benefit of the Government and all Malaysians.

Malaysia's Next PM Mends Fences With Minorities

Malaysia's incoming premier Najib Razak Tuesday hailed the ethnic Chinese community's contribution to the nation, in a bid to mend ties with minorities who deserted the coalition in 2008 elections.

The comments from Najib, who is expected to be sworn into power later this week, came after an angry debate over the role of minorities in the multiracial country's independence struggle.

"I would like to thank the Chinese community for their many contributions to our nation's development," Najib told editors of a local Chinese paper, according to a statement from his office.

"The Malaysian Chinese community has, is now, and will forever play a vital role in the fabric of our nation," he added.

Najib last week became president of the ruling United Malay National Organisation (UMNO) which represents majority Muslim Malays who make up 60 percent of the population and dominate the government.

UMNO leads a coalition of race-based parties that also represent the ethnic Chinese and Indian communities, but they were hammered in elections a year ago as minorities shifted towards the opposition.

The opposition benefited from a rising sense of "Islamisation" of Malaysia, and fears that minorities' rights are being eroded.

Najib pledged to "develop a government that respects the voices of all Malaysians" and said the government "recognises and respects the contributions of all people in building Malaysia."

His comments came after a senior leader said at last week's UMNO assembly that independence and later developments were forged by "UMNO and our Malay rulers and no one else."

The Malaysian Chinese Association (MCA), a key member of the coalition, urged a stop to "rewriting the facts of history or denying the efforts of other races in helping to fight for the country's independence."

Malaysia gained its independence from Britain in 1957 under the leadership of UMNO, MCA and the Malaysian Indian Congress, which later along with several other parties, came to form the present ruling coalition. - AFP