Un-tolled joy or un-told joy?

The Star with its 29th January 2010 headline screamed "un-tolled" joy.



Toll abolished on one stretch, no rates hike on two highways

PUTRAJAYA: Toll for the Salak to Taman Connaught stretch of the East-West Link Expressway is set to be abolished by May, Datuk Seri Najib Tun Razak announced.

The Prime Minister also announced that the toll rates for the Kuala Lumpur-Karak Expressway and East Coast Expressway Phase One would not be increased for the next five years.

He said the decisions were made following a review of transportation costs, including restructuring the toll charges and to ease the people’s burden.

He also added that no compensation would be paid to the concessionaires of the three highways.

“In line with the 1Malaysia spirit, People First, Performance Now, I have asked toll concessionaires to carry out a review of the respective toll charges to help the Government prosper the country and lessen the burden of the people.

“Taking up the Government’s call, two corporate figures who are also major shareholders of a toll concessionaire, came forward with a toll restructuring proposal through the acquisition of assets, which will benefit the people,” he told a press conference at his office here yesterday.

Also present was Works Minister Datuk Shaziman Abu Mansor


An early nice Chinese New Year surprise for the toll hating Chinese community before Tenang by-election?

MTD Capital Berhad operates the above 2 tolled highway until 2032 with another one (not acquired by the directors in this exercise) until 2018.

Below is a screen shot of the letter of offer, announced by MTD Capital Berhad in Corporate Announcement section of the Bursa's website as required by the listing requirements.

According the the offer above, the 2 directors via a Special Purpose Vehicle will pay MTD RM3.525 billion in cash to buy the 2 concessions. I get a bit worried whenever I see the term SPV and any government linked initiative in the same article. Not sure why.

The question is, how is this SPV (i.e. entirely new company, starting from zero) going to raise the RM3.525 billion? Is it from bank loan guaranteed by government? Government loan? EPF investment? Khazanah contribution? Either way, the rakyat is going to finance this either via tax money or hard earned deposits with commercial banks. It looks unlikely that some rich entrepreneur came up with the cash elsewhere.

The challenge nowadays is to achieve more with less resource; not achieve less with more resource committed.
So is this a good deal for the people as the Prime Minister indicated?

This is tricky as I do not have all the relevant details. According to MTD Capital Berhad's 2009 audited accounts, 3 tolls gave them a profit before finance charges and tax of RM143.8 million

Now this RM143.8 million is from 3 toll highways but in the absence of the breakdown per highway, I took the offer purchase price of RM3.525 billion for 2 highway toll concessions and divided by total profit earned by 3 concessions.

Lo and behold, it is about 24 1/2 years, calculating from 2011 onwards, it covers profits up to 2035 while the 2 concessions will end July and December 2032. 3 years extra.

Those who understand financial terminology knows what I am saying - I do not have MTD's WACC nor cash flow projection to do a proper discounting.

From tax payers' point of view, why can't Najib administration negotiate better? By paying off immediately, the termination of business risk and immediate cash inflow would worth a huge discount from MTD. If Rakyat Diutamakan surely the most powerful prime minister can play a bit of hard ball and carrot & stick to part with lesser money? He has proven to be a smooth political plotter elsewhere.

Although the article mentioned no increase for 5 years, there is no further details about whether the length of concession will remain the same or otherwise, nor what will happen from the 6th year onwards.

Furthermore, who are the shareholders of the SPV? To whom the profits arising from future toll be going to? Does the SPV have concrete cost management and reduction programme? Is there going to be open tender by the SPV to obtain the best offers from vying contractors to maintain the highway?

The sentence "no compensation for the 3 highways" makes me wonder. The profit above would have included the compensation for 2009. If the purchase consideration exceeded the profits then the compensation would have been included in the RM3.525 billion anyway.

I won't be jumping with un-tolled joy until the untold parts are clear to me.

Home Ministry's battle with youtube and facebook users

After reading this report from the Sun below,


I do not understand just exactly what the Home Ministry is trying to address. Is it a piece of faulty reporting or the Ministry’s own ambiguity? I do not see why the Ministry seek to renegade against Mahathir’s pledge that Internet will not be subject to interference in Malaysia.

The key sentences are as follows:

# Mahmood said the amendments were not meant to tighten control over the press but to address loopholes in the law and make it more inclusive.

- this gentleman says that there is no intention to tighten control over the press, but does expanding the coverage of a regulation not result in tighter control? If there is no concrete end result/purpose, why waste money, time and energy?

# "It is not about having stricter guidelines. But there is a loophole at the moment, and some things do not fall into any category."

- now closing a loophole means tightening control, what else could it mean?

- It is quiet clear that the ministry via the gentleman is contradicting himself

# "We monitor what is in YouTube and discuss it. We won’t be able to control it, but we have to see how to go about it."

- This gentleman has disclosed his intention – after talking about what he has watched in Youtube, he has admitted that while he badly wants to curb it, but according to Mahathir’s pledge to the world, there is no existing laws in Malaysia to impose censorship Internet ala press suppression 20th century style, he and his team are cracking their heads trying to impose a 20th century philosophy onto an unstoppable 21st century trend.

- reading between the line, this civil servant's statement seems to indicate that the solution in the pipeline is not to censor the Internet but "go about" on the people airing their opinion in cyberspace.

- given the manner in which printing press act has been implemented in Malaysia for decades, I am not 100% confident that the application of any expanded legislation would seem to be fair to both side of the political divide.

# He said although the existing guidelines were only a year old, they had to be modified to ensure they suited the 1Malaysia concept of giving priority to the people’s interest.

- Another irritating, general and incomprehensible string of words so typical of the successive administrators as attaching a well used slogan does not add credibility to a statement of opinion. The attached clarity and apparent logic would prove the weigth, not another round of the over-used rallying call.

- I do not see how slapping gags on communication via Youtube and Facebook can priortise people’s interest under some political sales pitch.

The Singapore diplomats have confirmed that many Malaysians have concluded for a long time anyway – we do not have many competent people running the country.

After reading the article a few times over, I struggle to convince myself not to conclude that:

# This is prove that the existing administration have lost the cyberspace warfare in convincing and winning over public opinion of savvy and thinking internet users

# The partisan administrators hope to replicate the outdated modus operandi of airing one sided arguments in cyberspace

# But the 21st century solution is not to impose censorship or intimidate, but to show actual performance in real world and defeat its detractors in open and sensible debate

# If the gentleman thinks clamping down on facebook exchange is necessary, then they are guilty of voyeurism, intrusion and for consistency sake, they should eavesdrop into all conversations in coffee shops, mamak stalls, taxies and other places where thinking people are articulating, evaluating, criticizing and debating the performance, integrity and achievement (or lack of) of elected people’s representatives and tax payers funded machinery.



Published: Saturday August 8, 2009 MYT 9:39:00 PM
Internet should not be censored, says Tun Mahathir

KUALA LUMPUR: Former prime minister Tun Dr Mahathir Mohamad said Saturday the Internet should not be censored in any way, and it was wrong to do so although some things needed to be disciplined.

"For example, there is too much violence coming through on the Internet.

“That, I think, we have a right to ban but as far as political thinking, if you are not instigating violence and things like that, I think the Internet should not be censored in any way," he said.

He was speaking to reporters after delivering his speech at the Third Annual Malaysian Student Leaders Summit here.

He said that during his time of administration, he had given the undertaking that the government would not censor the Internet when it started the Multimedia Super Corridor (MSC) years ago.

"So maybe that was an undertaking given by me during my time. I don't know whether that will commit the present government," he added.

On Friday, Information Communication and Culture Minister Datuk Seri Dr Rais Yatim said the government was looking to put up Internet filter to stop access to undesirable websites. However, Prime Minister Datuk Seri Najib Tun Razak said the government had no intention of monitoring and censoring the Internet contents as the move would not only be ineffective but would also cause public dissatisfaction. - Bernama

PLUS EXPRESSWAY : Scratching the tip of a block of tar

The biggest deal for the year so far is of course the UEM-EPF acquisition of PLUS. Without DAP Economic Bureau's alternative budget for 2010 proposing a RM15 billion bid to nationalise PLUS, I doubt if this UEM-EPF initiative would ever be mooted by the BN administration.


Tuesday January 18, 2011
PLUS Expressways says UEM-EPF offer ‘confirmed’

PLUS Expressways Bhd's board of directors, save for the interested directors, has deemed the UEM Group Bhd-Employees Provident Fund's (EPF) RM23bil takeover offer as a “confirmed offer.”

It told Bursa Malaysia yesterday that the board had decided to proceed with the adjourned EGM for its non-interested shareholders to consider the disposal of its entire business and undertaking to UEM-EPF, and the proposed distribution of the cash proceeds to all entitled shareholders via a proposed special dividend and selective capital repayment.

So under BN, the valuation is RM8 billion more than DAP's economic bureau but that is not what I am examining here.

I took a look at the 2009 audited accounts and try to appreciate the magnitude of the issue at hand.

I extracted the numbers from the audited 2009 accounts.

What strike me is that the compensation for 2009 and 2008 represent almost 70% of the total profit. The "compensation" is almost equal to the "direct operating cost" i.e. PLUS essentially is running a service with hardly any capital contribution of its own. Without compensation, the profits of RM1.2 billion for both years are already an impressive RM300 million.

The word compensation is dubious, as we only compensate when there is a loss, not profit.

I already hearing some one saying that Plus needs the huge profits to generate enough cash to pay for the capital infrastructure, right?

According to the balance sheet, resource available comprising compensation receivable plus all the cash in banks as at 31 December 2009 was around RM5.5 billion; about half of all liabilities due to government and financial institutions. Those debts are not immediately payable but many years later.

Note 24 of the accounts provide a breakdown as followings:
Due within 1 year : RM582 million
Due between 1 and 2 years : RM943 million
Due between 2 and 5 years : RM2.7 billion
After 5 years : RM6.8 billion

It seems that cash in the bank alone, RM2.9 billion (the 2 numbers shaded in yellow) was more than enough to pay 2 years' worth of borrowings already.

So just want do PLUS do with the RM800 million compensation receivable for 2009?

Why, pay dividend of RM800 million, of course!

Never mind if the welfare department monthly pay out to the needy is between RM150 to RM300; never mind if the flooring in some SRJK(C) is rotten enough to cause a teacher to fell to his death in Melaka; never mind if the medical facilities in East Malaysia are not up to scratch.....

Idris Jala is right, improper subsidy will bankrupt the country but he was not very clear with the nugget above. Time for PLUS and UEM to change their life style?

A fair amount of the borrowing is from "government" a.k.a. shareholders hence the subsidies come in more than 1 form, i.e. compensation plus interest free loans.

In Note 33 "Long Term And Short Term Borrowings And Amounts Due to Government", there is this lovely disclosure:



(a) (ii) Government Loans

ELITE entered into an agreement on 15 December 2000 with the Government whereby the Government provides financing up to a maximum of RM100 million, at an interest rate of 8% per annum capitalised on an annual basis.

The Government and ELITE entered into a Supplemental Loan Agreement ("SLA") and Additional Government Loan Agreement ("AGLA") dated 15 January 2003, whereby the Government agreed to waive ELITE's obligation to pay interest on the existing Government Loans with effect from 15 December 2000 to 31 December 2001 and to provide ELITE with an interest free term loan facility at a principal of RM300 million. It was also agreed that the aforesaid existing Government Loan shall be interest free with effect from 1 January 2002 to the final repayment date.


What the above mean is that in 2000 PLUS-ELITE suppose to pay interest of 8% but did not. After prolonged delay, in 2003, not only BN administration waived the interest not paid up according to the loan agreement, but advanced 3 times more the money at no interest.

If we mere mortal citizens try defaulting a couple of motorcycle loan instalments, we will encounter incomparable consequences, probably.

Taking PLUS under UEM-EPF would not mean the solution is found. Public utilities are meant to be loss making and finance by tax payers, not creating super normal profits for shareholders at public expense.

UEM via its subsidiaries like PROPEL enjoy a monopoly as PLUS's primary supplier of materials and services. A glance at "Recurrent Related Party Transactions" includes:

* provision of maintenance works and maintenance management services by UEM group companies - RM20,689,467

* construction and other related works to Expressway and Ancillary Facilities by UEM group companies - RM61,168,000

* provision of upgrading works in relation to the Expressways and Ancillary Facilities by UEM group companies - RM20,139,751

* provision of IT related services, maintenance and upgrading works, supply of IT equipment and software, electrical and toll equipment spare parts - RM6,636,760

(the above are amounts for 1 financial year)

If the profit guarantees are still in place then there is no real incentive for UEM to control cost since it is a cost-plus model. Although the Chairman's speech contained the following statement:

"We managed our costs efficiently amidst the economic downturn and realised total savings of
about RM 30.7 million by focusing on Six Sigma initiatives, the Project BETA (Boosting Efficiency Transforming Attitude) business process improvement programme, and several procurement initiatives."

The best model to save money for the rakyat is for the entire highway network to be maintained by a non-profit, non-dividend paying statutory body that understand it's mission is to provide efficient and effective road network for the welfare of the nation and rakyat.

Like health care, national road network should not be a tool to maximise profit for certain selected businessmen.

Taking away profit element of toll concessionaires and its monopoly service and material providers will lower the cost of business, increase the purchasing power of the rakyat and could have incalculable multiplier effect on the flow of economic activities of the nation.

Enough about croninomic projects, it is food that counts

Cost of living in high income countries are high, understandably. However, before Malaysia achieve the high income status Najib administration aspires and advertises, we are nearer to high cost of living than high income. Lately the food prices are getting more and more unbearable, especially to those low income groups and those depending on social welfare assistance.

Part of the reason is the unprecedented high crude oil price. Other reason includes abnormal weather trend and raising demand for food, especially from China

High food prices has resulted riots in Algeria and abrupt and continuous increase in retail prices was the catalyst for the 1997 riot and mass murder in Indonesia.

Managing cost of living, and food price in particular, is critical for social order, much more than manufactured inter-racial differences.

However, a more sinister and largely unpublished reason for food price increase is food speculation. This article reveals something that made my stomach turned.



For over a century, farmers in wealthy countries have been able to engage in a process where they protect themselves against risk. Farmer Giles can agree in January to sell his crop to a trader in August at a fixed price. If he has a great summer, he'll lose some cash, but if there's a lousy summer or the global price collapses, he'll do well from the deal. When this process was tightly regulated and only companies with a direct interest in the field could get involved, it worked.

Then, through the 1990s, Goldman Sachs and others lobbied hard and the regulations were abolished. Suddenly, these contracts were turned into "derivatives" that could be bought and sold among traders who had nothing to do with agriculture. A market in "food speculation" was born.


So it has come to this. The world's wealthiest speculators set up a casino where the chips were the stomachs of hundreds of millions of innocent people. They gambled on increasing starvation, and won. Their Wasteland moment created a real wasteland. What does it say about our political and economic system that we can so casually inflict so much pain?

The world is a big place and Malaysia is also subject to the turbulence the speculators inflicted on the global population.

But, have our democratically elected leaders did all that is within their power to protect Malaysians from higher food prices?

In 2008, 50 of our members of parliament was taken to Taiwan for agriculture studies and yet the food price Malaysians have to grapple with seems to be a heavier than ever burden.

The answer to Teo Nie Ching's question on our behalf, in 2009, went unaccounted for:-



13. Puan Teo Nie Ching [Serdang] minta Perdana Menteri menyatakan manfaat yang diperolehi dan direalisasikan oleh rombongan back-bencher BN yang telah mengunjungi Taiwan untuk mempelajari teknologi dan teknik pertanian tahun lalu supaya terdapat pulangan berpatutan daripada perbelanjaan wang rakyat yang mendadak itu.


Utusan Malaysia should stop focusing on what decent clothes she wears because YB Teo is much much more than that.

Securing food source for Malaysians do not require politicalising the livelihood of pig farmers and food source of non-muslims. If some quarters do feel strongly against pig farming and incapable of seeing this as a practical issue as it really is, spare a thought for our Hindu friends who have to put up with beef rendang servings in 5 star hotels, Big Mac dealing shopping malls, drive throughs and corner shops which are certainly more ubiquitous and obvious that some remote pig farms.

Making food prices reasonable does not require excessive level in supply chain. Padiberas Nasional Berhad took over the government's function in rice supply and subsidies management and all consumers have to pay extra to enable this company to be profitable and dividend paying to another concessionaire holder.


"Talk about coming back with a vengeance. Is this privatisation necessary? Why Malaysians have to pay additional middleman profits? Can't the well remunerated Barisan Nasional Federal Government with more than 50 years track record operate rice system without this middleman at Malaysians' expense?"


Please bear in mind that when our food suppliers and manufacturers calculate their cost of production and sales, they have to include profit guarantees or compensation accruing securely to the highway toll concessionaires who hence do not have great pressure to keep cost down.

Making food prices reasonable also does not require making a well connected person taking up a huge chunk of sugar subsidy


According to note 29 of its 2009 accounts, government grant /tax payers money of RM287 million was received by TW Group for rice and sugar.

Amazingly, this was disclosed in the accounts:

RM203.6 million or roughly 21% of the subsidized sugar was sold to......Bukhary Sdn Bhd


It is perhaps time for the government of Malaysia to serious look into the following strategic points:

1) ensuring Malaysian food supply can be substantially supplied by our own agriculture sector, thus insulating ourselves from the impact of world market; and

2) designing a complete and shortest possible supply route that ensure the food stuff reaches the population quickest possible (guaranteeing freshness) with minimal middle men intervention hence substantial portion of the profits can be channelled back to the farmers for their reinvestment and reward while keeping the price of food down. Reviving co-operatives anyone?

Steel and automobile industries are among those listed as "industry of national strategic importance" but I would rank food production above those 2 as more critical.

Let's look at how seriously our neighbours take their food supply:-


1) Singapore:



1. The Ministry of National Development (MND) and the Ministry of Trade
and Industry (MTI) had formed an Inter-agency Committee (IAC) in 2008 to
look into the long term strategies to ensure that Singapore continues to enjoy a
resilient supply of safe food.
The IAC’s recommendations were announced for
implementation in July 2009

Food fund
3. The Food Fund was launched in Dec 2009 with the aim to strengthen our strategies of food diversification and local farming to ensure a resilient supply of food for Singapore.

7. AVA’s "matchmaking" efforts have also resulted in the successful establishment of an MOU between the Singapore Food Industries Pte Ltd and Indonesia’s fruit and vegetables association. Apart from this, AVA has been working with NTUC FairPrice in their ongoing efforts to expand their contract farming initiative. NTUC FairPrice recently established a new contract farm in Medan, Indonesia, to supply leafy vegetables to Singapore.

Food Substitutes
8. To help consumers mitigate the effects of potential supply disruptions and price increases, AVA has implemented public education programmes to create awareness on the availability of good product substitutes. Consumer uptake of frozen meat has increased since the launch of the frozen meat public education programme. A similar programme to raise awareness of liquid eggs and egg powder as viable alternatives to shell eggs was launched in Feb 10.

2) Brunei:


Brunei Darussalam has targeted a rise in its rice self-sufficiency target to 60 per cent by 2015 and also seeks to increase its self-sufficiency in other food requirements including fruits and vegetables and seafood like fish and prawns. Brunei is already self-sufficient in beef. The Brunei government owns a cattle farm in Australia that supplies most of the country's beef.

On Tuesday, His Royal Highness Prince Haji Al-Muhtadee Billah, the Crown Prince and Senior Minister in the Prime Minister's Office, emphasised on innovation taking a primary role in achieving and maintaining food security in the Asean region. Speaking at the opening of the 31st Asean Ministers on Agriculture and Forestry Meeting (Amaf), His Royal Highness said: "
I believe that innovation, based upon science and technology, will be a primary contributor to the maximisation of food production in a sustainable, more cost effective and environmentally responsible manner."

3) Indonesia


Indonesia Attains Rice Self Sufficiency
By news desk on January 01,2009

Indonesian Vice President Jusuf Kalla has announced that the country would not be importing any rice in 2009 because its rice production target has been achieved.

The vice president also said that Indonesia had this year succeeded in achieving self-sufficiency in rice after a period of almost 50 years in which the country’s rice production continuously dropped


So, where do Malaysia go from here? Should more resource and attention be directed to making food supply secured and afforable, rather than raising more bonds for more cronimonics projects which turn up as white elephants, abandone projects or not so well maintained structures thereon?

Of banning other religion and commonsense

I am not going to question the intelligence or the common sense of all the officials in 1Malaysia Najib's office pertaining to this:


'Najib, apologise for un-1Malaysian directive'
Thursday, December 30 @ 05:07:18 PST

Teresa Kok slams Najib for contradicting his 1Malaysia with his directive to remove all crucifixes at a Christmas tea party.

Seputeh MP Teresa Kok is demanding an apology from the prime minister for his office's directive to rid religious elements from a Christmas celebration, which she said was “disrespectful” to Christianity.

According to Kok, who is also Selangor senior exco, the Prime Minister's Office's had issued a directive for crucifixes to be removed from the Christian Federation of Malaysia (CFM) Christmas event on 25 Dec, where Prime Minister Najib Razak was a guest.

The directive, she said, also prohibited Christian prayers and hymns during the event that was held at the Catholic Church Archbishop's residence.

“Najib should apologise to the Christian Federation of Malaysia for 'de-Christianising' their Christmas celebration, that yet again denied Malaysians the right to freedom of religion,” said Kok in a statement.

“Such an order from the Prime Minister's Office shows how insincere and ungracious Najib behaved, as a guest at the celebration held at the Catholic Church Archbishop's residence.

If Chrisitans can't sing or pray according to their religion and display sacred religious sign on the holiest day of the year, just because someone whose salary are also taken from Christians happens to drop by; well that explains a lot about Najib's Rakyat Diutamakan. Might as well not to have the party spoiler around, thank you.

Your vote I want, your religious right not my concern.

Surely Najib's officials can't be worried about the Prime Minister faith being affected merely by attending a very common religious ceremony held in Malaysia for generations?

By comparison, let's look at this brainy Singaporean Malay girl of high school age. 19 years old Humaira Ahmad, concerned about the environment and hope to make the environment better, decided to work with Keg Wei Yang and Raya Chowdhury, to produce a hybrid incense paper to reduce pollution during traditional and religious funtion.

Click the picture to see the article in full screen

Gee, was she offended by Chinese customs and religion? Did she changed her beliefs after this project? The answers to both questions are probably "No".

I think she must have looked at this as an environmental issue and an opportunity to better the living condition in her country via application of scientific solutions.

Now compare to Humaira and the people who are suppose to run the country and have done so for more than half of a century....I think I know who has more reasoning power and believable. It is just sad that Malaysian tax payers have to waste money in worse ways than burning papers sustaining this lot.

Apart from Rakyat Diutamakan, which proven in the above case as totally empty sloganeering, let's see how the little red dot enable and empower it's SME.

The Net Generation Nationwide Broadband Network has been launched to enable SMEs - all fibre, ultra high-speed network so that SME can access into "Cloud Computing" and obtain software previously available only to big companies, improve their response time to customers etc

Whereas in Malaysia, we do not have comparable facilities, and the continuing application of various legislation to curb free flowing of ideas hence development of critical and right thinking citizens.

Click the photo to see in full screen

Time for those who deal in communal politics to wake up or to be kicked out. Malaysia is a better place if we focus on real livelihood and social justice issues.