AES contracts: An ignominious dereliction of duty

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Patriots

Calling the original contractual agreement inked in 2012 appalling is an understatement, says Mohamed Arshad Raji.

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 acquisition of the assets of the two companies with RM555m paid from the Armed Forces Fund Board (LTAT).

Since then, veterans and serving personnel have expressed many grouses. Sentiments of frustration have grown louder – but not a squeak is heard from any current member of the LTAT board of directors. It is surprising that a former chairman of the board had to make a statement late on 23 August, which raised more questions than answers.

To get the perspective right, the transport minister on 20 August said the following:

  • The contract signed by the BN administration in 2012 with two concessionaires, Ates Sdn Bhd and Beta Tegap Sdn Bhd, was lopsided; hence the new government decided to cancel the contract and refund RM555m, the amount paid by LTAT.
  • Two tiers of payment were involved. First, the government had to pay RM16 to the concessionaires for each summons issued, irrespective if the summons was collected. The RM300 summon was to be divided equally, RM150 each to the company and the government.
  • 47 cameras were installed at RM250,000 each.
  • During the five-year period, there were 3.1m or 80% of unpaid summonses amounting to RM435m. But the two concessionaires had already profited by RM129m.

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 operations in 2015, after due diligence and with a view to earn double-digit profits and provide employment opportunities to veterans.

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Patriot would like to ask the following questions:

  • What kind of due diligence was there for acquiring the two companies with assets predominantly in the form of 47 cameras at RM555m, or RM11.8m a camera, when the previous companies paid only a quarter million (for each camera)?
  • With such a high rate of non-performing summons, how could LTAT, relying on the RM16 per summons issued, ever hope to recover the vast sum of capital outlay?
  • LTAT paid the RM555 million to whom (which company or person) and what amount?
  • How many veterans have been employed since 2015?

Indeed, calling the original contractual agreement inked in 2012 appalling 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. But this stupidity applies to negotiations with local companies too. LTAT was unwise to enter late with a huge pile when the original concessionaires had already made their pile, unless of course there was another agenda.

The current LTAT board of directors must speak up immediately or take responsibility for the whole ignominious dereliction of duty and resign. Patriot reiterates the call for a 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 the LTAT board of directors to ask themselves whether they have done enough.

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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) is president of Persatuan Patriot Kebangsaan.

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