On 21 November, Malaysiakini reported that the Selayang Municipal Council claimed it was unaware that Selmax Sdn Bhd – the company awarded the concession to manage the Selangor Intelligent Parking initiative for multiple city councils across Selangor – had links to royalty.
Malaysiakini had earlier reported that Raja Muda Tengku Amir Shah had a beneficial stake in Selmax through two other holding companies: Tanah Perwira Sdn Bhd and Greyscale Holdings Sdn Bhd.
The Center to Combat Corruption and Cronyism (C4 Center) is alarmed by the council’s claims of ignorance – a clear sign that the concession process not only lacks accountability but is also completely inadequate in identifying and mitigating conflict-of-interest risks, leaving the door wide open for abuse.
To put it bluntly, this is a shameless admission of negligence on the part of the council which cannot be ignored.
C4 Center had previously raised concerns regarding the parking initiative in a previous statement dated 19 November: Selangor government must clear up all suspicions regarding Selangor Intelligent Parking concessions.
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Concerns regarding the opaque concession process, shifting concession structure, and inadequate safeguards against conflict of interest were among the points raised.
How did the council remain unaware?
This latest revelation that the council was unaware of the Selangor royalty’s link to the concessionaire has worrying implications about the integrity of the concessions process. Malaysiakini was able to identify that Tengku Amir Shah has a 16.5% beneficial stake through Selmax’s majority shareholder, Tanah Perwira, as well as through its holding company Greyscale Holdings, of which he holds a 55% share.
The fact that Malaysiakini was able to find out this information through procedures available to the public demonstrates the sheer negligence of the council in upholding its duty to serve its constituents.
Seeing as the municipal councils participating in this parking initiative are, on paper, the contracting authority, the fact that they seemingly did not run any background checks on Selmax – as would be expected of a local authority contracting a private entity – is especially egregious.
This further raises the issue of whether or not the council’s procurement guidelines were adhered to, or if there are even guidelines at all.
The only exception to this is the Petaling Jaya City Council, whose mayor refused to sign off on the contract until all uncertainties regarding the parking initiative were resolved.
This further speaks to a failure of the Selayang council, and possibly the other councils, in its complete lackadaisical attitude towards performing due diligence duties or asserting its own decision-making capabilities to serve its own residents.
Why is the Selangor government so heavily involved?
In response to Malaysiakini, the Selayang council claimed the decision to appoint the company was made by the state government, ostensibly to rid themselves of responsibility and guilt.
Regardless of the council’s ineptitude, this statement reveals that the Selangor state government very likely made all decisions on behalf of the municipal councils and clearly did not involve them in much of the concession process –except until after the decision to appoint Selmax had already been made by the Selangor government.
However, what is clear is that the Selangor state government is heavily invested in this parking initiative. Whilst the concession structure experienced changes, what was kept consistent was the ability of the state government to collect revenue from this initiative.
The original concession structure allocated 10% of parking revenue directly to MBI Selangor, while the current structure allocates 10% to Rantaian Mesra Sdn Bhd, a wholly-owned subsidiary of MBI Selangor.
Furthermore, the contracts are 10-year awards with an optional five-year extension. These extensions are subject to assessments by the respective local councils together with Rantaian Mesra.
The Selangor state government demonstrably has a financial interest arising from the contracts but also has a say in whether or not the contracts are extended.
Opacity remains unclarified
The exact terms of the agreements between the councils and Selmax remain unclear. The Bursa filing states that Selmax will be responsible for deploying, managing and operating all gazetted car park spaces under the councils’ jurisdiction.
It would also bear the maintenance costs for the parking areas. This includes repainting, repairs and supplying enforcement equipment such as cameras and vehicles.
However, it is not made clear to what extent the local councils are still involved in parking management, if at all.
An announcement made by Selangor state local government and tourism committee chairman Ng Suee Lim on 15 July stated that Rantaian Mesra, along with the eventual concessionaire, are expected to invest approximately RM200m in developing the parking infrastructure. There is no clarity as to how much each of the two entities is investing respectively.
Government institutions exist to serve the public. For too long, claims of ignorance have been used to avoid responsibility for negligent actions. This must change.
Hence, C4 Center reiterates its previous calls and strongly urges the Selangor state government to:
- Revert the parking initiative concession to the contracting stage and issue new requests for proposals, as the process of appointing Selmax was insufficiently thorough in mitigating corruption risks and meeting standards of public disclosure
- Implement contracting processes that prioritise public disclosure regarding concession details and conflicts of interests, and prioritise access to information
- Provide a clear breakdown of the role and duties of Selmax in implementing the parking initiative, including detailed cost breakdowns of expected investment expenditure
- Provide an official explanation about the series of events and decisions that led to this point, especially the issue of the royalty’s beneficial interest going unaddressed, to ensure the Selangor state government takes public accountability
- Introduce local government elections to ensure transparency, accountability and public trust in decision-making.
– C4 Center
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