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Why AES Should Be Halted

Getting to the Bottom of the Automatic Enrichment Scandal (AES)
by Koon Yew Yin

Slowly but surely, the ugly side of the AES is emerging and revealing itself to be yet another scam of the Barisan regime.  This one aimed at enrichment of a small group has been cleverly camouflaged in the name of public interest.

Fortunately, this time around the scope for undeserved enrichment is so overwhelming and the disregard for prudent principles of transparency and accountability so obvious that even some UMNO leaders are protesting.  These late protestors from Barisan are way behind the curve on the issue and are jumping on the bandwagon of opposition political and public protest to prevent damage to their own election prospects but it is an indicator of how unacceptable the current AES proposal is.   

I predict that the AES will be dead in the water before long.  But it is important that any suspension or abandonment of the system does not prevent the authorities and the public from having a full and open inquiry on how this particular scam has managed to get through all the responsible authorities, including the cabinet at the highest level. 

Such an inquiry is necessary to ensure that the full truth comes out, lessons are learnt and an appropriate speed deterrent system is implemented – a system that is not riddled with weaknesses and drawbacks, and does not enrich a few at the expense of the public.     

Who are responsible for the debacle?

Poor Minster of Transport, Kong Cho Ha must be having sleepless nights trying to defend the indefensible.  And he must be kicking himself for foolishly putting his job on the line in repeatedly pushing for the implementation of the system.

It is likely that Kong will be made the scapegoat for this debacle. But let us not forget that this scam was cooked up some time ago. Various other crooks, sorry - slip of the finger, I mean cooks – as yet unnamed – were involved in the preparation of this billion dollar dish.  According to federal estimates for the budget year 2013, the government expects an additional RM1.02 billion in revenue from AES enforcement – all this coming from the Malaysian road user.

The origins of the outsourcing of speed cameras and speeding tickets go back to the Abdullah Badawi administration – possibly during Dr. Ling Liong Sik’s time as Minister of Transport.  Apparently, despite objections from some ministers who argued that enforcement should remain within the government’s domain, the project was pushed through by the Transport Ministry during Chan Kong Choy’s tenure. 

After 5 years as the Transport Minister, Chan stepped down officially due to health reasons in the midst of the RM4.6 billion Port Klang Free Zone scandal. Following Kong Choy’s resignation, Ong Tee Keat was at the helm of the ministry, and the project was finalized during his time. Since Tee Keat has been dubbed Mr. Clean by his MCA supporters, he should come clean on the AES and provide an explanation on his role in it and answer the questions raised.
Why so much outrage?

Firstly, there is more than a strong whiff of cronyism about the project and the way in which it has been privatized which runs against principles of responsible government and common sense.

Allegations have been made that Ates Sdn Bhd and Beta Tegap Sdn Bhd which have been awarded the contract have strong political connections.  According to PKR assemblyman Chang Lih Kang, the major shareholder of Beta Tegap Sdn Bhd is the niece of a Johor Umno assemblyman and comes from a family of "renowned Umno political figures" whose parents were previously elected to the state legislative assembly.           

"With the extraordinary connection between the largest shareholder of Beta Tegap and Umno, another instance of sheer cronyism is evident. If this is not cronyism, how on earth does the government deem a dormant company without expertise in the related field is worth rewarding a lucrative AES contract?"  Chang asked at a recent press conference.

Secondly, the system comes embedded with an extremely lucrative revenue sharing arrangement to benefit the project concessionaires.  According to reports, the two companies can claim between RM600 million to RM800 million for the services and the equipment involved in installing 831 cameras in traffic hotspots nation-wide.

This disclosure has infuriated members of the public who strongly support road safety but are concerned at the opaqueness of the implementation process and are suspicious that the main purpose appears to be to benefit various cronies.

Claim for AES Compensation Coming Up Next

The two firms awarded the contract to implement the enforcement system claim to have spent between RM300 million and RM400 million each to set up and operate the system.  If the system is to be abandoned, they will insist on being compensated for their expenses to date. 

But how believable are their estimates of expenditure?   One skeptic has worked out in great detail the expenses involved in the establishment of the AES.  According to him a total of $24 million would be more than adequate in setting up the company, main office, staffing , maintenance and vehicles; establishing a roving maintenance team at 8 locations; setting up the server, monitoring and control system; and purchasing cameras for one year’s operation (see http://unofficialversion.wordpress.com/ for the full breakdown ) 
As a long time engineer and business man, I find the breakdown of expenses provided by the skeptic credible and believable and the concessionaires’ estimates incredible and unbelievable. 

Should Compensation be Paid

We can be sure that the two companies will have insisted on full compensation clauses built into the contract should the Government back out. They will have the paper evidence to show that they have spent hundreds of millions in setting up the system.  

So it looks like either way – whether the AES is implemented or not - the two companies could be laughing all the way to the bank with their bloated claims.

There is only one way to stop this daylight robbery.  This is for the Malaysian public to kick up the biggest fuss possible and to demand that the full truth of the Automatic Enrichment Scandal - including its real costs – emerge before any compensation is to be paid.      

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