theSun | WEDNESDAY JANUARY 7 2009
speak up!
MAKE Big Money Sdn Bhd (MBM),
as the name suggests, wants to
make mega bucks. Its sharehold-
ers have little to invest, but they
have “connections”. They prepare
a “working paper” to be submitted
to the government. They want
to build bungalows which would
be subsequently leased to the
government for 30 years. The com-
pany doesn’t have the land or the
money. The government acquires
the land and provides a loan so
that the bungalows can be built.
So, how can MBM not succeed?
Everything is served on a platter
and there’s a ready taker when the
bungalows are handed over. In the
event MBM loses in this venture,
the government will compensate
the company!
This in a nutshell describes
one of the many toll concessions
that have been entered into by
the government. For long, these
concessions had been kept under
wraps, for reasons better known
to the powers that be. But with the
declassification of the documents,
it is now public knowledge that
some of them were lopsided deals.
How and why did the government
enter into such deals? No one can
answer these questions except the
people who were tasked with the
responsibility.
How could the government
take the financial risks to pay for
all costs? Besides, why did it under-
take to guarantee concessionaires
profits and indemnify them from
losses and even ensured the
profits?
It is interesting to note that
former prime minister Tun Dr
Mahathir Mohamad was quoted
in theSun (Jan 9, 2007), as saying:
“What you have is a cabinet which
is not very knowledgeable all the
time because it is not made up
of experts but politicians (and)
some politicians like myself can
sometimes be stupid. The cabinet
merely gave approvals in princi-
ple and never really studied the
implications in some parts of the
agreements.”
Mahathir’s statement implies
letter
letters@thesundaily.com
Why are people unequal in society?
PEOPLE who seek a just world
almost always identify inequal-
ity as a source of injustice. Every
time we interact with one other,
inequalities emerge in some form
or another. Over time, most people
come to accept the inequality that
exists. Obviously, this acceptance
aids its perpetuation.
As a sociology student, I learnt
that inequality arises from social
conflict, the division of labour and
the existence of private property.
It also arises from the mutual
influence of power, privilege and
prestige. Through it all, a relatively
permanent structure is created
and people are placed in it and
socialised into it.
Inequality continues over time.
The efforts of those at the top of
society help perpetuate it. The in-
stitutions of society, the basic ways
in which things are done, operate
to uphold the existing inequality.
The socialisation of people into a
culture that justifies inequality is
also an important factor, as well
as the successful socialisation of
people to learn and accept their
position. Finally, instruments of
force are used to perpetuate
inequality.
Some inequality is probably
inevitable. People must work hard
to prevent its emergence and once
it emerges, they must work even
harder if they wish to control it.
Robert Michels argues that organi-
œ 15
People pay for sweet toll deals
FY March 2006, exceeding RAM’s expec-
tations for the fourth consecutive year.
Nevertheless, we expect the envisaged
traffic congestion to moderate growth in
the longer term.
With all these glowing statements on
those given the task to the contents of Lebuhraya flow generation for Litrak, as reflected cash flow and profitability, were we, the
undertake the drawing Damansara Puchong (LDP) by its average annual free cash flow (ie taxpayers, misinformed as to why the
up of the concession concession contract, not operating cash flow less net investing government “has to pay compensation
agreements failed in withstanding the fact that cash flow) of about RM120 million over if we do not allow them to increase the
their duties by not the contents were already the past five years ... Looking ahead, rates”? This question is pertinent be-
providing proper advice in the public domain. Litrak is expected to generate at least cause there was more than the projected
and there was derelic- These are some of the RM150 million of free cash flow a year traffic volume and in turn, a bigger profit.
tion of duties. Surely, if observations made by RAM throughout the remaining tenures of its Why then was an increase necessary? It
the “reasonable man” in 2007: debt issues. was in the concession agreement, that
test was used, no one » Litrak’s toll rates were » Since the commencement of its toll- notwithstanding the guaranteed profits,
would have entered reduced to RM1 in March ing operations, LDP’s traffic volume has the company has the right to increase
into such deals which CitizenNades 1999 as a result of public continued to chart impressive growth, the rates periodically. How did we enter
committed the govern- pressure, with the govern- underpinned by its favourable alignment into such agreements? Will someone
ment, in this case, the by R. Nadeswaran ment paying compensation that stretches across the densely-popu- own up and tell us the truth?
taxpayers. So, if the for the reduced rates, the lated areas of Puchong, Bandar Sunway,
cabinet merely gave the approvals concessionaire was the real winner – To Petaling Jaya, Damansara and Kepong.
in principle, who then conducted date, the lower toll rates have turned The highway’s average daily traffic R. Nadeswaran hopes that the govern-
the negotiations and the terms out relatively well for Litrak as they increased to 417,581 vehicles in FYE ment will never ever enter into deals
of the agreements? So, we have have attracted more vehicles to the LDP, March 31, 2006 (FY March 2006) from which burden the people by entering
the works minister, the ministry’s contributing to the highway’s strong 188,066 vehicles in FY March 2000 – a into lopsided deals. He is editor (special
secretary-general, the head of the traffic volumes. 14.5% compounded annual growth rate and investigative reporting) at theSun
Malaysian Highway Authority and » The LDP’s excellent operating track for the past seven years. Meanwhile, and can be reached at: citizen-nades@
other officials who were part and record has translated into robust cash traffic growth worked out to 7.98% for thesundaily.com.
parcel of the whole thing. And it
is more than obvious that these
personalities failed the people.
What about the legal eagles in the
government? Didn’t they read the
fine print?
The bottom line, despite
Mahathir’s assertion, is that the
buck stops with the cabinet,
irrespective of their ignorance or
lack of knowledge on the subject.
After all, they are supposed to be
the guardians of public money.
And surely, they had experts in
the ranks of the civil service who
advised them, and in this context,
they failed miserably.
Now, the public can understand
the previous minister’s raving
and ranting when financial as-
sessments of concession owners
carried out by the Rating Agency
of Malaysia (RAM) were used to
show their profitability. He had
wanted the four opposition leaders
(in February 2007) – Tan Sri Khalid
Ibrahim and Tian Chua of PKR, Ron-
nie Liu of DAP and Dr Hatta Ramli
of PAS – charged for disclosing
sations with leaders will inevitably
develop a system of inequality and
ultimately that system will be very
difficult to eradicate.
Although Marx believed that
with the destruction of capitalism,
equality will prevail in society, the
twentieth century has not proved
him right. Indeed, the situation
seems far more complicated. In
the Soviet Union, China or Cuba,
nations where private property
was abolished, there still arose
a stable system of inequality,
perhaps not based on ownership
of property as much as on political
leadership, occupation and control
over property.
To claim that inequality is inevi-
table does not mean that people
should also claim that poverty and
hardship must be accepted or the
tyranny must be tolerated. The
question should be: How much
inequality is to be tolerated? How
much inequality is necessary?
Beneficial? Democratic? Moral?
To realise that inequality is
inevitable also means that those
people dedicated to principles
of equality have a difficult task
ahead, because so much in society
seems to encourage and protect a
system of inequality. In this respect,
equality is like freedom: it is
possible only with vigilance.
Mathavi Nadarajah
Klang