Samy Vellu Runs Into Flak Over Privatised Roads In India

The ebullient Malaysian works minister, Dato' Seri S. Samy Vellu, whose close rapport with the Tamil Nadu government is in tatters with the emergence of Mrs Jayalalitha Jayaram, cannot understand how the Indian constitution could give so much powers to the states and the consumer who feels he is cheated.  So, when he met the Indian Prime Minister, Mr Atal Bihari Vajpayee, during his recent official visit here this week, he pressed upon the Indian leader for help sort out problems caused by a Bolehland-type road project and of a Malaysian-owned palm oil mill which cannot get the fruit from a nearby estate to process.  He also cannot understand the growing opposition to projects being awarded to Malaysian companies without tender and one a government-to-government level.  Parliament dares to question why Malaysian companies was awarded a RM712 million road project in Andhra Pradesh (the Star, 16 May, p6).

Dato' Seri Samy insists that since Malaysia gives Indian companies projects without bids, really crumbs off the table, so should India to Malaysian companies.  The Indian companies got projects because India promised to accept counter-trade payments in palmoil.  There is no quid pro quo.  Malaysian companies went into the Indian projects with both eyes closed, confident of ripping off the Indian consumer, and with a helpful Indian government in tow to help it along.  But it did not happen that way.

He does not understand the different roles states and the centre plays in a federal state, though he has been a minister of a federation for nearly quarter of a century. He once famously offered to show the Indian government how it can amend the constitution at will to rein in the states and the people who challenge the right of Bolehland companies to rip them off.  Did not the Malaysian palm oil know that it did not have prior claim to palm oil from the nearby estate, and had to bid for them at market prices? When a state-owned refinery, as in Andhra Pradesh, have had a long relationship with the estate, why should the estate break it to ensure a Malaysian investment to take off?

A Malaysian consortium offered the roadbuilding project to the Indian government, which it accepted, but forgot that it had to deal with the state governments and the individual whose land or rights are challenged.  So, Dato' Seri Samy now wants New Delhi to be responsible for paying for the land the consortium needs to build the roads.  This would be good news for the Trengganu state government.  The mentri besar, Tok Guru Hadi Awang, wants that too for the land alienated for a privatised highway through the state.  Now, let us see the good minister put his money where his mouth is.

More interesting, as an article in Outlook magazine of India reveals, is that the Malaysian roadmaking consortia has to recover costs in 12.5 years, or one-third that of Malaysia, which is often extended for spurious reasons the minister's creative mind forks out to make the consessionaires even richer.  The latest scam in Malaysia is the elevated highway from Ampang Point to Jalan Sultan Ismail.  Dato' Seri Samy is to get cabinet instructions on what the toll should be.  The consessionaire wants RM2.50. The cabinet should leave that be.  For any price it fixes below this also involves a government grant to enrich the concessainaire.  Let the chips fall where they must.  Let them put whatever toll they want to impose, and let market forces come into play.

The government should not be compensating them for reduced tolls.  It is already paying out billions of ringgit in compensation, even when the highly inflated traffic figures to justify the high cost is not met.  That must stop.  Those who understake privatised projects must be told that they are on their own when it comes to collecting the tolls.  The privatisation is a scam, corruption, as the Outlook article infers, a way of life.  And since the government believes that these tolls are what makes Malaysia a country what it is, then it should have no qualms about the consumer who gets angry that its money is used to enrich the plutocrats.  It might even get, if it believes in what it does, more support from the consumer for being given yet another chance to be ripped off. 

M.G.G. Pillai
pillai@mgg.pc.my

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