This article first appeared in The Edge Financial Daily on August 21, 2018
KUALA LUMPUR: The two concessionaires, ATES Sdn Bhd and Beta Tegap Sdn Bhd, which operate the automated enforcement system (AES) under a concession that will be ending on Aug 31, received RM129 million in commissions for AES summons issued between 2012 and up to May this year, said Transport Minister Anthony Loke Siew Fook.
The payment was broken into two tiers that stipulated the sum of the summons that was initially RM300 each and later reduced to RM150 in November 2016 and the RM16 commission for each summon issued.
Tier One (commissions from the summons issued) amounted to RM60.2 million, while Tier 2 (summons) came up to RM68.8 million, said Loke, adding that the sum would be audited.
“Whatever the amount, it made no difference because the government did not earn a single sen. There was no revenue from this agreement. It was a lopsided deal signed by the previous government,” Loke told a media conference yesterday.
He identified the shareholders of ATES, set up on June 15, 1985, as Traffen Force Sdn Bhd and Commercial Circle (Malaysia) Sdn Bhd, while the shareholders of Beta Tegap, established on Feb 7, 2004, comprised Dr Andreas Teoh, Datuk Mohd Yunos Othman, Toh Puan Rozana Redzuan, General (Retired) Tan Sri Nik Ismail Nik Mohamed and Datin Yap Kim See @ Yap Ai Lin.
Apart from that, the Armed Forces Fund Board (LTAT), through its subsidiary, Irat Properties Sdn Bhd, was instructed by the former government to pay RM555 million to the companies to take over the management and operation of the AES in 2015.
“The government then used the money from LTAT to compensate the companies when it decided to take over the AES operation at a cost of RM555 million based on the loss of profit the companies suffered because it could not fix the remaining number of cameras. I was angry when I saw the agreement. The people who signed it were fools,” he alleged.
Now, the current government will need to repay LTAT that amount, which is expected to be done in stages, said Loke.
In the meantime, Loke alleged that in six years since the original agreement was signed, the concessionaires had made a “clean profit” based on the gross investment of RM10 million as it only installed 47 cameras out of 1,000 that were stated in the deal.
“Up to now, only 38 cameras are working. Out of that, seven are being calibrated with two in the process of being installled. That means only 47 cameras.
“If one camera cost RM250,000, their investment would have been RM10 million only, but they got RM129 million. They got back whatever that was invested plus a clean profit,” he added.
Last Friday, Loke announced that all outstanding AES summons worth over RM435 million will be waived and the government, via the Road Transport Department, will take over the management and operation of the system starting Sept 1.
The government will discuss with the Malaysian Institute of Road Safety Research regarding the spots where the cameras would be installed in, including accident-prone areas.
“The objective of the AES is good, which is to reduce speeding on the road. We will continue the system, but with a different model of implementation,” said Loke.