KUALA LUMPUR: The government did not reach any settlement to pay RM500 million each to automated enforcement system (AES) operators Beta Tegap Sdn Bhd and Automated Traffic Enforcement System (Ates) Sdn Bhd.

Transport Minister Datuk Seri Liow Tiong Lai said Beta Tegap and Ates are being taken over by Irat Properties Sdn Bhd — a subsidiary of Lembaga Tabung Angkatan Tentara (LTAT) — through a business transaction.

“This does not involve any compensation by the government to Beta Tegap and Ates,” Liow told Parliament while wrapping up the debate on the royal address.

Liow noted that both companies have obtained approval from the government with regards to the takeover.

“Given that LTAT is a government-linked investment corporation, the government has agreed to the proposal to take over the equity in the [AES] operators by LTAT and its subsidiaries Irat Properties and Boustead Holdings Bhd,” he said.

The exercise is to reduce the financial burden of the government, he added.

He said the perception — that the AES was privatised — did not arise as the government, through the LTAT, has interest in the companies.

When asked by Ng Wei Aik (Tanjong-DAP) about the news report — that the companies were compensated RM500 million each, Liow replied: “That is not true.”

Speaking to reporters at the parliament lobby later, Liow explained that there was an arbitration initiated by Beta Tegap and Ates. However, it is up to the companies to withdraw it now that they are being taken over.

“Once the companies agree to hand over to LTAT, they shouldn’t take the case against us, so there is no case,” he said.

When asked if the companies have agreed to a settlement, Liow asked the reporters to check with Beta Tegap.

The Edge Financial Daily reported in February that the government is close to finalising a settlement package with Beta Tegap and Ates — which could cost the government RM500 million each.

Liow said in the chamber that terms of the concessionaire agreement with the AES operators remain the same.

“The existing concession period is five [years] plus five [years of extension]. We have not added new criteria,” he said.

The AES was supposed to be launched nationwide in September 2012, but the government backtracked due to resistance from opposition and government MPs.

Beta Tegap and Ates have taken their case to the Kuala Lumpur Regional Centre for Arbitration after the government’s reverse decision.

This article first appeared in The Edge Financial Daily, on March 24, 2015.