KUALA LUMPUR: The RM2.4 million fine imposed on YTL Communications Sdn Bhd over the 1BestariNet project is nothing compared to the RM50 million profit the company makes from just two contractual loopholes, says a DAP lawmaker.

Bukit Bendera MP Zairil Khir Johari said one of the ambiguities he found in the third series of the Auditor-General’s Report was the installation of the 1BestariNet receiver integrated system (1BRIS).

For schools without a suitable existing LAN structure for high-speed broadband, 1BRIS towers are installed on the premises in order to receive and relay high-speed wireless signals.

The Valuation and Property Services Department (JPPH) advised the Education Ministry in January last year that an appropriate rental for YTL to pay would be RM1,200 a month for each 1BRIS site. But, Zairil said the company refused to pay this amount, asserting instead that it is to install the towers for free under the contract terms.

In February this year, the Education Ministry decided to charge a token sum of RM1,000 in rental a year for each 1BRIS site and based on this, YTL paid the outstanding arrears, amounting to RM2,416.67 per site from May 1, 2012 to June 30, 2014, including three months’ deposit.

Zairil said RM1,000 a year was far from the RM1,200 a month that was recommended by the JPPH.

“With 3,203 1BRIS towers installed all over the country, rental revenue at RM1,200 a month or RM14,400 a year would come up to RM46.12 million a year.

“Currently, YTL is only paying RM3.2 million a year. This equates to a whopping RM42.92 in lost revenue annually for the ministry,” he said in a statement yesterday.

The 1BestariNet project is aimed at installing high-speed 4G broadband across all the 10,000 schools in the country, as well as a VLE platform for e-learning.

Zairil also highlighted that the report found that according to the contract between the ministry and YTL, all utility charges related to 1BestariNet and 1BRIS would be borne by the government during the contract period, and that the contractor is only responsible for costs associated with the installation, maintenance and management of 1BRIS.

He said this is a serious flaw to the agreement, as the ministry had admitted in their reply to the A-G that the installation of the towers had increased electricity costs of schools by RM150 to RM180 a month. Given 3,203 1BRIS sites all over the country, this amounts to an increase of between RM5.77 million and RM6.92 million a year in electricity charges, which the government had to subsidise for YTL’s benefit. — The Malaysian Insider

This article first appeared in The Edge Financial Daily, on November 13, 2014.