DAP calls on Datuk Samy Vellu to make public the variations of terms to the UEM contract on North-South Highway for the public to study for at least a week before any signing of the contract

Press Conference Statement by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, at the launching of the book, ‘The North-South Highway Scandal’ at DAP PJ on Wednesday, August 12, 1987 at 12 noon.

DAP calls on Datuk Samy Vellu to make public the variations of terms to the UEM contract on North-South Highway for the public to study for at least a week before any signing of the contract.

This is to launch the new DAP publication, ‘The North-South Highway Scandal’ in English, to be followed by Bahasa Malaysia and Mandarin shortly. The purpose of this publication, which features six of my speeches and statements on the North-South Highway (NSH) tender of United Engineers Malaysia (UEM), is to create and sustain public awareness and interest in this issue, which has such a far-reaching implication to Malaysians for the next 25 years.

There are many aspects of the NSH privatization contract which should be fully debated by the public before the contract is signed, but unfortunately, the Works Minister, Datuk Samy Vellu, does not appear to be a ‘free agent’ and is required to sign the UEM contract within 10 days of his return from his overseas trips with the Prime Minister, Datuk Seri Dr. Mahathir Mohamed, to united Kingdom, Hangary and Soviet Union.

This probably explains why he has broken his solemn word that he would meet me any time on the NSH, which was made not in private between both of us, but in the presence of other DAP MPs, as well as the top brass of the Works Ministry and Malaysian Highway Authority during his special briefing to DAP MPs on July 16, 1987. This also explains why he had been avoiding me in the last two days when I tried to reach him on the NSH.

I want to make it very clear to Datuk Samy Vellu that the NSH privatization contract of UEM is not a private matter between both of us, but an issue a great national interest to the people. I would therefore call on Datuk Samy Vellu to make public the variations of terms to the UEM contract on North-South Highway for the public to study and comment for at least one week, before any signing of the contract.

When explaining why he would not meet me on the NSH a second time. He said “I will not be able to go on making concessions and we might as well not build the road.”

The important is that if further ‘concessions’ should be made in the UEM contract on NSH, in the interest of the people of the people and the next generation, to ensure that it is not so one-sidedly in favour of UEM, then the Works Minister must make them or he would be failing in his duty to the nation and people. The very fact that the Minster has conceded that he is making ‘adjustments’ to the UEM contract shows that the contract could be further modified in the interest of the people.

During the special briefing for DAP MPs on July 16, Datuk Samy Vellu said that he was varying the UEM contract, whereby the 25-year concession period for toll collection to UEM would not extend to 30 years; that the government’s loan would be reduced from $1.6 billion to maximum of $750 million, which would begin to be repaid after 7.5 years at market interest rates; that there would be no government guarantees for external risks; a toll rate at 5 sen per km from 1989-1994, with subsequent increase linked to inflation; traffic volume guarantee by the government for 17 years, which would be repaid to Government with interest; and the completion of the entire NSH in 7.5 years.

Have all these variations been accepted unconditionally by UEM? I had calculated that these variations would reduce the original cost of the UEM contract to the people by $22 billion, i.e. reducing the total cost from $63 billion to $41 billion. However, the revised total cost is still too burdensome and should be knocked down further.

What is the Attorney-General’s opinion on the ethnical and conflict-of-interest aspects of the UEM contract?

When I met Datuk Samy Vellu on July 16, one of my questions was the position of the Attorney-General, Tan Sri Othman Talib, on the ethnical and conflict-of-interest aspects of the UEM contract, in view of the dual and conflicting roles of Datuk Seri Dr. Mahathir Mohamed, Ghaffar Baba, Daim Zainuddin and Senusi Junid in the Government and Cabinet on the one hand, and in UMNO and Hatibudi Sdn. Ghd. (the controlling company of UEM) on the other.

Datuk Samy Vellu’s reply was that as the UEM contract had not be finalized, the matter had not been referred to the Attorney-General. But he gave an assurance that the Attorney-General’s legal opinion would be sought before the signing of the UEM contract.

As far as I know, the UEM contract has not yet been finalized yet, even though Datuk Samy Vellu has said that it would be signed on August 19. Going by what Datuk Samy told me at the briefing, this means that the matter of the ethnical and conflict-of-interest aspect of the UEM contract has not yet been referred to the Attorney-General. How can the Minister then make an announcement of the signing of the UEM contract on August 19? Or has the Attorney-General promised to give his opinion in a matter of one or two days?

The Attorney-General must make public his position on the ethnical and conflict-of-interest aspects of the UEM contract, before the signing of the contract, to satisfy public opinion that the strictest legal propriety is being complied in this tender.

‘For Whom the Road Tolls – It Tolls for UMNO’

The NSH privatization tender of UMNO has aroused growing and widespread concern as to whether the privatization programme launched by the government will serve the larger interest of the people, or only a select few. The government must convince Malaysians that the privatization programme is carried out with the following three stringent safeguards:

1. That there would be adequate checks and balances to avoid profiteering and exploitation;

2. That it would not provide opportunity for a small group of individuals or companies to make money at the expense of the public and nation from vital services; and

3. That no political parties or leaders would be allowed, directly or indirectly, to benefit from the privatization programme.

The UEM contract for NSH fails on all the above three grounds, especially as UEM is associated with UMNO. We have reached the position where it could be said with justice:

“For whom the Road Tolls – It tolls for UMNO!”

This is why the motorists and highway users are so upset and angry by the precipitate imposition of 100% increase in highway toll rate tomorrow. It is not the government which will benefit from the 100% increase in toll rate, but UEM, which will take over all toll plazas and collections when the NSH contract is signed.

The toll rate is the most important element in the NSH privatization contract. How can the government unilaterally give away an important bargaining point in the final negotiations with UEM, by doubling the roll rate? This is a most extraordinary manner for any Minister or government to negotiate privatization contracts.

All Malaysians must be gravely concerned at the manner the NSH contract is being awarded to UEM, and UEM’s association with UMNO. This gives the Works Minister and the Government an added responsibility to satisfy the Malaysian public that everything is above-board in the UEM contract, by making public the final terms of the contract before the signing ceremony.

The DAP has planned an initial series of five protest ceramahs against the North-South Highway awarded to UEM, beginning in Kepong this evening, Malacca tomorrow (Thursday), Kuala Lumpur Federal Hotel on Friday, Seremban on Saturday, and Penang on 23rd August 1987(Sunday). I will speak at the ceramahs in Malacca, Kuala Lumpur Federal Hotel, Seremban and Penang.

Datuk Samy Vellu and the Cabinet should expect nation-wide and prolonged and demonstrations by the people if the government goes ahead to sign the NSH contract with UEM, without satisfying them that their future and that of their children had not been mortgaged away for a quarter of a century.