by Parliamentary Opposition Leader, DAP Secretary-General and MP for Tanjung, Lim Kit Siang, in Petaling Jaya On Wednes¬day, 4th March 1992:
Is the UEM so powerful that the Works Minister, Leo Moggie and the Cabinet must start doing their homework even before PLUS had submitted, a formal request for government approval for new syndicated loan for the North-South Highway?
The Works Minister, Datuk Leo Moggie, announced yesterday that the Cabinet will discuss Projek Lebuhraya Utara-Selatan Bhd’s (PLUS) request for Government approval to seek a new syndicated loan to finance the ongoing construction of North-South Highway.
Datuk Leo Moggie said that the loan is to meet cost over-runs in the construction of the North-South Highway project.
What is most extraordinary is that Datuk Leo said that PLUS had not indicated the amount of additional loan it wanted to raise.
The query uppermost in the minds of Malaysians is whether United Engineers Malaysia (UEM), which was awarded the North-South Highway privatisation contract, is so powerful that the Works Minister
and the Cabinet must start to do their homework even before PLUS had submitted a formal request, for government approval, for a new syndicat¬ed loan and specifying the exact amount?
I do not think there is any other company in Malaysia which could get the Works Ministry and the Cabinet to start making studies and doing their homework even before it had submitted a formal request to the Government.
The Works Ministry and Cabinet are acting in a most abnor¬mal manner in putting the cart before the horse on the question of a new syndicated, loan for PLUS for the North-South Highway project.
The Government privatised the North-South Highway project to UEM and not to PLUS. What locus standi has PLUS to ask the Government for approval to seek a new syndicated loan which could be in the region from $1.5 billion to $2 billion?
It has been reported that the cost overruns for the North-South Highway project is around $2.2 billion, and that this will be PLUS second commercial loan. PLUS raised $2.54 billion locally in 1989. It has
also been reported that the total cost, of the North-South Highway will be $6 billion, as compared to the original estimate of $3.42 billion.
The 30-year concession to collect toll at North-South Highway should be reduced to 25 or 20 years in return for Government standing guarantee for a new $1.5 – $2 billion syndicated loan to UEM or PLUS.
Before the Government gives approval and stand guarantee for the new $1.5 – $2 billion syndicated loan, the Government should make public the request and explain why the Malaysian people must assume further burdens for the UEM and PLUS with the Government stand¬ing guarantee for the new loan, when the project had been privatised.
A government guarantee for a new syndicated loan to UEM or PLUS for the North-South-Highway would mean that public cost is being raised in a project which will benefit a private company. In return for such an additional public cost, the government must extract addi¬tional benefits to the Malaysian public, as in the reduction of the 30-year concession period for the North-South Highway toll collection
to 25 or 20 years.