by leo velusamy, donplaypuks® intrepid correspondent for killer watt tolls
As a layman, it is my understanding that any 2 or more parties may enter into a valid contract, but not quite for any endeavour. Leaving aside the intricacies of ‘honour and offer’ etc., among the list of illegal and voidable contracts and agreements are those promoting:-
1. illegal and unlawful activities
2. activities against public interest
3. and containing unfair terms and conditions
4. possible breaches vis-à-vis issues of National Security
Thus, a prostitute cannot sue in court a client who has enjoyed her favours, but refuses to pay up, since the contract would have been for an illegal activity. In a bygone age, prostitutes could not be taxed on their ‘back-earned contract earnings’ since the source of their earnings was deemed illegal. But when high class hookers in Mayfair and Park Lane in London took home half a mill a year, but also claimed welfare (dole) privileges, the law got wiser, pronto. The Inland Revenue, eschewing their usual laid-back stance, just issued these women of genteel leisurely pursuits and easy morals, a Tax Assessment on their ‘activities from a Trade.' Gains from plying one’s body, mind and soul to another for mere mutually agreed pleasure (and ‘optional’ lucre and ‘tips’) were no longer to be viewed as a charitable endowment. Solicitation, the oldest profession in the world before Accounting & Tax Fiddles, and Priesthood, became a taxable Trade.
The Inland Revenue’s new posture was apparently a sea change from the usual missionary position they assumed when dealing with Madames. It was up to the Christine Keelers of our world to dispute the tax assessment, but most paid up quietly rather than risk losing a lucrative 9-5 (p.m. to a.m. that is) income and a lifestyle that engaged AND simultaneously challenged the rich and famous.
There is also that wonderfully enlightening ‘Nuremberg’ ruling that no one is obliged to follow and act on the instructions of their superiors (or inferiors, I suppose), to commit a crime. Of course, the Nuremberg Principle was established in 1945-6 to prevent German (and Japanese) soldiers and officers from pleading ‘mea culpa’ after enthusiastically committing Genocide. Thus while a Nazi Boche Jerry Hans might have signed up and agreed to follow implicitly every command of his SS General on the battlefield, it did not give him the right to gas the Jews (whether by 6 million or not), and after that to knock out their gold teeth and rifle through their wallets as well ! ‘I was merely following the General’s orders’ is simply unacceptable in the civilized modern world.
Which brings us to the ‘Sanctity’ of Agreements for Toll Roads (TR) and Independent Power Producers (IPP) signed between our Government and various privately incorporated companies, several of which are listed on the KL Stock Exchange.
It was only by the narrowest of margins in 1988 that our Federal Court ruled that the Government need not secure contractors for huge privatisation projects through transparent Open Tender processes, which had been the Government Treasury and Ministry of Finance mandated norm until them. The tipping vote came from one, Tun Salleh Abbas! This paved the way for a little known once Singapore listed company, United Engineers Malaysia Berhad (UEM) to be awarded the then largest contract in Malaysian history – worth some RM 800 million or so.
The rest, as they say, is History.
What is most revealing and devastating as to the failure of Dr. Mahathir’s Government in its fiduciary duty towards its citizens’ and taxpayers’ can be gleaned from a disclosure by the former MD of Tenanag National Berhad (TNB), Tan Sri Ani Arope (TSAA).
In an interview published in the STAR, TSAA divulged that the Economic Planning Unt (EPU) which is a department operating under the aegis of the Prime Minister, had repeatedly attempted to force him to concede to onerous terms demanded, not requested, by several companies lobbying for very lucrative IPP contracts. Among these demands were:-
1. IPP status even though Tenaga had excess capacity of about 15% - 20%.
2. Charges of as high as 20 cents per kw of electricity when Tenaga could produce them at below 10 cents per kw.
3. ‘Take or Pay’ contracts which meant Tenaga had to pay the IPP’s at extortionate rates whether or not it needed or used their supply.
4. IPP’s be allowed to utilise TNB’s infrastructure and take over assets for a song.
Where TSAA had courageously stood firm against the onslaught and outright threats of
the IPP promoters and their buddies in the EPU, his successor had no qualms in approving the IPP proposals carte blanche, with indecent haste. When recently, there was a suggestion that these IPP contracts be reviewed, it was then that a Mahathir-era crony ‘entrepreneur’ pontificated about the ‘Doctorine of Sanctity of Contracts’, someone who had wangled, some say (since details are classified under the Official Secrets Act or OSA), an unheard of 18 cents or more per killer watts of theft.
Among Malaysian Ali Baba Phoneykookakhomeni Entrepreneurs, this is called the ‘Apocalypse Now’ strategy. When their gravy train is threatened with possible derailment, they will circle the wagons and bleat as one that the entire world financial system will collapse if their unfair contracts are hauled up for review. Phrases such as ‘The very foundations of the global financial system will be undermined’, ‘Foreign Direct Investments (FDI) will dry up’, ‘This is the thin end of the wedge of Communism’, and my favourite, ‘We are not a charity, you know. We cannot be subsidizing TNB at give-away prices’ will abound in the financial sections of state-owned newspapers and media. Revolting, is it not !
For his honesty and integrity, TSAA was rewarded with early retirement and short-listed for possible Chairmanship of Kelvinator – the company that produces liquid nitrogen deep freezers!
The Direct Negotiations Non-Tendered Out Contract (DNNTOC), which perhaps had its historic beginnings with the Penang Bridge, metamorphosized and evolved into an art form with the TR contracts. The inventor, thought apocryphal, of the DNNTOC is said to be a certain ex-Minister renown for the piscatorial delight on his tonsure, who is famously quoted as saying, just seconds before 40 cracks appeared, that ‘The Keposayang Bridge vill last a hundred years’ as well as for his prescient ‘After the General Elections, ve vill yave a new team !!’ Never were more prophetic words uttered.
This Minister has never minced his verds. He has always, repeatedly made it clear that he represented the interests of Big Biz, the ruling political parties and then the People, in that order. I suppose we should be grateful to him for his honesty for having none of the usual pretensions that other Ministers wear on their sleeves about serving the Electorate by whose covenant the ruling classes are given their legitimacy to form Governments.
A cornerstone principle of such a DNNTOC is ‘CYA (cover your ass) everywhich vay at the peoples’ expense.’
No one knows who conducted pre-contract traffic studies or reviewed them. One wag suggests it was probably done in London, Beirut and Cairo, during one of several ‘Lawatan Sambil Belajar’ (Research cum Holiday) overseas junkets sponsored by State and Federal Governments,and possibly, a political party charity fund or two to boot. Spouses of Ministers and VIP’s may have made that arduous and physically sapping journey through the savage roads leading to Knightsbridge, Harrods and Fortnum & Mason and thence to Oxford Street and Selfridges.
This may serve to explain the veil of secrecy surrounding these DNNTOC, the sadistic vicarious thrill derived, in this instance, from keeping the veil on, firmly intact !!
Not only do these TR contracts allow for periodic automatic increase of Toll charges, they appear to do so even where traffic count has far exceeded agreed approved targets by the thousands. And if traffic count should fall short of base figures used in computing the initial charges, or God forbid, plunge as motorists shun toll roads, why, the White Knight on his Woven Wig Bucephallus will charge in and help out – the Concessionaires, of course. So what’s an additional $100 million or two to buy out TR contacts awarded to croneys who in the first place were subsized with low-interest preferential loans. And if it was felt unnecessary to inform EPF & Socso members that the returns on their funds were not maximised, lest God forbid, they should rush out into the streets and topple a Government or two, the National Security angle and card were well played.
And, if the public protests about crippling toll charges, the solution? And there’s that damned phrase again, - to protect the sanctity of contracts – keep the toll rate unchanged, but extend the tenure of TR contracts from 15 to 20 to 30 years. QED, Einstein. Oops, forgot the Addendum. Yes, compensate the TR Concessionaires to the tune of several $100 million or billions a years from Government coffers. Heads I Win, Tail You Lose! And damn that pain-in-the-ass promised alternative non-toll access roads or about maintaining them.
Details of the TR & IPP contracts, though clasified under OSA, have become available in the public domain through filings with KLSE in documents pertaining to listing and raising of capital through issuances of Bonds and Loans. So, there have been exposes in the Edge about undue preferential protection and terms given to Concessionares, much against public interest.
Yet, the Minister can say it with a straight 'po' face that the Concessionaires had to service bank loans and interest charges, implying an onerous business with razor-thin margins and profits. Strange then isn’t it that none has folded up, gone bankrupt, seen their share prices collapse or seen to be looking to sell their companies. None to be had for a bargain. Financing Interest Charges are 100% deductible against operating profits. So, what's the beef? Except perhaps, UEM, which given a golden goose, promptly began to dissect it, and eventually, of course, had to be bailed out with taxpayers’ money.
But, the icing on the cake must surely be that clause which requires the approval of TR & IPP Concessionares before such Public Works contracts and agreements can be disclosed to our People.
And this is where we started.
Can the OSA be legally invoked to conceal contracts from being disclosed to the Public, where such contracts are funded by taxpayers’ funds? The use of the OSA is in this instance, clearly illegal if not Unconstitutional as well.
The use of the OSA here is clearly to avoid transparency and prevent accountability for unfair terms which are blatantly against Public Interest. It would be prudent to get all these companies to disclose how much they have donated to the coffers of political parties over the last 10 years. Who will bell the cat? The KLSE and Securities Commission should insist on it, or stand convicted of protecting these robber-barons.
National Security cannot be invoked to protect one-sided Public contracts. If, as the Minister claims, the disclosure of these contarcts ‘might lead to unrest and dissatisfaction against the Government’ that is no more than the just desserts the Government deserves for trying to hood-wink the People. What, the Government wants cast-iron guarantees from its People? The Bastille fell for want of mere loaves of bread. Should the Elite & Croneys stay afloat for the loss of billions of ringgit?
And, the Nuremberg Principle?
No civil servant or citizen is obliged to comply with any Ministerial or Government orders to prevent the disclosure of any Government Contract if such a contract:-
1. promotes illegal and unlawful activities
2. is against Public Interest
3. contains unfair terms and conditions that adversely affect the People
4. prevents the Public from guaging transparency and accountability where Taxpayers’ Money is utilized.
There's no two ways about it!
donplaypuks with my tax money man!! at http://donplaypuks.blogspot.com/
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