Getting to the Bottom of the Automatic Enrichment Scandal (AES)

By Koon Yew Yin

Slowly but surely, the ugly side of the AES is emerging and revealing itself to be yet another scam of the Barisan regime. This one aimed at enrichment of a small group has been cleverly camouflaged in the name of public interest.

Fortunately, this time around the scope for undeserved enrichment is so overwhelming and the disregard for prudent principles of transparency and accountability so obvious that even some UMNO leaders are protesting. These late protestors from Barisan are way behind the curve on the issue and are jumping on the bandwagon of opposition political and public protest to prevent damage to their own election prospects but it is an indicator of how unacceptable the current AES proposal is.

I predict that the AES will be dead in the water before long. But it is important that any suspension or abandonment of the system does not prevent the authorities and the public from having a full and open inquiry on how this particular scam has managed to get through all the responsible authorities, including the cabinet at the highest level.

Such an inquiry is necessary to ensure that the full truth comes out, lessons are learnt and an appropriate speed deterrent system is implemented – a system that is not riddled with weaknesses and drawbacks, and does not enrich a few at the expense of the public.

Who are responsible for the debacle?

Poor Minster of Transport, Kong Cho Ha must be having sleepless nights trying to defend the indefensible. And he must be kicking himself for foolishly putting his job on the line in repeatedly pushing for the implementation of the system.

It is likely that Kong will be made the scapegoat for this debacle. But let us not forget that this scam was cooked up some time ago. Various other crooks, sorry – slip of the finger, I mean cooks – as yet unnamed – were involved in the preparation of this billion dollar dish. According to federal estimates for the budget year 2013, the government expects an additional RM1.02 billion in revenue from AES enforcement – all this coming from the Malaysian road user.

The origins of the outsourcing of speed cameras and speeding tickets go back to the Abdullah Badawi administration – possibly during Dr. Ling Liong Sik’s time as Minister of Transport. Apparently, despite objections from some ministers who argued that enforcement should remain within the government’s domain, the project was pushed through by the Transport Ministry during Chan Kong Choy’s tenure.

After 5 years as the Transport Minister, Chan stepped down officially due to health reasons in the midst of the RM4.6 billion Port Klang Free Zone scandal. Following Kong Choy’s resignation, Ong Tee Keat was at the helm of the ministry, and the project was finalized during his time. Since Tee Keat has been dubbed Mr. Clean by his MCA supporters, he should come clean on the AES and provide an explanation on his role in it and answer the questions raised.

Why so much outrage?

Firstly, there is more than a strong whiff of cronyism about the project and the way in which it has been privatized which runs against principles of responsible government and common sense.

Allegations have been made that Ates Sdn Bhd and Beta Tegap Sdn Bhd which have been awarded the contract have strong political connections. According to PKR assemblyman Chang Lih Kang, the major shareholder of Beta Tegap Sdn Bhd is the niece of a Johor Umno assemblyman and comes from a family of “renowned Umno political figures” whose parents were previously elected to the state legislative assembly.

“With the extraordinary connection between the largest shareholder of Beta Tegap and Umno, another instance of sheer cronyism is evident. If this is not cronyism, how on earth does the government deem a dormant company without expertise in the related field is worth rewarding a lucrative AES contract?” Chang asked at a recent press conference.

Secondly, the system comes embedded with an extremely lucrative revenue sharing arrangement to benefit the project concessionaires. According to reports, the two companies can claim between RM600 million to RM800 million for the services and the equipment involved in installing 831 cameras in traffic hotspots nation-wide.

This disclosure has infuriated members of the public who strongly support road safety but are concerned at the opaqueness of the implementation process and are suspicious that the main purpose appears to be to benefit various cronies.

Claim for AES Compensation Coming Up Next

The two firms awarded the contract to implement the enforcement system claim to have spent between RM300 million and RM400 million each to set up and operate the system. If the system is to be abandoned, they will insist on being compensated for their expenses to date.

But how believable are their estimates of expenditure? One skeptic has worked out in great detail the expenses involved in the establishment of the AES. According to him a total of $24 million would be more than adequate in setting up the company, main office, staffing , maintenance and vehicles; establishing a roving maintenance team at 8 locations; setting up the server, monitoring and control system; and purchasing cameras for one year’s operation (see for the full breakdown )
As a long time engineer and business man, I find the breakdown of expenses provided by the skeptic credible and believable and the concessionaires’ estimates incredible and unbelievable.

Should Compensation be Paid

We can be sure that the two companies will have insisted on full compensation clauses built into the contract should the Government back out. They will have the paper evidence to show that they have spent hundreds of millions in setting up the system.

So it looks like either way – whether the AES is implemented or not – the two companies could be laughing all the way to the bank with their bloated claims.

There is only one way to stop this daylight robbery. This is for the Malaysian public to kick up the biggest fuss possible and to demand that the full truth of the Automatic Enrichment Scandal – including its real costs – emerge before any compensation is to be paid.

  1. #1 by yhsiew on Sunday, 11 November 2012 - 8:08 pm

    It is shocking to learn of the government of the day, which is evil and devoid of moral principles.

  2. #2 by Bigjoe on Sunday, 11 November 2012 - 8:17 pm

    It true I really really like to take a detail look at the numbers and the detail documentation.. There is no way the numbers are anywhere close to what they say they are…

  3. #3 by yhsiew on Sunday, 11 November 2012 - 8:46 pm

    Minster of Transport, Kong Cho Ha claimed that the AES was only installed at 14 locations. So one should not expect compensation to run into hundreds of millions of ringgit.

  4. #4 by Jeffrey on Sunday, 11 November 2012 - 8:56 pm

    Pro-govt mainstream papers sing praises for AES and condemn Opposition for politicizing this issue-which is natural & expected. That PR is politicizing this for GE13 is also true – which is equally natural & expected. And why not if the powers-that-be make a boo boo of it? Any clever Opposition will do so. They will get the road users’ votes the moment the Opposition raises cronyism, conflicts of interest etc, with all due respect to Tengku Adnan who is still grumbling that UMNO’s main problem is “perception” of its crony and elitist image! Malaysia has changed (for the better in this respect) since the time of Mahathir’s administration. Every deal and concession initiated by the govt will be subject to intense public scrutiny, debate and criticism. Simply too many clever and articulate people are prepared to speak up and share common suspicions of a govt belaboring for some time under a credibility deficit but which is still pushing through its programs based on old ways of patronage and cronyism without sufficient public consultation with stakeholders and deep thought when it comes to implementation.

  5. #5 by Jeffrey on Sunday, 11 November 2012 - 9:03 pm

    The outcry against AES must be something that the Powers that be never expected when they planned it. After all what could go wrong- aren’t the public interested in public safety on the roads, isn’t it true that there’s correspondence between high speed and terrible accidents; isn’t it true that technology of AES could catch the offender more efficiently than any cop; and isn’t it also true that AES is implemented in US and many developed countries in Europe; isn’t it true it will cut the opportunity for bribery/corruption between offender and cop – so what could go wrong with such a scheme? They haven’t a clue.

  6. #6 by Jeffrey on Sunday, 11 November 2012 - 9:17 pm

    The clue is this: the Powers That Be say that for reasons stated in above posting AES is implemented for public interest. Detractors say “no”, its cronyism, and not in public interest. Its not just alleged links of concessionaires with present or past ruling party’s politicians or their lack of track record that shifts the on the govt to explain. Traffic enforcement is traditionally done by govt. When it outsources and shares revenues with private commercial entities the first objection is ‘conflicts of interest’, actual or potential, that the Powers That Be assume Malaysians cannot sense. Eg of conflicts: supposing public interests require certain accident prone areas to have big signage of danger & AES as early warning to prevent accidents. If these were done, the cameras there won’t catch any offender, so how to meet profit bottom line of Concessionaire after paying bank’s commitments? Also possible AES cameras are placed in locations most likely to catch motorists unaware. They will sure think money is made out of them on RM300 per summon more than considerations of public interest. What more good or bad the culture is still there : he can’t get away with a RM50 to the cop to “redistribute wealth” so to speak.

  7. #7 by Jeffrey on Sunday, 11 November 2012 - 9:33 pm

    Continuing from post under moderation: But even for those who are disinclined to bribe their way out of an offence, they may object to AES for not having flexibility and discretion of a traffic cop. The fundamental right of a citizen is not to be punished wrongly for wrong doing of another. If the camera catches the registration no. of speeding car – and not face of motorist – should owner of the car be fined when another is driving his car? Is the onus on him that he’s not driving the car? The skeptic of AES is more convinced of cronyism when things are thought but pushed through in a hurry. For eg to meet this AES, they amended the Road Traffic Act to make sure that it covers offences caught by such cameras but they forget to amend section 9(2) when AES summons for speeding are issued under that which only cover disobeying traffic rules and signs. They also forget that installation of AES requires consent of local councils of states including those under PR that object! On location to place AES, they cannot answer on criteria of locations and why they serve public interest. People ask- has Malaysian Institute of Road Safety Research (Miros) been consulted on which locations are accident prone justifying AES?

  8. #8 by boh-liao on Sunday, 11 November 2012 - 9:38 pm

    NR learnt fr MMK how 2 enrich d favoured few, more so b4 d next GE is called

  9. #9 by Jeffrey on Sunday, 11 November 2012 - 9:45 pm

    People are of course concerned with public safety but they don’t like being made a source of profit center under the guise of public safety, and they know that likelihood of being exploited is great when there is a “profit” motive on part of the partner of the govt in sharing revenues. Such conflicts between public interest/safety and profit incentive create a dynamic where the partner will lobby for the creation of more violations that bring in the profits, and the govt, sharing in the spoils, will not for example do more to promote safety by putting money into straightening the road, increasing visibility and put more signage of a bend ahead if AES could capture more violations by not doing so! This is the issue: conflicts of interest actual or potential that privatization of traffic law enforcement is put in place. Esp when awarding of concession is not transparent, processes and criteria of implementation are opaque and not prior discussed with stakeholders in a milieu where there’s already widespread public perception of and unhappiness with other instances of cronyism and corruption in such projects (NFC & PKFZ for eg).

  10. #10 by Jeffrey on Sunday, 11 November 2012 - 9:56 pm

    If you don’t have a partner (whom everyone is jealous of, including those in BN who cannot get the concession for their cronies) at least you can argue that the money made from the traffic violations captured by AES all goes back to public coffers: here’s there’;s leakage to commercial entity. If you come out with an argument that these entities come out with the costs of installation, and deserve it, it can be equally argued that the govt can raise even more money than these entities and recover the costs plus longer term gain for public purse/consolidated fund. With all the BR1, 2, 3 to help win support for election its hard in the first place to believe that govt cannot afford this and have to depend on Private Finance Initiative in this form.

  11. #11 by SENGLANG on Monday, 12 November 2012 - 7:07 am

    The people of Malaysia are so helpless as this was what I felt when I staring reading PKFZ stories written by Nades in the Sun paper. Nades has then expose the possibility of a scam but no authority is willing to take any action. As it is now much tax payers money has long gone to the seas before the port can took off. And before PFFZ has settled down we have yet another scam of this AES. It is always my believe that these BNc cronies are not ordinary people and they have the time and resources to conceptualise beautify scheme to milk our money, of course with the assistance from the relevant authority.

    One the scheme is in place and approve the taxpayers have been a lamb ducks on the copping board, either way we are the loser and the winner is always the cronies.

    We have to learn the lesson fast and not be blind with all the promises by the current government. The chance has come few months away for the concern voters to make the change once a for all.

  12. #12 by Sallang on Monday, 12 November 2012 - 7:58 am

    Dear Jeffrey, my respect to you for the lengthy post.
    However, I am very frustrated that I cannot comprehend all that you had written, because I have read the main story which is quite lengthy, and I won’t read yours completely. Sincere apology.

    My conclusion of the AES fiasco is that, Transport ministers, who are from MCA, dare not go against the decision, by RESIGNING.
    What is so proud to be a minister, when one is made a scapegoat, always. Cheh!

  13. #13 by Godfather on Monday, 12 November 2012 - 8:43 am

    The icing on the cake has to be the revelation that police enforcement will continue to be strengthened. Cameras will also be placed in parallel with the AES cameras in “hot” spots. To avoid competition, AES is likely to place their cameras in low speed zones to catch more people. After all, profit is their main objective.

  14. #14 by dagen wanna "ABU" on Monday, 12 November 2012 - 8:46 am

    Rakyat dideritakan supaya kroni diperkayakan.

    This new umno get super-mega-rich-quick program replaces the old one started by monsterO’mamak.

    During monsterO’mamak’s time the country was rich, has petroleum and was attracting lots of foreign money. Our economic pie was still a growing one at that time.

    We were then a little dragon, or tiger whatever, amongst several others in asia.

    After 22 yrs of abuse, wastages, mismanagement and wonton corruption; and after US$100b (barry wain) had leaked out of our economy, effectively our economy came to a halt.

    Today, we are still a little dragon, or tiger whatever, when the original little whatevers have joined the premier league of economies.

    Our economic pie isnt growing. In fact i fear that it could be shrinking. But that is ok says umno because we do not have hungry stomach like the people in some african nations.

    Quite obviously, umno is looking for suitable comparators (companions??!!) in africa in readiness for the time when those recently promoted tigers or dragons would get elevated.

    Going by this reaction, we can only observe that our economic pie is set to shrink further.

    So you see it is no wonder that, during his time, monsterO’mamak could easily cut chuncks off the (then still growing) economic pie and hand them directly to his cronies.

    Today, jib would have to take away what are due to the people and feed them to his hungry cronies.

    ps. We may not see malaysians dropping dead as a consequence of hunger but complaints of “hunger” have been heard for some years already. But of course, umno is not hearing any of them.

  15. #15 by Godfather on Monday, 12 November 2012 - 8:46 am

    This is another PKFZ style venture. UMNO takes the cake but shares some crumbs with chinamen and gets the chinamen to promote and defend the project. You would think that MCA would learn, but I guess crumbs are better than nothing in today’s economic climate.

  16. #16 by HJ Angus on Monday, 12 November 2012 - 9:40 am

    The AES can be a good method to start a proper campaign to enforce road safety rules but the method of implementation is seriously flawed.
    Road users blatantly ignore traffice light controls especially at the smaller junctions and soon develop the habit of disregarding all traffic rules as long as they are not caught and fined or jailed.
    As for the AES, the government can easily afford to pay RM700 mil for the project as the payback is a matter of months if properly implemented.
    The open tender would have probably attracted 10 bids and the project awarded to the most experienced contractor with/without international partners.
    That way the profits will be returned to taxpayers and the monies can be used for other serious road safety measures and even improving public transport in the cities.

  17. #17 by ENDANGERED HORNBILL on Monday, 12 November 2012 - 11:34 am

    “…daylight robbery….”

    The robber barons may be laughing all the way to the bank but the Rakyat isn’t laughing.

    Hello, Kong Cho Ha, what kind of a fish is this? A dish fit for the gods. See you in GE13, not even the gods can help you now even with this dish. I think you are going to lose your deposit if you have the guts to contest. Otherwise, just retire and say you need to spend time with your family or some other nice excuse-lah man. The Rakyat thanks you for handing them your MPseat on a dish. Tsieh, tsieh.

  18. #18 by dagen wanna "ABU" on Monday, 12 November 2012 - 12:56 pm

    The AES thingy is good in theory. But those idiots, if only they are not profit driven, should actually commence a pilot project first to evaluate the system; and not implement the it full scale nationwide.

    Then again umno (mca is also umno because mca does not exist) is in a hurry to make a lot of money.

  19. #19 by HJ Angus on Monday, 12 November 2012 - 1:15 pm

    the way projects such as the AES are awarded to BN cronies, it is always a no-lose contract.
    First of all, the promoters get the first trip laughing all the way to the bank; next are the operating companies like SYABAS where the CEO pockets RM400+k per month whether or not the company makes a profit; then comes the winding-up profits when the government agrees to buy back the project under the secret agreement.
    The people are the main losers!

  20. #20 by Loh on Monday, 12 November 2012 - 2:15 pm

    Article 8 of the constitution reads: (1) All persons are equal before the law and entitled to the equal protection of the law.

    When the AES concessionaires get a percentage of the fine on account of another citizens breaking the law, then AES concessionaires profit on account of the law. That is unconstitutional.

  21. #21 by waterfrontcoolie on Monday, 12 November 2012 - 10:32 pm

    Just tell me, which ‘MAJOR PROJECTS’ embedded by BN have taken the interest of the nation into consideration? NONE! There is Only ONEWAY out of this, Malaysians! Talks are useless!!

  22. #22 by waterfrontcoolie on Tuesday, 13 November 2012 - 6:09 am

    The only way out of all these cheating games is to form a RCI to reveal all these piratized projects when PKR forms the next Gomen! Period! From Perwaja, PROTON, IPPS, PORTS, Road Tolls, Airports, MRT,AES. etc!

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