Transmenu powered by JoomlArt.com - Mambo Joomla Professional Templates Club

I congratulate the DAP for organizing a topical and timely subject of public importance for public discussion.  In the present difficult economic conditions, no other issue raises as much as frustration and anger than the exorbitant charges that members of the public have to daily pay for their electricity, water, travel and other basic amenities.

A. BRIEF HISTORY

2. Shortly after becoming Prime Minister in 1979, Margaret Thatcher called for a radical review of the role of the State in the social and economic life of Great Britain.  Idealogically, she was against the State, and wanted to roll back its historical activities in key areas of everyday life.  Mrs Thatcher desired that the Government should retreat from or withdraw providing such services, to be replaced by the private sector which she claimed would be more efficient and cheaper.

3. Her policy was even at that time not accepted by all Conservatives: thus, a former Conservative Prime Minister, Harold MacMillan, described it as giving away the nation’s crown jewels for a song.

4. Mrs Thatcher’s privatization policy was a forerunner to Dr M’s policy after he took power in 1981.

5. As a result, the traditional services provided by Governments, such as roads, energy, water, hospitals and universities were taken over by the private sector.

6. In Malaysia, the privatization exercises involving the highways, the power plants, water, the ports and hospitals were never conducted in an open, accountable and transparent manner through public tenders.  Instead, they were given away to favoured businessmen, cronies and friends of politicians.  The result was lop-sided agreements very much against the interests of the public, and very much in favour of the fortunate businessmen – that is, a classic case of piratization!  The entire process of giving the contracts, and the actual contracts were shrouded in secrecy, and protected under the Official Secrets Act.

7. The recent de-classification of highway toll concession agreements confirmed what was known in the public domain for over 20 years, that is, their terribly unfair terms, with the concession-holders making obscene profits running to billions of ringgit.

B. SOLUTION

The Unfair Public Contracts Act

8. As the problems of these one-sided contracts are clear to everyone, it would be more profitable to focus on resolving them.  Any solution would require these agreements to be reviewed.  
9. In my opinion, what is presently lacking under the laws of Malaysia is an Act of Parliament which would give legal power to compulsorily set aside or review these lop-sided contracts.  In other words, an equivalent to the Land Acquisition Act, 1960 which empowers Government to acquire any private land for a public purpose.  Article 13 of the Federal Constitution recognizes the right of the State to compulsorily acquire land, provided adequate compensation is paid to its owner.  The power of the State to legally acquire private land exists in nearly every country, and has never been doubted.  If private ownership of land is not sacrosanct, then it would be impossible to argue that other lesser property rights under a contract cannot be the subject matter of compulsory acquisition by the State.  In either case, public interest overrides private rights.  Thus, the sanctity of an IPP or water contract should not be regarded as the ultimate value; instead, national interest is supreme.

10. I therefore propose that the Federal Parliament enact the Unfair Public Contracts Act which would give legal power to an independent person called the Public Contracts Commissioner to demand that all contracts of a public nature be made available to him, together with supporting documents and accounts to enable his office to review them, and to certify that they are unfair.  Upon such certification, the Public Contracts Commissioner will have power to set aside or re-negotiate the contracts.  In either case, he would be empowered to give compensation to the concession-holder, but the Act should contain relevant guidelines limiting the measure of such compensation, having regard to past profitability and the actual costs incurred by the concession-holder to build the highways, plant and the like.

11. The Public Contracts Commissioner’s decision can be challenged by the concession-holder in legal proceedings, and it is up to the Courts to decide on the validity of his decision.  In my opinion, such an Act of Parliament, if properly drafted, would be constitutional.  It would be a made-in-Malaysia statute to deal with a Malaysian problem.  Our statute books have precedents.  Thus, under the Companies Act, 1965, a liquidator of a wound-up company can disclaim that company’s unprofitable contracts entered into by the directors:  so can a Special Administrator appointed to manage a distressed company under the Pengurusan Danaharta Nasional Berhad Act, 1998.  Finally, the State has been given wide powers under the Water Services Industry Act, 2006.

12. I therefore call upon the DAP and its Pakatan partners to urgently start a public campaign for the passing of such an Act of Parliament to give legal power to revoke or revise these unfair and inequitable contracts.  If the component parties of the Barisan Nasional truly care for the welfare of the ordinary voter, they should also support this Bill so that it receives all-party support.  The global financial and economic crisis which has now adversely affected Malaysia gives us a golden opportunity to take tough decisions.  Times of crisis offer challenges and opportunities.  This is therefore the best time to pass such a law as the first step towards reclaiming our highways, power plants and the like.

Thank you.