BN govt agreed to higher payout for AES takeover

KUALA LUMPUR (August 24): The previous Barisan Nasional (BN) administration proposed to take over the Automated Enforcement System (AES) project from the Armed Forces Fund Board (LTAT) in November last year, said LTAT ex-chairman Tan Sri Mohd Anwar Mohd Nor.

Further, the agreed takeover cost exceeds RM555 million, which is LTAT’s original cost of investment to take over the project from two private companies, he said.

In a statement yesterday, Mohd Anwar pointed out that the full agreed takeover price for the project by the BN government then, via the finance ministry (MoF), was LTAT’s full investment costs, plus a “12% return per annum” for the two-and-a-half years that LTAT owned it.

“If the government decides to pay back only LTAT’s money used to acquire the two companies without paying back all other expenses spent to date by LTAT on the project, plus the 12% return per annum as agreed by the previous government upon the takeover of AES in November 2017, this would be quite unfair to LTAT and not in line with the concession agreement signed by the two parties,” he said.

In the statement, Mohd Anwar also confirmed that the LTAT took over the AES from private firms ATES Sdn Bhd and Beta Tegap Sdn Bhd in 2014 under an invitation from the government.

“In 2015, the cabinet approved the proposed acquisition of the AES project by LTAT and in November 2016 the cabinet approved a new financial model including a new fee structure for the AES project renamed AWAS,” said Mohd Anwar.

Later in in November 2017, the MoF decided to take over the AES (AWAS) project from LTAT, said Mohd Anwar, “and to pay back all LTAT’s investment costs in the AES project plus 12% return per annum”.

Calling LTAT’s financial model in relation to the AES project a “win-win” situation for all parties involved, Mohd Anwar said: “The flip-flopping of decisions on the AES project by the previous government should not impact the return to LTAT of an investment which was taken on with due commercial consideration.”

The AES project garnered spotlight after Transport Minister Anthony Loke questioned the previous government’s decision to ask the LTAT to take over the project from the two private companies for RM555 million in what he described as a lop-sided agreement.

The present government is taking over the automatic speed-trap system beginning Sept 1, and Loke said the payment of RM555 million will be paid to LTAT in stages. There was no mention of the 12% annual return raised by LTAT’s Mohd Anwar.

This article first appeared in The Edge Financial Daily, on Aug 24, 2018.

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