Thursday, August 22, 2013

Are the acquisitions and enforcement operations of AES are to rescue crony companies?

The acting Transport Minister Datuk Seri Hishammuddin Hussein Onn who stated recently that federal government soon to take over the operation and enforcement of Automated Enforcement System (AES) should provide a more detailed explanation, if the acquisition is a form of bail-out for crony companies to assist their ailing financial terms.

This question is a reasonable one as not long ago, it was reported in the media that both AES operators, namely Beta Strapping Sdn, Bhd and Automated Traffic Enforcement System (ATES) Sdn. Bhd were pressured by banks for failing to service the loan on time due to cash flow problems amounting to millions of dollars.

Previously, people were told that according to the contract signed with the Road Transport Department (JPJ), the two companies should provide services to JPJ enforcement unit continuously without interruption since September 2012 until the end of the five-year contract in which the equipment will be handed over to JPJ.

Free Malaysia Today reports show that a leading commercial bank has frozen the account of a company that fails to pay back the loan. Also it was reported that Beta Tegah and ATES were trying to negotiate with the Ministry of Transportation and JPJ on future projects following their cash flow constraints problem.

In addition, it was reported that a search on the website of Malaysia’s Companies Commission (SSM) discovered Beta Strapping is incurring losses of RM7.62 million for the financial year ended June 30, 2012.

This has raised many doubts, whether the acquisition of both AES operators is intended to bail them out from being demanded by the bank to repay the loan? Moreover, when the federal government repeated so many times that the implementation of the AES system does not directly involve the government’s money. We are concerned now if the federal government has to take over the operation and enforcement of the AES with cost. Thus, Hishammuddin Hussein Onn has the responsibility to inform Malaysians of the expected cost involved for the acquisition of the AES operation and enforcement.

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