Residents sure surveyor report will favour them

Wednesday April 30, 2008

By GEETHA KRISHNAN

KAJANG: The Bandar Mahkota Cheras Open Access Road Committee is confident the outcome of today's meeting at the Kajang Municipal Council (MPKj) will be in its favour.

At a press conference yesterday, independent surveyor Khoo Leong Hok pointed out that the barricade demolished on April 21 was erected outside the Malaysian Highway Authority road reserve. Khoo had volunteered his services to the committee.

Seri Kembangan assemblyman Ean Yong Hian Wah produced a letter from the Hulu Langat Land Office that stated the land originally belonged to Bandar Mahkota Cheras developer Narajaya Sdn Bhd because it was obtained through land acquisition as detailed in the Government Circular No 1007, dated May 27, 2003. The road was subsequently delivered to the council.

Last week, Selangor State Local Government, Study and Research Committee chairman Ronnie Liu gave the surveyor on the council's panel another week to present a report on who had the right of way, Bandar Mahkota Cheras or Cheras-Kajang highway concessionaire Grand Saga Sdn Bhd. Another surveyor was appointed by the panel to provide a fair perspective on the matter.

The toll-free access road has been the subject of controversy between both parties since Grand Saga closed the road in 2005.

Selangor has no need to pay concessionaire RM200m

Saturday April 26, 2008

By ELAN PERUMAL

THE Selangor Government will not pay any compensation to highway concessionaire Grand Saga Sdn Bhd.

State Local Government committee chairman Ronnie Liu said the state government had no contract with Grand Saga, the concessionaire for the Cheras-Kajang Highway in Cheras.

Under the circumstance, he said the state government had the right to open the access road in Bandar Mahkota Cheras so that the residents would be provided with the option of a toll-free access to the area.

“It is absurd to pay compensation totalling RM200mil to the concessionaire when there is no contract.

“The contract is between Grand Saga and the Federal Government and therefore there is no reason why we cannot provide an access road on our land,'' he told StarMetro.

He stressed that the state was determined to open the access road, adding that the Selangor government was firm in its decision on the matter.

“We are the people's government and our stand will favour the people and there is no way things will change on our side,'' he said

Besides that, Liu said the highway builder, Narajaya Sbd Bhd, had not obtained approval for the construction of the highway from the Kajang Municipal Council.

He said they had in fact failed to get the nod from the Malaysian Highway Authority before the highway was constructed.

“To make matters worse, the developer did not submit an application to the council for the construction of the highway,'' he said

He added that after detailed research, he found former Mentri Besar Datuk Seri Dr Mohamad Khir Toyo's claim that the concessionaire must be compensated RM200mil if the access is to be opened as baseless.

Dr Khir was quoted as saying that when the road was first opened in 2005, the concessionaire had asked for RM200mil in compensation for loss of toll collection based on the formula in the concession agreement.

“That is why we decided that the toll-free access road should be closed as it would be unfair to use taxpayers money to pay such a huge sum,” he said at a press conference this week.

He said the state had asked the developer, Narajaya Sdn Bhd, to pay the sum but the company also found the figure too high.

The present state government, he said, had promised to open the access road recently but added that it should not use public funds as it was unfair to the rest of the taxpayers in the state who would not benefit from it.

The saga continues

Friday April 25, 2008

By GEETHA KRISHNAN

IN a new development to the Bandar Mahkota Cheras access road issue, Cheras-Kajang Highway concessionaire Grand Saga Sdn Bhd has issued a warning letter to the company that owns the heavy machinery used in dismantling the barricade.

Residents of the township brought down the barricade blocking their toll-free access to the highway on Monday after mounting frustration against Grand Saga for closing the road in 2005.

The highway concessionaire issued the letter to Wing Sing Tractor Work through a legal firm based in Kuala Lumpur.

Among the contents was this phrase, “Take notice that you are to cease and desist from further causing and/or assisting in the damage and/or demolishing of the said barricade lawfully constructed/erected by our client”.

At a press conference on Thursday, Segambut MP Lim Lip Eng who is one of the legal advisers for the Bandar Mahkota Cheras Open Access Road Committee said the letter would be ignored.

Another legal adviser Keppy Wong said no party could claim the legal right to erect the barricade and in doing so Grand Saga had overlooked the lawsuit filed by township developer Narajaya Sdn Bhd and scheduled for a court hearing on May 21.

Cheras MP Tan Kok Wai who chaired the press conference called on the intervention of the Federal Government because the Selangor state government had repeatedly stated its stand on the issue.

“We hope the government would review all highway concession agreements. The Cheras-Kajang Highway was built at a cost of RM286mil but toll collection to-date has exceeded RM300mil. The concession agreement is till 2027 so imagine the profits,” he said.

Residents have been maintaining a 24-hour vigil at the Bandar Mahkota Cheras-Bandar Tun Hussein Onn junction since Monday, fearing the road would be blocked again.

They also take turns to control the traffic flow.

In a special meeting held at Menara MPKj on Wednesday, the surveyor hired by the Kajang Munici-pal Council to determine who has right of way over the road and to clarify ownership of the land asked for more time to announce his findings.

“We are confident the land belongs to the state. But if the outcome proves that the land belongs to Federal government, we hope residents' civil rights would be considered and the matter put to rest with a positive outcome,” said Selangor executive councillor Ronnie Liu who chaired the meeting.

Another surveyor will also be appointed and the results of the report would be revealed on Apr 30.

Be prepared to pay

Friday April 25, 2008

By DHARMENDER SINGH

THE Selangor government will have to ensure that highway concessionaire Grand Saga Sdn Bhd is paid RM200mil in compensation if it allows the access road in Bandar Mahkota Cheras, Kajang to be opened.

Former Mentri Besar Datuk Seri Dr Mohamad Khir Toyo said when the road was first opened in 2005 the concessionaire had asked for RM200mil in compensation for loss of toll collection based on the formula in the concession agreement.

“That is why we decided that the toll-free access road should be closed as it would be unfair to use taxpayers money to pay such a huge sum,” he said at a press conference.

He said the state had asked the developer, Narajaya Sdn Bhd to pay the sum but the company too found the figure too high.

The current state government, he said, had however promised to open the access road recently but it should not use public funds as it was unfair to the rest of the taxpayers in the state who would not benefit from it.

Dr Khir, who is also the Opposition Leader, also called on the state government to ensure that it kept its promise to offer the first 20 cubic metre of water free to consumers by June 1.

He said the offer would cost water distribution concessionaire Syarikat Bekalan Air Selangor (Syabas) RM17mil a month.

“We do not want to see problems in the implementation as people are eagerly waiting for the free water that was listed as part of their (Pakatan Rakyat’s) election promises,” he said, adding that changes also needed to be made to the billing system.

He said the state government had initially said it would provide free water by April but then postponed it to June 1.

Dr Khir also asked the state government to deliver on its promise during the General Election to give the people a 20% discount on assessment charges on homes and 10% for commercial properties.

He said annual assessment collection in the state stood at RM889mil and providing the discounts would reduce the government’s revenue by RM170mil per year but the pledge to lessen the people’s burden with the discount should be kept by the current government.

“I have also had many come up to my service centre to enquire where and how to apply for the RM1,000 aid that they (Pakatan Rakyat) promised to give each Selangor born university student during the election campaign,” he said.

He said the new intake for students at local universities was in July and people wanted to know the procedures involved in getting the aid.

On the integrated high-tech pig-rearing farm in Ladang Tumbuk, Dr Khir said, the state government should hold a public hearing to get the opinions of nearby villagers and pig rearers before carrying out the project.

He said the Barisan Nasional assemblymen would lend its support too if the government got at least two-thirds of the people and farmers to agree.

“Although it was proposed during our time, it is being implemented under the Pakatan Rakyat government and they need to convince the people it is for in their own good before they go on,” he said.

He said Barisan assemblymen would conduct a public hearing on the matter if the state government failed.

Drama unfolds as cops step in to block road

Thursday April 24, 2008

By GEETHA KRISHNAN

MORE drama unfolded at Bandar Mahkota Cheras yesterday when the Kajang police temporarily closed the controversial road offering toll-free access to the Cheras-Kajang Highway.

Several patrol cars were used to block the road under the flyover leading to the Cheras 11th Mile toll plaza from 8am to 9.50am. This led to a large group of angry residents gathering at the site to protest the move.

Cheras MP Tan Kok Wai, who arrived at the scene at 9am, called Kajang OCPD Asst Comm Shakaruddin Che Mood to seek an explanation.

“I have spoken to the OCPD and he said it was done to protect road users’ safety as the traffic lights at the junction have not been synchronised.

“The police fear accidents may occur,” Tan said.

He appealed to ACP Shakaruddin to allow residents to use the road for another day, pending the outcome of the survey to determine who has the right of way over the road at a meeting at Menara MPKj in Kajang at 3pm.

Police personnel later removed their vehicles to allow motorists to pass through.

Temporary measure: (From left) Seri Kembangan assemblyman Ean Yong Hian Wah, Tan, Serdang MP Teo Nie Chin, Hulu Langat MP Che Rosli Che Mat and PAS representative Mohd Sany Hamzan trying to calm the residents.

The access road built by Bandar Mahkota Cheras developer Narajaya Sdn Bhd was opened in September 2005 and closed soon after by highway concessionaire Grand Saga Sdn Bhd, who cited a loss of toll collection as the reason for the closure.

On Monday, residents defied an order from the Selangor government and opened the road.

The government had wanted a survey to be carried out with reports from the Hulu Langat Land Office, Kajang Municipal Council, Narajaya and Grand Saga.

At a press conference later, the surveyor said he needed a few more days to prepare the report and it would be ready soon.

Grand Saga official pelted with stones

Wednesday April 23, 2008

By GEETHA KRISHNAN

A REPRESENTATIVE from Grand Saga Sdn Bhd, the concessionaire for the Cheras-Kajang Highway, was pelted with stones yesterday when he threatened to restore the dismantled barricade at the Bandar Mahkota Cheras toll-free access road.

Before the incident, Grand Saga representative Zainal Abidin was heard telling residents gathered at the Bandar Mahkota Cheras-Bandar Tun Hussein Onn junction that they had no right to open the road. He roused their anger further by threatening to block the road.

Bandar Mahkota Cheras residents forcefully dismantled the barricade on Monday. They acted on their own accord after learning that the Selangor Government wanted them to wait till today for the surveyor's report which would reveal if the land belonged to the state or the federal government.

The road was barricaded by Grand Saga in September 2005, soon after its opening.

Residents, however, have claimed that the road was included in the Kajang masterplan while the highway was built later and therefore the concessionaire had no right to deny them access.

Serdang MP Teo Nie Ching, who arrived at noon to ease the tense situation between the residents and Zainal, urged Grand Saga to wait for 24 hours more before putting up the barricade again.

“Please maintain your cool till the outcome is known tomorrow (to-day) after 3pm. We are also awaiting the surveyor's report to determine who has the right of way,” she said.

When the StarMetro visited the site in the morning, many motorists were seen using the road although it needed proper resurfacing work.

But traffic at the crossroads leading to the highway and the Cheras Perdana-Bandar Tun Hussein Onn junction was chaotic because the traffic lights were not synchronised.

Traffic police from Kajang later arrived to ensure the traffic flowed smoothly.

When asked what they would do if the road was barricaded again, the residents said the federal government should step in to resolve the matter.

They said the closure affected their rights as citizens and the government should defend their cause.

Angry residents remove barrier at access road

Tuesday April 22, 2008

By GEETHA KRISHNAN

JOY turned to despair and anger when Bandar Mahkota Cheras residents learnt that the toll-free access road to the Cheras-Kajang Highway would not be opened yesterday as earlier anticipated.

More than 700 angry residents who had gathered at the barricade under the flyover before the Cheras 11th mile toll plaza and at the junction to Bandar Tun Hussein Onn took matters into their own hands by forcefully removing the blockage.

With the use of heavy machinery, they removed the barrier placed by highway concessionaire Grand Saga Sdn Bhd in 2006 and defied an order from the Selangor state government to wait till Wednesday.

An excited crowd lead by Bandar Mahkota Cheras Open Access Road Committee chairman Tan Boon Wah had earlier gathered at the location yesterday, expecting the Kajang Municipal Council (MPKj) to remove the barrier at 10am.

This came about because on Friday, Selangor State Local Government, Study and Research Committee chairman Ronnie Liu had said that the land belonged to the state and gave the council the power to act.

At 10.20am, heavy machinery brought in by the Bandar Mahkota Cheras Open Access Road Committee with the help of developer Narajaya Sdn Bhd which built the road, began drilling holes into the concrete barriers, amidst cheers from the residents.

Elected representatives who addressed the jubilant crowd in the morning were Hulu Langat MP Che Rosli Che Mat of PAS, Serdang MP Teo Nie Ching and Segambut MP Lim Lip Eng, both of the DAP.

Work was stopped at 10.40am when MPKj president Datuk Hasan Nawawi Abdul Rahman arrived to announce the bad news that the wait would be prolonged.

“The council has received orders from the state government to appoint a surveyor to determine who has right of way over the road.

“The surveyor will collect reports from the Malaysian Highway Authority, Narajaya and Grand Saga and deliver his findings on Wednesday,” Hasan told the crowd who booed and jeered at him.
Calls were then made to the state government to ascertain if this was true.

The elected representatives then left for Menara MPKj to view the letter purportedly from Selangor Mentri Besar Tan Sri Khalid Ibrahim, asking for all work to stop and for the crowd to disperse peacefully.

“We were told to wait but the federal and state governments must understand that we cannot wait any longer. Who is Grand Saga to flex its muscles so that we residents have to live with traffic jams every single day?” Tan asked.

Bandar Mahkota Cheras residents Phoon Chee Kai, 68 and Kelly Moh, 35, said they were tired of battling traffic every day just to access the highway using a longer route that measured 4.5km.

Residents were unanimous in their decision to ignore the calls to stop work and the barriers were removed by 4pm. Re-surfacing work was carried out soon afterwards.

Selangor gives go-ahead for toll-free road to open

Saturday April 19, 2008

KAJANG: The Selangor Government has given the green light for the opening of the Bandar Mahkota Cheras toll-free access road leading to the Cheras-Kajang Highway.

The Kajang Municipal Council has been given the power to remove the barricade put up by highway concessionaire Grand Saga Sdn Bhd in 2006 due to loss of toll collection.

A date for the opening of the RM16mil road, built by Bandar Mahkota Cheras developer Narajaya Sdn Bhd, will be announced by the council soon.

The go-ahead was given by Selangor executive councillor and State Local Government, Study and Research Committee chairman Ronnie Liu following a meeting at Menara MPKj.

“We are ordering the opening of the road because it is on state land. It has been handed over by developer Narajaya to the council,” he said.

Residents of the township and the adjoining Bandar Sungai Long will benefit from the opening of the road as they have been using the main road meant for the latter.

Bandar Mahkota Cheras Open Access Road Committee members were earlier in pensive mood at the meeting, which was also attended by council president Datuk Hasan Nawawi Abdul Rahman, Cheras MP Tan Kok Wai, Kajang assemblyman Lee Kim Sin and representatives from developer Narajaya Sdn Bhd and the Malaysian Highway Authority.

Committee chairman Tan Boon Wah said it was a victorious moment for residents of both townships and urged residents to remain patient until the date of the opening was announced.

Technical Update

April 2008

The Malaysian Institute of Accountant's (MIA) Financial Reporting Standards Implementation Committee (FRSIC) recently issued two implementation guidances relating to accounting standards to provide assistance to both preparers and auditors of financial statements.

The first consensus deals with a common issue on whether fixed deposits held on lien for bank guarantee facilities granted to subsidiaries meet the definition of cash and cash equivalents, and form part of the component of cash and cash equivalents pursuant to FRS 107 (equivalent to IAS 7).

In considering the issue, the committee acknowledged that fixed deposits held on lien for bank guarantee facilities are not available for general use by the parent or other subsidiaries due to restriction over the use of such cash for specific purposes. However, the fact that they are not available for general use does not necessarily mean that they are not eligible to be part of the components of cash and cash equivalent of an entity.

Paragraphs 48 and 49 of FRS 7 states that there are various circumstances in which cash and cash equivalent balances held by an entity are not available for use by the group and requires an entity to disclose the amount, together with a commentary by management. FRS 107, paragraph 46, states that, in view of cash management practices and banking arrangements around the world, and in order to comply with FRS 101 (IAS 1), Presentation of Financial Statements, an entity is required to disclose the policy that it adopts in determining the composition of cash and cash equivalents.

Based on the above provisions, the committee decided that an entity may adopt the policy of including fixed deposits held on lien for bank guarantee facilities in determining the composition of cash and cash equivalents, provided there are adequate disclosures. However, appropriate disclosures, including the policy adopted by the entity and the amount of cash and cash equivalent balances that are not available for use by the group in the financial statements, together with a commentary by management that provides a clear explanation of the nature of the restrictions, should be made in the financial statements to enable users in understanding the financial position and liquidity of the entity.

The second consensus informs that the Central Bank, in a letter to FRSIC, has confirmed that MSC Malaysia status companies are no longer required to submit their audited annual financial statements to the Central Bank.

Both the above consensuses are already effective. FRSIC Consensus is guidance issued by the MIA, and is to be regarded as best practice and should be read in conjunction with the respective applicable accounting standards.

Jennifer Lopez, head of policy and technical development, ACCA Malaysia.

House Prices to Rise 10%-15%?

April 2008

House prices in Malaysia could go up between 10% and 15% this year in tandem with the overall escalation of construction contract sums by 16% to 18% spurred by the rising costs of building materials, reported The Edge. Apparently, the ceiling price of steel bars and billets and cement rose more than 40% in 2007, while the prices of copper used in air-conditioning and wiring escalated between 40%-50% in the past six months.

Revised Unit Trust Guidelines

April 2008

The Securities Commission (SC), in a move to expand Malaysia's unit trust sector, has revised its guidelines, effective 3 March, to allow unit trust funds to increase their exposure in derivatives, and scrapped the requirement to seek the SC's approval to invest in foreign markets, subject to the said markets fulfiling certain criteria such as their home regulator being a member of the International Organisation of Securities Commissions (IOSCO). Other key changes include lifting cash borrowing restrictions to meet redemption requests, mitigating the need to dispose of assets in a fund's investment portfolio, which could affect the interest of the remaining unit holders.

Waning IPOs

April 2008

Bursa Malaysia data indicates that the number of initial public offerings (IPOs) in Malaysia coming to market since 2005 has declined drastically, with many companies opting to list abroad in more flexible markets.

According to the stock exchange's data, reported in The Edge, the number of IPOs fell to 28 for 2007 from 40 in 2006 and 79 in 2005, whereas the number of annual IPOs has declined by about 68.2% from a decade ago.

The falling numbers were attributed to a trend among Malaysian companies to list abroad on more liberal bourses such as the London Stock Exchange's AIM and Singapore Exchange's Catalist for fast growing companies. Other deterrents include low valuations in comparison with the rich price-earnings ratios that come from listing abroad and a preference to take companies private or go the merger and acquisition (M&A) route, compounded by stiffer regulations to ensure only quality companies were listed on Bursa. In 2006, 40 IPOs out of a total application of 71 were rejected, whereas 51 out of a total application of 124 companies were rejected in 2005. Twenty-six IPOs were approved in 2007, while three were rejected. Other obstacles to local IPOs include the stringent disclosure-based regime that calls for listed companies to be more transparent.

However, the trend of declining IPOs is expected to reverse, thanks partly to the Securities Commission relaxing its listing requirements recently. As of March 2008, there have been six IPOs, three on the Second Board and three on the MESDAQ market, and more are in the pipeline.

A New Political Landscape

April 2008

In what was billed as a political tsunami by local media, the Opposition coalition parties swept into power in five states, while the establishment Barisan Nasional (BN or National Front) Government lost its entrenched two-thirds majority for the first time in four decades to end up with a simple majority in Parliament, in Malaysia's 12th general elections.

Although BN retained power, winning 140 of the 220 parliamentary seats and securing majorities in several states, and Abdullah Ahmad Badawi was sworn in again as Premier, the shift in the political landscape unnerved foreign investors and rocked the market.

The Kuala Lumpur Stock Exchange plunged by more than 10% on the Monday immediately following elections due to concerns on government-linked companies (GLCs) and the fate of mega projects announced during the previous Government's regime. Hard-hit stocks included government-linked construction companies Malaysian Resources Corp Bhd (MRCB) and UEM World Bhd, which are involved in the Monorail and Second Bridge projects in the prosperous Opposition-held state of Penang and property developer Equine Capital Bhd, linked to the controversial Penang Global City Centre project. Other affected stocks were Kumpulan Perangsang Selangor Bhd (KPS) and Puncak Niaga Holdings, which have interests in the water treatment sector in Selangor, another wealthy and populous state which fell to the Opposition.

Since then, the political flux has continued to pound stocks, and the situation is exacerbated by jitters about a pending US recession. However, the Prime Minister has reassured investors that Malaysia's business and investment friendly policies would stay and that federal projects still had the green light. Nevertheless, it remains to be seen if projects in Opposition-controlled states might be delayed or even derailed, since there have been signals that contracts affecting these states might be reviewed if they were awarded by executive fiat, through political connections or closed tender or, in other words, via a less than transparent process.

Bandar Mahkota Cheras folk to get an answer on Friday

Thursday April 17, 2008

By GEETHA KRISHNAN

ON Friday, Bandar Mahkota Cheras residents will know if their wishes would come true if the Selangor state government orders the opening of the Bandar Mahkota Cheras access road that was blocked in 2005.

This would depend on the outcome of a meeting between the Bandar Mahkota Cheras Open Access Road Committee, the Kajang Municipal Council (MPKj), the Malaysian Highway Authority (MHA) and developer Narajaya Sdn Bhd.

Selangor executive councillor Ronnie Liu who met with the Bandar Mahkota Cheras Open Access Road Committee members at the state secretariat building in Shah Alam on Tuesday said he would act as an observer.

“We have asked the MHA to attend to obtain a clearer picture of the situation and to find ways to open the road,” the State Local Government, Study and Research Committee chairman said.

Bandar Mahkota Cheras Open Access Road Committee chairman Tan Boon Wah said Works Minister Datuk Mohd Zin Mohamad had assured committee members that he would help open the road.

“We cannot wait for the matter to be brought up in Parliament because the issue has dragged on for more than two years.

“The legal suit is between Grand Saga and Narajaya and does not involve the residents,” Tan explained.

Cheras-Kajang highway concessionaire Grand Saga Sdn Bhd barricaded the road in October 2005 citing loss of income from toll collection and this eventually led to a legal dispute with Narajaya.

Bandar Mahkota Cheras residents are now using the access road through Bandar Sungai Long to access the highway.

Traffic congestion during peak hours is a common occurrence.

Grads prefer to stay on overseas

Sunday April 13, 2008

By SIM LEOI LEOI

PUTRAJAYA: More and more medical students sent abroad to study on government scholarships, many costing more than a million ringgit each, are breaking their 10-year bond by refusing to return and serve in public hospitals.

“This is a sore point with us. In 2006, 21 medical students in Britain did not return. Last year, the number was 63. For those studying in Ireland, three students did not come back in 2006 while last year, 27 did not return,” said Human Capital Development division director Datin Madinah Mohamad.

She said these students cost the Government up to RM1.1mil each in funding for the five-year course.

“The number has been steadily increasing each year since 2003. The excuse these undergraduates often give is that they want to do their two-year housemanship over there and continue with sub-specialisation courses.

“But when they do so, they may then get employed and become eligible for registration in Britain. With the pay they are getting there, it’s highly unlikely they will come back and serve here,” she said in an interview here yesterday.

Since 2003, 145 students from Britain and 85 from Ireland have not come back. However, only three from Russia, two from Jordan and one from Japan failed to return.

Another reason many students chose to stay back could have been due to PSD’s perceived lenient treatment of such students in the past and a paltry penalty of RM160,000 each before 2003, she said.

“It encouraged undergraduates, who have seen many of their seniors being let off, to follow suit,” she said.

Although the department had officers in Britain and Ireland to track down errant medical students, some in the last year of studies ignored notices and others did not bother to show up when called for interviews.

She said tougher measures were needed to make them come back and serve or pay their bond.
The department was now seriously considering suggestions to make errant students repay twice or thrice the sum of their scholarships as punishment.

“We need to study this recommendation,” she said, adding the department had also handed 30 such cases since 1989 to the Attorney-General’s Chambers for legal action and had even declared one former student bankrupt.

But legal action was slow and guarantors would be taken to court only as the last resort, she said.
Since PSD’s Overseas Scholarship Programme started in 2000, RM2.15bil in scholarships had been given to 10,485 students up to the end of last year.

Move to blacklist loan defaulters gets full support

Sunday April 13, 2008

KUALA LUMPUR: Those who have been diligently paying back their education loans support the firm action being proposed against defaulters.

Among them is radiologist Dr K. Kanagalingam, 43, who said it was unfair for government scholars not to pay back their loans as they would deprive others of the benefit.

“If I am paying back my loan monthly and promptly, why are they not? They also signed an agreement like me and should pay the Government back.”

Dr Kanagalingam’s parents financed his basic medical degree and he took a loan to do his masters in radiology for four years (1995 to 1999) in Universiti Malaya.

So far, he has paid back RM25,000 of the RM80,000 loan he took and intends to pay every sen back.

“They should be grateful the Government gave them loans. Many did not get such facilities.

“They are supposed to be professionals, yet they don’t pay. It is sad they do not have a conscience.

“They owe it society to pay back the loan,” he said.

It was reported yesterday that the Public Service Department (PSD) has come up with a last-gasp measure to recover loans by putting defaulters on the credit-rating blacklist to bar them from getting any more loans.

However, bank officer Faizal Alam, 35, hoped the Government would take into consideration borrowers who defaulted on their loan repayments because of financial problems.

Recounting his own case, he said he stopped his civil engineering programme in his second year when he found that it wasn’t what he wanted.

“I went straight to work and my starting pay wasn’t that high. PSD tracked me down but they were kind enough to understand that I could not afford to pay back the whole sum in one go, so after negotiating with them, they allowed me to pay in affordable instalments.”

He said he did not regret leaving his course as he has found a career that suited him better, but if he had spent all his first few years of work to pay back his “debt”, he would not have succeeded.

“At the same time, the graduates or students also need to be honest with the authorities.”

PSD: Drastic move to get borrowers to pay up

Saturday April 12, 2008

By SIM LEOI LEOI

PUTRAJAYA: Defaulters of government study loans may soon find themselves on the credit-rating blacklist and unable to get loans from financial institutions.

In a drastic move to get defaulters to pay up, the Public Service Department (PSD) will hold discussions with Bank Negara to participate in the Central Credit Reference Information System (CCRIS).

PSD has also consulted legal experts on the matter and has been given the clearance to go ahead with the move.

CCRIS, which is run by Bank Negara, keeps the financial history of all those who have taken loans and is widely used by financial institutions to check a loan applicants’ credit worthiness when processing applications for housing and car loans, and even credit cards.

PSD’s Human Capital Development division director Datin Madinah Mohamad said the drastic move was being considered as the department’s funds would last only until 2010 if its efforts to collect the study loans were not stepped up.

“The money that goes into these loans comes from a revolving fund. This means that if those who have previously taken the loans don’t pay back, we won’t be able to help needy students in the future.

“These funds are duit rakyat (taxpayers’ money). So far, we have had 11,253 loan defaulters, among them 866 civil servants, who have yet to repay their loans amounting to some RM135.8mil.

“We hope to participate in CCRIS in a few months’ time, probably this year,” she said in an interview here yesterday.

Madinah said the implications of PSD joining CCRIS would be huge on loan defaulters as the system contained the financial records of all loan applicants.

“This means details of their PSD loans will be included in their credit history, which will come up each time they apply for credit cards or loans. It will also give us information that will facilitate us in tracking down the defaulters,” she said, adding that each year, 500 applicants received loans.

The department has given out loans to 151,707 students pursuing their first degrees in overseas universities between 1987 and last year. Some 78% – 118,003 students – have either repaid their loans or started repaying.

“The list of defaulters will be published in newspapers in May,” she said.

National Higher Education Fund Corp (PTPTN) CEO Yunos Abdul Ghani said he would consider implementing a similar move to get loan defaulters to pay up.

“As it is a government initiative, we will probably go along with it. I will have to bring this matter up at the next board meeting.”

PSD gets nod to put defaulters on credit-rating blacklist

Saturday April 12, 2008

AFTER trying just about everything to recover payments for study loans and still not making any headway, the Public Service Department has come up with a last-gasp measure – to put defaulters on the credit-rating blacklist to bar them from getting any more loans.

The PSD has consulted legal experts and has been given the go-ahead to implement the plan.

In the past, the department and other agencies had embarked on measures which included:
> Deducting the salaries of its own employees who had defaulted in repaying the loans.

> The Higher Education Ministry tabled a Bill in Parliament last year to allow it to seize passports of loan defaulters who tried to escape overseas.

> It was also announced last year that hardcore study loan defaulters serving in the civil service would not be considered for promotions. This meant that those blacklisted by the PSD, National Higher Education Fund Corp (PTPTN), Mara and other government-linked corporations would not be promoted until they settled their loans.

> The names of study loan defaulters to be forwarded to the Attorney-General’s Chambers so that legal action can be taken against them.

> PSD decided to revoke the 75% discount given to 1,200 hardcore defaulters and blacklist them as well as their spouses and children (if any) so that they would not enjoy a similar loan facility in future.

Sacked GM wins RM1.3mil

Monday April 7, 2008

By CHELSEA L.Y. NG

KUALA LUMPUR: A former general manager of industrial gases supplier Malaysian Oxygen Bhd (MOX) won over RM1.29mil in back wages and compensation in lieu of reinstatement for wrongful dismissal.

The Industrial Court granted the huge award despite having found Soh Tong Hwa guilty of two misconducts, saying that dismissal was too harsh a punishment.

Court chairman Susila Sithamparam held that Soh had breached his fiduciary duty and placed himself in a position of conflict of interest when he failed to disclose that his wife and family members were key figures in two firms that were major suppliers of MOX.

Soh, whose last drawn salary was RM31,625, was granted 24 months of wages in compensation and a similar sum, albeit scaled down by 30% for back pay, as he was found guilty of two of the eight charges against him. Counsel V.K. Raj acted for him in the case.

Susila ordered that the RM1,290,300 be paid by the company by April 16.

She had, among others, held that, under the law, an employee should not engage in another business or put himself in a position of conflict of interest but found that Soh had devoted his time fully to MOX which had recognised his dedication by giving him salary increments, generous bonuses, payment in lieu of his annual leave and written testimonials.

“The court found that he was not engaged in the activities (of the other company owned by him and his wife) ... to the extent that he was not able to fulfil his obligations to MOX.

“A passive shareholder or director of one company would not give rise to any conflict of interest as an employee in another company,” she said, adding that Soh’s company was not a competitor.
The court held that the dismissal was without just cause or excuse but did not order reinstatement as Soh is currently employed elsewhere at a higher salary from March last year.

In its claims, MOX alleged that it discovered Soh’s misconduct after investigating complaints from outsiders who claimed difficulties in doing business with the company, especially the department headed by Soh.

MOX claimed the probe revealed that Soh and his team had also obstructed potential suppliers from doing business with MOX.

Soh denied he had the ultimate approving authority for purchases for his division and pointed out that MOX only implemented the conflict of interest policy during his suspension.

He joined the company as a production engineer in 1979 and rose steadily to the position of general manager of the Process Gas Solutions division before he was sacked in 2003, after 24 years of service.

His last drawn salary was RM27,125 not inclusive of a RM4,500 car allowance. He was also paid a bonus every three months and given an annual holiday allowance.

Don’t subsidise fuel, don’t tax cars

Sunday April 6, 2008

I AGREE with Dzof Azmi's argument in Fuelling trouble with petrol subsidies, (Contradictheory, StarMag, March 30) that the Government cannot afford to subsidise petrol and keep prices artificially low forever.

However, I want to point out that when you talk about the price of petrol, you have to also talk about the price of cars in Malaysia. These two items go hand in hand, something that Dzof failed to mention.

If one expects the rakyat to pay the real price of petrol (say, RM3 per litre) in the future when the petrol subsidy is zero, then the price of cars must also be real, ie, be tax free.

If one expects the people to pay the full, real-world price of petrol – and I must say it is a perfectly reasonable expectation – then the rakyat expects, also reasonably, to buy cars at real-world prices, without the exorbitant taxes currently imposed.

For example, a Toyota Corolla at the real price of US$19,000 (RM60,500) instead of artificially high at RM117,000.

Now, when the average consumer buys a car, he has already paid (in the form of import duties, excise duties, and sales tax) to the Government, in advance, a sum greater than the petrol subsidy he can expect to enjoy over the time he owns the car.

Let me give you an example.

If a consumer buys a Toyota Corolla at RM117,000, the tax he pays, up front, to the Government is more than RM50,000.

Then, he enjoys the fuel subsidy each time he fills up with petrol. To benefit from the RM50,000 that he has paid, in advance, it will take approximately 16 years (assuming he uses 60 litres of petrol a week and the subsidy is RM1 per litre)!

So, it is not fair to say that the subsidy of petrol has to be reduced or removed when the commodity price goes up, without reducing or abolishing the hefty taxes on cars.

You can’t use the “cheapest petrol in South-East Asia” and “price of crude oil has skyrocketed” excuses to justify the reduction in petrol subsidy as long as the ridiculously high tax is imposed on cars.

The rakyat won’t buy your story because we know that we, as motorists, have already paid for the petrol “subsidy”. In advance.

Jimmy Wah, Bayan Lepas, Penang