KUALA LUMPUR: Malaysia will make public once-confidential concession agreements for toll highways with private companies, providing a rare peek into the inner workings of the government's controversial privatisation policy.
The unprecedented move to open up the documents, announced by the government yesterday, could intensify demands for greater transparency in the award of large infrastructure projects.
Bankers and economists also say that the move could put pressure on the government to make public other privatisation awards.
Works Minister Mohd Zin Mohamed told reporters yesterday that the government decided to backtrack from its earlier decision not to declassify the toll agreements, after it obtained consent from all but one of the highway toll concession companies.
The agreements to be made public included those for the North-South Expressway that links Johor in the south to Perlis in the north. Other highway concessionaires are mostly those which built and operate toll roads in the Klang Valley area that surrounds Kuala Lumpur.
Datuk Mohd Zin said the declassification would take place before the year- end. But he declined to disclose why Maju Expressway, a private company which operates a new highway linking Kuala Lumpur and the administrative capital of Putrajaya, refused to give its consent to make public its contract.
Maju Expressway executives could not be reached for comment and it is unclear if the government will unilaterally decide to make public details of the concession agreement.
The move to lift the lid of secrecy over the concession contracts for public services is likely to be welcomed by consumer groups. But it could embarrass former premier Mahathir Mohamad, say analysts.
The demands for greater transparency in the highway concession agreements go to the core of a three-decade debate over the government's controversial privatisation programme that Tun Dr Mahathir began in the mid-1980s.
During his tenure, the government regularly entrusted politically well-connected companies or entrepreneurs to carry out so-called national projects.
These included the privatisation of public services such as electricity generation, processing and supply of water, the management of ports and the dredging of the country's rivers.
Typically, these projects were awarded without public tender. Their contracts, which included regular increases in charges imposed on the public, were kept out of the public domain.
In recent years, there has been growing public anger over the increases in toll rates imposed by operators of highways, prompting attacks against the government that the contracts were lopsided in favour of the private concessionaires at the expense of the public.
Several private economists and bankers say the move to declassify the toll agreements may be part of a public relations gambit by the government to force concessionaires to consider reducing their toll rates in favour of longer concession periods in operating the networks.
"It looks like the highway operators are the guinea pigs for a plan to get concession companies in other sectors to the negotiating table, to discuss how they charge the public for their services," said the head of research of a local stockbroking company.
This article was first published in The Straits Times on Nov 19, 2008.
