Tanjong Pagar and subsidies

ARCHIVES 2010

By admin-s On May 31, 2010

The past week has been an interesting one. Firstly Najib overruled Mahahir’s objection to Daim Zainuddin’s 1990 Point of Agreement with Lee Kuan Yew (and I wonder why the Dr did not shout at Najib the way he did when Badawi cancelled his bridge).

By Lee Wee Tak

http://en.wikipedia.org/wiki/Malaysia%E2%80%93Singapore_Points_of_Agreement_of_1990

Malaysia-Singapore Points of Agreement of 1990 (POA) is an agreement between two Southeast Asian countries on the issue of the future of railway land owned by the Malaysian government through Malayan Railways (Keretapi Tanah Melayu or KTM) in Singapore. This agreement has been an issue that makes relationship between the two countries less than warm. It was signed between former Prime Minister of Singapore Lee Kuan Yew and former Finance Minister of Malaysia Tun Daim Zanuddin on behalf of their respective countries on 27 November 1990.

The 1990 POA states that the KTM railway station would be moved either to Bukit Timah first, or directly to Kranji. In exchange, under the 1990 POA, three parcels of railway land — at Tanjong Pagar, Kranji, and Woodlands — would be jointly developed on a 60-40 basis with the Malaysian Government holding the larger share. However, three years later, Prime Minister Mahathir expressed his displeasure with the POA as it failed to include a piece of railway land in Bukit Timah for joint development.

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I just wonder how Daim felt after all his hard work came to nothing. And what made Najib reversed Mahathir’s reaction to a signed agreement after 3 years. On the plus side, Mahathir’s firm stand, and willingness to arrest the progress of a signed agreement, did give Malaysia some “holding gain”.

Secondly, the decision on withdrawal of subsidy, which Idris Jala claimed to have cost the country RM73 billion and will bankrupt Malaysia in a few years.

I can’t help but put together the 2 events and ponder:

1) BN administration claims that it needs to cut subsidy, and part of the subsidy highlighted was RM394million for toll compensation. (who agreed to this kind of stupid arrangement?) while at the same time, it was announced that

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Cheaper toll soon

http://www.malaysianmirror.com/nationaldetail/6-national/40849-tanjong-pagar-train-station-for-woodlands

Both leaders also announced that Malaysia and Singapore have agreed to reduce the toll charges for the Second Link to increase the road connectivity.

The toll charges at both sides of the Second Link, connecting Tuas here and Tanjung Kupang in Johor, would be reduced significantly, both the leaders said at a joint press conference after the retreat.

The new toll charges would be announced within a month.

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er….are the tax payers of Malaysia going to bear more compensation or subsidy as a result? Perhaps a Parliament question should be raised.

2) With regards to the proposed M-S Pte Ltd, I just wonder:

2.1 who will represent Malaysia as the 60% shareholder of this Joint Venture?

2.2 how is the capital for this joint venture be raised and how much Malaysia has to invest in?

Investing in Singapore is not cheap, given the exchange rate situation, and Malaysia’s external borrowings is already at unprecedent high and will CIMB again be appointed as one of the arranger of syndicated financing?

How would this affect the actual expenditure vs the 2010 budget which hope to address the decade long deficits?

2.3 what is the expected return on this joint venture; if and how the return of this joint venture will flow through to Malaysians?

Looking at the trend established by privatisation, most Malaysians do not get any direct benefit from GLCs. Do Ali, Chong and Muthu get anything from Indah Water Konsortium, Pos Malaysia, Tenaga, Telekom apart from paid services and increasing tariff?

Let’s see what our 40% partner has for their citizens:-