AES valuation tiff
Govt puts value at RM180mil buy operators contend it’s worth double the amount
PETALING JAYA: The Government’s planned takeover of the companies operating the controversial Automated Enforcement System (AES) has hit a bump due to a valuation gap between the authorities and the concessionaires.
According to sources, the Government has placed a valuation of about RM180mil each to take over the companies lock, stock and barrel, while the opera- tors contend it should be double that amount or more.
“The Government had hired a well-known accounting firm, which came up with the value. They are not prepared to pay more than the stated amount,” said a source.
In contrast, one of the concessionaires had hired one of the big four accounting firms, which came up with a figure of between RM400mil and RM500mil for the nationalisation of the project.
“There is a valuation gap between what the Ministry of Finance (MoF) has proposed and what the two firms are looking at,” said the source.
The two companies given the mandate to implement the AES under a build-operate-transfer concession are Beta Tegap Sdn Bhd and ATES Sdn Bhd.
The idea, which was mooted during former prime minister Tun Abdullah Ahmad Badawi’s administration in 2007, only firmed up in 2012 after a competitive tender exercise.
The mandate given to the companies was to establish and operate a network of automatic speed cameras in 831 “black spot” areas on highways in addition to stretches of state and federal roads.
The five-year concessions started in September 2012, but the project came to an abrupt halt three months later due to enforcement problems.
Subsequently, the Attorney-General’s Chambers (AGC) froze all court proceedings related to the summonses issued under the AES on the grounds that it needed more time to study legal concerns raised during the prosecution of the offenders.
The AGC was supposed to have come up with a statement a few days after that, but nothing came about until a year later.
In early December last year, a motion was passed in the Dewan Rakyat to allow the Government to take over the project from the companies, paving the way for negotiations between the companies and the MoF.
The companies’ estimated capital expenditure (capex) for the project was to have been between RM300mil and RM400mil, with 60% being spent in the first six months of rolling out the system.
However, up to last year, the companies were reported to have spent just over RM100mil each.
The Government is taking over the two companies via AES Solutions Sdn Bhd, a company owned by MoF-controlled Prokhas Sdn Bhd.
AES Solutions, incorporated on Sept 2, 2013, has two directors – Maamor Che Alias and Datuk Kamal Mohd Ali.
The-then Deputy Finance Minister Datuk Ahmad Maslan had said that the two companies had an estimated investment cost of RM717mil, and that the Government would conduct its own due diligence.
Under the terms of the concession, Beta Tegap was supposed to have implemented the AES for Kuala Lumpur, Putrajaya, Selangor, Negri Sembilan, Malacca, Johor, Pahang and Terengganu, while ATES was to have operated in Perlis, Kedah, Penang, Perak, Kelantan, Sarawak, Sabah and Labuan.
The system was supposed to have been launched nationwide in September 2012, but was delayed due to massive resistance from various quarters.
The major shareholder of ATESis Commercial Circle (M) Sdn Bhd. One of its directors is Chee Chwee Cheong, who also happens to be the founding partner of Ethos Consulting, which is one of the country’s most influential boutique advisory houses.
Apart from Chee, the other director of ATES is Lawrence Foong, who is Chee’s father-inlaw.
Beta Tegap, meanwhile, has a total issued share capital of RM19mil. Its four shareholders are Tan Sri Nik Ismail Nik Mohamed, Yap Kim See @ Yap Ai Lin, Rozana Redzuan and Andreas Teoh.