Outsourcing AES project implementation was inappropriate, says PAC

The implementation of the Automated Enforcement System (AES) through outsourcing was inappropriate as it should have been conducted by the Road Transport Department, according to the Public Accounts Committee (PAC).

PAC chairman Wong Kah Woh said this was among the conclusions made by PAC in its proceedings regarding the AES project under the transport ministry, which started on Nov 16, 2020.

He said the view of the AES project committee, chaired by the chief secretary to the government at the time, for the project to be implemented by the government itself, had not been taken into consideration.

In addition, he said the government’s directive in 2014 for Lembaga Tabung Angkatan Tentera (LTAT) to take over the concession companies, namely ATES Sdn Bhd and Beta Tegap Sdn Bhd, was an indirect bailout action by the government.

“The takeover cost by LTAT, amounting to RM555 million, was overvalued and exorbitant. The value did not follow the results of due diligence carried out by KPMG (audit company), where the maximum value is only RM251 million,” he said in a statement today.

PAC also concluded that the terms of the contract, especially related to the service fee to be paid to the concession companies, were not in favour of, and in fact, detrimental to the government, while the total compensation paid by the government to LTAT in 2019 was RM668.9 million.

As such, PAC recommended that the government ensure that all the terms in any concession agreement are not detrimental to them.

Wong also said the Malaysian Anti-Corruption Commission needs to review and investigate the issues raised in the Governance, Procurement and Finance Investigation Committee investigation report and the PAC report, to see if there were individuals involved in accepting kickbacks in the acquisition process of the AES by LTAT.