No vision upstairs and double vision on the road, that’s AES for you

NEWS ANALYSIS Which is more important? Supporting your political adviser who’s been defending a couple of companies that lost RM100 million? Or holding faith with that person called the Malaysian, who voted you into office and expects you to protect his interests, always?

A simple poser for Prime Minister Datuk Seri Najib Razak. But a timely one, given the decision on Monday by the National Economic Advisory Council (NEAC) headed by him to allow the troubled Automated Enforcement System (AES) to continue, pending a complete study on it.

Question: what is a sign that government decision-making is ad hoc, hurried or just incompetent?

Answer: when it commissions a study on a project after the thing’s been running for 11 months.

And yet there was Acting Transport Minister Datuk Seri Hishammuddin Hussein declaring that a final decision on the AES – a privatised speed-camera system for traffic control – would be made only after legal and other issues are thrashed out.

After all the layers of unhappiness about this privatisation project have been peeled away, this has been the most disturbing fact surrounding the AES.

It has the stench of a rush job. No thinking. No planning. No asking how motorists would react to having two systems of traffic cameras, one profit-driven and the other by the police.

The RM700-million AES began in September last year with a pilot phase of 14 cameras and a final roll out of 831 cameras by end of this year.

Two companies – Beta Tegap and Ates – were given a five-year contract to supply the hardware and software and set up a command centre for Road Transport Department (RTD) officers.

The job of the RTD officers is to check the images of speeding vehicles and send out the summonses. Sounds simple, right? It is simple.

You would have thought that the police and RTD, which have decades of experience in the summons business, could have bought and operated the hardware and software. But no, this is Malaysia where the middleman and privatisation have pole positions.

The project became mired in controversy when it became clear that the police, who enforce speeding laws, would also retain their speed traps, alongside the privatised speed-camera system, the AES.

So what happened was many motorists received two speeding tickets, one from the police and the other from AES.

Equally upsetting was news about the revenue-sharing model between the RTD and the two companies running the privatised speed traps.

Shouldn't this source of government revenue – fines – all go to the government? It would have made more financial sense for the government to have purchased the hardware and given the two AES companies a maintenance contract.

Instead, the government opted for the revenue-sharing deal, the highlight of which is an internal rate of return of up to 17%.

No one is questioning the value of speed cameras and any other initiatives to make Malaysian roads safer. But why inject a profit-motive into the equation? Or if the government really had to privatise this function of the RTD, then it should have asked the police to dismantle their speed cameras.

Instead, the government has decided to persist with the double whammy approach.

To be sure, this idea of privatising the traffic camera system did not emerge during the Najib era. It was raised by a businessman close to Tun Abdullah Ahmad Badawi when the latter was the PM.

It did not get much traction then, with objections from the police as well as some Cabinet members who felt that anything to do with summonses should be left to the government.

There was also resistance to this privatisation idea from senior members of the Najib administration when the idea resurfaced. But this time, the objections melted away when it became clear that the PM was a supporter.

Around this time, it emerged that a key promoter of the privatisation concept was the PM's adviser. When criticisms against the project mounted and there was talk that the government could cancel it, he went on overdrive to safeguard the project.

As recently as a couple of weeks ago he defended the AES, saying that the criticisms against the project were focused only on that narrow point of the revenue-sharing model, not the project overall.

He is wrong. The objection to the AES goes deeper: in the eyes of the public, this is just another example of another privatisation project that doesn’t make sense.

But is the PM listening? – August 21, 2013.