YTL’s RM2.4 million fine is peanuts, says DAP rep Published: 12 November 2014 Bukit Bendera MP Zairil Khir Johari said the RM2.4 million fine slapped on YTL Communications Sdn Bhd over its failure to deliver in the 1BestariNet project is nothing. – Screenshot of 1BestariNet, November 12, 2014.The RM2.4 million fine imposed on YTL Communications Sdn Bhd over the 1BestariNet project is nothing compared to the RM50 million profit the company makes from just two contractual loopholes, says a DAP lawmaker. Bukit Bendera MP Zairil Khir Johari said one of the ambiguities he found from the third series of the Auditor-Generals Report was the installation of the 1BestariNet Receiver Integrated System (1BRIS). For schools without a suitable existing LAN structure for high-speed broadband, 1BRIS towers are installed on the premises in order to receive and relay high-speed wireless signals. The Valuation and Property Services Department (JPPH) advised the Education Ministry in January last year that an appropriate rental for YTL to pay would be RM1,200 a month for each 1BRIS site. But, Zairil said that the company refused to pay this amount, asserting instead that they are to install the towers for free under the contract terms. In February this year, the Education Ministry decided to charge a token sum of RM1,000 in rental a year for each 1BRIS site and based on this, YTL paid the outstanding arrears, amounting to RM2,416.67 per site from May 1, 2012 to June 30, 2014, including three months’ deposit. Zairil (pic, left) said RM1,000 a year was far from the RM1,200 a month that was recommended by the JPPH. With 3,203 1BRIS towers installed all over the country, rental revenue at RM1,200 a month or RM14,400 a year would come up to RM46.12 million a year. Currently, YTL is only paying RM3.2 million a year. This equates to a whopping RM42.92 in lost revenue annually for the ministry, he said in a statement today. The 1BestariNet project is aimed at installing high-speed 4G broadband across all 10,000 schools throughout the country, as well as a VLE platform for e-learning. The auditor’s report revealed that the Internet connection to 4,176 users of the RM663 million 1BestariNet project was delayed by between 12 and 439 days, with no time extension or fines levied. The 1BestariNet project, developed by YTL Communications under the auspices of the Education Ministry, is sorely lacking in implementation according to the A-Gs report. After the release of the report, Putrajaya announced on Monday that it fined YTL Communications RM2.4 million for failing to provide all 10,000 schools with the 1BestariNet e-learning project. It said that 1,003 schools had not been equipped with 1BestariNet as YTL Communications failed to obtain approval from the local authorities to build telecommunication towers in several states, particularly Sarawak, Penang and Kelantan. Zairil also highlighted that the report found that according to the contract between the ministry and YTL, all utility charges related to 1BestariNet and 1BRIS would be borne by the government during the duration of the contract, and that the contractor was only responsible for costs associated with the installation, maintenance and management of 1BRIS. Zairil said this was a serious flaw to the agreement, as the ministry had admitted in their reply to the A-G that the installation of the towers had increased electricity costs of schools by RM150 to RM180 a month. Given 3,203 1BRIS sites all over the country, this amounts to an increase of between RM5.77 million and RM6.92 million a year in electricity charges, which the government had to subsidise for YTLs benefit. According to the Auditor-General’s Report, the government as a subscriber to YTL’s service should not be burdened by utility charges, which should be part of the service provider’s operational costs. Due to the inadequacies in the clearly one-sided 1BestariNet contract, it would appear that YTL would profit to the tune of nearly RM50 million a year, Zairi said, adding that this would add up to RM750 million over the 15-year timeline of the project. Zairil said this did not include profits gained from the commercial usage of the 1BRIS towers. He said that it was plain to see that YTL was benefitting substantially at the cost of Malaysian taxpayers. There are only two explanations for such a lop-sided contract, either the government and its lawyers are incompetent for agreeing to such a deal, or the deal was engineered in such a way as to benefit a crony company. Whichever the case, it is a huge cause for concern, Zairil said. He added that given this scenario, the RM2.4 million fine on YTL for non-compliance with the infrastructure roll-out deadline was “peanuts” compared to the hundreds of millions of ringgit in profits that YTL was able to make from contractual loopholes alone. – November 12, 2014. - See more at: themalaysianinsider/malaysia/article/ytls-rm2.4-million-fine-is-peanuts-says-dap-rep#sthash.JfE6Puba.dpuf
Posted on: Wed, 12 Nov 2014 01:42:45 +0000
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