Pak Lah should tell-all about the agreement between PLUS and the government

Press Statement
by Ngeh Koo Ham

(Ipoh,  Sunday): The Perak Coalition Against Unfair Toll ( CAUTI ) calls on the Prime Minister , Dato Seri Abdullah Ahmad Badawi to be transparent in his administration and to tell the public the truth  which was  his pledge upon becoming the PM concerning the agreement between Project Lebuhraya Utara Selatan Bhd ( PLUS ) and the Government in the operation of the North- South Expressway (NSE ).


The PM must not continue to use the Official Secrets Act ( OSA ) to protect any wrong doings of the previous administration if not he will be found to be as guilty as the previous administration and suffer the wrath of the people.


From what has been said in Press in the past, we know that an agreement dated 18/3/1998 was signed between the PLUS and the Government. PLUS was allowed to increase the toll rate by 50%  from 5 sen per km. to 7.5 sen per km in 1993. In 1996, it was allowed a further increase of 33 % from 7.5 sen per km to 10.0 sen per km. Under the said Agreement, PLUS can raise toll yearly from 1997 i.e. PLUS is allowed toll increases 24 times in its 30-years concession!


Due to protest made by various parties, the Government realized that this one-sided agreement  favoring  PLUS at the expense of road users does not go down well with the people.  The Government then decided to ask PLUS not to raise the toll rate as per the Agreement and compensate PLUS for the shortfall in consequent thereto.


Works Minister, Datuk Seri S. Samy Vellu had announced in 1999 that the Government paid RM65 Million in 1997 and RM160 Million in 1998 to PLUS as compensation.


In 1999, the Government renegotiated the contract with PLUS and extended the concession to 42 years i.e. till 2030.  Despite the extension, Works Minister, Datuk Seri S. Samy Vellu has on 16.12.2004 announced that the Government still has to pay PLUS compensation in the tune of RM154 Millions a year ! Samy Vellu has also stated that the Government has still to pay PLUS compensation for the next 33 years, implying that the concession has been extended to  2038. Is that the true position? Prime Minister, Dato Seri Abdullah Ahmed Badawi has the duty to clarify this ambiguity.


In 1999, PLUS had announced that their costs for the NSE was RM7.2 billion ( though the figure RM5.9 billion had been used by the Works Minister, Datuk Seri S. Samy Vellu ). PLUS also claimed that they will have to pay RM19.4 billion over a period of 25 years to its financiers. According to PLUS own forecast then, it would collect more than RM80 billion from the toll when its concession ends in 2018. The traffic volume was beyond that forecasted and PLUS’ revenue was estimated to far exceed RM100 billion.


From the above facts and figures, the Government must renegotiate the terms of this one sided agreement.  Reports have been lodged with the Anti Corruption Agency and it is hope that a thorough investigation will be carried out to determine if there were corrupt practices when the contract was awarded to PLUS.


PLUS must be reminded that it had received very favourable terms under the privatization of NSE. The Government had given PLUS RM1.65 billion ‘soft loan ‘ as well as various guarantees with regard to revenue collection, traffic volume, external risks etc. The Government had even surrendered to PLUS free-of –charge for toll collection the RM 1.5 billion worth of the sections which had been completed including Kuala Lumpur- Seremban, Seremban- Ayer Keroh, Ayer Keroh- Pagoh, Slim River-Tanjong Malim, Ipoh- Changkat Jering and the Jitra- Gurun stretches.


If the toll increase is allowed, road users will be paying 13.6 sen per km  next year which is 2.72 times what they paid in 1993 at 5.0 sen per km. It is equivalent to 172% increase in price. The profit of PLUS is expected to rise every year.


Based on the above said facts and figures, it can be seen that the people had always been made the suckers when the Government deals with PLUS with regard to NSE.


Therefore, Perak CAUTI calls on the Government to have a open debate on this matter and disclose fully all the agreements that have been entered into between the Government and PLUS.


CAUTI and the people demands that there can be no further increases in  toll rates unless the Government and PLUS can after a open debate make out a case for any further increase in toll rates.



* Ngeh Koo Ham, DAP Perak Chairman, Perak Assembly Opposition Leader and the Assemblyman For Sitiawan