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Samy Vellu would perform better as a juggler in Genting Highlands than as a Works Minister in trying to "hide" huge profits of tens of billions of ringgit enjoyed by highway concessionaires
by Lim Guan Eng
(Petaling Jaya, Saturday): Datuk S. Samy Vellu would perform better as a juggler in Genting Highlands than as a Works Minister in trying to "hide" huge profits of tens of billions of ringgit enjoyed by highway concessionaires up till 2006. In denying the huge profits of RM 20 billion earned by the highway companies, Samy claimed that the construction cost of RM18.93 billion did not include maintenance cost of RM 492 million a year, loans, expansion of two lanes to three lanes or other operational costs. Samy was replying to my questioning the necessity for any toll increases when the RM 23.7 billion in toll collections from the public had already far exceeded the construction cost of RM 18.93 billion.
Samy is clearly trying to deceive the public by failing to mention that apart from the RM 23.7 billion in toll collections from the public, the government had also paid compensation of RM 38.5 billion to the toll concessionaires for deferring toll hikes. In other words toll concessionaires had received a combined sum of a shocking RM 62.2 billion from the public and government, far exceeding any expenditure incurred by them.
Even if we take into account the yearly maintenance cost of RM 492 million a year, this would work out to RM 8.1 billion. Coupled with the RM 18.9 billion construction cost, total cost is only RM 27 billion. Even if we account for loan interests and operational costs, the RM 27 billion is far below RM 62.2 billion revenue of toll concessionaires by RM 35 billion.
For Samy to be claim that it is not true that toll concessionaires are earning huge profits shows him to be a champion juggler worthy to perform in Genting Highlands. How much would interest from loans be? Not much if we look at the obscene after-tax profits of Lingkaran Trans Kota Holdings Bhd (Litrak) that operates the Lebuhraya Damansara-Puchong (LDP).
For an initial capital cost of RM 1,327 million, inclusive of capitalised interest of RM 142.3 million, this 30 year concession agreement allows Litrak to an after-tax profit of RM 18,865 million. To get a profit after tax of RM 18,865 million from an initial capital outlay of only RM 1,327 million is a fantastic return of investment of 1,322%. In other words by 2029, Litrak would earn more than 13 times what it put in.
Isn't it a cheaper option for Samy or the government to build the highways themselves and rake in all these profits? For this reason, DAP advises Samy to stop behaving like a juggler or magician performer which he is not and start behaving like a Works Minister who must explain the unfair toll concessionaires in the interests of accountability and transparency.
The people have a right to know why the government did not build the highways themselves or allowed toll hikes when such unfair toll concessions are against national interest where the total amount of toll collections and government compensation paid of RM 62 billion far exceeds the RM 27 billion construction cost. As next year would see another round of toll hikes by PLUS for the North-South Highway, Samy can expect to see huge public protests against him when such toll hikes are implemented.
* Lim Guan Eng, Secretary-General of DAP