No logical reason whatsoever for the BN government not to buy over all the highway concessionaires, which have already recorded profits of RM 35.2 billion comprising toll collections from the public and compensation of RM 62.2 billion over and above the RM 27 billion in construction cost and expenses incurred
____________
Press Statement
by Lim Guan Eng
________________
(Petaling Jaya,
Monday):
The
BN government should stop
privatization when it is more
expensive and costly to the
public compared to
maintaining it as a public
asset. DAP welcome the
support from Public Accounts
Committee (PAC) Chair Datuk
Shahrir Samad for DAP‘s
long-standing proposal that
the government purchase and
take over the management of
Projek Lebuhraya
Utara-Selatan Bhd (PLUS) to
resolve the problems faced by
the public when toll rates
are increased next year. Even
if the government rejects the
application by 9 toll
concessionaires to go ahead
with the toll hike, the
people will still lose out as
the government would have to
pay RM 380 million
compensation for deferring
the toll hike. The breakdown
of the RM 380 million
compensation to be paid to
nine highway concessionaires
is:
1.
Ampang-Hulu Klang Elevated
Highway – RM 28 million
2. North South Expressway
(Central Link) – RM 18
million
3. Seremban-Port Dickson
Highway – RM 178 million
4. Kulim-Butterworth Highway
– RM 10 million
5. Malaysia-Singapore Second
Link – RM 6 million
6. Sprint Highway – RM 34
million
7. North Klang Valley
Expressway Highway – RM 9
million
8. Penang Bridge – RM 22
million; and
9. Litrak, operator of the
Damansara Puchong Expressway
– RM 75 million year to
reduce its toll rate of RM
2.20 to RM 1.60
Based
on revenue received by the
toll companies against the
construction cost, it is
sound economic judgment and
financially feasible for the
government to end this
privatization exercise by
turning the highways into a
public asset. Shahrir said
that a short payback period
of bank loans for private
companies (7 years) as
compared to government (20
years) resulted the
concessionaire seeking toll
hikes. By buying over the
highways Shahrir said that
the toll charges could be
used for maintenance works
and funds saved from ending
the concession could be used
to fill public needs.
It is cheaper for the public
when the government buys over
the highways as the public is
now paying toll not to enable
the highway companies to get
back its investment but to
contribute to its profits.
This is proven by the
announcement in Parliament by
Works Minister Datuk Samy
Vellu in September 2006 that
the government paid
compensation amounting to RM
38.5 billion to the highway
companies for deferring toll
hikes as compared to RM 23.7
billion in toll collections
from the public as at March
2007. 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.
Total expenditure cost is
only RM 27 billion from the
estimated maintenance cost of
RM 8.1 billion and the RM
18.9 billion construction
cost. Even if we account for
loan interests and
operational costs, the RM 27
billion total costs is far
below RM 62.2 billion revenue
of toll concessionaires by RM
35.2 billion. In other words,
the toll companies have
already earned RM 35.2
billion which is 130% more
than what they invested. This
130% rate of return still has
another 30 years of
concession to run.
Would not it be cheaper to
buy over the highways and
allow the government to make
the RM 35.2 billion profits
instead of private companies
earning it? When the highway
concession companies are
already making such huge
profits of 130% return over
their investment, it is
immoral that they are allowed
to collect toll and increase
toll rates not to take back
their costs but to pad and
add on to their extraordinary
profits.
Prime Minister Datuk Seri
Abdullah Ahmad Badawi is not
running an administration
based on justice, competence,
efficiency and ethical
conduct in the national
interests if he fails to see
that buying over the highways
is cheaper than
privatization. There is no
logical reason whatsoever for
the government not to buy
over all the highway
concessionaires, who have
already recorded profits of RM 35.2 billion comprising
toll collections from the
public and compensation, paid
of RM 62.2 billion over and
above the RM 27 billion in
construction cost and
expenses incurred.
(26/11/2007)
* Lim Guan
Eng,
Secretary-General of DAP |