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Press Statement

by Lim Guan Eng

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(Petaling Jaya, Friday): Works Minister Datuk Samy Vellu should not be sending a working paper to Cabinet justifying a toll increase but instead why there should be no 10% toll increase by eight concessionaires on 1.1.2008 without any government compensation. Samy Vellu said the ministry must send a report to the Cabinet 60 days prior to the agreement taking effect on January 1 2008.

There is no point in refusing toll hikes if the government still has to pay compensation. The highway companies will be happy if the government rejects the 10% toll increase when they have received much more in government compensation than they ever hope to collect from the public.

Samy announced 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 is far below RM 62.2 billion revenue of toll concessionaires by RM 35 billion. In other words, the toll companies have already earned RM 35 billion which is 130% more than what they invested. This 130% rate of return still has another 30 years of concession to run.

For this reason, Samy should tell the toll concessionaires that if they have the national interests at heart, they should waive the toll hike without any government compensation. National interest requires the government to put the welfare of 27 million Malaysians over and above that of a few companies. The government should not add to the inflationary burden of rising fuel prices by allowing transportation costs to increase following the toll hike that will only add on to the already huge profits earned by the toll concessionaires.