Why should the concession of Penang Bridge be extended by 17 years?

Speech by Lim Guan Eng during the PR Penang Youth Toll Debate at Dewan Besar Sungai Dua Hall in Teluk Air Tawar, Penang on Wednesday, 29^th February 2012:

Why should the concession of Penang Bridge be extended by 17 years?

I am disappointed that Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop failed to accept a public debate in his constituency tonight on whether the abolition of toll on the North-South Expressway(NSE) and Penang Bridge would bankrupt the nation.

Malaysia would not go bankrupt if PR abolish the NSEW and Penang Bridge toll should we win the next general elections. Malaysia would go bankrupt because of corruption, abuse of power and cronyism.

I had also wanted to ask Tan Sri Nor on the toll revision deal. Why the Federal government victimized Penang by extending the concession period for Penang Bridge by 17 years until 2038 and Butterworth-Kulim Expressway(BKE) by 11 years until 2038, in exchange for a freeze on toll hikes(see table below). For BKE the freeze on toll hikes is until 2015, a toll hike of 5% will have to be paid every 3 years from 2016.

TOLL COMPENSATION WAIVER ~ REVISED CONCESSION TERMS

Expressways	Now to 2015	Current toll structure	New toll structure	Current expiry of concession	New expiry of concession
NSE	No toll hike	10% every three years	5% in 2016 and every three years thereafter	Dec 31, 2038	Dec 31, 2038
Elite	No toll hike	10% every three years	5% in 2016 and every three years thereafter	May 31, 2030	Dec 31, 2038
LINKEDUA	No toll hike	25% every five years	5% in 2016 and every three years thereafter	Dec 31, 2038	Dec 31, 2038
BKE	No toll hike	15% - 25% every five years	5% in 2016 and every three years thereafter	Jun 27, 2026	Dec 31, 2038
Penang Bridge	No toll hike	10% every five years	No increase	Dec 31, 2021	Dec 31, 2038

Abolishing the NSE and Penang Bridge will not bankrupt the nation but is morally and ethically right. What is most unconscionable and unfair to the rakyat is that the toll operators of NSE and Penang Bridge are reaping obscenely high profits where they have more than recouped their original investments of construction cost.

In a written parliamentary reply to me, the toll operator for NSE spent RM 5,945 million to construct the NSE but has received RM 24,266 million in toll receipts and government compensation as at 31.12.2010. In other words the NSE toll operator has recorded a surplus of RM 18,321 million as at 31.12.2010 over his investment outlay.

Is there any need for the NSE toll operator to collect any more tolls from the public much less increase toll fares? By right and in the rakyat's interest, toll collection in the NSE should be stopped immediately in view that the revenue returns of RM 18.3 billion are 3 times more than the original investment of RM 6 billion.

The situation is similar for Penang Bridge which has collected RM 1,859 million but spent RM 944 million on construction cost, enjoying a surplus of RM 924 million. For BKE, toll collection amounts to RM 340 million on construction cost of RM 256 million, recording a surplus of RM 84 million. Instead of paying until 31 December 2038, Penangites should not be paying any toll at all in the Penang Bridge and the BKE.

Maximum RM50 Billon Cost For Abolishing Both NSE And Penang Bridge Will Not Bankrupt Malaysia.

Abolishing both NSE and Penang Bridge costs a maximum of RM50 billion, RM R40 billion for the NSE and RM10 billion for the Penang Bridge. RM50 billion will not bankrupt the nation. It is corruption, abuse of power and cronyism that will bankrupt the nation. After all the new MRT project costs more than RM50 billion.

Malaysia can afford RM 50 billion to abolish tolls in Penang Bridge and NSE but not corruption that costs more than USD100 billion(RM35 billion). The Global Financial Integrity Report highlighted that illicit(black) money secretly taken out of Malaysia during the lost "decade of corruption" from 2000-2009 amounted to RM 1,077 billion.

Tan Sri Nor should also explain how the revision deal of extension of the Penang Bridge toll concession from 2021 to 2038 in exchange for no toll hikes of 10% indeed benefits Penangites. Given a choice, Penangites would be willing to suffer 10% increases in toll hikes every 5 years in exchange for the toll ending on 31.12.2021 than wait until 31.12.2038 even though no toll hikes are imposed.

Similarly for the BKE, Penangites would be willing to pay 15-25% toll hike every 5 years until 27.6.2026 than continue paying until 31.12.2038. BKE is even worse than the Penang Bridge as there will be toll hikes of 5% for every 3 years after 2016 instead of every 5 years.

This revision deal of extension of the toll concession until 2038 in exchange for waiving government compensation of RM6.5 billion was done without consultation with the people and benefits only the toll operators at the expense of Penangites and Malaysians.

*Lim Guan Eng, Penang Chief Minister