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Samy Vellu is a better magician than David Copperfield if he can deceive Malaysians into believing that buying over the countryís highways would not be affordable as it would cost billions of ringgit when the true picture is that government is losing out on tens of billions of ringgit in profits earned by toll concessionaires

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Press Statement

by Lim Guan Eng

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(Petaling Jaya, Tuesday): Works Minister Datuk S. Samy Vellu is a better magician than David Copperfield if he can deceive Malaysians into believing that buying over the countryís highways would not be affordable as it would cost billions of ringgit when the true picture is that the government is losing out on tens of billions of ringgit in profits earned by toll concessionaires. In fact if the highways had not been privatized to the few cronies of BN and built by the government, the government and the people would be earning RM 35.2 billion in profits.

Instead the toll concessionaires are reaping huge profits at public expense as evidenced by Samy announcing in March 2007 that RM 23.7 billion in toll collections was paid by the public and also in September 2006 that the government paid compensation amounting to RM 38.5 billion to the highway companies 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.

Construction cost amounts to only RM 18.9 billion whereas maintenance costs are RM 8.1 billion giving total costs of RM 27 billion. In other words even though the toll concession still has 30 years more to run, they have already earned RM 35.2 billion with total receipts of RM 62.2 billion compared to costs of only RM 27 billion. Isnít this irresponsible and against national interests to allow toll companies to hike toll rates and earn more profits at public detriment when they are already earning so much.

How can Samy claim that it would cost the government billions of ringgit when it should be earning not billions but tens of billions of ringgit? 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 capitalized 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.

Isnít 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 when he is not and start behaving like a Works Minister who must explain the unfair toll concessionaires in the interests of accountability and transparency.

 

(27/11/2007)


* Lim Guan Eng, Secretary-General of DAP

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