Samy Vellu is a better magician than David Copperfield if he can deceive Malaysians into believing that buying over the country’s 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
_________________
(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 country’s 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. Isn’t 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.
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 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 |