Prime Minister Najib Abdul Razak has betrayed the people by increasing the toll rates on 18 highways, especially when most of the concessionaire companies are reaping huge profits even before the toll hike.
Taking New Pantai Expressway (NPE) as an example. NPE is constructed, operated and maintained by New Pantai Expressway Sdn Bhd (NPESB), a subsidiary of the IJM Corporation Berhad. The concession period had commenced on 12 September 1996 and is for 33½ years. Development costs for the highway was approximately RM1.3 billion.[1]
According to the Annual Reports of IJM Corporation Berhad[2], the pre-tax profits for NPE from 2008 till March 31, 2015 was RM243.81 million. It was also revealed in the 2009 Annual Report that cash compensation of RM184 million was paid by government for deferring toll hike, reducing the toll fare for Class 5 (Bus) by 50% in September 2008 and abolishing NPE’s PJS 2 (KL Bound) toll plazas in February 2009.
The 3-year and 5-year average pre-tax profit growth for NPE are higher than 30% and 25% respectively. Without taking into consideration the current and future toll hike, NPESB is envisaged to record a profit of RM15.109 billion or RM9684 million at the end of concession period.
In other words, IJM and its subsidiary NPESB will not only be able to cover its costs for constructing NPE, but also gaining lucrative return by the end of the concession period even if the toll rate maintains at its current rate. So, why Najib allows the highway companies to increase the toll when the people are already heavily burdened by GST and the massive Ringgit depreciation? What was the mechanism used to calculate toll rate and return on investment for the concessionaire companies when the concession agreements were signed? Who should we put the blame if not BN for signing the lopsided concession agreements?