The decision by the BN Federal government to postpone toll hikes for highways until end of 2017 shows that BN had bowed to public pressure, following public unhappiness with rising prices following the hike in petrol and cooking oil prices. Works Minister Fadillah Yusof said today that the Cabinet had on October 12 decided to postpone the restructuring for toll rates in 2016 and 2017. This is in contrast to his reply to my parliamentary question on 1.11.2016 that four highways are entitled to hike toll rates next year:-
- Eastern Dispersal Link (EDL),
- Kajang-Seremban Highway (Lekas),
- Senai-Desaru Expressway (SDE), and
- Guthrie Corridor Expressway (GCE).
Fadillah said that if the toll hike was deferred the Federal government would have to pay toll compensation for the four highways in 2017 for RM59.77 million. As the 2017 Budget did not provide for any toll compensation payments, ordinary Malaysians will have to bear the full brunt of the toll hikes.
Clearly BN is exercising damage control to avoid public opprobrium by saying that the Federal government will absorb the RN59.77 million payment in compensation to defer toll hikes. This is a small victory for consumers because even if we do not have to pay the toll hikes directly, Malaysians still have to pay up indirectly RM59.77 million through the Federal government, in the form of compensation.
As this RM59.77 million toll compensation is not provided for in the 2017 Budget, can Fadillah Yusof state where is the money coming from? Will the concession period of the four highways be further extended in lieu of paying compensation, just like the extension of the concession period for the North-South Expressway by an extra 20 years from 2018 to 2038.
The key issue is toll concessions which are against public interest that benefit crony companies at the expense of ordinary Malaysians. Whilst DAP does not oppose toll operators getting back their capital investment and construction cost, why should they be allowed traffic volume guarantees, guaranteed profits and even extraordinary profits collected even after the initial construction cost has been recouped?
EPF Contributors Would Prefer To Have A Toll-Free North-South Highway Than Get The Benefits Of A Miserable 10% Return From Their 49% Share Equity Investment In PLUS.
A prime example of such unfair toll concessions against public interest is the North-South Expressway. Fadillah had claimed that Plus Highways Berhad(Plus) is not a crony company because it was privatized in 2011 and 51% was owned by the Federal government and 49% by EPF.
Clearly Fadillah is either playing political games or pretends to forget the sordid history behind Plus or the construction of the North-South Highway by UEM. At its inception, the North-South Highway project is a crony project. I will however give Fadillah the benefit of the doubt that he is neither involved nor aware the chronology of events, since he is from Sarawak and not from Peninsular Malaysia.
Fadillah added that EPF’s ownership of Plus Highways gave contributors a stable return of 10% every year and that toll charges for the North-South Highway had not been increased for the past 11 years. I wish to challenge Fadillah to ask the 14.55 million Employee Provident Fund (EPF) members whether they would prefer to have a toll-free North-South Highway, than get the benefits of a miserable 10% return from their 49% share equity investment in Plus.
I am positive that EPF members will stand together with 30 million Malaysians in wanting a toll-free North-South Highway. There is no justification for the North South Highway to collect toll when it has fully recouped its construction cost and capital expenditure of RM5.9 billion. Costs incurred in land acquisition were covered by the Federal government.
Fadillah had earlier said until the end of 2015, the overall toll collected for the North-South Expressway alone was RM36.39 billion. Furthermore, the total amount of compensation paid out by the Federal government to PLUS following the deferment in toll hikes until 2015 was RM917.1 million. In other words, this RM 36.39 billion collected from Malaysians, is 6 times more than the construction cost of RM 5.9 billion.
Even if we took into account maintenance and widening of roads, such extra costs cannot exceed the RM36.9 billion collected from the public. For that reason, toll collection should be abolished. In the interests of full accounting, what are the costs of maintenance of the North-South Highway yearly that is not inflated by Plus but subject to due diligence and accounting scrutiny? Since Plus has recouped its capital expenditure why have the toll rates not gone down to reflect only maintenance costs?