Toll operators should not only reduce existing toll rates but rescind
the right to annual toll increase in return for any extension of concession
by Lim Kit Siang
(Petaling, Friday): Works Minister,
Datuk Seri S. Samy Vellu said the government would reduce all existing
toll rates by allowing toll operators longer concession periods to ease
the burden of commuters during the economic slowdown.
The toll rates which will be reviewed are the North-South Expressway,
the Second Causeway Link and the Kuala Lumpur-Karak Highway.
Right from the very beginning in the privatisation of the North-South
Expressway to United Engineers Malaysia (UEM), which was later assigned
to PLUS, the exorbitant toll rates had been one of the main reasons for
the DAPís objection and protest.
It is good to see what the DAP had the foresight to oppose ten years
ago are now accepted by the government as legitimate and right.
In the renegotiation with regard to the toll rates for the North-South
Expressway, serious consideration should be given to the following matters:
- Since June last year, Malaysians have paid PLUS over RM3.2 billion
in toll for the use of the North-South Expressway.
- In 1986, PLUS was compensated with RM176 million cash of taxpayers'
money by the government for the delay and reduction in toll increase for
- According to PLUS forecasts, it expects to collect over RM80 billion
from toll on the North-South Expressway during the 30-year concession period.
However, this is only a conservative estimate, as with the vastly increased
traffic volume in the past few years as compared to the forecast traffic
volume, PLUS' total revenue might be exceeded by 50 to 100 per cent, which
could bring it to the region between RM120 billion to RM160 billion.
- UEM had been given RM1.3 billion government loan for the completion
of the North-South Expressway, as the government had already constructed
various segments of the Expressway which were handed free of charge to
UEM. The sections of the Expressway constructed by the government and handed
to UEM free of charge included:
- Kuala Lumpur-Seremban 60 kilometres
- Jitra-Bukit Kayu Hitam 24 km
- Jitra-Gurun 56 km
- Ipoh-Changkat Jering 54 km
- Slim River-Tanjong Malim 21 km
- Seremban -Ayer Keroh 60 km
- Ayer Keroh - Pagoh 56 km
- The irresponsible use of the RM1.3 billion government loan to help
precipitate the biggest crash in the Kuala Lumpur stock market in the six-month
economic crisis, causing the KLSE Composite Index to fall by 19.58 per
cent, from 667.29 to 536.62 points in three days in November, wiping out
RM70 billion of the investors' funds in the stock exchange in the highly
irresponsible RM3.24 billion UEM-Renong deal for UEM to acquire 723 million
Renong shares, representing a 32.6 per cent stake.
- UEM is a favourite conglomerate, awarded numerous privatisation projects
like the MSSC, the National Sports Complex and Commonwealth Games Village,
NSECL/KLIA Expressway, the KL International Airport Satellite terminal
and Putra LRT System II and the construction of hospitals in West Malaysia.
In the review and renegotiation of the toll rates, the toll operators must
not only reduce existing toll rates but rescind the right to annual toll
rate increases in return for any extension of concession periods.
If PLUS and UEM are not prepared to renegotiate the North-South Expressway
concessionaire to end its one-sided nature in both reducing the toll rate
as well as to rescinding the right to annual toll increase, UEM should
be blacklisted and excluded from all future privatisation contracts.
In the renegotiation, a new principle and formula should be used to
compute future toll rates to ensure that it is fair to all parties based
on the revenue collected by highway concession operators.
There should be no automatic right to increase toll rates every year.
All toll operators should in future justify every toll increase it wishes
to impose in the court of public opinion.
*Lim Kit Siang - Malaysian Parliamentary
Opposition Leader, Democratic Action Party Secretary-General & Member
of Parliament for Tanjong