Buying all five highways makes more sense
Malaysiakini.com
Dec 15, 2006

Wouldn’t it make sense for the government to buy up the five highways by paying the concessionaires RM4.13 billion for the total construction cost?

DAP secretary-general Lim Guan Eng posed this question in response to the government’s announcement yesterday that toll prices will go up between 20 and 60 percent for the five highways.

Works Minister S Samy Vellu, who unveiled the new toll rates, also disclosed that it cost RM4.13 billion to construct the highways: Lebuhraya Damansara-Puchong, Shah Alam Highway, Cheras-Kajang Highway, Kuala Lumpur-Karak Highway and Guthrie Corridor.

The minister also revealed that a RM2.589 billion compensation package for the five concessionaires was to be incurred from Jan 1, 2007 when the new toll rates take effect to the next review in toll rates, which is between 2010 and 2012.

Samy also said the government had to compensate a total of RM2.275 billion to the operators of four of the five highways, not including Guthrie Corridor which is a new highway [see chart].

However, while he gave a breakdown of this figure, he did not specify over what period of time this amount was paid.

But going by this, the government could be paying as much as RM4.9 billion in compensation alone for the highways.

“Common sense dictates that the government just buys over the highways, which would not only save the highway operators from going bankrupt, it will also save the government billions more in subsidies and ensure a reasonable toll rate for all,” said Lim in a statement today.

The DAP leader also took the government to task for claiming that measures had to be taken to avoid concession holders from going bankrupt.

“In a normal business environment, toll operators will have to bear the risks of losses. But the Malaysia Boleh spirit allows toll operators to pass on the risk of losses to the public with healthy compensation from the government and enjoy the profits themselves.

“Why should the public bear their losses when they are unable to participate in sharing the profits? [...] Clearly the Barisan Nasional government has given more priority to profits of big businessmen than the interest of 27 million ordinary Malaysians,” he added.

Publicise agreements

Meanwhile, the Federation of Consumer Associations Malaysia (Fomca) said the burden being beared by the public is the result of weak privatisation programmes.

Fomca secretary-general Muhammad Sha’ani Abdullah said the concession agreements were the results of direct negotiations which had resulted in unreasonable construction costs for the highways.

“Fomca understands that the reality in all business dealings is for profit [...] but the implementation (of highway concessions) were in favour of those who proposed the project rather than considering its effects on the public in terms of living cost and global economic competitiveness,” he said in a statement.

As such, Fomca urged the governmnet to form a royal commission to review the concession agreements and identify and resolve its weaknesses.

Similarly, Gerakan information chief Chua Chong An said the government must set up a probe on clauses deemed unfair to the public within the concession agreements.

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