Cabinet’s approval for another round of highway toll rate increase completely unacceptable for four important reasons

(Petaling Jaya, Thursday): The Cabinet’s approval for another round of toll rate increases for four expressways effective from Monday is completely unacceptable for four important reasons:

• Imposing an unacceptable burden on the people at a time of economic hardships with still no light at the end of the tunnel as far as economic recovery is concerned.
• Disregarding the voice of the people against another round of highway toll rate increases until there is a comprehensive review of the highway privatisation programme and highway tolls by a Highways Consultative Council as demanded  by Malaysians in the past few weeks throughout the country, especially at the Sunday nation-wide toll plazas protests.
• The Cabinet approval of another RM200 million to four expressway concession companies this year is against the  "user pays" principle of highway privatisation and extends the injustice of the unfair highway tolls to non-motorists and non-users of the expressways, such as farmers and fishermen in other states.
• Continued lack of accountability and transparency with regard to the  highway privatisation contracts which make it impossible for political parties, NGOs and the Malaysian public to evaluate the propriety, legitimacy or even the fairness of the tolls or toll rate increases or compensations paid to the toll-road companies  from public funds.

Samy Vellu said the Government has begun renegotiating the concession agreement with Projek Lebuh-Raya Utara Selatan (PLUS) with a view to extending the concession period and providing for toll rates to be increased once in five years instead of annually as at present.

He said motorists will be facing an increase of 28 percent over the prevailing toll rate if the rate is increased once in five years compared to 36 percent if the increase were to be every year.

On the extension of the concession period which is being renegotiated, Samy Vellu said the government is considering a specific period but he declines to say how long it will be, pointing out that talks are still in progress and it involves loan repayment by PLUS. The present concession period is 30 years.

The Coalition Against Toll (CAT), represented by opposition political parties and NGOs, demand that the public should be involved in the renegotiation of the highway privatisation contracts.

It is precisely because the government had failed to ensure that the public interest is fully protected in the highway privatisation programme that the series of unfair highway tolls and unfair highway toll rate increases have become a process of "piratisation" rather than "privatisation".

The bitter  lessons of the motorists as well as the entire Malaysian population from the 12-year highway privatisation programme is that the government cannot be completely trusted unless there is accountability and transparency in the privatisation process with the public given the opportunity to give their inputs before any highway  privatisation concessions are finalised.

The most shocking part of Samy Vellu’s post-Cabinet announcement yesterday is that the government, which means the Malaysian public,  has to pay a total compensation of RM199.71 million to the  concession holders for not allowing them to increase the toll rates to the extent demanded by them.

The breakdown of the government compensation for this year is as follows:
 

• PLUS (North-South Expressway)  -RM87 million;
• Elite (North-South Central Link - RM6.38 million;
• MTD Capital Bhd (Kuala Lumpur-Karak Highway) - RM13.6 million;
• Intria Bhd (Penang Bridge) - RM7.75 million;
• Lingkaran Trans Kota Sdn. Bhd. (Damansara-Puchong Expressway) - RM85 million

Samy Vellu said if toll rate increase is not allowed at all, the government will have to pay a total compensation of RM286.3 million annually - RM145 million to PLUS, RM12.43 million to Elite, RM18.83 million to Kesas (Shah Alam Expressway) and Butterworth-Kulim Expressway concessionaire (RM3.78 million).

This shows the one-sided and unfair highway privatisation concessions and not the generosity of the government, as finally, the toll-road companies are winners whether they get their increased toll revenue directly from motorists through toll rate increases or indirectly from the 22 million Malaysians through government compensation from the Treasury.

The RM200 million compensation to the highway concessionaires are most unacceptable, especially the  RM85 million compensation to  the concession holders for the Damansara-Puchong Highway (LDP) following the decision to reduce toll rate by 50 sen from RM1.50 to RM1.

According to the briefing given to the media at the National Economic Action Council (NEAC) by Litrak Sdn Bhd managing director Datuk Lin Yun Ling last month, toll collection by the company was expected to reach RM81 million a year if the original rate of RM1.50 was maintained.

Why should the government compensate Litrak RM85 million for a 50-sen  reduction in the toll rate, when the concessionaire would only lose  RM25 million a year arising from the one-third reduction from the RM1.50 toll rate?

As Samy Vellu claimed that there has been a  drop in  protests over highway toll increases, the CAT calls on Malaysians all over the country to make clear their strong protests this coming Sunday at the Cabinet decision to disregard to demand for a freeze on all toll rate increases until there is a full review of the highway privatisation programme - the fifth nation-wide toll plazas protests.

The people should also make it a point to attend the Anti-Toll Protest Public Rally at the Selangor Chinese Assembly Hall on Monday night - to protest the increase of highway tolls which will come to effect on that same day.

(25/2/99)