by Lim Guan Eng

Following the electricity tariff hike announced on 2 December 2013, Malaysians will be slammed with a major hike in toll charges involving 13 highways in 2014. BN justifies the increase in toll charges by arrogantly asking Malaysians to use alternative shoddy toll-free roads instead of admitting to selling out the interests of ordinary Malaysians and small businesses to satisfy the insatiable greed of their cronies.

If Minister in the Prime Minister’s Department Abdul Wahid Omar can urge motorists to choose to use alternative routes if they were unhappy with impending increases in highway toll charges, Malaysians could ask why they were not given the freedom not to choose these toll concessionaires that were granted without open competitive tenders. The double standards of the BN government recycles itself in being able to afford to pay RM400 million in compensation for not increasing toll charges before the general elections but not being able to afford to pay RM400 million once the elections are over.

Despite signing the contract, the BN government can still escape from the unfair terms by renegotiating a new contract. BN has continued to claim that the scheduled toll hike is done in accordance to the contract and it is the government’s duty to honour the sanctity of the contract terms or to pay huge compensation.

Renegotiation of contracts had been done before

We should be reminded that barely 3 years ago on 15 October 2010, then first term PM Najib Razak announced a 5-year cap on toll rate for the North-South Expressway and four other associated expressways when tabling the 2011 Budget in the Dewan Rakyat. The BN government then claimed success in renegotiating a new deal with PLUS so that a 5-year freeze on toll increase was put in place.

For this reason, BN should not lie that highway contracts cannot be renegotiated to stop toll rates hike for companies that had recouped their investment or construction cost when BN has successfully renegotiated such contracts in 2010 to forestall toll rates increases in preparation of the 2013 general elections.

Further, beyond 2015 when the moratorium period expired, toll increases will be fixed at a ‘milder’ 5% every 3 years as opposed to the original 10%. PLUS will also waive RM6.2 billion of compensation claims against the government. The 2010 5-year Moratorium showed us that the federal government could do a lot more by renegotiating a more acceptable deal for rakyat rather than succumbing to the insatiable greed of cronies for excessive profits.

Let us take Lebuhraya Damansara-Puchong (LDP) for example. The road users are paying RM1.60 for each toll and it may increase to RM2.00 or more. The LDP concessionaire holder, LITRAK, made RM127.2 million of net profit on top of RM370.7 million of revenue (The revenue is inclusive of a RM86.5 million compensation paid by the federal government for keeping the toll rate unchanged in 2012) for financial year 2013.

Even without government’s compensation, LITRAK will make at least RM 41 million of net profit. For the past 5 years, LITRAK’s cumulative net profit was close to RM 500 million with RM 1.65 billion of revenue. Year on year, revenue and profits has been growing at about 5% and profit after tax is within the range of 30% – 35%. All this is achieved without any toll hikes.

Don’t use toll roads?

It is difficult to believe that Wahid is not aware of the excessive profits enjoyed by BN crony companies when he is a banker. But as a rich banker, perhaps Wahid is not aware for many Malaysians toll roads are their only routs. Whenever it is possible to do so, Malaysians drivers are doing their best to bypass tolled and jammed highways. This has contributed to only further traffic complications along the trunk roads and smaller roads in the housing areas.

We have 27 private tolled expressways nationwide with a total length of about 1500 kilometres, operated by 20 companies. At least one third of these tolled roads concentrated in the Klang Valley. With public transport usage in the urban areas only at 20%, how is that possible for ordinary Malaysians to avoid travelling by cars and pay tolls, no matter how unwillingly? It is only our BN Ministers, chauffeured around in their tinted saloon escorted by convoy, who are disconnected with the everyday suffering of an ordinary Malaysian.

By raising fuel and sugar prices, electricity prices and this will soon be followed by toll hikes, school bus fares, buses and trains tickets prices as well as the 300% increase in assessment charges in Kuala Lumpur, the increase in the yearly Bantuan Rakyat 1Malaysia (BR1M) to RM650 for each family with a monthly household income below RM3,000 has been rendered ineffective and meaningless to help poor income groups.

Worse middle-class families who are not qualified to such assistance would be even worse off following the spiralling price hike. Such inflationary effect is a sign of poor mismanagement by the BN government and will only make inclusive economic growth even more elusive.