#Update* Toll hike postponed

Update Toll hike postponed

Politics & Government 2009

Written by Yong Min Wei

Friday, 27 February 2009 16:54

KUALA LUMPUR: Cabinet has decided to defer toll hike for five highways scheduled for March 1 till year end, said Works Minister Datuk Seri Mohd Zin Mohamed.

Zin said on Feb 27 with the postponement, the government would have to pay an estimated RM287 million in compensation to the toll concessionaires as per the agreements, adding that the compensation is for the January to December 2009 period.

He pointed out the Finance Ministry would allocate the compensation accordingly and that a portion of the compensation would be taken from “wang rakyat” which could be used for development activities that bring benefit to the general population.

“As such, the announcement that I made yesterday on the toll increase is now cancelled,” he told reporters at the Works Ministry this afternoon.

Yesterday, the Works Minister announced that toll would be increased effective March 1, 2009 on five highways namely PLUS North-South Expressway, SPRINT Highway, Ampang-Kuala Lumpur Elevated Highway (AKLEH), Sungai Besi Highway (BESRAYA) and the New Pantai Expressway (NPE).

The toll increase for the PLUS North-South Highway was supposed to be 5% or 0.68 sen per kilometre while the remaining four highways would have a hike ranging from 10 sen to 50 sen.

According to Zin, of the RM287 million compensation, RM195 million would be paid to PLUS, RM36 million to SPRINT, RM27 million to AKLEH while BESRAYA and NPE receiving RM9 million and RM20 million respectively.

He said the Cabinet at a meeting chaired by deputy prime minister Datuk Seri Najib Tun Razak earlier today had taken into consideration the negative public reaction and the global and regional economic slowdown when deciding to defer the toll increase.

On whether the toll for the five highways would be raised come in Januay 2010, Zin replied: “We will revisit the subject when the time comes.”

Asked on the possibility of the government taking over the concession, the minister noted it would have to address issues including the total liability that would be incurred and the shareholders interests, noting that the government would have to consider both technical and financial parameters.

“It is a question of whether we want to stick to the principle of privatisation or vis-a-vis nationalisation,” he stressed.

Meanwhile, DAP Parliamentary Leader Lim Kit Siang when contacted said that while the opposition party welcomed the news of the postponement, a reversal within 24 hours goes to show the nation had a “shambolic government."

“The government does not know where it is going within such short space of time,” he said adding that the economic situation now and two weeks ago when the government decided for the toll hike was practically the same.

Regina William reported from Penang that Gerakan president Tan Sri Dr Koh Tsu Koon has called on the federal government to form an independent panel to assist the government in reviewing and renegotiating all toll concession agreements so as to ensure fairness and reduce overall toll rates of all tolled highways in the long run.

Koh said while he supported Prime Minister Datuk Seri Abdullah Ahmad Badawi's call to review and reduce the toll increases, which have since been postponed till end of the year, the government’s response has so far been ad hoc, after widespread protests.

"A major overall review is needed to put public interest in priority and to restore public confidence, in line with the government’s commitment to openness and accountability.

"This is especially so since the recent public disclosure that these agreements were weighted very much in favour of concessionaire companies, against public interest," he said.

Citing his own experience in the case of the privatisation of the present Penang Bridge in 1992-1993, Dr Koh said that concession companies would always ask for the sky.

“It is up to the government to be alert and firm enough to strike a hard bargain in public interest, before signing the agreement. I understand there are problems related to the fact that the government is legally bound by the concession agreements already signed earlier under the previous administration and that the concession companies are public-listed companies.

“However, in the interest of the public, the proposed panel should look into how to overcome such problems and also how to amend the formulae of toll increases to be more reasonable so that concessionaire companies would no longer reap excessive profits at the expense of road users and the public," he said.

He added that the panel should also deliberate on various options for the government, for example to buy back the concessions, or to take over or hold equity with golden share in concessionaire companies, versus the opportunity cost of doing so and alternative use of such funding for the benefit of the people.

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Last Updated on Saturday, 28 February 2009 14:44

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