Sunday, May 03, 2009

Toll Discounts For Those Travelling Further?

The new Works Minister, Datuk Shaziman Abu Mansor who suggested that “motorists who incur a heavy toll bill from shuttling between their workplace and home may get to enjoy a special discounted rate” as reported in The Star on May 1st, is not only insufficient and unacceptable, but also impractical.

The Minister had argued that it is not the choice for commuters to be staying far away and hence should not be penalised for having to pay for high toll rates. However, should commuters who travel short distances be penalised instead for just getting out of their houses? It defies logic that communters who use very short stretches of the highway be paying more than, and subsidising for those who use longer stretches?

The idea is also clearly impractical as its will be an administrative and enforcement nightmare for the toll concessionaire or the government to manage such an impossible system.

Most importantly, such token and piecemeal measures does not resolve the fact that many of these highways have been given overwhelmingly lucrative concessions which results in excessively high toll rates which burdens the people all over the country. For example, the Lebuhraya Damansara-Puchong (LDP) has net profit margin of 48.7% in 2008, while PLUS Expressways made even higher net profit margins of 57.3% for its financial year ending 2007. These astronomical margins are clearly unacceptable in a regulated infrastructure industry.

Datuk Shaziman also appears to be making excuses already to preparing the masses for disappointment by hinting that “we must also consider the Government’s financial ability...the Economic Planning Unit (EPU) would have to evaluate the Govenment’s financial ability in absorbing the cost of retaining the toll rates.”

The DAP Ops Restore team has already showed via our memorandum earlier to the previous Works Minister that the government has more than sufficient financial resources to expropriate some of the highways on terms specified very clearly in the contract, which have of course, been agreed to willingly by all parties.

In fact, it is far cheaper for the government and the people to expropriate some of these highways than to continue to pay them compensation. For LDP, the Government has already paid more than RM630 million to date, despite the fact that it was built at the cost of only RM1.33 billion including capitalised interest, and there's still more than 20 years to go to the expiry of its concession. Based on the concession agreement, it will only cost the Government not more than RM1.4 billion to exercise the expropriation clause.

Therefore we hope that the new Works Minister will refrain from using the same tired old excuse previously used ad nauseam by Datuk Seri Samy Vellu, who had insisted that the Government cannot afford to buy back the highways despite the fact that hundreds of millions in compensation were paid to these toll concessionaires annually.

We hope that the new Works Minister will ensure that the interest of the people comes first above all else, and not those of the concessionaires. He will also need to take subtantive measures immediately to live up to the mantra promised by the new Prime Minsiter, Datuk Seri Najib Abdul Razak, “people first, performance now”.

As a footnote, I must say I'm a little disappointed that Mohd Zin has been dropped from his position at the Works Ministry. For whatever his other faults which I'm not aware of, he has certainly been easy to deal with and he has ensured replies to all specific questions in the Parliament, unlike many other ministers.
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