Tuesday, December 26, 2006

Highway Robbery

Work the maths yourself.

The construction cost for the for the 5 highways of which the toll rates are being revised in January 2007, is estimated at RM4.13 billion.

According to our Minister of Works, Datuk Seri Samy Vellu, the government has already paid RM2.275 billion in compensation for 'suppressing' the toll rates to date.

In addition, despite the hefty toll hikes expected in January which has been announced, the honourable Minister has also, out of compassion for the rakyat, agreed to fork out an additional RM2.589 billion in compensation to the concessionaires over the next 3 to 5 years.

So, how much is the promised compensation in total? A whopping RM4.86 billion! That's RM734 million or almost 18% more than the actual cost of constructing the highway! And this does not take into consideration, further generous compensations which will be paid to the toll operators when the next toll rate review is due in a mere couple of years.

Yet, everyday, tens of thousands of vehicles are still paying hundreds of millions annually at toll booths for using roads which the Government has more than paid for. And our Government has the audacity to claim that the hefty increase in toll rates by as much as 60% is absolutely necessary, and has been kept to a very minimum.

I have no problems forking out cash for toll in a fair deal. However, when our very own Government commits highway robbery at the expense of the rakyat, it's just plain abhorrent.

Here are some upcoming activities in relation to expressing our unhappiness over the proposed toll hikes:
  1. Sign the online petition against the unfair toll hikes.

  2. Join the Dec 31 protest at the Grand Saga toll plaza along the Cheras highway. The protest is jointly organised by the Bandar Mahkota Cheras Open Access Road Action Committee (BMC-OARAC) and the Democratic Action Party (DAP)

  3. Or for those who prefer to remain more aligned to pro-establishment parties, MCA Puchong also will be organising a protest against the toll hike at 10am this Friday, Dec 29, at the Lebuhraya Damansara-Puchong (LDP).

  4. Attend a forum tomorrow (Wednesday 8pm, Selangor Chinese Assembly Hall) organised by the Anti-Toll Hike Coalition comprising of political parties and non-government organisations. The talk will feature prominent speakers including PAS deputy president Nasharuddin Mat Isa, DAP secretary-general Lim Guan Eng, PKR president Dr Wan Azizah Wan Ismail, Malaysian Trade Union Congress president Syed Shahir Syed Mohamud and human rights group Suaram executive director Yap Swee Seng.

  5. Join another toll protest at the LDP on January 7th organised by the Coalition.
Go on and do our part as responsible citizens of Malaysia. Every little bit counts.


Anonymous said...

ain't this wat they call bright daylight and moonlight highway robbery ?

Trashed said...

Would it not be simple economics for the govt to buy out the toll companies now rather than to continue this pillaging of the rakyat ? All the govt has to do is to step into the shoes of the toll companies and they will then be able to mandate the toll rates as "fair and reasonable". The upshot to the govt is that they can collect toll in perpetuity and for the rakyat, the toll rates need not be revised upwards every couple of years for whatever reason.

The govt will eventually recover the investment thru toll collection and heck, we pay road tax anyway.

A win-win situation for all ?

Anonymous said...

While overall, I do think there is a case to protest against toll increase, I am getting a sense that the debate and protest is not revealing the truth about how it all works.

The issue is actually more complex that simple math reveal. To be honest, if you look at the numbers in simple terms, while they may be large, its all very real and justified. Samy Vellu is not lying when he said that the government has to compensate toll road builders/operator and the contracts infamous terms - guarantee of toll increase and traffic volume is NOT unusual.

The issue is far more complex. Toll rates in Malaysia is low. The issue number or miles of toll roads especially near urban areas. In other words, all road systems are subsidized in some form and having private toll roads near urban areas is just taking away subsidies and taxes and putting them in private hands. Its actually very similar to subsidizing Proton.

With regards to the contract terms - there is a failure in government but its not in the most infamous terms which are the guarantee in volume and rates. These are actually standard in all toll projects. The failure of the government is not having the foresight to negotiate for unexpected benefits such as higher than expected volume and also lower cost of interest expense. A lot of toll roads was negotiated with very high expected cost of financing but it has turn out that interest rates are at historial low for a long time.

Samy Vellu worst failures happened long time ago and his failure now is about hiding his own past failure. This is the issue.

Anonymous said...

Yes Tony, you are right.

Lets look at LDP alone to make things simple.

For example, it was said LDP was built at a "cost" of 1.42 billion. Believe it or not, there was some mark-up already. Normal business practice would mark the original cost (labour + materials - profit) up by at least 30%. No businessmen will built the structure at 1.42 bil and not make anything after it was completed. Okay, they got the 1.42 billion fund some investors, and bank loan probably. After the completion, huge amount was used to buy materials and pay labours, ha! there was some amounts left (probably in the hundreds of millions range) to play around! Okay, fair, because its payback time for investors.

The LDP started construction in 1997 completed in 1999. Start toll collection in 2000, it will continue till 2030.

From 2000 to 2005 (six years), government paid them RM479.7mil, due to subsidi of 50 cents per vehicle. That means, daily about 438,000 passes (about 959,000,000 passes since operation till end of 2005). Therefore, the estimated amount collected from public is about RM959mil (assumming RM1 per vehicle) from 2000 to 2005.

Let's estimate if the LDP concessionaires have made back the "cost", okay. 959mil + 479mil = 1.44bil!!! walla! The concessionare got back what was invested in JUST SIX YEARS TIME!!!

From 2007 - 2030, everything they collected are PURE PROFITS!!! Based on current traffic flow of 438,000 passes daily, they can now goyang kaki and continue to collect (est RM256mil from public yearly + RM75mil from gov subsidi yearly) RM331mil yearly. In 24 more years, the total collection is RM7.9 BILLION (assuming the rate is RM1.6 over the next 24 years).

Anonymous up there, the issue is GREED, that is all.

Anonymous said...

at least 1209 online signatures now

And read their angry comments.

Really hope that the toll hikes will be scrapped.

Anonymous said...

if you want to find out the answer and a resolution, save your energy now and vote BN out in the next election! Give DAP, the caring party, a chance to rule the country and REALLY fight corrpution!

Anonymous said...

Another Cartoon for this issue...


Anonymous said...

Of course the current confidential contracts signed between the government and the various highway companies are 'win-win' for them. Surely many selected individuals and parties are laughing all the way to their banks. Ask TDM. He should know.