Sunday, March 01, 2009

RM64 Billion Toll Compensation For PLUS

RM63.83 billion.

That's the approximate amount which needs to be paid in terms of compensation PLUS Expressways Bhd between 2008 to 2038 (when the concession ends), should the Government for one reason or other decide to maintain the tariffs at the current rate. That works out to an shocking average of RM2.1 billion a year, and an incredible strain on taxpayers and the Government's finances.

For 2008, the Government has agreed to pay (or have paid) PLUS more than RM731 million in toll compensation (compared to RM698 million in 2007) . With toll rate hikes of 10% scheduled every 3 years, this amount will just keep increasing over the next 30 years.

For example, a Kuala Lumpur - Penang return trip costing RM86.60 today will cost an exhorbitant RM247 by 2038, if the tariff structure is fully complied with. And based on existing compensation terms in the agreement, the Government will have to pay for all loss of revenue from actual traffic volume, which is estimated to increase by 5% annually.

Of course, in between, the Government may just decide to raise the toll rates or alternatively, perpetually extend the toll concession with PLUS. But given the highly charged political scenario where the Barisan Nasional government has little political capital or credibility, the frozen rates may just be extended ad infinitum. Rates will never be raised in the 2 years before general elections, they will also not be raised when there is a change of prime ministers, or even before critical by-elections or for any other reasons.

Of course the compensation figure has yet to take into account the RM112 billion in actual toll which will be collected from the road users over the next 30 years based purely on current toll rates, and an annual 3% increase in traffic volume. The type of returns guaranteed for PLUS, relative to its RM5.9 billion cost of construction is just absolutely mind-boggling. Worse, PLUS isn't even the only highway concession in the country enjoying such lucrative returns (or compensations)!

The BN government has obviously dug a deep deep hole for themselves, and are now stuck between the devil and the deep blue sea, with their past excesses fast catching up on them.

But for PLUS at least, there's an "easy" way out. DAP has proposed that the Government "privatises" PLUS Expressways from Bursa Malaysia with RM13.75 billion which will be more than paid for within 6 years of operations. This means that the Government and hence tax-payers do not have to fork out a single additional cent.

Come on BN, for the sake of the people, let go of your ego and pride and do something right for once! ;-)

20 comments:

Anonymous said...

Never mind!

Malaysia government will bankrupt soon (by 2011). So, the tolls operator could bring the case to court!

Moreover, the rakyat (both individual or corporation) will not paying any income tax effective from this Y/A2009 or FYE2009. The reason is simply the rakyat have no money espeacially during this global financial crisis.

Very soon, the rakyat will

So, please do not be stupid to suggest to use xx billions to buy back the highways.

Anonymous said...

Dear YB

Are YB getting any commissions if the Buy-back is successful?

Anonymous said...

YB

While at this, shud we also nationalise IOI, KLK, Perlis Plantation & Asiatic on your same basis?

After all they too have reaped untold benefits from the rakyat have they not?

How much have these tycoons actually put in & for how long more do they need to recoup their capital?

Tell us more about this wonderful plan of yours

Unknown said...

Hi Anon 11.27pm

Why so sensitive about buying back PLUS? ;-)

I have no problems with entrepreneurs making big returns on investments.

I however, have big problems with pretend-entreprenuers making giga-returns based on no-risk guaranteed-lucrative and one-sided concession contracts granted by our Government.

Tony

Donplaypuks® said...

For several yaers after the 1997/8Asia currency crisis, the KLSE could not recover until Mahathir bit the bullet and the Govt took over 100% of UEM for about $3.50 per share compared to $18 during its heydays!

Now, The Govt has once again painted itself into a corner by poor management and ill-thought out policies vis-a-vis Toll/IPP/Water privatisation agreements. Mahathir, Samy Velu, Ling, Daim and many in the EPU and top echelons of the Civil Service are responsible for this ponzi scheme!

Pride goes before a fall. But this would be infinitely better than bankrupting the nation through automatic increases in Toll/IPP/water charges irrespective of increase in traffic and consumption.

The UMNO/BN Govt must take over these entities by financial schemes as sensibly proposed by DAP and others and not sabotage them.

They must also get going another Royal Commission to prosecute Mahathir and Samy especially for devising policies totally against national and public interest and determine if the benefitted in any way through nominees or by aewarding these one-sided contracts to their cronies!!
http://donplaypuks.blogspot.com

Khun Pana aka johanssm said...

An average of 2 million ringgit a day as compensation to just one highway.
The minister who inked this loop sided agreement is indeed insane or his family members have a share in that company.

I agrees that in business,they have the right to make whatever insane amount of money . Thats business.
However why must there be a protection from making loses.

clear conscience said...

Tony Pua

Please invite TDM to post his comments in this blog post of yours here.

Otherwise I suggest, I will post your blog post, on a quote-basis in TDM's blog and ak him to comment there in his (TDM's) own blog chedet.cc.

Let's see if he avoids this issue. I guess he will chicken out for the adverse results of his wrong doing as PM then

clear conscience said...

Daer Tony

I had posted the below comment on chedet.cc website for TDM to expound his comment to your posting.

I reproduce it here for all to view.

"Dear Tun

It is aptly right that this issue has been brought in your blog here.

I just wonder, on side tracking slightly here but still related to tolls, what would be your comments in response to MP Tony Pua's posting? (http://tonypua.blogspot.com/2009/03/rm64-billion-toll-compensation-for-plus.html)

I hope for the sake of Malaysians, with your excellency being the PM at that point of time when these concessions were entered into, we Malaysians have the right to know how we could be unburdened with such being unfairly imposed upon taxpayers. It must be noted that this was done not through any of the taxpayer's fault nor their willingness.

Why must we bear all these, shoved down our throats? It has also encumbered upon the next generation Malaysians.

While you put aside politics for a while, we the entire nation of 26 million Malaysians (minus the politicians) await your honest comment, reply, answer, direction....(or whatever you may call it) in view of the global economy biting into our pockets.

Let us not forget,the sufferings are not being felt by politicians especially (those from BN). Let us be honest to all Malaysians. All Malaysians are now suffering, if you do kindly spare a deep thought for all of us in expounding your vision to unwind these unfair, lop-sided and unjustified no-risk agreements.

Thank you TDM"

Tony, I wonder if TDM would ever response to my comment. I hope in the interest of all Malaysians, he would aptly do so.

Anonymous said...

"the Government will have to pay for all loss of revenue from actual traffic volume, which is estimated to increase by 5% annually"

Tony,
Is this means if the traffic volume didn't increase up to or more than 5%, the differences in traffic volume, with an estimated toll to be collected will be compensated by government? If this is the case, there could be loop hole in the survey of traffic volume. They can always report an increase of traffic less than 5%.

Now I see another point of why Malaysia public transport could never get better...

Anonymous said...

ots a winder why they keep electing BN to be the government.
Sammy velu ur good.....

Anonymous said...

Dear Linda,
Not all UMNO members like Mahadey. But like a Stalinist leader aka Kim Il Sung,there are many who have been brainwashed.

Hes just the worlds biggest hypocrite, don't think he'll bother to show up anywhere outside his comfort zone.

amoker said...

I also want to have my own expressway.

Anonymous said...

GOSH! WITH THAT AMOUNT! MALAYSIA WILL HAVE THE MOST BILLIONAIRES CREATED BY ROBBING FROM THE POORS!!!

Anonymous said...

i am a believer in free markets. and therefore i support privatization. however, there needs to be ground rules to ensure migration from national entities to private enterprises are fair to both parties. malaysia claims to be a constitutional monarchy based on the british common law of clearly defined separation of powers with checks and balances in place.

however, the most fundamental flaw in these privatization schemes such as water concessions and highway operators, is that the government of the day did not negotiate for the good of the public, but worked hand in hand with the private party, for self gain. for such contracts that were inked for personal gain, the spirit of the agreement is null and void. now you see why tdm and his previous team were so eager to control the judiciary. a judge of sound mind can shred up such agreements even though its supposedly signed by willing buyer-willing seller.

i do not agree with those snipe remarks about nationalizing other private enterprises such as ioi etc because this goes against the principle of free market. nationalization turns away investors and enterprises. i agree that nationalizing now will drain the country's coffers at a time when we need to muster all our financial resources to tide over these difficult economic times.

we should think out of the box. why compensate these crony enterprises anyway? the clock is ticking, and in the not too distant future, we can expect a new government to take over. and if YB tony and his gang walks the talk, we will have a new judiciary and this independent body will teach these crony companies a lesson. now why do you think the bn is releasing these agreements off the OSA... they are looking for a soft landing.

Anonymous said...

"Anwar Ibrahim's" blog has explained that the soon-to-be-PM has low IQ. How do you expect him to discuss this with Mr. Tony Pua.

God damn it, talking about his IQ really PISS ME OFF!! How can we let an idiot govern us!!

Anonymous said...

Thanks Tony for doing a great job for your fellow Malaysians.

We need more YBs like you not just those merely 'toll correctors' leading the nation.

Once again, many thanks from the bottom of our hearts. Your article will be circulated in the net till the next election and next next elections.

Perakian

Anonymous said...

WHEN PAKATAN RAKYAT BECOMES THE NEXT GOVERNMENT IN GE13 THE FIRST THING TO DO IS START BUILDING NEW PARALLEL HIGHWAYS. IT WILL BE CHEAPER THAN TAKE OVER OR PAY COMPENSATION.

IT CAN BE DONE!

mob1900 said...

Thank you for a rude but effective 'eye-opener' on how BN elites are raking in the moolas at the expense of the rakyat.

Keep these figures and facts coming so these AMNO goons can't keep blinding the rakyat with 'ketuanan' and 'martabat raja-raja' while sucking the rakyat dry!

Anonymous said...

PLUS was not privatisation. It was protection. Compensated if audited acounts says "no profit" & this is after huge payouts to all the Shareholders (who are they?), Directors (who are they?) & Executives (who are they?). Guaranteed to reep (being polite) billions of RM from the rakyat &/or tax-payers treasury ala BN style.

So - what is the bloody difference if it was owned by government or rakyat? It owned by RAKYAT, we benefit or lose. If owned by government, we benefit or lose. If owned by BN-cronies...we lose & lose.

What kind of privatisation excercise involves government compensation if it does not make money? What kind of agreement is this? This is not about NEP. NEP was the excuse. Did the poor Malay man on the street benefit??? NO. Only BN & cronies. Also, not to forget, the agreements were deemed as OSA. What they heck is this? OSA for toll agreements considered as threat to National Security??? In that case, every S&P of home buyers should be classified as OSA. Even buying a car is OSA since we have to use the toll roads which are under OSA. There is no national threat, only threat to BN & cronies bank accounts. That's all & nothing more than that. But BN will bring all about NEP, Malay rights, etc etc to twist & turn every thing under their belt to safeguard their bank accounts to pay for the luxuries they have to pay for locally & overseas...so, this is not about NEP at all. It is downright corruption to the core.

Moreover, we pay AP for imported vehicles, road tax - private & commecial, sales/excise tax, import duty for spare parts (imported), many other forms of taxes...all related to 'road using'. Even tyres have a tax. So, question is IN WHAT WAY PLUS DESERVES COMPENSATION WHEN THEY HAVE NO RISK & GOVERNMENT HAVE BEEN COMPENSATING LOSSES SINCE? PLUS should do the honorary thing & surrender it to the RAKYAT. The privatisation of the roads should benefit the rakyat (not only in the facility to use) but also as a way to circulate the wealth back to the rakyat - where the economy is. As it is, billions are only going to a few, millions to the mass. How can this make sense?

Anonymous said...

this is where one part of 70billion GONE!!!!!