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.

16 comments:

Anonymous said...

All the tolls should be scrapped. Where does our road tax money go to?

Hill isn't Broken said...

The suggestion of buying over the Plus highway by government was ignored by government is showing this government is not sincere at all. The calculation done by you is clear and the meaning of it is sincere. But then they are playing dump and muting. How to accept them to go on like they wish to? After all this perfidious events have taken place, it is time for them to pack off. GE13 is the day!

Unknown said...

"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?"

This statement stinks of playing on popularistic sentiment. There should be more journalistic balance into inquiring about details for such a policy. It might also be journalistic lazyness that lashes out at such a comment without inquiring further. Or, it could just be a badly thought out policy if this is as far as the policy goes.

As usual, execution of such wide based policies are difficult, to target the needy in these times of economic difficulties. But generally, motorists who live further away are more 'financially-challenged', assuming that their work place are based in Petaling Jaya and Kuala Lumpur. Property prices in these areas has sky-rocketed in the past decade. More and more office workers are moving out to the fringes of Shah Alam, Puchong, Cheras in order to afford a home for their families.

Politically sound statement. Even then, we have to dwelve deeper. The above assumes that the target for this toll reduction are house owners with families living further away from commercial centres such as Petaling Jaya and Kuala Lumpur. This leaves out a majority of individuals renting out rooms or homes to be nearer to their workplace. Would this policy help them?
It also leaves out kapchai factory workers in Shah Alam or shipping related industry workers in Klang.

Then, there is the minority of rich Bukit Jelutong, Putra Heights and various others semi-detached guarded communities that will benefit undeservedly from such a toll rebate. That is, of course, assuming that they work in the city and are not at home speculating the KLCI. There are also the execs in their KLCC condos that just couldn't give a rat's ass about such policies.

Toll discounts for those travelling further? How about toll discounts for spurring the economy?
Sales-person, direct marketing, insurance agents who travel a lot. Transport-based businesses, DHL or even our favourite office boy?

There is more to a toll discount than just gaining popular sentiments. Or to poke holes in it for the same purpose.
Let's not forget what this is for- educating the public.

Anonymous said...

Perhaps that's why he was dropped. :-)

Shawn Tan said...

Just wondering out loud here. If the government is not willing to buy them back, can the people do it? Assuming that the costs are non-prohibitive, is there any clause that allows the people to buy the tolls instead?

mut said...

A small shareholding would enable an NGO or a rep from PR to attend the AGM and ask questions/suggestions according to the rulesa nd regulations.

Make sure the alternative press is there as well. Make them a shareholder if BN tries to keep them out.

Just a thought.........

Anonymous said...

apparently some quarters in Khazanah agree with the DAP proposals....don't worry too much about politicians!

Hill isn't Broken said...

Originally PLUS was under Reong. Now UEM-World. UEM-World is big ship under UMNO. UMNO is the big master of present BN's government.
A well performed money making company is supposed benefiting to people, but its profits have gone to no where or even unknown.
The relationship between them is quite complicated and over sophisticated for one to understand it. Buying back is merely a paper's talk.
People are too weak to scrutinize governmental GLC. That's why they are arrogant and profligate. They are reluctant to be an efficient government. Even they have tried to be one but, it has gone into man made mismanagement. National funds are stolen and pirated. PLUS's money is too small for them to down throat.
Pity to people. Praises go to PR. People must stand up raising higher their heads voicing out their disgusts toward it, other wise betterment for future won't going to be realized.

Anonymous said...

Yeah, make toll free. Hey, why not make electricity free too since IPPs are laughing all the way to the bank. Wait a minute, why not make water, healthcare, education (including higher education), road tax, income tax, cukai pintu, quit rent, everything freelah. Let us be a welfare state. DAP and Tony Pua will look after us. Come on YB, be realisticlah. You and I know there is no such thing as a toll free model. Don't give empty promises and raise the expectations of the rakyat. Look at controling toll increase not abolishing toll. Why don't you let EPU complete the review first before you start jumping the gun.

Anonymous said...

Yes please cut the rhetoric and political play. Let and ask for something that is achieveable like the quantum of toll increase every 3 years rather than bullshitting about abolishment of toll which we know will never happen. Then again, I think PLUS is not the real problem. The biggest burden is the urban highways arounf the Klang Valley e.g. LDP, Kesas, Guthrie, NPE etc where we pay toll on a daily basis even to go to work. Tony, you are barking up the wrong tree. You should be looking at these urban highways. Any reduction or abolishment of toll along the NSE will only benefit the business community because even if toll is lowered, you think the businessman will lower their price. Never, the will only find ways to keep on increasing. What have you got to say about this? Why don't you also send a proposal to the government to buy over Tenaga Nasional as everyone knows how TNB is being held at ranson by the IPPs. Why are silent on the IPPs? If you are sincere in wanting to stand up for the rakyat, why are you being selective? Why don't you address all the "injustices" out there? YB, for your information, we the rakyat are a bit more educated these days. Please show us some respect and don't insult our inteligence.The likes of you are dragging this country down the path towards a chronic welfare state. The next stage would be a basket case. However, having said all that, I will continue to support PR and will wear black today. All the best to Nizar and Sivakumar. Thank you.

Unknown said...

Anon 11.34

Rhetoric? Have you studied the numbers?

If the Government can afford to pay compensation amounting to RM700 million per annum to PLUS, why can't they make PLUS toll free when it costs only RM200 million to maintain the highways as the the PLUS financial reports?

And what's wrong with buying back the highways under terms signed in the concession agreements? Are you saying that we must compensate these concessionaires more than what was willingly agreed?

And have you read our position papers and posts on IPPs? On Water?

Please study the numbers involved first, then comment.

Anonymous said...

Don't talk about discounts ! There shouldn't be any toll in the 1st place !

Anonymous said...

YB Tony Pua,
I think toll must be maintained on a user pay business model. After all, this is not something unique to Malaysia as there are tolled highways all over the world. However, what you should be fighting for is to control the toll increase so that it is more reasonable. I am sure the average Malaysian understands the need to pay toll, just like the need to pay electricity bills, quit rent, income tax, road tax etc. What we find a burden is the steep increase every years.That is the issue and not the concept of toll payment per se. Do I make sense?

Anonymous said...

YB, do you agree with my "Boycott Toll Highway Day" suggstion where all motorists stay away from the highways in protest for a day and use the federal roads instead. I am ready to do it. Lets walk the talk man!

Anonymous said...

Anon 11:27 Don't waste time with proposals to boycottlah. Malaysians are all too soft, too spoilt. They will complain and criticize all they want but not willing to sacrifice the comforts of life like smooth travel along the highway. Malaysians are "cakap tak serupa bikin". They want the Tony Puas of the world to fight for them, but they themself won't do it. If they are really pissed of with paying toll, show your displeasure by avoiding the highways and use federal roads. If the numbers are great enough, toll consession companies will be forced to reduce toll or face a drastic drop in traffic volume which will impact their bottomline.

Anonymous said...

If that is the case, those who pay more taxes should also get discount ie pay less tax ??? Do we have Ministers who serve the people or jokers serving the monkeys (sorry, no offence to the monkeys). In any case, there should not be any tolls. Recent article in the STAR: a Camry cost USD 20K in the US (ie. RM 72K) & probably a 3.0 ltr engine. Camry in M'sia 2.4ltr RM 150k. If Toyota can sell in the USA at RM 72K, that either means we pay extra RM 78K on taxes or Toyota M'sia is screwing us M'sians. Which is which now? If RM 78K goes to tax ie. if there were 100 Camry's, the gov't should have revenue of RM 7.8 Million on taxes. Yet, we have to pay Toll (& mind you Malaysia has the highest density of Toll roads in the world...don't buy the story of Semi Value that we pay the lowest rate per km, that's playing with words & treating us like kindergarten kids) & the traffic flow / road planning is terrible.