Malaysian Insider
April 26, 2011
KUALA LUMPUR, April 26 — The federal government has forked out just over RM2 billion since the 1980s to compensate highway concessionaires for toll hike freezes, Penang Chief Minister Lim Guan Eng has revealed.
“Compensation should be paid following the government’s decision to postpone toll rate hikes for highways [and] expressways in operation, as specified in the concession agreement,” the Works Ministry said in a written reply dated March 21 to Lim.
The ministry also said compensation was also paid to concessionaires after Putrajaya eliminated toll charges at Salak Jaya Toll Plaza and Sungai Besi Highway, and put in place a 50 per cent toll discount for buses on PLUS Expressways Bhd (PEB) highways.
Compensation was also paid for not implementing a “restriction order” on the New North Klang Straits Bypass, the ministry added.
As of December 31, 2010, the total compensation paid out to 27 highway concessionaires stood at RM2.05 billion.
The North-South Highway received the most compensation (RM735.2 million), followed by the Damansara-Puchong Highway (RM631.1 million) and the Penang Bridge (RM181.2 million).
Lim (picture) cautioned today that this total did not take into account bank guarantees, subsidies and tax incentives or the total toll collected from highway users.
“BN (Barisan Nasional) should reexamine highway concession agreements for the welfare of the public,” he said in a statement.
Prime Minister Datuk Seri Najib Razak announced in last October’s Budget 2011 speech that PEB would not be allowed to raise toll rates for the next five years.
Critics warned that the move could cost the government RM5 billion in compensation - in addition to the RM2.5 billion already owed to PEB as of June 30, 2010 - and push up federal debt.
Total federal government debt soared from RM362.4 billion in 2009 to RM408.2 billion last year, or 53.7 per cent of GDP, the highest in five years.
Najib, however, announced a similar five-year toll freeze on the Karak and East Coast Phase One highways in January.
He also said toll charges for the East-West link highway at the Salak and Taman Connaught interchange in Kuala Lumpur would be eliminated by May.
Pakatan Rakyat (PR) has flayed Najib’s “populist” measures, pointing out that any benefit highway users gain from the freezes will be wiped out by compensation paid to concessionaires using public funds.
The opposition has promised to reforms the country’s tolled highway system within 100 days of seizing Putrajaya. PR has promised to abolish the toll system by instructing Khazanah Nasional Bhd, the Employees Provident Fund (EPF) and other government bodies to take over highway assets from the concessionaires.
