Govt Bears RM286-mln Compensation For Postponing Toll Hike

BERNAMA, March 30, 2009 18:10 PM

KUALA LUMPUR, March 30 (Bernama) -- The government has to bear compensation payment of RM286.38 million to highway concessionaires for postponing by one year a scheduled increase of toll rates on five stretches of highway, the Dewan Negara was told Monday.

Deputy Works Minister Datuk Yong Khoon Seng said the toll rates on the North-South Expressway (PLUS), Sistem Penyuraian Trafik Kuala Lumpur Barat (SPRINT) highway, Ampang-Kuala Lumpur Elevated Highway (AKLEH), Sungai Besi (BESRAYA) highway and New Pantai Expressway (NPE) were retained until the end of this year.

"As a result of the postponement of the increase in the toll rates for a year, the government has to bear the compensation payment to the highway concessionaires, according to the terms of the concession agreements," he said when replying to a question from Senator Muhamad Yusof Husin.

The Cabinet had decided last month that the proposed increase in the toll rates on the five stretches of highway effective March 1 this year be postponed for a year.

Yong said the government would look at a long-term solution besides studying the finance model and implication when considering the issue of toll rate increases in the future.

Meanwhile, Human Resource Minister Datuk Dr S Subramaniam said the ministry had launched a study towards the setting up the Relief Fund For Loss of Employment to help retrenched workers deprived of retrenchment benefits.

"The proposed fund will benefit those workers who do not get compensation because their employers are unable to pay or cannot be traced," he said when replying to a question from Senator Prof Datuk Dr Ismail Md Salleh.

Toll hike postponed indefinitely

STAR, February 27, 2009
By ROYCE CHEAH and MAZWIN NIK ANIS

KUALA LUMPUR: The toll hike for five major highways that was set to take place on Sunday has been postponed indefinitely.

Works Minister Datuk Seri Mohd Zin Mohammed said the decision was made due to the negative public reaction and the current economic situation.

“When the announcement was made, there was negative public reaction. As a result, the Cabinet decided today (Friday) to postpone the toll hike indefinitely,” he told a press conference at the Works Ministry here on Friday.

The toll hike, had it taken place, would have increased toll rates on the North-South Expressway by 0.68sen per km; the Sprint Highway by between 30sen and 50sen; the Sungai Besi Highway (Besraya) by 10sen; the Ampang-Kuala Lmpur Elevated Highway (Akleh) by 50sen and the New Pantai Expressway (NPE) by 40sen.

The announcement met with strong opposition from consumer groups, lorry and bus associations as well as Members of Parliament from both sides of the House.

They said it was not a good time to increase toll rates considering the economic situation.

Prime Minister Datuk Seri Abdullah Ahmad Badawi, who is in Thailand for the Asean Defence Ministers meeting, had also asked for the decision to be reconsidered.

Mohd Zin said as a result of the toll hike cancellation, the Government would have to fork out an additional RM287mil to pay the concessionaires - PLUS (RM195mil), Sprint (RM36mil), Akleh (RM27mil), Besraya (RM9mil) and NPE (RM20mil) - for the period Jan 1 to Dec 31 this year.

Mohd Zin said RM245mil was already paid to PLUS, Akleh and Sprint in the form of compensation due to a scheduled increase in January last year that did not take place.

“The Finance Ministry will prepare the compensation as stipulated in the concession agreement.”

Mohd Zin said the money being used for compensation was also the public’s money that could have been used to implement other projects that could benefit the entire country.

Meanwhile, in Putrajaya, Deputy Prime Minister Datuk Seri Najib Tun Razak said the toll hike postponement was not meant to woo voters in the three upcoming by-elections.

He said the toll hike was put off because the public protested and was unhappy with the hike, even though the decision meant that the government would have to fork out a substantial amount of money to compensate the five highway concessionaires.

“This is not an election gimmick. This is not to attract voters (to support Barisan Nasional) and they have our undertaking that it (toll rates) will not be increased once the by-elections are over,” the Deputy Prime Minister told reporters on Friday.

Three by-elections will be held within the next few months - in Bukit Gantang (Perak), Bukit Selambau (Kedah) and also in Batang Ai (Sarawak).

The Bukit Gantang parliamentary seat fell vacant when its MP, Roslan Shahrum of PAS died on Feb 9 while the Bukit Selambau state seat is empty when assemblyman V. Aurumugam resigned on Feb 8. The by-elections for the two constituencies will be held on April 7.

The Batang Ai state seat in Sarawak is vacant following the death of its assemblyman Datuk Dublin Unting and the Election Commission will decide on polling date for this seat on March 4.

Najib also confirmed that the postponement was indefinite.

“We do not know for how long as it will depend on our affordability (to pay compensation). We will make whatever necessary decision when the time comes.

“But by not increasing the toll rates, the government has to fork out an additional RM500million a year and that is tax payers’ money,” he said.

Najib said the increase announced by the Works Ministry earlier was a “moderate increase” and the government had to pay more compensation if there was no increase at all.

“The amount will be substantial and it will add up over the years. But the public is so averse to any increase; which I understand.

“So the government decided not to increase but this means we will have to set aside more money for compensation,” he said.

On Thursday, Mohd Zin announced that road users would have to pay a higher toll when using the North-South Expressway (PLUS), the Sprint/Kerinchi/Damansara Link highways, Ampang-Kuala Lumpur Expressway (AKLEH), Sungai Besi Highway and the New Pantai Expressway (NPE).

For the PLUS highway, it was a 5% increase. This meant that toll charges from Bukit Kayu Hitam in Kedah to Kempas in Johor would increase from RM108 to RM113.40.

A trip from Kuala Lumpur to Ipoh would increase from RM26.50 to RM27.90.

For the Sprint/Kerinchi/Damansara Link highways, it was an increase of between 30sen and 50sen.

The Sungai Besi Highway was to see an increase of 10sen, while the AKLEH and NPE were to be increased by 50sen and 40sen respectively.

Mohd Zin had said the increase was minimal and hoped the public understood that the increase was stipulated in the concession agreements that the Government had signed.

Prime Minister Datuk Seri Abdullah Ahmad Badawi, however, urged for the decision to increase the toll rates to be reconsidered.

He said the matter will be discussed in the Cabinet meeting Friday, which will be chaired by Deputy Prime Minister Datuk Seri Najib Tun Razak.

“People are having difficulties. The situation is not right for a toll hike. I feel that this matter needs to be discussed again in the Cabinet.

”The decision may come in the form of measures that will included in the second stimulus package or through some other measures,” he had said in Pattaya, where he was attending the Asean Defence Minister’s Meeting.

Create laws to review lopsided highway contracts

STAR, 19 February 2009
By Florence A. Samy

PETALING JAYA: An “Unfair Public Contracts Act” should be passed in Parliament to set aside or review lopsided contracts, including those for highway projects that have not benefitted the people.

Lawyer Tommy Thomas said only such an Act would make it compulsory for such contracts to be revised.

“The Act should give legal power to an independent public contracts commissioner. He should be allowed to access and review all public contracts and supporting documents, be given the power to subpoena and have a team of experts to aid him,” he said when speaking at a public dialogue entitled “Can we get back our highways?” Wednesday night.

“The commissioner must then certify in his judgment whether the contract is unfair, and he should also be given the power to set aside or renegotiate the contracts and provide compensation where it is due,” he added.

There should also be relevant guidelines on compensation, limiting them depending on past profits, he added.

Panellist and Petaling Jaya Utara MP Tony Pua said that it was contractually possible for the Government to buy back certain highways such as the Lebuhraya Damansara Puchong (LDP) at a reasonable figure as stated in the declassified concession agreement.

“For the LDP agreement, there is an expropriation clause where the Government can terminate the agreement by giving the concessionaire three months’ notice.

“LDP cost RM1.33bil to build, but they stand to make RM18.8bil by 2019 according to profit projections based on their listing prospectus,” he said.

He added that at the end of last year, the Government paid a total of RM628mil in compensation to the concessionaire Lingkaran Trans Kota Sdn Bhd (Litrak).

“The toll rates are expected to increase to RM3.10 in 2016. Even if the Government absorbs some of the cost and we pay RM2.60, it is still the taxpayers’ money that has to be used to pay the compensation,” he added.

More questions over toll deals

STAR, 6 January 2009

KUALA LUMPUR: Confusion reigned at the library in the Works Ministry on the second day after toll agreements in the country were declassified.

Politicians and reporters, who had turned up as early as 7.30am to get access to the documents although the library opened at 9am, were dismayed to find that much of the contents were either too technical, incomplete or that they just had no time to digest the information.

With public viewing in the morning restricted to only five people at one time for a maximum of two hours and one document each, reporters had to rely on information supplied by politicians, who were given priority to read the agreements.

As at lunchtime, only one reporter had managed to read an agreement relating to the New Pantai Express­way but complained that she could not fully understand the content or compensation formula.

In the evening, however, 15 people were allowed in at one time after Works Minister Datuk Mohd Zin Mohamed gave the directive to the library to expand the facility.

Busy reading: Visitors to the library going through the toll agreements at the Works Ministry in Kuala Lumpur Monday.

There was also grumbling after some of the reporters, who had turned up early for their turns to look at the documents, got bumped down in the queue after politicians made an earlier booking with the library,

Among the “incomplete” documents were the deals for the SMART Tunnel, which only came with the first 118 pages without any appendix or schedules, and the Shapadu toll agreement, which was only 16 pages long. None of the agreements also carried with any subsequent exemption or additional clauses.

Petaling Jaya Utara MP Tony Pua, who led a DAP delegation, said the Damansara-Puchong Highway was making excessive profits and called for the Government to stop compensating the operator.

The highway operator had initially set its toll rate at RM2.10 but reduced it to RM1.60 in the last adjustment in 2007.

“Under the agreement, the toll charge will rise to RM3.10 in 2016. In its financial prospectus, the highway operator has stated that the construction cost was RM1.327bil and that the 30-year projected profit was RM18.865bil.

“Between 1997 and 2006, it was supposed to have made a profit of RM1.22bil, nearly the construction cost. So, their collection to date has more than paid for the highway and what they are collecting for the next 20 years, is excess profits,” he said, adding that to allow Kesas to raise toll charges by more than 10% every two years until 2022 was also excessive.

Pua called on the Government to nationalise the highways to lighten the financial burden of the people and keep toll charges minimum.

Serdang MP Teo Nie Ching said the agreement with Penang Bridge almost guaranteed profit for its highway operator, adding that this was unfair because the bridge had been opened since 1985 whereas the agreement only started from 1993.

Future agreements will be made public, says ministry

STAR, 6 January 2009

KUALA LUMPUR: All future toll concession agreements signed between the Government and highway operators will be made public.

Works Minister Datuk Mohd Zin Mohamed said this as the Govern­ment decided to declassify 22 out of the 23 toll concession agreements beginning last Friday.

However, as at 4pm on the second day of public viewing yesterday, only 17 toll agreements were available at the Works Ministry’s library.

The agreements were for the Damansara-Puchong Highway (LDP), Guthrie, Sprint, Besraya, Ampang-Kuala Lumpur Elevated Highway, SMART Tunnel, NNKSB, Metramac, Kesas, Grand Saga, Lebuhraya Pintas Selat Klang Baru, NPE, MTD, Penang Bridge, SILK, BORR and Shapadu.

Only Maju Expressway, which operates the Kuala Lumpur-Putrajaya highway, has not given its consent for its toll agreement to be declassified.

Zin said PLUS, the New Klang Valley Expressway and other toll agreements would be made available to the public from noon yesterday.

“If it’s not (ready) in time for today, the public can view it tomorrow,” he assured.

Asked if any future toll agreement would be made public, Zin said the Government had taken the first step in declassifying the documents.

“That is the way in future,” he said.

Asked about suggestions that the expressways should be nationalised, Zin said the Government “was not looking at the option at the moment”.

On certain highway operators already making profits due to high traffic volume, Zin said it was time such companies looked into “giving something back in return.”

“That’s why we are seeking an understanding on this concession agreement so that the ones who have really shown good returns on their investments reflect their corporate responsibility and give discounts and rebates like what PLUS has done.

“This is the moment for any concessionaire that feels it can give back to the stakeholders, to look into it,” he pointed out.