Reading this report in The Star,
MPs urge Govt to postpone toll hike, and
similar reports in other mainstream papers today, I would like to put
into proper perspective why the public have felt so strongly that toll
rates must be held or reduced, rather than increased. Not withstanding
the fact that contracts have been signed with the concessionaires, have
the Government and the politicians ever considered that those contracts
may have not been signed at "arms length" and may have been flawed, thus
putting the taxpayer's money at a great disadvantage? If those
concession companies which are in turn, owned by GLCs, is there no way
negotiations can be made with them to accept more Corporate Social
Responsibility and Morality in their business missions, rather than to
hold on to the adage that "profit matters"?
It is also not entirely unjustified that the
rakyat has clamoured for status quo in the toll rates. Why do I say this.
In
2009, I posted in my blog and also wrote to the mainstream papers my
experience with the toll operations in a foreign country {let's call it
B} which signed a toll operations agreement with a blue chip Malaysian
company called A.
(Reason to reduce tolls, a factual story) Please allow me to quote from the column..
" Let me tell a factual story and put things in perspective. In 1996, one
of the largest infrastructure construction and toll operations company
in Malaysia, which I will call 'A', entered into a joint venture
agreement overseas, with the government of an South East Asian country, which shall
be 'B', to rehabilitate an existing segment of a highway, and to also
construct new segments through one of the busiest sections of the
country. Government B was responsible for the acquisition of land for the
road, called the right of way(ROW), and Company A will bear all the
construction costs, provide the systems and also training for the
operations and maintenance of the completed highways. The joint venture
agreement (JVA) signed between A and B, among other things, stipulated
the Revenue Sharing arrangements. The JVA stipulated that until the
construction costs, finance charges and interest have been FULLY
recouped by Company A, the toll revenue (nett of operations costs) shall
be shared in the ratio of 90:10 to A and B respectively. However, when
those costs including loans, finance charges and interest have been
fully recovered by A, the revenue (nett of operations costs) shall be
shared in the ratio of 40:60 between A and B respectively. Unfortunately
company A eventually disposed off the business to a local Investor, as
Govt B could not raise the funds to acquire the ROW for continuation of
the project.
Now what does the story tell us? It shows us
undeniably that there is a need for concession companies in Malaysia to
re-visit the toll rate, once they have collected sufficient revenue to
repay their loans and other finance costs. It is then clearly immoral
for these concession companies to continue raising toll fares, AND for
the Government to approve it under those agreements. The fact that
Company A in my story can agree to take a 50% less revenue in Country B
after recovering their Finance costs shows that there is no need for
such high toll fees, after the completion of construction of the
expressways. It is not surprising then that the former UEM employees, in
proposing to buy over PLUS, has also proposed to cut the toll rate by
20%.!!
In my opinion, democratic capitalist systems do not always work to the benefit of the
rakyat,
and
a Government which sincerely professes to have the citizens in its
heart should temper its decisions and minimize their suffering. I for
one, do not believe that the Government and most of the owners of the
toll concession companies, who are 'on the same side of the fence'
cannot come to an agreement to re-visit those onerous toll contracts,
and renegotiate for more equitable ones.
Shoving such toll rate increases down the throat of the long suffering
rakyat just because biased contracts have been signed, can only be seen to have a sinister motive.
I
hope, in my twilight years, I can see some sense prevail in our
politicians, who for once take the needs of the rakyat above their own. I
also hope that the Government that we have now is a caring one.
