Asas Serba’s RM50 billion outrageous attempt to take over the toll highway concessions as a monopoly is highly ambitious – on paper. The reality on the roads is something else.
Could Asas Serba magically cancel the traffic jams, poor services and road deteriorations that concessionaires have struggled to overcome for years with the wave of a RM50 billion carrot?
Besides the financial pitch, Asas Serba appeasement of road users with a 20% discount and no further toll hike is just a slick sales manoeuver - until the crunch comes.
Being an unknown entity, Asas Serba’s pitch that their bid will ease government budgetary constraints and erase burdensome toll subsidies looks attractive but if that is all there is to it, then there is a problem.
Let’s step back and review the implications of what a monopoly inspires. For sure, the pressure for Asas Serba to recoup its huge investment with immediate gain would trigger socio-political problems.
Besides, bond market observers and bankers have been reported as saying that Asas Serba’s plan is ‘fraught with challenges’ and faces numerous roadblocks such as a ‘huge indigestion’ in the bond market stemming from the exorbitant cost of carrying out the project.
However, the immediate problem is much more obvious when Asas Serba start operations by the inevitable cost-slashing. Asas Serba is likely to hire a foreign-based efficiency expert who would recommend culling by as much as 50% the current 100,000-odd workers dependent on the 23 concessionaires for jobs. That’s a lot of families thrown into chaos there.
Another downside to the monopolistic take-over is that the toil, labour, innovation, enterprise and legacy of the 23 concessionaires will be wiped out. What does this say about the original intent of the New Economic Policy to spread wealth to as many entrepreneurs as possible if not to dishonour it?
It is unthinkable that the concessionaires would want to give up that easily because to do so would also mean betraying the trust placed on them besides fouling the long-term agenda of creating a pool of new and independent Malay entrepreneurs.
These likely twin scenarios of social woes and political ramifications are a burden the government cannot afford to carry, not in this climate of growing resentment from the working class.
It is worse than what a simple toll hike, if there is one to begin with, will cause. Such tangible defeat and losses cannot be equated to the simple arithmetic of discounts.
This is the true nature of a monopoly. What’s not to say that in the near future, when escalating costs become untenable, Asas Serba will forfeit their earlier promise and still raise toll rates? Asas Serba certainly cannot etch in stone their generous guarantee.