Works Minister S Samy Vellu defends the coming steep rise in toll rates on grounds that Malaysia has the 'cheapest tolls in the world'. What the minister fails to add is that other countries' citizens don't pay road tax and their import duties and excise duties don't reach to 100% to 200% levels depending on the models.
An average popular car like Toyota Vios cost US$10,000 (RM36,000) in America. In Malaysia, it costs almost RM90,000 - more than twice the value as in America. Naturally motorists in America don't mind paying a higher toll rate since cars are cheaper. But in Malaysia, we are hit with a triple whammy - we pay road tax, road tolls and pay hefty import and excise duties on cars.
When the American government builds their highways, the contracts are openly tendered and the whole process is transparent. All contracts, the terms and conditions of the highway contract agreements are opened for public scrutiny. When a contract of US$1 billion is given out, we can safely assume that it is a justifiable cost.
On completion of the highway, the operator assumes the risk of a normal business venture. There is no such thing as a government guarantee that the highway toll collected will be profitable. Any loss would have to be borne by the operator and there is no such thing as compensation if the expected profit does not materialise.
Can we say the same practice for our Malaysian highway construction? Here in Malaysia, highway contracts are given out without tender. Cost of a RM1 billion highway project is given at RM3 billion to companies dubiously connected to the ruling political party. Terms and agreement of the highway contract are so secretive that they come under the purview of the OSA (Official Secrets Act).
Naturally, when inflated values are given to the actual cost of highways, the tendency is that toll rates are calculated based on the inflated rates. What should have been a RM1 collection becomes RM2 because of the inflated cost of the highway.
The most ridiculous part of the whole highway contract agreement is that the government provides the operator with an iron-clad guarantee allowing them to increase the toll rates every few years.
If toll rate increases are not given, the government gives an undertaking to compensate the operator to the extent of the amount loss in revenue. According to the works minister, an amount of RM2.5 billion was given as compensation to a concessionaire. This alone should create further suspicions as to whether the whole structure of the highway concession agreements was done in a fair and equitable manner.
The minister should desist from comparing our toll rates with other countries especially when all other factors are not similar and equal. First and foremost, let us have a look at the highway concessionaire agreements to see if everything is above board. Then let the public judge whether the toll increase is justifiable.