Is the 18pct discount by Plus a big deal?

KINIGUIDE | This KiniGuide attempts to answer a few questions frequently posed to Malaysiakini on the federal government's decision to cut toll charges by 18 percent for all collection booths operated by Plus Malaysia Bhd.

How many highways does Plus own?

Eight - the North-South Expressway (NSE), New Klang Valley Expressway (NKVE), North-South Expressway Central Link also known (Elite), Malaysia-Singapore Second Link, East Coast Expressway Phase 2, Seremban-Port Dickson Highway, Butterworth-Kulim Expressway; and the Penang Bridge.

How much is the toll charges on each highway?

Toll charges are different for each highway. For the North-South Expressway, the toll charges are 13.6 sen per kilometre.

After the 18 percent discount, it will cost 11.15 sen per kilometre.

This means a trip from Kuala Lumpur (through the Jalan Duta toll booth) to Alor Setar would be RM45.50 from Feb 1, down from RM55.50 currently, resulting in a saving of RM10.

When was the next scheduled toll charges increase?

Last year, for all tolled roads under Plus, except for the East Coast Expressway Phase 2.

However, the government did not allow it to happen in the effort to put a lid on rising cost of living.

What would it be without the 18pct discount?

In November 2015, then deputy works minister Rosnah Rashid Shirlin told Parliament that Plus was scheduled to raise toll rates by five percent in 2016 and every three years after that.

Going back to the North-South Expressway as an example, toll charges would have been 14.99 sen per kilometre by now, up from 13.6 sen, according to the concession agreement.

The same Kuala Lumpur-Alor Setar trip would have cost RM61.20 by now, up from RM55.50.

Assuming that the there is no intervention and what Rosnah said was correct, then the same Kuala Lumpur-Alor Setar trip would cost RM81.96 in toll charges by 2038 (the original expiry date of the contract).

Would that keep up with inflation?

Probably not. 

Let us assume that the annual inflation rate stays until 2038 averages at 2.41 percent. This figure comes from the average annual inflation rate between 1998 and 2018, according to World Bank data.

Therefore, to keep up with inflation, toll charges would have to go up to RM87.26 for the same Kuala Lumpur-Alor Setar trip by 2038.

So what's next?

The government will have to gazette the new toll charges. It will appear on the federal gazette website.

Khazanah Nasional Bhd, which owns 51 percent of Plus Malaysia Bhd, said it will be announcing further restructuring initiatives after further consultation with the government and other stakeholders.

What did Pakatan Harapan's manifesto say on highways?

This is their promise in the Harapan election manifesto, verbatim:

"The Pakatan Harapan government will review all highway concession agreements.

"We will renegotiate to obtain the best value for money for the people so that we can take over the concessions with the ultimate view of abolishing tolls gradually.

"We believe that infrastructure like roads and highways are the responsibility of the government for the people.

"The Pakatan Harapan government will provide fair compensation to the affected companies."

Is Pakatan Harapan keeping its promise?

That's for you to decide. Sound off in the comment box below.

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