Several DAP parliamentarians have called on the federal government to buy back the Damansara-Puchong, Cheras-Kajang and Klang-Shah Alam highways, as well as the Penang Bridge.

They argued that this would be more economical compared to the currently ‘lopsided’ deals signed with the respective concessionaires.

highway contracts tony puah event 050109 03 Citing the Damansara-Puchong Highway (LDP) as an example, PJ Utara MP Tony Pua (in blue shirt) said the government’s compensation to concessionaire Lingkaran Trans-Kota Sdn Bhd (Litrak) and sum collected in toll charges are astronomical compared to the quantum needed to buy over the infrastructure.

Pua said Litrak itself projects that it will rake in RM18.8 billion - mainly from toll collection and the compensation received - in post-tax profits over its 30-year concession period ending 2028.

This is in contrast to the RM1.327 billion that Litrak incurred in constructing the LDP as well as the capitalised interest on loans taken to build the highway, he said.

“It is highly feasible for the government to buy back the LDP. The amount incurred by toll payers and the government’s compensation is much more than what it would cost for the government to expropriate the highway,” said Pua when contacted.

highway contracts 050109 lim lip eng tony pua teo nian ching.jpg Pua was among several DAP leaders who were at the Works Ministry in Kuala Lumpur yesterday to view the recently-declassified agreements signed between the government and operators of 16 highways.

The government was pressured to be more transparent, particularly in view of price hikes for fuel and other goods, as well as highway toll charges. Barisan Nasional, in turn, paid a high price for its policies when the general election was held last March.

Last May, it was reported that the government had paid four highway toll operators RM2.9 billion in compensation, with Litrak receiving RM630 million.

Public interest not protected

Pua criticised the strict rules imposed on public access to the concession agreements - five people at a time are given two hours to go through one agreement each at the Works Ministry library. Documents cannot be taken out for photocopying.

Serdang MP Teo Nie Ching said her perusal of the agreement with the concessionaire for the Penang Bridge - Penang Bridge Sdn Bhd (PBSB) - revealed ‘unbalanced’ terms and conditions.

highway contracts tony puah event 050109 04 For example, if the government terminates the agreement within the first 10 years of the concession, it is liable to pay PBSB RM550 million - equal to the cost of construction.

On top of this, the government would have to pay PBSB the equivalent of 10 years’ pre-tax earnings that it would otherwise have gained from continuation of the concession.

Termination of the agreement after the first 10 years would result in PBSB being compensated RM550 million and the equivalent of the earnings it would have received in the years remaining in the agreement.

“In contrast to the liabilities borne by the government in the event of a breach of contract, the agreement does not mention any measures to be taken against the concessionaire in the event of a violation on its part,” said Teo.

highway contract 020109 highway contract.jpg Uncovering a similarly lopsided agreement in relation to the Grand Saga Sdn Bhd’s concession over the Cheras-Kajang highway, Segambut MP Lim Lip Eng said the government will have to answer for apparently acting on private interests.

“If Grand Saga violates a provision in the agreement, it is given six months to repair that breach. Failure to do so would enable the government to terminate the agreement. But in the event of such a termination, the government will still have to compensate Grand Saga!

“In other words, if I screw up a project with the government and the contract is terminated, I still get compensation from the government. If this is not lopsided, I don’t know what is!”

Star , meanwhile, reported that MCA Youth will set up a special unit to study the toll concession agreements.

Youth chief Wee Ka Siong and MCA ministers will then discuss the documents and suggest appropriate actions to be taken, said MCA central committee member Wong Nai Chee.

Wong also asked for the toll rates, profitability and projected traffic volumes to be scrutinised by the auditor-general.