Not-so-smart toll agreements

Following the declassification of 22 toll agreements on Jan 1, a DAP team continues to uncover terms and conditions that are of greater benefit to highway concessionaires than to road users.

Its latest focus was on the Smart Tunnel, North-South Highway and Malaysia-Singapore Second Link documents. These and other agreements are open for view at the Works Ministry library.

Kampung Tunku assemblypersom Lau Weng San spent an hour yesterday looking through the Smart Tunnel agreement.

He unearthed the requirement that at least 30 percent of contractors and suppliers for construction, maintenance and management of the highway must comprise bumiputeras.

Lau said the contractors should be registered with Contractors Service Centre or Construction Industry Development Board, while bumiputra suppliers should be recognised by Finance Ministry.

Commenting on this, Petaling Jaya Utara MP Tony Pua, who led the DAP team, expressed worry that this could become the model for future concession agreements.

"Smart Tunnel is the most recent highway to be built, but the government has signed a few more agreements since then. We want the minister to explain whether this new model is being applied," he said.

Highlights of the other documents:

North-South highway (Plus Expressway Bhd)

1. The cost of construction was estimated at some RM6 billion. As at 2006, however, the accumulated revenue from toll charges stood at RM18 billion.

Serdang MP Teo Nie Ching questioned why such a profitable highway remains privatised.

2. The agreement states that, if the vehicle volume is lower than projected, the government will compensate the concessionaire or extend the concession period to offset payment of compensation. This means guaranteed revenue for the concessionaire.

3. If the government terminates the agreement, it will have to pay the cost of construction, the cost of loans and interest, and potential revenue from continuation of the concession.

Toll charges were also found to have been increased sharply over the years. For example, from 1988-1996, toll charges for first class vehicles went up from RM5 per kilometre to RM10 per kilometre.

Malaysia-Singapore Second Link

Pua noted that the increase in toll charges has been structured in an unusual way, in that strong growth in the volume of vehicles will not translate to lower toll charges.

For instance, if the average annual vehicle volume increases by 5 percent from 2008-2012, toll charges will go up by 27.6 percent.

If the vehicle volume increases by an average of 8 percent, the toll charges will go up by 46.9 percent.

MCA proposes review

In a statement today, MCA spokesperson Lee Wei Kiat said the party has two recommendations in relation to privatisation of highways.

Its Youth wing has conducted a preliminary study of the toll agreements. Based on the findings, MCA suggested that:

1. The government should review the privatisation of all highways so as to ensure that this truly benefits the people.

"The purpose of privatisation is that the company concerned must be ready to bear all the risks and liabilities that may arise," explained Lee.

"However, what we have deduced from the toll agreements is that the main aim is to generate profits. (The exercise) has totally neglected the interests of both the government and the people."

2. The Works Ministry should resolve all technical problems by revealing related agreements without further delay, to enable everyone the opportunity to read and study the contents of the agreements.

Lee said the MCA Youth legal affairs and parliamentary legislation research bureau will study the declassified agreements.

"It will compile its findings into a report for the MCA ministers, who will then submit it to the cabinet for discussion," said Lee, who heads the information and communication bureau.

"MCA supports the (declassification of the agreements). This is not only the first step towards transparency, but also towards a clean and efficient government."