You Won't Be Able To Avoid A Toll Rate Hike In 2014

Tan Sri Muhyiddin Yassin announced today that there would be no toll increase this year, but the government would need to pay RM400 million in compensation to the concessionaires involved.

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“There are altogether 29 highway concessionaires, but only the ones in the Klang Valley are involved (getting compensation). If I’m not mistaken, there are nine of them,” he said.

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“So, there won’t be any toll hike in 2014 as rumoured,” he was quoted as saying by news portal Malaysiakini.

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Muhyiddin said the committee today resolved to direct the Works Ministry to explore the possibility of renegotiating existing contracts with the highway concessionaires to keep toll rates unchanged.

“If there are terms that both sides can agree upon, including extending the concession period as a means to ensure that toll rates will not be raised in future, these can be discussed,” national news agency Bernama reported Muhyiddin as saying.

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Muhyiddin said the government made the decision not to raise tolls in the light of increasing criticism from various quarters over the rising cost of living, with hikes in prices of goods and subsidy cuts.

He said that this is one way of addressing the people's concerns on the rising cost of living.

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He said the move will cost the government RM400 million which has to be paid as compensation to the various toll concessionaires, which Putrajaya said it could not afford under a plan to cut the federal deficit.

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Tindakan kerajaan membekukan kenaikan tol bagi 2014 semalam merupakan satu taktik oportunis dan sebagai usaha untuk memenangi hati pengundi bagi Pilihan Raya Kecil (PRK) Dewan Undangan Negeri (DUN) Kajang yang akan berlangsung pada 23 Mac ini walaupun terpaksa membayar RM400 juta kepada syarikat konsesi, kata Lim Guan Eng.

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"Pengumuman yang dibuat Timbalan Perdana Menteri, Tan Sri Muhyiddin Yaasin bahawa Kabinet tidak akan mengenakan sebarang kenaikan tol pada 2014 adalah satu taktik oportunis yang jelas digunakan oleh BN untuk menyenangkan hati pengundi BN di Kajang pada 23 Mac 2014.

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"Walaupun mereka berjanji dalam manifesto PRU13 untuk mengurangkan kadar tol antara bandar, kerajaan persekutuan BN mengumumkan akan terdapat banyak kenaikan kadar tol pada tahun ini. “Menteri di Jabatan Perdana Menteri, Datuk Seri Abdul Wahid Omar malah memberitahu bahawa mereka yang tidak bersetuju dengan kenaikan kadar tol boleh menggunakan jalan alternatif yang tidak bertol, meskipun tidak ada sebarang jalan alternatif untuk sesetengah laluan,” katanya dalam satu kenyataan pagi ini.

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"Langkah taktikal demi pilihan raya kecil Kajang ini menunjukkan bahawa BN sudah terlupa bagaimana untuk mentadbir dan hanya melakukan pendekatan memerintah sehari demi sehari hanya berdasarkan ketergesaan politik dan bukan prinsip kepentingan umum," katanya.

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The Federation of Malaysian Manufacturers (FMM) has warned that an increase in tolled road charges will raise prices of consumer goods.

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The FMM recently conducted a quick survey among its members to gather feedback on the proposed increase in rates by toll concessionaires in the Klang Valley.

According to the survey, all respondents, out of which 68 per cent comprised small and medium entreprises operating in the Klang Valley, were certain that the hike in toll rates would have an impact on the cost of doing business.

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FMM warned that the hike in toll rates, coupled with the increase in the price of raw materials and electricity tariffs, would definitely increase manufacturers' operating costs.

"This increase in operating costs will be passed down to the consumers, which will lead to higher inflation, lower domestic consumption and affect Malaysia's export competitiveness," FMM added.

"Given the recent increase in electricity rates, the proposed toll hikes would definitely put pressure on inflation and FMM foresees that these increases would dampen domestic consumption and affect export competitiveness.

"FMM strongly urges the toll concessionaires to review their decision to increase the toll rates and the government to intervene to prevent any further increase in the cost of doing business in Malaysia," said FMM.

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The Selangor government will use its position as shareholders in three highway companies in Selangor to halt the planned toll hike.

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Opposition leader Datuk Seri Anwar Ibrahim has ask Selangor Government which has 30% stake in Kesas as well as Sprint and 20% stake in LDP to object to plans by Putrajaya to increase toll rates.

The Selangor government has ordered PKNS to stop the proposed toll hike at the three highways in which it has a stake.
Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim said the exco decided on the move as it did not want the public to be burdened.

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Anwar said the Selangor government will also impose strict terms and conditions on companies involved in building new highways like DASH, KIDEX, SUKE and KLORR, he said.

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Profit margins as high as 121 per cent enjoyed by some highway concessionaires cast doubt over the need to raise toll charges by as much as RM2.00 next year, said PKR’s Rafizi Ramli today.

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Kesas Highway recorded 121 per cent profit annually from 2008 to 2012.

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PAS wants the government to re-negotiate the terms of agreement with concessionaires of tolled highways which have already made a profit and recovered their costs so that these highways can be made toll-free sooner.

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This could be done by changing the duration in which a toll is imposed, so that it is based on the amount of money a highway operator makes and not on how long the concession is supposed to last, said PAS central committee member Dr Dzulkefly Ahmad.

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The Works Ministry has not finalised its rates on selected highway tolls, saying that any decision on the matter will depend on the Cabinet.

When contacted, Fadillah said he did not say 15 major highways would see a rate hike from Jan 1.

“No, I never confirmed (that) but I’m saying as per (the) agreement. There is no decision from the Cabinet yet,” he was quoted as saying by the English daily.

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In the GE13 campaign, the Barisan Nasional (BN) pledged to reduce intra-city toll rates in their manifesto but their political foes and analysts now say the ruling coalition have gone back on their word as 13 highways are to see higher rates next year.

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DAP Klang MP Charles Santiago said BN had "played games" with voters from the start, as they had known all along that toll rates would go up and subsidies would be cut, resulting in a higher cost of living.

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In Najib's Budget 2011 speech, he said that four highways belonging to PLUS Expressway Berhad will not increase their toll rates in the next 5 years.

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Motorists upset with the proposed highway toll hike can use other routes, although highway concessionaires will adjust rates according to traffic volume, Putrajaya's economic czar Datuk Seri Abdul Wahid Omar said today.

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Calling the hike unacceptable, UMNO Youth's vice-chief Khairul Azwan Harun said the study must take into consideration the volume of traffic, projection of road users and profits made by toll concessionaires.

On the other hand, Lim Guan Eng also said Putrajaya’s failure to practice open tender for project awards had led to lopsided toll concession agreements, which he alleged had ultimately forced the government’s hand in increasing next year’s rates.

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A newspaper reported that the increase would likely be between 30sen and RM1, involving 13 highways.

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The toll rate hike next year is unavoidable as it is an express condition in the concession agreement between the government and highway concession companies, according to Minister in the Prime Minister's Department Abdul Wahid Omar.

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He said the hike was a fair measure for taxpayers, coupled with the fact that highways were alternative routes which they don't use everyday.

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According to Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar the toll rate should have been revised in 2011, as stated in the concession agreement.

“However, as the rate was maintained, the government had to fork out RM400mil in compensation from taxpayers’ money, which could have been used for other purposes.

“And now, it’s time (again) to fulfil the condition,”.

With impending toll rate increases adding to the list of price hikes that Malaysians have had to endure so far, an opposition MP has warned Putrajaya that it must be responsible for signing lopsided agreements with highway concessionaires, which burdened the people.

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DAP's Gobind Singh Deo said any agreement which had an impact on the people, like concession agreements, should contain clauses giving Putrajaya the right to control toll rates.

"This includes the right to reduce toll charges where it is shown that the volume of traffic on that highway has increased.

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"This includes the right to reduce toll charges where it is shown that the volume of traffic on that highway has increased.

"This means, the profit expected to be achieved has been realised much earlier," he told The Malaysian Insider yesterday.

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Gobind, who represents the densely populated Puchong constituency in Selangor, said Putrajaya should take proactive steps to renegotiate contracts which imposed heavy financial burdens on the people.

"It must find ways to solve the problem."

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Michael Edward, 30, who started working in real estate sales and valuation two months ago, lives in Klang and works in Petaling Jaya.
“I take the Kesas Highway to work, which costs me RM2. Coming back, I take the Federal Highway and go through two tolls, for which I pay RM1 and RM1.10,” he said.
“I also work on Saturdays so altogether, I spend RM24 a week on toll fees alone.

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Kathleen Gillian, 22, a freelance writer who drives daily from Subang to Mid Valley, said she was “disappointed” as she had just bought her car a month ago.
“I did not budget for such a hike. I take the NPE to work and the toll costs RM1.60. Going back, I go through two tolls, which adds up to RM2.60,” she said.

Siti Noor Arfa, 25, drives from Puchong to Pudu daily.
“If I am on the 9am shift, I take both the Kesas Highway and the MEX Highway to work, and both toll fees are RM2,” she said.

“Petrol prices are more of a concern for me, as I spend at least RM50 on petrol every two days.
“Furthermore, the Federal Highway was built long ago. Tyhe concessionaires should have recouped a major portion of their costs, so the toll should be going down, not up, and eventually abolished.”

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Siti Noor Arfa, 25, drives from Puchong to Pudu daily. “I have been working for a year now. Prices are rising for everything but not salaries,” she said.