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M'kini: If you want it, pay for it - Samy

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  • Y.W.Loke
    http://www.malaysiakini.com/news/60958 Samy: If you want it, pay for it Andrew Ong Dec 14, 06 6:39pm [extract quoting Samy Vellu] Asked if the government
    Message 1 of 1 , Dec 14, 2006

      Samy: If you want it, pay for it
      Andrew Ong Dec 14, 06 6:39pm

      [extract quoting Samy Vellu]

      Asked if the government would publicise highway concession agreements for
      public scrutiny, the veteran minister replied:

      "I don't think you (journalists) are smarter than (opposition leader) Lim
      Kit Siang. Are you? I put forward the whole concession (agreement) to Lim
      Kit Siang for nine hours. (He was) looking at it. There is nothing there to

      "The opposition have seen it, everybody has seen it. If you want to see the
      concession (agreement), you bring your experts and I will seek permission
      from the government to put it forward to you. If you can't find any mistake,
      I will fine you RM50."


      Works Ministry's Answers To FAQs On Toll Rates
      December 14, 2006 19:24 PM

      KUALA LUMPUR, Dec 14 (Bernama) -- Following are the Works Ministry's answers
      to frequently asked questions (FAQs) on toll rates and their increase.

      1. Why is there a need to raise the toll rates for the five highways?

      The toll rate increases for the five highways are provided for in the
      respective concession agreements. Nevertheless, the government has studied
      as to whether it can keep the toll rates at current levels or prevent
      awarding 100 per cent increases in the rates' review.

      The study was done since Jan 2005, and it was found that the toll rate
      increases for the five highways must be given. The study covered the aspects
      of traffic volume, concessionaires' financial information and the loan
      repayments they needed to make for their borrowings to build the highways.

      2. Why isn't compensation in the form of extending the concession period
      used? This method can help consumers as the toll rates will not be raised.

      A 100 per cent compensation in the form of concession period extension
      cannot be given as it will create a cashflow deficit in the highway
      concessionaires' accounts. Furthermore, why should consumers be burdened
      with extended toll periods. Consumers should be aware that highway
      privatisations are done under the build, operate and transfer (BOT) method,
      whereby they (highways) will become government property when the concession
      periods end. Thereafter, there will be no toll charges for using them.

      Therefore, the government needs to ensure that the concession periods are
      not be arbitrarily extended as this will be more burdensome for consumers
      despite the toll rates being kept reasonable levels.

      3. Who determines the toll rate of a highway and its increases?

      The Privatisation Committee of the Economic Planning Unit (EPU) in the Prime
      Minister's Department, comprising representatives from the Finance Ministry,
      Works Ministry, Attorney-General Chambers, Malaysian Highway Authority and
      relevant agencies will evaluate and assess all the information and data
      given to ensure the toll rates increases are not excessive.

      4. There are perceptions that the concessionaires are already getting very
      high traffic volumes to ensure sufficient profits. Why does the toll rate
      still need to be raised?

      From a general view, it looks like every highway has achieved its traffic
      volume targets, but in reality, it is the opposite. In the case of
      Damansara-Puchong Highway, the mean average is 20 per cent lower that the
      targetted numbers.

      5. The targetted traffic volume used is very high and will never be
      achieved. The highway concessionaires may be using this to obtain toll rate
      increases or compensation if the rates are not revised?

      The traffic volume targets given by the companies will be carefully
      evaluated and compared with that arrived at by the Road Planning Division of
      the Works Ministry. The most realistic one will be used by the EPU's
      Privatisation Committee for the next stage of negotiations.

      6. Why not the government simply take over these highways and extend them as
      a free facility for the people?

      Consumers must realise that highways are alternatives to existing roads. Why
      should the government take over an alternative to an existing road? In
      addition, the government will have to bear a very high cost to take over
      these highways.

      Furthermore, the toll charges are only imposed on users of the highways. If
      users do not want to pay the toll, they can use the alternative roads. The
      government is also responsible to provide free infrastructure to the people.

      Development of highways also involve many investors and they take huge risks
      whether the highways will be profitable or otherwise. If the government
      takes over the highways, it will give the administration a bad image. This
      will make investors lose their interest to invest in Malaysia, and
      subsequently, employment opportunities and economic growth in the country
      will not be generated.

      7. The Highway Concession Agreement is said to be unfair and only benefits
      the concessionaire?

      The government will ensure that the concession agreement will yield a
      win-win situation to both parties. All the terms in the agreement are
      studied and carefully reviewed by the Attorney-General's Chambers. Among the
      clauses attached is the Toll Review Mechanism.

      Under the mechanism, if the actual traffic volume is higher that the
      targetted volume, then the concession company may not receive any increase
      or only a partial increase in toll rates and the Government does not need to
      pay compensation.

      8. Is the toll rate increase due to the hike in oil prices early this year?

      No. The toll rate increase has nothing to do with the oil prices hike. It is
      provided for in the concession agreement, and it has been evaluated with
      care before being approved.

      9. Why does the government refuse to continue to subsidise the toll? It can
      help reduce the burden on consumers.

      Consumers must understand that it is better to use the money saved for
      developing other infrastructure that can benefit the people. Apart from
      that, it is also not fair for the government to be burdened with having to
      pay high compensations for alternative routes.

      Every user of the highways must pay for the facilities in line with the
      users-pay concept.

      10. Despite the high toll rates, traffic congestions still occur on

      Various measures have been taken by each concession company to ensure smooth
      driving on the highways. Sometimes traffic congestion cannot be avoided due
      to several factors peak-hour traffic, accidents or vehicles breaking down.

      Nevertheless, if the congestion is due to the highway itself, the concession
      company will be directed to upgrade the infrastructure to improve traffic

      11. Are the toll rates imposed compatible with the service and comfort
      provided by these highways?

      The Malaysian Highway Authority constantly monitors every highway to ensure
      that the concessionaire provides quality services and are appropriate to the
      toll rates they charge. Among the facilities provided are suraus, rest &
      service areas, emergency telephones and highway patrol teams. In addition,
      high-technology facilities like intelligent transportation systems are also
      provided for users' convenience.

      Therefore, it is only proper for users to consider these facilities and the
      comfort they obtain for every sen they pay for using tolled highways
      compared with the congestion and time wasted when using traditional roads.

      12. Are the toll rates in Malaysia high compared to other countries?

      The toll rates imposed in Malaysia are way lower than the rates charged by
      neighbouring countries. Furthermore, there are several routes in these
      countries where there are no alternative roads to tolled highways, which can
      be quite costly to use. The toll rates per kilometre in some of these
      countries are as follows:

      The Philippines - 35.57 sen/km

      Thailand - 22.76 sen/km

      China - 27.62 sen/km

      Indonesia - 14.80 sen/km

      The factors that are considered in determining toll rates increases are:

      i. The initial toll rates are not too high;

      ii. The increases make sense and based on specific periods and not made too
      often; and

      iii. The increases will not burden consumers but high enough for the
      concession companies to pay their monthly loans, operating and management

      Other aspects that the government has to consider before approving a toll
      rate increase:

      i. The total amount of traffic using the highway, whether it meets the
      target or not;

      ii. The increase will not burden consumers;

      iii. The services and facilities provided justify the toll rate increase;

      iv. The amount of compensation need to be paid by the government if it does
      not approve the increase in toll rate;

      v. The government has sufficient funds to pay the compensation for not
      allowing toll rates to be raised; and

      vi. If the allocation needed to pay compensation for not having the toll
      rates raised can be better used for other development projects that will
      yield more benefits to the people. -- BERNAMA

      YW: Perhaps it is timely to AGAIN remind Samy Vellu that the govt pays
      with the RAKYAT'S money?


      Govt To Pay RM2.5 Bln Compensation To Highway Concessionaires
      December 14, 2006 21:23 PM

      KUALA LUMPUR, Dec 14 (Bernama) -- Despite the Government agreeing to
      increase toll charges at five highways from Jan 1 next year, it still has to
      fork out a hefty RM2.58 billion in compensation.

      Works Minister Datuk Seri S. Samy Vellu said the Government had to pay the
      compensation to the five highway concessionaires because the rates were not
      in accordance with the concession agreement signed by both parties.

      Samy Vellu today announced toll hikes in five highways -- Lebuhraya
      Damansara-Puchong, Lebuhraya Shah Alam, Lebuh Raya Cheras-Kajang, Lebuhraya
      KL-Karak and Lebuhraya Koridor Guthrie.

      "Even with the increase, we have to pay so much in compensation. We have to
      compensate the reduction in the toll rates we are collecting from the
      public... the Government has to pay the balance.

      "For LDP, for instance, the Government pays 50 sen for every car using the
      highway because according to the concession the new toll rate is supposed to
      be RM2.10 and not RM1.60 as we have announced," he said.

      Samy Vellu said going by the concession agreements the new toll rates for
      the five highways would be considerably higher than the rate fixed by the

      He said the percentage toll increase for the LDP was 60 per cent, Lebuhraya
      Shah Alam (47 per cent), Lebuhraya Cheras-Kajang (43 per cent) (Batu 9) and
      50 per cent (Batu 11), Leburaya KL-Karak (25 per cent) (Gombak) and 20 per
      cent (Bentong) and Lebuhraya Guthrie (40 per cent).

      Samy Vellu said the next toll hike would be in 2008 involving seven
      highways. They are Ampang-KL Elevated Highway, the North South Highway,
      Kulim-Butterworth Highway, Second Link, Seremban-Port Dickson Highway, North
      Klang Straits Highway and Penang Bridge.

      "Although we allow for toll hikes, we make sure the increase is not too
      high. We also pressure concessionaires to improve and upgrade facilities as
      localities developed and these costs are borne by toll operators.

      "At the LDP, we ask the concessionaire to build four new interchanges and an
      overhead bridge. They have built the facilities, so we can't complain much.
      They are doing their job," he said.

      Samy Vellu said toll rates in Malaysia were one of the lowest in the region,
      with 13.60 sen per km. The toll rate in the Philippines was 35.5 sen per km,
      Thailand 22.76 sen, China 27.62 sen and Indonesia 14.08 sen.-- BERNAMA

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