A concerned Malaysian writes about Malaysian affairs. "You are the Change you Seek" Barack Obama

Thursday, June 19, 2008

JB's RM1.2b Highway to HELL?

(click2 on image to enlarge) Highway tolls and high fuel prices are the two main factors that are fuelling inflation in Malaysia though the Domestic Trade and Consumer Affairs Minister claims in this malaysiakini article:

"Inflation to surge 'substantially': Shahrir" http://www.malaysiakini.com/news/84689

that "Inflation is set to soar "substantially" in June due to high fuel prices, but it will not hit double digits".

Maybe 9.99% will still be OK?

This write-up is to show that the quickie of becoming filthy rich is now being foisted on JB-ians who have long been spared the blood-sucking tactics of the toll operators.

But not for long. According to the MalaysianInsider, a new highway is being built especially to fleece the thousands of motorists who use the Causeway.


According to the Straits Times,

"At a price tag of RM1.2 billion, it will cost roughly RM150 million per kilometre to build, according to bankers and analysts."

So the dual 3-laned highway will be 8km long or about 5 miles and will link up to the start of the NS Highway. While this is a good way to ease the congestion in JB city, this highway has many interesting questions to be answered.
  1. Singapore always practices a reciprocity arrangement as far as tolls are concerned and this has been done for many years. It is a form of a self-regulating mechanism so that no one will simply up the toll for Causeway traffic or the Second Link.
  2. According to the LTA, the current number of vehicles who exit Singapore is 16,000 and the table assumes that 11,000 cars use the Causeway. The figures are worked out using a 5% annual growth rate.
The tolls shown are my own guesses - you can make your own estimates to show that this is a most lucrative contract from any financial stand-point.
The government approves a most generous contract price and then allows you to milk the motorists for all they ar worth.
But don't take my word on the exorbitant contract price. Let's compare this project with another one that was tendered out in India. You can read the details here.
Look at the interesting highlights.
  1. There were 9 bidders
  2. The length of the highway was 9km
  3. The project cost 450 crore or 4500,000,000INR or RM341.4m
  4. The successful bidder had to pay the highway authority for the BOT project

According to the article,

"Apart from the four-lane elevated highway, there will be a main carriageway on the ground level which comprises three-lanes on either sides and a service road involving two-lanes on either sides, taking the number of lanes to 14."

In India they can build a 14-lane highway system at a cost that is one-third that of a 6-lane system we pay for in Malaysia.
We seem to have approved a project that is really exorbitant even with the increases in raw material costs during the last three years.

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