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

Thursday, July 3, 2008

RM2.9bil - That's What it Cost for FLAWED Highway Agreements

"Highway operators get RM2.9bil payout"


That's the headline of the malaysiakini article.
According to the article,
"Plus received RM2 billion, Litrak RM630 million, Kesas RM150 million and MTD RM98 million".

I'm not sure about the other companies but the last time I checked, PLUS is still making good profits each year and able to pay out tax-exempt dividends.
At one time, the government declared that they would reveal the toll agreements but then they chickened out when they realised that the agreement was too one-sided (you guess to which party) and then they came back with the excuse they needed to get the consent of the other party.

It seems to me that the toll agreements may have a clause with the following lucrative details for the company:
  1. There is a projected minimum traffic flow if not reached will attract compensation
  2. The toll rate is fixed and then allowed to increase perhaps 5% every 2 years
  3. The concession period is fixed for perhaps 25 years but easily extended when minor improvements are made.

You only have to look at the way PLUS has been able to extend the toll period to realise that these type of toll concessions are going to be with us forever unless there is a change of government.

To me a toll operator like PLUS may be useful but they need to be properly controlled as the effect on inflation will be great if toll hikes (or compensation) is allowed to rise with some unknown mechanism.

Let's have another look at those secret agreements. What is the government hiding?

Photo: thanks to malaysiakini

No comments: