Wednesday, February 14, 2007

Toll Hike - Cabinet today must decide to reveal toll contracts

I had yesterday received a formal letter from Datuk Seri Samy Vellu, the Works Minister in regard to an Online Petition submitted by me to the Minister on 18th January 2007 to protest against the unfair toll hike for five major expressways in Klang Valley with effective from 1st January 2007 (The petition is signed by 16,455 people).

Samy Vellu in his letter briefly explained that the government has to abide by certain obligations as outlined under the contracts and that the toll hike is unavoidable.

DAP Selangor believes that the Minister’s reply has in no way help to clear the air on why the government can sign such lopsided and unfair agreements with private companies, more so when the government is also reluctant to reveal the content of the agreement publicly and that the Minister had earlier warned four Opposition leaders, namely Tan Sri Khalid Ibrahim and Tian Chua of PKR, Ronnie Liu of DAP and Dr. Hatta Ramli (PAS) to “pay the price” and be jailed for at least a year under the OSA for revealing that the government had guaranteed profits to Litrak in the Lebuhraya Damansara-Puchong (LDP) concession agreement.

Yesterday, Samy Vellu was full of the “milk of human kindness” when he said he would seek the Cabinet's approval to declassify the toll concession agreements when only ten days ago, he was so “bloodthirsty” in demanding that actions to be taken against the four.

Is Samy Vellu the advocate for a regime of openness, accountability, transparency and freedom of information, or he is a defender for the cult of government secrecy, where the OSA is used to shield and protect corruption and abuses of power?

We would like to remind Samy Vellu that he shall not apply double-standards where Cabinet Ministers want whistleblowers to be prosecuted and jailed for revealing information about the lopsided contents in the concession agreements to protect the interests of 26 million Malaysians, while they are blissfully unconcerned about the disclosure of information from the concession agreements to equity analysts, rating agencies, bondholders and the investing public to flog the shares, bonds and loans of concession companies?

On September 22 last year in Parliament, Samy Vellu revealed that the government had RM38.5 billion in compensation to the 20 highway concession companies. The first toll collection began at the Shapadu highway in Klang in 1984 followed by the North-South Expressway in 1988.Of the total RM38.5 billion, the government paid RM1.76 billion in cash while the remainder was in tax exemption and extending the concession period.

Clearly the RM38.5 billion in compensation to the 20 highway companies does not include the toll collected from motorists using the highways. In that, the RM38.5 billion compensation paid by the government alone is enough to pay for the construction cost without including the tens of billions ringgit more collected from motorists.

Prime Minister Datuk Seri Abdullah Ahmad Badawi has disappointed Malaysians by failing to fulfill his promise to be transparent and accountable in justifying why the government paid compensation of RM4,864 million or RM739 million more than the construction cost of RM4,125 million for the 5 Klang Valley highways. Again the RM4,864 million in compensation paid does not include the toll collected directly from the public by the highway companies, which would be extra profits earned by them.

There is no economic rationale or financial sense for the government to refuse to buy over the highways when buying it over is cheaper and more cost-effective. Why let the 5 highway companies make RM739 million mid-way through their concession period ending between 2024-2035? By allowing the 5 Klang Valley highway companies to impose a 20-60% toll rate hike on 1 January 2006 despite already getting back their investment cost, the government is “abetting” these companies to reap huge profits at public’s expense.

There is mounting public anger over the toll hikes seen as “highway robbery in broad daylight that sells out” the rights of motorists, consumers and ordinary Malaysians to big corporations. Privatization should result in efficiency gains as well as reduction of costs to government. However this has not happened in the privatization of our highways where the costs to the government continues to escalate until it exceeds the construction costs.

The government should during the Wednesday Cabinet Meeting today comes out with a clear and complete explanation in explaining all sorts of accusations and questions thrown to the government on this matter to uphold accountability and transparency as pledged by the BN government during the previous general election.
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