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Sunday, April 19, 2015

Why was Federal Highway toll extended, Selangor politicians ask

The toll concession agreement between PLUS and Putrajaya on the Federal Highway, such as Batu Tiga, will only end in 2018, not 2014, as Selangor lawmakers were led to believe. – The Malaysian Insider pic by Kamal Ariffin, April 19, 2015.The toll concession agreement between PLUS and Putrajaya on the Federal Highway, such as Batu Tiga, will only end in 2018, not 2014, as Selangor lawmakers were led to believe. – The Malaysian Insider pic by Kamal Ariffin, April 19, 2015.
Lawmakers and politicians are demanding that Putrajaya come clean on why toll is still being collected on the Federal Highway Route 2 (FHR2), one of the oldest privatised highways, as they claim the agreement to manage it is supposed to end this year.
They said that there had been conflicting messages coming out of the Najib administration on why the concession agreement with the highway’s operator PLUS Malaysia Berhad had been extended.
PLUS Malaysia Berhad in a statement on Friday said that the 16km FHR2 was part of the North-South Expressway (NSE) concession which was revised in 2011, and confirmed that its concession had been extended until December 2038.
Selangor Pakatan Rakyat politicians, however, said they had always been made to understand that the agreement would end this year.
Shah Alam MP Khalid Samad said the extension flew in the face of statements by the federal government just before the 13th general election that it was reviewing all highway agreements to either restructure or abolish tolls.
“This was the impression given to the public by Barisan Nasional, after Pakatan Rakyat said we would phase out some of the concession agreements if we took over," Khalid told The Malaysian Insider.
He said Selangor politicians had heard that the concession for the Federal Highway would be extended for another 20 years, but had not heard of any formal announcement. The statement by PLUS appears to be the first time the matter has been confirmed.
“We are disappointed because it goes against the impression they gave us before the general election,” Khalid said.
On Thursday, Selangor assemblyman Rodziah Ismail raised the issue in Selangor government newspaper Selangorkini, demanding that the government justify extending the concession agreement beyond 2015.
Demands for the toll to be reviewed have also come from Umno, the biggest member of the Barisan Nasional ruling government.
Shah Alam Umno division chief Datuk Azhari Shaari said Putrajaya should not extend the concession agreement.
“We have not received confirmation that the agreement was extended. If it has not, we want the government to consider not reviewing it,” Azhari said.
“If the agreement is extended, we want the public to get something back. The toll rates should be fair and the extension must not burden the public.”
Whether the concession was originally supposed to end this year, as Khalid and Rodziah believe, or in 2018, as claimed by PLUS, will be difficult to verify as highway concession agreements are classified by the government.
A May 6, 2012 report had quoted then Works Minister Datuk Seri Shaziman Abu Mansor as saying that Putrajaya was looking at several proposals to either abolish or restructure toll rates.
“The concessionaires involved were positive in their response to the government’s aspirations to reduce the people’s buShah Alam MP Khalid Samad says Putrajaya promised to review all highway agreements prior to the13th general election. – The Malaysian Insider file pic, April 19, 2015. Shah Alam MP Khalid Samad says Putrajaya promised to review all highway agreements prior to the13th general election. – The Malaysian Insider file pic, April 19, 2015.rden concerning toll collection,” Shaziman was quoted as saying in Bahasa Malaysia daily Sinar Harian.
The Federal Highway is one of the busiest tolled roads linking outlying areas to the west of the Klang Valley to Kuala Lumpur and Petaling Jaya, and is heavily used by commuters from Klang, Shah Alam and Subang.
The 16km stretch of the highway between Subang and Klang has two toll plazas, at Batu Tiga and Sungai Rasau.
A motorist travelling from Klang to Subang would have to pay RM1 at Sungai Rasau and RM1.10 at Batu Tiga.
On December 17, 2013, Pandan MP Rafizi Ramli said PLUS earned pre-tax profits of RM2.5 billion in 2011.
Rafizi had also said that based on the company’s 2011 annual report, it spent RM241 million on maintenance works in 2010 compared with collecting RM4.098 billion in toll in 2011.
PLUS said in its statement that rates at Batu Tiga were restructured in 1999, 2002 and 2011 as part of efforts to reduce the toll burden on the public.
“If one were to use the original concession agreement, which states that concession would end in 2018, the toll rate of Batu Tiga today would be RM2.40 versus the current rate of RM1.10, a rate which has remained the same since 2005.
“No toll increase was implemented by the government and or PLUS on Batu Tiga since 2005,” the company said in a statement emailed to The Malaysian Insider.
The company also said it spent RM410 million from 1992 to 1993 to upgrade the Sungai Rasau-Batu Tiga stretch from a two-lane carriageway to a three-lane dual carriageway.
“Each year, PLUS invests in the maintenance of the Batu Tiga-Sungai Rasau stretch.”
Besides the FHR2, PLUS operates five other highways, including the 772km North-South Expressway from the northern border of Thailand in Bukit Kayu Hitam to the southern border of Singapore in Johor Baru.
About two years ago, Khalid said, PR lawmakers had asked the federal government in the Dewan Rakyat whether the agreement would be extended after it expired.
“They said they would look into it but they did not commit on whether to extend it or not.”
Khalid speculated that the extension was so that Putrajaya did not have to bear the cost of maintaining the highway. Under PLUS, the company collects toll and is responsible for its upkeep.
But since PLUS is wholly owned by the government, Khalid said, the question was whether Putrajaya should continue to allow it to collect toll.
And if the company is allowed to continue to collect toll, should the rate be reduced to reflect only the costs of road maintenance, since according to its 2011 financial report, it spends only a small fraction of revenue on maintenance.
Khalid said he would bring the matter up at the next Dewan Rakyat sitting in May and press the government to state the reasons the agreement was extended.
- TMI

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