`


THERE IS NO GOD EXCEPT ALLAH
read:
MALAYSIA Tanah Tumpah Darahku

LOVE MALAYSIA!!!


 


Thursday, July 9, 2015

Toll hikes to better absorb financing costs

PSKLM asserts that not all highways are profit-making and that the hike in toll rates was to help in debt servicing, maintenance and overheads
PSKLM,-toll-plaza
KUALA LUMPUR: The scheduled toll rate increase gives concessionaires the flexibility to better absorb financing and rising maintenance costs as well as service charges, the Association of Highway Concessionaires Malaysia (PSKLM) said.
In a statement, it said the consideration to increase toll rates was not solely based on the agreement between the government and the toll operators, but also took into consideration the agreements made between the concessionaires and the financers as well.
PSKLM said this in response to an article in a local daily yesterday on a possible toll hike.
“While the association appreciates the views put forth in the article, we would like to clear some misconceptions in the arguments against toll hikes,” it said, adding that among others, the article implied that toll operators were cash cows.
Citing a Malaysian Highway Authority’s study, PSKLM said about 75 per cent of the tolls collected went towards debt servicing, while about 20 per cent was spent on maintenance and overheads.
PLUS, for instance, with toll collection amounting to RM3 billion, spends a substantial sum (50 per cent) on loan repayment.
The rest of its revenue is re-distributed for management costs (13 per cent), scheduled maintenance costs (12 per cent), return to shareholders (10 per cent), maintenance costs (8 per cent), and upgrading costs (7 per cent).
On the North-South Expressway alone, it said PLUS spent more than RM20 billion on construction, operations and maintenance (O&M) since its inception.
PSKLM asserted that not all highways were profit-making.
For instance, as of 2010, the Stormwater Management and Road Tunnel (SMART) Tunnel spent about one third of its annual income on maintenance alone.
As the concessionaire has to service a significant amount of interest on its loans, the tunnel is operating at a loss.
“Traffic volume is below projection as the SMART tunnel has to be closed whenever the situation warranted to alleviate flooding, and the cleaning up costs could go up to RM500,000,” it said.
The association said despite traffic falling short of estimates, the concessionaires were not allowed to raise their tolls according to the agreement.
And this caused them to run into difficulties to service their loans, and they had to go back to the lenders to negotiate on a new arrangement, it added.
Nevertheless, PSKLM said it is in talks with the government to find the best solution for the upcoming scheduled increase, taking into consideration issues like rising cost of living, and its members’ financial obligations.
On a suggestion that toll rates should not be increased as traffic congestion remains an issue, PSKLM argued that the hike was necessary as the concessionaires had borrowed and spent hundreds of millions of Ringgit on highway development and facilities which needed to be maintained and upgraded for users’ convenience.
It said new facilities and infrastructure had to be built, especially to step up safety measures and ease congestion.
- BERNAMA

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.