Toll rates would have increased without takeover, says deputy minister

Deputy International Trade and Industry Minister Ong Kian Ming speaks at a forum in Kuala Lumpur today.

KUALA LUMPUR: A deputy minister today defended Putrajaya’s plan to acquire four highways, saying it would prevent an increase in toll rates at no cost to the government.

In his keynote address at a forum here, Deputy International Trade and Industry Minister Ong Kian Ming said the government had shown its commitment to reducing and eventually eliminating tolls, particularly intracity tolls.

This follows the government’s announcement last week that it was offering to buy over Lebuhraya Damansara-Puchong, Kesas, the SPRINT Highway and the SMART Tunnel for RM6.2 billion.

Ong said some critics had labelled this as a bailout of concessionaires linked to Gamuda Bhd, but added that there were other perspectives like savings in the billions for consumers and the government.

“If there was no change of government and this proposal to acquire tolls were not put in place, the toll rates for LDP would have increased from RM2.10 to RM3.10,” he said, adding that he had studied the concession agreements.

“You are basically paying RM1 more to get stuck in a traffic jam,” he said in his speech at a forum organised by the Institute for Democracy and Economic Affairs titled “The Next Four Years: What Now for Malaysia?”.

Ong said the toll rates for the SPRINT Highway (Damansara link) would also increase from RM2 to RM2.50, while rates for the Kerinchi link would increase from RM2.50 to RM3.50 and the Penchala link from RM3 to RM5.

“So instead of allowing toll hikes to happen or compensate toll companies in lieu of toll hikes, the government is taking the money for compensation to acquire the tolls with a promise of toll discounts during off-peak periods without the increase of toll rates.”

He added that by acquiring these tolls, the temptation to defer compensation for toll concessionaires by extending the length of concessions would also be removed.

This, he said, was something the previous administration had done when it did not want to pay toll concessionaires compensation and instead increased the length of toll concessions by 10 to 15 years.

“This is something which could have taken place if there was no change of government.

“Instead, this acquisition of tolls is funded by the proceeds of toll collections with no cost implications to the government. It will not increase our budget deficit.”

Ong said the takeover of tolls would be fully funded by toll collections which would be channelled to a special purpose-vehicle while allowing users to enjoy off-peak discounts.

Putrajaya said in February that it intends to abolish the existing toll mechanism upon successful takeover of the highways and introduce a congestion charge instead.