By Eric See-To
In a recent DAP propaganda video about abolishing toll highways, Tony Pua tried to insinuate that Prime Minister Najib Razak was to blame for the MEX highway concession and trying to enrich cronies.
He said the MEX highway concession agreement was extremely lop-sided because he said that RM976.7 million was paid for by Malaysian taxpayers via a grant to the concession holder which constitutes 74% of the total cost of construction for the RM1.32 billion highway.
Perhaps Tony has forgotten that he himself issued a statement on April 18, 2012 titled “Dr Mahathir’s criticism of Maju Expressway sale smacks of hypocrisy and false righteousness when it was him who awarded the concession to Tan Sri Abu Sahid Mohamed”?
In his statement, Tony pointed this out saying: “Dr Mahathir’s argument is twisted and illogical on the simple basis that it was he himself who had awarded this lopsided concession agreement to Tan Sri Abu Sahid in 1997 and subsequently revised the agreement and terms of the concession in 2003 prior to his retirement.”
Thus it is dishonest for Tony to insinuate that it is Najib who is responsible for this concession agreement and for trying to enrich BN’s cronies when it was his Pakatan Chairman as well as their PM candidate himself who was responsible.
Tony also implied Pakatan can buy back MEX highways for only RM400mil – completely ignoring the fact that the owner of Maju Expressway Sdn Bhd has outstanding bank loans of close to RM1.6 billion.
This would mean that if the government only pays RM400 million, then our banks would have to suffer RM1.6 billion in losses. In the end, the government will still have to bear the burden of this loan unless it is willing to allow the banks to suffer these losses for just MEX highway alone.
Tony also insinuates that the LDP highway, also approved and completed during Tun Mahathir’s time can be bought back for about RM300 million.
However, he completely ignores the fact that the LDP highway is the crown jewel of the Bursa-listed concession highway company LITRAK Bhd which also owns the SPRINT highway.
LITRAK currently has a share market value of RM3.01 billion and bank loans and outstanding bonds of around RM1.5 billion.
This would mean that even if you can buy back LDP for RM300 million, you would be destroying another RM3 billion in market value and also asking the banks and bondholders to suffer RM1.5 billion losses in loans.
LITRAK’s major shareholders are mostly funds such as EPF, ASB, Amanahraya trustees, KWAP, unit trusts as well as 7% retail investors.
Is Pakatan then saying that they will allow these government funds as well as private investors who bought shares in LITRAK on our Bursa stock exchange to suffer RM3 billion in losses?
What Pakatan does not tell you is that the largest toll highway company in Malaysia is PLUS Highways Berhad and that it was Najib who instructed that this company be completely bought back from the private companies in 2011 and is now 51% owned by the government and 49% owned by EPF.
The second largest toll highway company is PROLINTAS Bhd which is owned by PNB via various funds such as Amanah Saham Bumiputera (ASB) and ASW.
Therefore, Pakatan’s manifesto promise to abolish all tolls in Malaysia within five years is unrealistic and does not take into account the extended financial system and losses to not just the government but to the retirement savings and investment of the Rakyat – collectively estimated to amount to about RM400 billion in total.
Additionally, most of the existing toll highways in Malaysia are in the richer west coast of peninsular Malaysia with no toll roads in Sabah and Sarawak.
Thus abolishing all toll roads would essentially mean subsidising the rich at the expense of lower-income rural folks, the east coast of the peninsular, Sabah and Sarawak where their retirement savings and investments will also take a hit.
This move would therefore further increase income inequality in Malaysia.
Compare this to the measured approach by Najib’s government to abolish toll gates as and when the government can afford to do this or when conditions are right such as when the government abolished four toll gates on January 1, 2018 – Batu Tiga, Sg Rasau, Bkt Kayu Hitam and Johor’s EDL.
Yes, Tun Mahathir’s legacy has to be undone but it has to be by a measured approach – certainly not in the irresponsible and haphazard approach as proposed by Pakatan which is guaranteed to cause irreparable damage to our economy, by subsidising the rich while taking money out of the poor.
However, Tony is correct to say that the MEX highway awarded by Tun Mahathir is extremely lop-sided as 76% of the construction cost was funded by the government and it still allowed the concession company to collect toll for 33 years.
But it is extremely disappointing that Tony is completely silent that the DAP Penang government awarded an even more lop-sided concession agreement where the RM3.6 billion construction cost of the Penang tunnel will be 100% funded by the Penang state government but it still allows the contractor to collect toll for 30 years.
Will Tony be taking his DAP boss Lim Guan Eng to task for an even more lop-sided toll concession that one awarded by Tun Mahathir ?
I think not.
Eric See-To is Barisan Nasional strategic communications deputy director.
The views expressed are those of the author and do not necessarily reflect those of FMT.