Jan 6, 2009 By ANDREA FILMER
GEORGE TOWN: The Federal Government should buy over all the major highway concessions in the country and run them as a business.
Penang Chief Minister Lim Guan Eng said that in the long term, the Government and people of Malaysia would gain from such a move, instead of private companies.
He said this after going through the details of the declassified information of the nation’s toll agreements.
“It would not cost much to buy over certain major highways like the North-South Expressway (NSE) or the Penang Bridge, and the Government would be able to regain the investment through toll collection.
“It is not expensive to buy some of these highways. For example, the NSE has been capitalised at RM8.8bil which is not very much for over 600km of road. PLUS, the operator of NSE, gains some RM1.1bil a year through tolls.
“Wouldn’t it be better for the Government and Malaysia’s 27 million people to gain this revenue instead of one private company?” said Lim.
Referring to details of the first Penang Bridge concession agreement with Mekar Idaman Sdn Bhd, Lim claimed the contract was lopsided and greatly favoured the concessionaire.
“The deal includes a one-way compensation agreement for the termination of the contract, meaning the company could have walked away without penalty while the Government would have had to pay billions if it decided to terminate the agreement.
“The compensation rate of a RM550mil bank debt plus other calculated compensations based on the bridge’s average revenue or estimated net profit is a heavy burden to the Government and also unfair to Malaysians,” he said.
On how the Government could improve in building the Second Bridge, Lim said all agreements should be done by open tender with no profit guarantees with regard to traffic volume and bank loans.
“The Government should also be the one to set toll rates and not the private company,” Lim said.