Posted: 18 Oct 2010 11:23 PM PDT
DAP is shocked at the revelations by UEM Group MD Datuk Izzaddin Idris that toll highway operator PLUS Expressways Bhd could be compensated as much as RM5 billion by the Federal government over the next five years for not raising toll rates. Clearly freezing toll rates is meaningless as the people still has to pay through compensation payments by the government.
Worse, the government still owes PLUS RM 2.5 billion making the total compensation amount to be paid for the next 5 years a total of RM 7.5 billion! In fact, PLUS would be pleased to be compensated as they would be paid money without having to work for it.
The time has come for the Federal government to consider a one-off nationalization program limited to toll concession agreements in the national interest. Nationalization of toll concession agreements is necessary to prevent irresponsible toll concession companies from reaping extraordinary profits at the expense of the public.
Nationalization is necessary when toll concession operators like PLUS have not only recouped their investment and construction costs but also maintenance costs and are earning pure profits from toll rates revenue collected. Failure to do so will not only create an unbearable financial burden to the people but also strain our country's finances for the foreseeable future.
The principal negative impact is that compensating PLUS RM 5 billion for the next 5 years for freezing toll rates will only increase both Federal government debt and debt service charges to even more unhealthy levels. According to the Ministry of Finance Economic Report 2010/2011, the total federal government debt would soar by 12.6% from RM 362.4 billion in 2009 to RM 408.2 billion in 2010. This works out to RM 15,118 in debt for each of the 27 million Malaysians as at 2010.
In other words for every Malaysian born, he or she will be immediately in debt of RM 15,118. If we take into account paying an extra RM 1 billion every year to PLUS, it is an expense and a debt burden that the country can ill-afford.(see following table)
Correspondingly, debt service charges have increased from RM 14.2 billion in 2009 to RM 15.9 billion in 2010 and expected to soar to RM 18.6 billion in 2011. Many Malaysians are unhappy why the country has to carry such a huge debt burden borne by 27 million Malaysians for the benefit of one company. Clearly unless drastic action is taken, 27 million Malaysians will lose out to enable a company comprise of BN cronies to gain.
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