KUALA LUMPUR, Oct 19 — Penang Chief Minister Lim Guan Eng threw a wet blanket today over the five-year toll freeze for Plus highways, pointing out that it was “meaningless” and would only lead Malaysians into greater debt.
He explained in a statement that while the people would save on toll money, they still end up paying toll-road concessionaire Plus Expressways Bhd large compensations.
UEM Group managing director Datuk Izzaddin Idris revealed yesterday that the five-year toll freeze could cost the government some RM5 billion in compensation payments, which is about RM170 per Malaysian.
If added to the outstanding RM2.5 billion presently owed to Plus, the government would have to foot a staggering RM7.5 billion bill to the company.
Izzaddin however added that although compensations averaged at RM1 billion each year in the past, the actual sum to be paid to Plus for the five-year toll freeze still needed to be finalised with the government and could cost less than RM5 billion.
Lim said today that the compensation payments would only lead to an unhealthy increase in both Federal government debt and debt service charges.
“DAP is shocked at the revelations by UEM Group’s Datuk Izzaddin Idris that toll highway operator Plus 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,” said Lim, who is also DAP secretary-general.
He suggested that the government consider a one-off nationalisation programme limited to toll concession agreements to prevent irresponsible companies from reaping extraordinary profits at the expense of the public.
“Nationalisation 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,” he said.
Lim revealed that according to the Finance Ministry’s Economic Report 2010/2011, the total federal government debt would soar by 12.6 per cent from RM362.4 billion in 2009 to RM408.2 billion in 2010.
This, he pointed out, meant every Malaysian would be in debt of RM15,118 as at 2010.
“In other words for every Malaysian born, he or she will be immediately in debt of RM15,118.
“If we take into account paying an extra RM1 billion every year to Plus, it is an expense and a debt burden that the country can ill-afford,” he said.
Lim also said that corresponding to the increase in federal debt, debt service charges had also increased from RM14.2 billion in 2009 to RM15.9 billion in 2010 and was expected to soar to RM18.6 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,” he concluded.