Dr M cannot keep having his way on the highways

Of late, Dr Mahathir Mohamad has started to talk about the need to impose toll charges in Malaysia to cover the cost of building and maintaining the expressways.

What he said is true. We obviously can’t have the convenience without paying for it.

But there is more to it than that. We can’t continue doing things the old way. We must rethink the manner in which privatisation and toll concessions are dished out.

For a long time, did these in the most opaque manner. Over and above that, the government guaranteed revenue and profit to concessionaires.

To me, if concessionaires bear no risk, their returns should rightly be “risk-free” plus a little premium at the most. As it is, I think the government is providing very lucrative returns to most concessionaires, given the risk level they have to bear.

Mahathir was right on the need to impose tolls, but he was wrong in dishing out the toll concessions in the manner he did. He shouldn’t be using Japan as an example when comparing toll charges with Malaysia.

The cost structure, income level, and cost of living are vastly different between the two countries. Why doesn’t he also compare us with UK and Norway too, where no toll charges are imposed?

When toll concessions agreements are “secret” and when revenue and profits are guaranteed, there is nothing to prevent the concessionaires to engage in “cost padding.”

The bank extending the loan doesn’t care a project is overpriced because it is guaranteed by the government. If the concessionaire fails to pay, the government will.

With cost padding in building and maintenance, the concessionaires are justified to charge high toll charges. They are also given “built-in” clauses to increase toll charges over time, failing which the government must compensate them.

This is despite the increase in traffic volume beyond original estimates, reaping enormous revenues to concessionaires and traffic congestions to the users.

It is time to remind Mahathir his way is not always right. It is time to review and renegotiate toll agreements in the country as intended by Pakatan Harapan.

Toll concessionaires cannot continue enjoying lucrative returns doing risk-free business, which at one time our IPPs also enjoyed.

Mahathir was too powerful and obstinate to listen to advice when he first started the privatisation of highways and IPPs. This time around he must listen.

It is ridiculous for him to ask us to compare toll charges with Japan. Malaysia is not Japan.- Mkini