Compensation to highway operators: Gov’t lacks “financial sense”, slams DAP

A DAP leader today poured scorn on the Government’s decision to pay highway concessionaires a whopping RM2.25 bil in compensation, claiming it makes no financial sense.

“The Government announced that it was freezing toll hikes on several highways in the Klang Valley for this year, purportedly in view of rising cost of living due to COVID-19.

“As a result, the Government must pay RM2.25 bil in compensation to these highway operators. The much-needed funds could have been used for other expenditure, especially since Prime Minister Tan Sri Muhyiddin Yassin himself declared that the Government is short of money,” Damansara MP Tony Pua said in a statement.

Recently, Senior Minister (Works) Datuk Seri Fadillah Yusof announced that the Government froze toll increase of several highways in the Klang Valley due to the economic turmoil triggered by the pandemic.

He said the postponement will cost the Government RM2.25 bil, and negotiations to restructure toll rates with the concessionaires were ongoing, which will be finalised before 2023.

“The estimated compensation will be determined after a traffic verification process is carried out by the Malaysian Highway Authority,” Bernama reported him as saying.

The highways include Shah Alam Expressway (KESAS), Duta-Ulu Kelang Expressway (DUKE), Damansara-Puchong Expressway (LDP) and the Kuala Lumpur-Putrajaya Expressway (MEX).

Pua said the Government could have easily saved hundreds of millions of the said compensation if it had just continued with the previous Pakatan Harapan administration’s plan of acquiring highways owned by Gamuda Bhd, as announced under Budget 2020.

The highways owned by Gamuda include KESAS Sprint Highway, LDP and SMART Tunnel, which make up about 50% of the toll collected in the Klang Valley.

“In our plan, the Government would acquire the highways for RM6.2 bil but we would not have to pay a single sen for it because it will be funded via the existing toll collection.

Lopsided deals prevail over common sense

“As a result, the Government no longer needs to pay these concessionaires any future compensation for ‘freezing’ toll rates – saving taxpayers a few hundred million ringgit for this year alone,” he stated.

Pua added that over the entire highway concession period, the Government would save more than RM5.3 bil, leaving more funds for people’s welfare and new infrastructure projects.

“Plus, under the arrangement mentioned, the Government will be able to reduce toll rates up to 30% immediately and without future increase, reducing the burden on the rakyat. In the first year alone, we can save close to RM180 mil,” the DAP national publicity secretary noted.

Given the massive compensation given now, Pua said it was obvious that the Government had ditched the previous plan, with concessionaires still owning the highways and continue to hike up toll rates every two or three years.

“And the people don’t get any further discounts from the toll. This shows that the current Government doesn’t have any financial sense or ability to execute policies in the interest of the people, just like the previous Barisan Nasional Government.

“They appear to only understand paying ridiculous amounts of compensation to the toll concessionaires under the lopsided highway contracts,” Pua retorted.

The lawmaker added: “We call upon the Perikatan Nasional Government to revive the highway acquisition plan immediately to benefit both the Government and motorists.

“Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz must educate his Cabinet colleague, Fadillah as well as the Prime Minister on policies that ‘make financial sense’.” – May 3, 2021

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