THE government is doing its level best to weigh the need to protect and enhance the welfare of the people while grappling with financial constraints, in arriving at its decision to reduce the toll rates by 18% for PLUS Malaysia Bhd-operated highways, said economists.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said this was especially true in the face of rising cost of living which continues to have negative implications on the real income for households.
“Hence, the 18% reduction in the toll rates is a step in the right direction although the direct expenditure on tolls among Malaysians, in general, is fairly low compared to, for instance, food and beverages,” he told Bernama today (Feb 6).
Nonetheless, he said the toll reduction should translate into lower transportation costs for businesses.
“As such, it is imperative to ensure the benefits of lower transportation costs enjoyed by businesses will be passed on to consumers,” he said.
This, Mohd Afzanizam stressed, would require strict enforcement on the part of the government as businesses may have little incentive to pass the benefits to the consumers.
“While we may not be expecting the same quantum of reduction, at least businesses should be able to contain their transport cost and would have no reason to raise prices excessively. What we are aiming for is stability in the price level,” said Mohd Afzanizam.
Meanwhile, Universiti Malaysia Sarawak, Faculty of Economics and Business senior professor Prof Datuk Dr Shazali Abu Mansor suggests that the toll business model should not be profit-oriented as it should operate in such a way that whoever uses the highway, the benefits would go back to the people.
“At least cover the cost (of highways)… rather than stick to the old model which emphasised profit, the same with water and electricity charges,” he said.
“Unless we change the model to a non-profit concept and applies it to all public utilities… I think that is a very good concept, non-profit operating (model) based on covering the cost of maintenance, it would then test the effectiveness of the model,” he said.
Shazali said psychologically, the reduced tolls would not provide much benefits because the people would prefer to have more discounts.
“A little bit of profit margin is alright as the money could be used for other things. If the government can reduce further, the people would have more (disposable) income that can be spent on other things, because we want other sectors of the economy to move also.
“The more money held by the people can be channelled elsewhere, that is more appropriate,” he said.
Shazali said profit on certain goods and services, for instance, telecommunication whereby the telcos raked in billions in profit should be looked at because water, electricity, telecommunication and roads are all necessities.
The government’s decision to reduce the toll rate by 18% sees the toll on the North-South Expressway reduced from 13.6 sen per km to 11.15 sen per km, which is lower than the toll rate in 1999 at 11.24 sen per km.
With the new toll rates, a journey from Jalan Duta (Kuala Lumpur) to Alor Setar (Kedah) costs RM45.50 compared with RM55.50 previously, while from Jalan Duta to Skudai in Johor, the toll is now RM38.50 compared with RM47 previously.
The toll rate decision was made at a Cabinet meeting on Jan 15. More importantly, PLUS highway users can rest assured that there will be no more increase in toll rates for the next 38 years until the concession ends in 2058.
This is because the concession period for all PLUS highways has been extended by 20 years from 2038 to 2058 to ensure that PLUS will be able to carry out its highway maintenance and operation activities without depending on the government. – Feb 6, 2020, Bernama