It’s funny how the government could be held ransom by the already fat toll operators making millions of dollars of profit from the lopsided concession agreement. But I supposed it’s not the fault of the current administration namely the outgoing Prime Minister Abdullah Badawi and certainly nobody can point their fingers faulting the Works Minister. This cancerous problem can be easily traced back to the former Prime Minister Mahathir Mohamad under his 22-year iron-fist rule. So the Prime Minister, his deputy and all the Cabinet members can walk proudly without feeling guilty that the already burdened average-Joes are to pay more for whatever that is going to be affected by the toll hikes announced today.

Really, it wasn’t their fault that the previous administration allowed or conspired with the toll operators (cronies) to have such a bias agreement that even Einstein couldn’t figure out why. Frankly I would like to be on the other side of this deal namely the toll operators, wouldn’t you? Boy! I really missed those lovely voices from former Works Minister Samy Vellu that if you don’t wish to pay the tolls then use other or alternative ways. Yeah right, as if there’re other alternative routes built for our convenience and despite taxes paid people are still being made the suckers. For this we have to congratulate those voters who voted the current government – Bravo. I guess after decades of paying toll, some of us can’t live without doing so huh *grin*?

Come Mar 1 2009, Malaysians will have to pay 5% more in toll for using the North-South Expressway – and extra 0.86 sen per kilometer. For Sprint Highway, the rate at the Pantai toll plaza will increase by 50 sen to RM2.00, up by 33% while at the Damansara toll plaza, the rate will be raised by 30 sen RM1.30, up by 30%. Ampang Elevated highway will see a 33% or 50 sen to RM2.00. As for the Sungai Besi Highway (Besraya) toll will be increased by 10 sen or 7.7 percent to RM1.40. The New Pantai Expressway (NPE) users will need to fork out 40 sen or 25% more as the new rate will be RM2.00. If this is not the greatest time to punish the citizens who are braving escalating cost of living, pay-cut and retrenchment, I don’t know what else is. Talk about putting more money into consumers’ pocket in order to excite the domestic economy.

It’s puzzling why the government cannot take over highway concessionaire PLUS Expressway Berhad when the writing was on the wall that by doing so the toll collection can be abolish by 2016. But then who cares about the RM14 billion in savings by doing so when Khazanah Nasional Berhad who owns 65% stake in PLUS would ended up the loser? Even if PLUS can generate RM20 billion positive cash-flow from now till 2016 “without” further toll hikes, that would be insufficient to be distributed to the hungry shareholders. Furthermore billions of dollars in a handful of cronies are certainly better than hundreds or thousands of dollars in savings for the man on the street, no? Well, since they voted the opposition it’s payback time *grin*. But what the federal government trying to do here knowing very well such an unpopular move would backfire or at least worsen the domestic economy. Didn’t they learn from the infamous fuel hike introduced by Badawi? Well, consider the following:

• The cronies need to make as much money as possible as there’s no guarantee the current government could last after the next general election. In fact it’s wise to increase the toll rate as much as possible to frustrate any future negotiation as the case-study of Selangor water concessionaires have shown.
• At the same time it’s good to test water of how mad the people are with such toll hikes. If the protests are mild then the federal government can continue with the next phase of price increment in other sector. Damn with the inflation. If the people started to commit suicide because of this toll hike then the government can act as hero by instructing the hiked rate to be reduced. Now the people can applause.
• The government (or rather Najib) needs lots of cash possibly for a snap election (at the later stage) after the new Prime Minister takes over.
• The stock prices of the toll operators would definitely go up since there’re new earnings flowing to the bottom-line – automatically. I bet many insiders would have loaded up the shares prior to this announcement.
• Due to lopsided agreement, the government needs to compensate the toll operators if the scheduled toll hikes are not granted but at the same time the federal government needs the cash badly for the second stimulus packages etc. Again, the average-Joes have to sacrifice again for the country (and the cronies).

Other Articles That May Interest You …

• Perak, PR, BN and Gamuda – It’s all about Business, Stupid
• Unemployment – How Bad Could It Get?
• Leave IJN alone you Greedy Sime and Corrupt Politician
• Greed & Corruption turn the country into Gangster-State?
• Litrak Capital Repayment, a nice way to suck money out
• Delayed Toll Hike – bait for voters before election
• Why Can’t Public Enjoy the Benefits of Strong Ringgit?

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February 26th, 2009 by financetwitter

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