TOO LITTLE TOO LATE! In the future, studies on toll rates a must before deals inked - Wahid offers a sop

PUTRAJAYA — All future highway projects must come with specific studies to determine the rates the public is willing to pay before the government awards any concession, Minister Datuk Seri Abdul Wahid Omar said today in the wake of an unpopular toll hike for at least 13 highways on the peninsula.

The minister in the Prime Minister’s Department said each project promoter will need to look into public acceptance of their proposed toll rates before the government gives its nod, though he did not specify who should foot the bill to carry out such a study.

"That will be the practice for future awards, to make sure that the rates that we agree to in the (concession) agreement is a rate that the people are prepared to pay,” the former banker said when met after the third anniversary celebration of the Economic Transformation Programme (ETP) here.

Two days earlier, Wahid said it is no longer possible to stop any hike in toll rates next year, as it is an express condition in the concession agreement between the government and highway concession companies.

He said the government had to fork out RM400 million in compensation to toll concessionaires after it froze a revision of the toll rates when it was supposed to have happened in 2011 under the concession agreement.

It was reported earlier that the hike in toll rates will take effect next year and is expected to range between 30 sen and RM1 and involves 13 highways.

Wahid today declined to comment when asked if the government would consider paying a lump sum to concessionaires to keep the quantum of the toll hike to a minimum, saying that it was best to leave it to the works ministry which oversees such agreements.

He did say that there is the possibility of maintaining toll rates by extending the concession periods, such as the deal between the government and Plus Expressways, but repeated that it falls under the purview of the works ministry.

“We have to look at the practice where big projects are proposed by the private sector and the government on its end will look at the need (for the projects).

“The intention would be to improve infrastructure at a much lower cost when compared to if the government were to do it.

“In determining viability, they (project promoters) look at traffic volume and for any project to be bankable, there must be certainty in terms of set the toll rates tied with the numbers of traffic volume,” he said.

Plus Expressways owners UEM Group Berhad and the Employees Provident Fund (EPF) announced in late 2011 that they had waived their right to some RM6.5 billion in compensation, in exchange for extensions to concession periods up to 2038 on three highways operated by the concessionaire.

The government owed Plus billions in ringgit in compensation after it ordered a freeze on unpopular toll hikes that were stipulated in the original concession agreement until 2015. - Malay Mail