Is govt bailing out MRCB by ending EDL toll, asks DAP

PETALING JAYA: DAP’s Teo Nie Ching has suggested that the government is bailing out Malaysian Resources Corporation Bhd (MRCB) with the Eastern Dispersal Link (EDL) toll being abolished from next year.

Referring to Prime Minister Najib Razak’s Budget 2018 announcement on Oct 27 that the EDL toll in Johor will be one of four highway tolls abolished from Jan 1, the Kulai MP said MRCB would “welcome the announcement to abolish the EDL toll”.

“It is no secret that due to the cash flow mismatch between its toll collection and debt obligations, MRCB has tried to dispose of the EDL highway for more than a year,” she said in a statement issued in Parliament today.

On Nov 1, Second Finance Minister Johari Abdul Ghani was reported to have said in a programme on TV3 that the government had to absorb the losses incurred by MRCB due to the ceasing of toll collection.

“He said the government is expected to pay in cash compensation an estimated total of RM70 million annually for abolishing the EDL toll.

“The EDL concession runs for a period of 30 years ending in 2042, that will make cash compensation amount to a whopping RM1.75 billion,” Teo said of the 8.1km long highway, of which slightly over half or 4km is above-ground or elevated.

She added that the EDL has been a drag on MRCB’s earnings and constitutes about 30% of its total debt as of June 30.

Teo also cited MRCB’s 2016 Annual Report, which stated that EDL generated revenues of RM112 million in 2016, which was a decrease by 2.6% from RM115 million in 2015.

Meanwhile, she said that the average daily traffic on EDL fell by 6.6% to 39,264 for year-to-date-April 2017 following an increase in road charges on both sides of the Malaysia-Singapore causeway.

“Total traffic for 2017 is projected to fall a further 10%. So how does the government arrive at RM70 million per year as the compensation for abolishing the EDL toll?

“More so, when the profit that MRCB has derived from EDL had only been RM59 million in 2016,” Teo said, adding that in 2014, the government had already paid RM62.96 million to MRCB for the delay in gazetting the toll collection.

Calling on the finance ministry to come clean on the compensation mechanism, Teo also questioned if the government is also going to take over the RM1 billion in bonds linked to the EDL highway.

“Because if that is the case, that will make the compensation for abolishing the EDL toll a total of RM2.75 billion.

“The people need to know if the decision to abolish the EDL toll is people-centric or another bailout exercise.”

Aside from the EDL toll, Najib announced that three tolls under concessionaire PLUS would also be abolished from Jan 1.

They are the Batu Tiga and Sungai Rasau tolls in Selangor, along the federal highway in the Klang Valley, and the Bukit Kayu Hitam toll in Kedah, on the north-south expressway. -FMT