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Sunday, April 29, 2018

Debunking DAP's toll propaganda, will Pua question his DAP boss?


GE14 | In a recent DAP propaganda video about abolishing toll highways, Tony Pua tried to insinuate that Najib Abdul Razak was to blame for the MEX highway concession and trying to enrich his crony
He said the MEX highway concession agreement is extremely lop-sided because RM976.7 million was paid for by Malaysian taxpayers via a grant to the concession holder which constitutes 74 percent of the total cost of construction for the RM1.32 billion highway.
Perhaps Pua had forgotten that it was he himself who issued a statement on April 18, 2012 titled "Dr Mahathir's criticism of Maju Expressway sale smacks of hypocrisy and false righteousness when it was him who awarded the concession to Tan Sri Abu Sahid Mohamed"?
In his statement, Pua pointed this out: "Dr Mahathir's argument is twisted and illogical on the simple basis that it was he himself who had awarded this lopsided concession agreement to Tan Sri Abu Sahid in 1997 and subsequently revised the agreement and terms of the concession in 2003 prior to his retirement."
Thus it is dishonest for Pua to insinuate that it is Najib who is responsible for this concession agreement and for trying to enrich BN's crony when it was his Pakatan Haparan chairperson as well as their PM candidate himself who is responsible.
Pua also implied that Harapan can buy back MEX highways for only RM400 million - completely ignoring that the owner of the Maju Expressway Sdn Bhd has outstanding bank loans of close to RM1.6 billion.
This would mean that if the government only pays RM400 million then our banks would have to suffer RM1.6 billion in losses. In the end, the government will still have to bear the burden of this loan unless it is willing to allow the banks to suffer these losses for just MEX highway alone.
A measured approach to dismantle Dr M's legacy
Pua also insinuates that the LDP highway, also approved and completed during Mahathir's time, can be bought back for about RM300 million.
However, he completely ignores the fact that the LDP highway is the crown jewel of the Bursa-listed concession highway company Litrak Bhd which also owns the Sprint highway.
Litrak currently has a sharemarket value of RM3.01 billion and bank loans and outstanding bonds of around RM1.5 billion.
This would mean that even if you can buy back LDP for RM300 million, you would be destroying another RM3 billion in market value and also asking the banks and bondholders to suffer RM1.5 billion in loans.
Litrak's major shareholders are mostly funds such as EPF, ASB, Amanahraya trustees, KWAP, unit trusts as well as seven percent retail investors.
Is Harapan saying that they would allow these government funds as well as private investors who had bought shares in Litrak on our Bursa stock exchange to suffer RM3 billion in losses?
What Harapan does not tell you is that the largest toll highways company in Malaysia is Plus Highways Berhad and that it was Najib who instructed that this company is completely bought back from the private companies in 2011 and is now 51 percent owned by the government and 49 percent owned by EPF.
The second largest toll highways company is Prolintas Bhd which is owned by PNB via various funds such as Amanah Saham Bumiputera (ASB) and ASW.
Therefore, Harapan's manifesto promise to abolish all tolls in Malaysia within five years is unrealistic and does not take into account the extended financial system and the follow on losses to not just the government but to the retirement savings and investment of the rakyat - collectively estimated to amount to about RM400 billion in losses to all.
Additionally, most of the existing toll highways in Malaysia are in the richer west coast of Peninsular Malaysia with no toll roads in Sabah and Sarawak.
Thus abolishing all toll roads would essentially mean subsidising the rich at the expense of the lower-income rural folk, the east coast of peninsular, Sabah and Sarawak where their retirements savings and investments would also take a hit.
This move would, therefore, further increase income inequality in Malaysia.
Compare this to the measured approach by Najib's government to abolish toll gates as and when the government can afford to do this or when conditions are right such as when the government abolished four toll gates on Jan 1, 2018 - Batu Tiga, Sg Rasau, Bkt Kayu Hitam and Johor's EDL.
Yes, Mahathir’s legacy has to be undone but it has to be on a measured approach - certainly not in the irresponsible and haphazard approach as proposed by Harapan which is guaranteed to cause irreparable damage to our economy, subsidise the rich while taking money from the poor.
However, Pua is correct to say that the MEX highway awarded by Mahathir is extremely lop-sided as 76 percent of the construction cost was funded by the government but still allowed the concession company to collect tolls for 33 years.
But it is extremely disappointing that Pua is completely silent that the Penang government awarded an even more lop-sided concession agreement where the RM3.6 billion construction cost of the Penang tunnel would be 100 percent funded by the Penang state government but still allowing the contractor to collect tolls for 30 years.
Will Pua be taking his DAP boss Lim Guan Eng to task for an even more lop-sided toll concession that even beats the worst that Mahathir was ever capable of?
I think not.

ERIC SEE-TO is BN strategic communication department deputy director. - Mkini

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