Johari tells how govt can buy 4 highways without more debt

The federal government proposes to take over the Litrak highway and three others linked to Gamuda. (Bernama pic)

PETALING JAYA: Better terms should be negotiated for a proposed takeover of four highways in the Klang Valley, according to a former second finance minister, who says the current proposal will add to the national debt.

Johari Abdul Ghani, who was a second finance minister in the previous government, said the present agreement would force the government to borrow more money to pay the operators.

Instead, Putrajaya should consider absorbing the tolls during off-peak hours until the toll agreement expires, while the toll operator would collect tolls during peak-hours.

By paying only for the loss of revenue during off-peak hours, there would not be a need to increase government borrowing.

“The operator and the government need to work together on this,” he added.

Johari Abdul Ghani.

Putrajaya has proposed a RM6.2 billion offer to take over Lingkaran Trans Kota Holdings Bhd (Litrak) and three other toll concessions linked to Gamuda Bhd: Kesas Holdings Bhd, Sistem Penyuraian Trafik KL Barat Holdings (Sprint) and Syarikat Mengurus Air Banjir dan Terowong (Smart).

Johari said: “The present way of buying the toll highways can only work if the government is cash rich. But the government has lots of debts.”

He reminded the government that when BN lost the 2018 general election, the national debt stood at RM681 billion. It had since increased to RM799 billion in June 2019. “I don’t know what will the figure be by end of this year,” he added.

He further said the debt ratio was 50.8% of gross domestic product in 2017 but 51.2% the following year, 52.7% in June 2019.

The 2020 Budget, which calls for a fiscal deficit of 3.2%, would entail borrowing RM50 billion more. “If it is a fiscal deficit, they have to borrow I understand. But when are they going to start reducing the debts?” he said. “How are they going to do it because their debts keeps increasing?”

He said Rafizi Ramli of PKR had once said in Parliament that government operating expenditure would be reduced by about RM20 billion if Pakatan Harapan took power. “But today the cost of running the government also keeps increasing.”

He said PH has yet to fulfil its election manifesto, while the economy is growing at a slower rate, with debts and operating expenditure increasing from RM230 billion in 2018 to RM241 billion in the 2020 budget.

“When are they going to reduce the country’s debts and government operating expenditures?” he said. - FMT