End Touch 'n Go's toll and transport monopoly

 

Accidents of history have a way of biting us in the back - repeatedly. One such is the granting of a monopoly to Touch ‘n Go as the only non-cash payment system on Plus and other highways throughout Malaysia from 1997 - when credit cards and debit cards were already available.

If we get rid of this needless monopoly which is over a quarter of a century old, we could adopt technology which will completely eliminate the need for toll booths and considerably improve traffic flow and reduce jams. But first, some history.

When main highway operator Plus stopped accepting cash payments for tolls in March 2020, blaming Covid-19, it led to Touch ‘n Go becoming the sole payment system on all highways - and gave it a monopoly on highway payment systems - and all kinds of abuses too.

I had occasion to write about one of them, where I estimated that the renewal of Touch ‘n Go cards alone could get them as much as RM270 million in extra income per year because of unfair practices and processes such as slow/non-existent refunds for expired cards, shorter expiry periods and the hassles they cause.

This elicited a response through a letter from Plus which denied that it has ownership links with Touch ‘n Go.

I never said it had - only pointing out that Touch ‘n Go was wholly owned by CIMB Group whose largest single shareholder with about a quarter of shares is national sovereign fund Khazanah Nasional. Khazanah effectively owns 51 percent of Plus.

This confirms an interlocking, incestuous relationship among all the companies involved, which cannot be good for the industry and for the consumer, who effectively bears all the extra costs incurred.

Plus, however, confirmed in its letter that “Touch ‘n Go is the sole government-approved electronic payment system provider for toll collections in Malaysia and operates, amongst others, its stored-value Touch ‘n Go card.” This extends even to public transport systems, as we all well know.

As the sole payment operator, Touch ‘n Go must get a percentage of the proceeds of toll collections, thereby reducing the amount available to Plus.

If Plus continues accepting cash and adding debit and credit cards from all banks to the payment system, then it can decrease the commissions it pays to Touch ‘n Go. Also, customers don’t have to incur extra costs buying Touch ‘n Go cards.

Govt moving to dismantle the monopoly

Thus, one must definitely welcome Prime Minister Anwar Ibrahim’s proposal to review the monopoly enjoyed by Touch ‘n Go on Plus and other highways, as well as transport systems. But the problem may be a binding agreement with Touch ‘n Go by the government.

If that is indeed the case, the government should come clean with the public and look at some ways to break the monopoly, perhaps on the basis that it is blatantly unfair and against fair competition, and allow the process of toll collection to be liberalised by permitting all payment systems to be used.

We now appear to be moving towards it. Transport Minister Anthony Loke said an open payment system for transport services, especially those under Prasarana Malaysia Bhd, which is basically the Kuala Lumpur transport system, will be implemented soon.

In the meantime, four highways will implement the open payment system for their tolls by this September, according to Works Minister Alexander Nanta Linggi. This means users can soon pay tolls on those highways using debit or credit cards.

They are the Sungai Besi Highway, New Pantai Expressway, Ampang-Kuala Lumpur Elevated Highway and Guthrie Corridor Expressway.

But unless this is allowed for all highways operated by Plus and others, which includes the North-South Expressway and many many others, Touch ‘n Go will continue to enjoy an unfair monopoly advantage to the detriment of all road users.

And as a payment card, it will also have an unfair advantage over other similar cards.

On top of that, such an advantage prevents the use of modern technology, which will even obviate the need for toll booths altogether. It needs to be pointed out that Touch ‘n Go is using new technology, but in a way that strengthens its grip on the public.

It owns the RFID (radio frequency identification device) which does away with smart tags and allows smooth but slow movement on toll lanes. And it locks RFID users to a Touch ‘n Go card even when the technology is there to simply tie it to a credit or debit card. Removal of a monopoly will remove that too.

But RFID is not the best technology - you have to slow down considerably and pass through a lane still. There is technology available which only requires a device to be fitted to the vehicle which will record your movement through toll roads.

You will be charged for all tolls automatically via your registered credit or debit card.

How much more convenient that will be than a Touch ‘n Go card forced upon us, which we don’t want, and for which we incur many costs?

But it will take courage and guts to get rid of outdated, derelict processes designed to create riches by diddling the public. One hopes this government has them. - Mkini

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P GUNASEGARAM says the cost of obsolete technology quickly exceeds its usefulness. Kill it or you will get killed trying to save it.

The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.