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Aiyoh, Samy -- what kind of agreement is this?

Aliran is appalled by the government's insensitivity towards the hardship that ordinary people will face when the 10 per cent hike in North-South Expressway tolls comes into effect in January.

Apart from the higher tolls, citizens will also bear the brunt of the inevitable increases in price of essential goods and services that will follow. Experience tells us that the government will be unable to prevent such price increases.

It is disturbing to see the government's pro-business philosophy taking effect at the expense of public interest.

The government appears to have painted itself into a corner by making such a lop-sided agreement, which allows the highway concessionaire to periodically raise the toll rates without regard to the higher traffic volume on the highway. It is such a blatantly one-sided agreement, which even stipulates that the government must pay hefty compensations if for any reason the toll hikes are deferred.

Such a practice virtually amounts to a guarantee of profitability by the government to the highway concessionaire. What kind of business 'entrepreneurship' is this - and where is the traditional business risk inherent in any private investment? Why should billions of ringgit in profits on the highway flow to a private entity, which only invested a few billion ringgit to build the highway - and that too financed by taxpayers' money in the form of government loans. No wonder the concessionaire of the proposed Penang Outer Ring Road has already dreamt up a toll hike even before road construction can start.

Works Minister Samy Vellu was reported to have argued that the higher toll rates are necessary for the government to avoid being burdened with ever-increasing compensation for the concessionaires.

But either way, the ordinary taxpayers, who are already paying income tax and road tax, lose. If the toll rates go up, they will have to cough up even more in tolls and hikes in the prices of other essentials. If the government rejects the toll hike and instead pays compensation to the concessionaire, it would mean that taxpayers' money (i.e. public funds) would still flow to the concessionaire.

We hold the Cabinet and the entire government responsible for this shameful fiasco.

Dr Mustafa K Anuar
Asst Secretary
21 December 2004