Home Web Specials Proposed sale unmasks flaws in highway concessions

Proposed sale unmasks flaws in highway concessions

It is perplexing that toll highways, initially constructed to alleviate congestion, are sold based on projections of greater congestion in the future

Follow us on our Malay and English WhatsApp, Telegram, Instagram, Tiktok and Youtube channels.

By Rosli Khan

It is perplexing that toll highways, initially constructed to alleviate congestion, are sold based on projections of greater congestion in the future.

A recent report that a toll highway concession holder is exploring the sale of its asset, valued at several billion ringgit, has reignited debate over the privatisation of Malaysia’s highways.

While such a sale may align with typical corporate strategies, it raises questions about the broader implications of the privatised highway infrastructure.

Concession holders tend to leverage rising traffic volumes to justify a high sale price – adding to the burden car users who face daily congestion around the Klang Valley have to bear.

It is perplexing that highways, initially constructed to alleviate traffic congestion, are now being sold for profit based on future projections of even greater congestion.

Early exits, inflated valuations

Critics argue that highway privatisation often enables private entities to reap substantial profits by exiting their investments early, often on the back of significant valuations of the asset while potentially sidestepping the original concession terms.

This approach, often facilitated by financial advisers, tends to prioritise short-term private gains over public welfare.

In some cases, highways concessions are restructured before they are bought by new entities. Their new owners often approach the government to request either an increase in toll rates or an extended concession period.

The government has in the past often agreed to such requests, extending concession periods to the detriment of highway users.

This practice reveals loopholes in regulatory oversight by bodies such as the Malaysian Highway Authority (LLM), and the works and finance ministries.

READ MORE:  Anwar must dismantle Mahathir's archaic transport policy

Calls for reform

Critics want these authorities to do more to close regulatory gaps, with many calling for reforms to curb practices that tend to otherwise go unchecked. Fiercer critics have even called for the abolition of toll highways.

The issues surrounding highway concessions reflect broader inefficiencies and possible corruption within the public sector, a priority for the current government, although little appears to have been done to correct them.

Observers warn of systemic issues across ministries and departments, where leakages and corrupt practices flourish amid ineffective oversight.

Meaningful policy reform is needed immediately if Malaysia aims to curb potential misconduct and improve transparency, especially where public funds intersect with private interests.

Without such reform, Malaysia risks remaining ensnared in a cycle where public policies and resources benefit private companies at the expense of the people.

Opaque operating structure

Highway concession agreements, currently shielded from public scrutiny by the Official Secrets Act 1972 (OSA), create a hazy environment that enables questionable practices.

Making these agreements public could ensure transparency and accountability – key components of effective policy.

Keeping these contracts confidential only creates an opaque operating structure which facilitates backdoor deals that put profits over the interests of the public.

The government must not shirk its duty to protect public resources and interests.

Without drastic regulatory changes, Malaysians will continue to bear the costs of inflated tolls, corporate profiteering and political neglect, perpetuating a culture of impunity under the guise of progress.

The government cannot continue down this path; it must dismantle flawed highway privatisation policies immediately.

READ MORE:  People over cars: Rethinking highway development for real growth

As a first step, all toll concession agreements covered by the OSA should be declassified. – Free Malaysia Today

Rosli Khan, a traffic planning consultant, has a masters in transport planning and a PhD in transport economics from Cranfield University in England. 

The views expressed in Aliran's media statements and the NGO statements we have endorsed reflect Aliran's official stand. Views and opinions expressed in other pieces published here do not necessarily reflect Aliran's official position.

AGENDA RAKYAT - Lima perkara utama
  1. Tegakkan maruah serta kualiti kehidupan rakyat
  2. Galakkan pembangunan saksama, lestari serta tangani krisis alam sekitar
  3. Raikan kerencaman dan keterangkuman
  4. Selamatkan demokrasi dan angkatkan keluhuran undang-undang
  5. Lawan rasuah dan kronisme
Support our work by making a donation. Tap to download the QR code below and scan this QR code from Gallery by using TnG e-wallet or most banking apps:
Subscribe
Notify of
guest
0 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments

Most Read

0
Would love your thoughts, please comment.x
()
x