‘Lower toll charges will ease cost-of-living pressure’


  • Nation
  • Friday, 17 Jan 2020

PETALING JAYA: The government’s move to ask PLUS Malaysia Bhd to once and for all fix its toll charges at lower rates is expected to slow down hikes in transportation costs, say economists.

Prof Dr Yeah Kim Leng, an economist with Sunway University, said the move, which is part of a plan

to allow the current owners of PLUS to hold on to the company, would likely help in containing inflationary pressure on transportation costs.

“With this new agreement, the public will not have to deal with any cost-of-living pressure caused by toll increases, which are supposed to happen every few years under the original concession, ” he added.

He said the 20-year extension of the concession was a trade-off so that the company could slash its toll rates by 18%.

It is unlikely, he added, that the reduction in toll collection would greatly impact PLUS’ ability to maintain its highways.

“It is not expected to be a big issue because the toll collection is still more than sufficient to pay the maintenance costs.

“According to some estimates, maintenance costs only make up about 10% to 25% of the concessionaire’s total costs, ” he said.

He also disagreed that the potential decrease in toll collection could lead to smaller payouts for the Employees’ Provident Fund (EPF), which owns 49% of PLUS.

“As there is a 20-year extension for the concession, the revenue cycle of PLUS has been lengthened by another 20 years.

“PLUS is a profitable and matured asset. It is good for it to remain indirectly in the hands of the government, especially because EPF contributors are members of the public, ” he said.

Socio Economic Research Centre executive director Lee Heng Guie also welcomed the move to lower the toll charges as it will help ease the cost of living.

“It is good news at a time when we have to cope with the rising cost of living. I believe the Government has weighed all the options and considered the rakyat’s welfare, ” he said.

The Institute for Democracy and Economic Affairs (Ideas) supports the decision to not sell PLUS and points out that there should first be a proper divestment policy before such a disposal.

CEO Ali Salman said a transparent divestment process must be in place before the Government engages in the privatisation of its assets.

“It is imperative on the part of the Government as guardian of national assets to produce and communicate a comprehensive divestment policy framework.

“The framework should also fully consider the implications of government-linked companies reforms, which may entail asset sales, to the broader socio-economic dynamics, ” he said.

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