www.kopihangtuah.blogspot.com
1 JANUARY 2018 marks the first day of no road tolls for Batu Tiga Shah Alam and Sungai Rasau. Presumably because these two spots carry heavy loads of traffic for vehicles going in and out of Kuala Lumpur for early mornings and end of work later in the day.
In any case, many people who used to pay tolls at these spots are in joy as they will now save approximately RM2.20 per day. That is RM44.00 per month assuming 20 working days a month. Times 12 months and you will get RM528.00 savings per year. For the B40 income earners, that is significant. It accounts for 1 nasi lemak bungkus every working morning for breakfast.
Rightfully, and for simple reasons, when the Government abolishes tolls, people should be happy. All this while there were many complaints about cost of living especially when Goods and Services Tax (GST) was introduced a few years back. People asked how are they going to be benefited. It was widely urged that the GST monies should go back to the citizens via many forms of subsidies.
So, here we have one of those subsidies that we have been waiting for - to improve cost of living - to use GST monies socialistically. Why is it a subsidy? Well, the Government has to pay compensation of approximately RM100 million a year to the road concession owners (Plus Highways under UEM Berhad (UEM)) to make up for the lost of revenues arising from the abolishment of those tolls. Multiply that by the remaining years of the concession (20 years by the end of 2038), the subsidy will be RM2 billion.
For the B40, they will not care for the owners of the concession. They are only worried about their cost of living. So, generally they should and are happy with this piece of benefit arising from the 2018 Budget that was approved in the Parliament last year. However, for the more sophisticated and savvy citizens, they question the move especially when it is perceived as a popular stunt for the upcoming General Election.
The question they asked was why it took so long for the concession to end and that the roads should be free for all by now. It was reported by many sources that UEM, via Plus spokes person, that the concession expiry was extended from 2018 to 2038. The extra 20 years are needed in order to generate enough cash flows to cover costs and repay loans taken to build those roads. This relocation of goal post is warranted by the decision made by the Government to not allow any increase in toll rates.
It was reported that the one way rate of RM1.10 last charged on 31 December 2017 was supposed to have been increased gradually over the past many years to be at a viable rate of RM2.40. In fact, it could have been much higher than RM2.40 under the original concession where the rates would have increased by either 10% every 2 years or 15% increase every 3 years.
This (non-increase in toll rates) happened all in the name of protecting the cost of living from being inflated - to move at the pace of disposable income growth - to ease the burden of the citizens. The Government, through the compensation, essentially pays itself (51%) via UEM and (49%) via Employee Provident Funds (EPF) as those entities are the contributors to the highways. This way, those entities are able to pay of their loans and simultaneously address the citizen's cost of living concerns.
One might criticise that this is a political stunt to win the hearts of the people. However on the flipside, people are expecting benefits to be flowed back to them after taxes have been collected. So, regardless of whether it is an election year or not, this was going to happen anyway. In fact, every year's budget will always have elements of winning the people's heart.
So, I would like to suggest my fellow Malaysians to not over analyse (and consequently to not be so negative about it) and take a good news as how a good news is supposed to be taken - i.e. be happy! Yay! No toll for people from Shah Alam, Klang and the region just beyond Sungai Rasau.
* kopihangtuah
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