Thursday, February 13, 2014

YB Nga Kor Ming on toll roads

It is really none of my business on whether or not toll rates go up. Of course I would like to see it go down because the RM 12 per day that I pay takes up a large chunk of my salary.

But what I can't accept is people who try to be heroes or make a lot of noise without facts.

On Feb 7, YB Nga Kor Ming said "Demi kroni, BN gadaikan hak rakyat. Krn kontrak kangkung, dlm 3 thn Krjn bayar RM976 juta pampasan kpd konsensi TOL."

This MP who has been a politician probably since before I was born, clearly knows nuts about toll.

The compensation, I believe, is calculated by (New toll rate - current toll rate) x (Traffic volume in that year). The definition of "New toll rate" here is the figure in the concession agreement while current toll rate is what we pay. The difference ... is the required compensation to ensure that today, tomorrow and forever you pay what you have been paying yesterday.

Did you know that toll rates in Malaysia for most, if not all of the concessions, are based on a step up rate? This means that there is a schedule of toll increment every X years. In this case, the expected revenue stream, in simple terms without time value of money, is simply just = (Price x Traffic Volume x Concession Period).

Seriously, you expect Tan Sri Irwan Serigar the Treasurer General to just wake up one fine morning and say "hey! Let's increase toll rates" ???

To enable the project to be bankable (ie you can borrow money to finance the roads development), I believe the Government agreed on a step up rate every X years. For example, an increase of 5% every 3 years under PLUS and Government also agreed on the concession period. This is public knowledge, found on The Star's Archive HERE and on NST's Archive HERE so Special Branch shouldn't worry or bother investigating me.

What is not guaranteed by the Government is the traffic volume (well, maybe just 1 ... long long time ago).

If no one uses LEKAS for example OR if many cars use LDP's non tollable roads OR if we bypass Damansara Link toll plaza through the inner road, then that's okay. Government will still tell the operators "That's your problem, mate. But you must maintain that highway according to specific standards."

This is a fair deal to the Government.

Did you know that there are 1 million users on LDP's non toll areas (it is an open system) but only 440,000 vehicles pass through their four toll plazas only?

Yes, of course, you can't be bothered with these details. All you care about is HIGH TOLL RATES and we are benefiting cronies.

Is this true?

Let's look at Australia. According to Wikipedia HERE, EastLink Toll Road in Melbourne which is managed by ConnectEast, has a concession that's valid for 39 years. This means that Australians must pay until 2047 if I am not mistaken (they started operations in year 2008). PLUS' concession ends in 2038.

What about toll rates?

Did you know that EastLink's toll rates are adjusted EVERY YEAR based on inflation numbers? Read it HERE. TIAP TIAP TAHUN TOL NAIK!

Please tell me. Which UMNO crony owns the toll roads in Melbourne?

Let me show you some math. According to news report, PLUS toll rate in 2009 was at 13.60 sen per km. If we used Australia's annual CPI adjusted model, PLUS should have charged us 14.358 sen per km in 2012 and 14.596 sen per km in 2013.

But guess what? Today, you still pay 13.60 cents per km.

Of course, this is just one example and simple math. I might have missed out some things.

But if our Malaysian MPs like YB Nga Kor Ming cannot even do some brief research and analysis like this but instead spend time slamming the Government with no baseline data and facts, it is really bad.

Good for nothing ... memalukan saja, YB.

*The opinions expressed in this article are the author's own and do not represent the views of any other individuals or organizations.

Wednesday, February 05, 2014

Cost of living

I am beginning to understand the curse of the social and digital media.

It is really interesting how one tweet or one article by influential journalists, politician, Government leaders or media house can create a 'tsunami' and put the whole country into a panic, frenzy mode.

Let's take a look at toll first.

On 15 Dec 2013, The Star - Minister: Toll rate hike unavoidable.

I am not really sure whether Wahid had plans to remove toll subsidies in 2014. I doubt it after reading quotes on what he said.

He said the toll rate should have been revised in 2011, as stated in the concession agreement. “However, as the rate was maintained, the government had to fork out RM400mil in compensation from taxpayers’ money, which could have been used for other purposes. And now, it’s time (again) to fulfill the condition,”

He said it is time to fulfill the condition lah.

On 2 Jan 2014, NST - Fadillah: No directive on toll hikes

The government has yet to issue directives to expressway concession holders on the toll rate hike, said Works Minister Datuk Fadillah Yusof. He said based on the concession agreements, some expressways were supposed to increase their toll rates this year, but the government had yet to issue directives to them. Instead, he said, the government was looking for ways to offset the impact on the people if toll rates were to increase, including setting up a special laboratory by the Performance Management and Delivery Unit (Pemandu) to study the implications of a toll rate hike in 2014, he said in a statement.

If we read carefully these two gentlemen's comments, THERE WON'T BE ANY TOLL HIKES IN 2014!

Let me guide you to Budget 2014 - an official document by the Government of Malaysia tabled in Parliament in Oct 2013.

Step 1: Go to
Step 2: In the menu bar, move your mouse cursor to Bajet
Step 3: Click on Maklumat Bajet Kerajaan
Step 4: Click on Anggaran Perbelanjaan Persekutuan 2014
Step 5: Scroll down to B/P.27 Kementerian Kerja Raya
Step 6: Right click and download the file b27.pdf

If you look at Kementerian Kerja Raya's Budget allocation, page 364 Butiran 080100 Bayaran Pampasan Tol, the allocation for year 2014 is not zero. It is clearly stated as RM460.86 mil.

You mean to say PM tabled Budget 2014 in October 2013 only for it to be "reviewed and removed" immediately in January 2014?

Siapa reka cerita macam ni la? 

This goes to show how many people actually bother to go through the Budget details every year and how many people actually bother to question how much they can trust the articles published in blogs, newspapers, or e-media.

Of course, I have to admit, my crystal ball did not show me information beyond 2014. Maybe I should check with Professor Dumbledore.

Should we panic if Government decides to take the drastic action of removing subsidies in 2015? Of course there will be grouses when subsidies are removed. I am unhappy too, I spend RM12 per day on toll roads, almost RM500 per month on fuel at current rate. I don't even want to talk about how much I spend on food and how much I save a month.

Is this a Barisan Nasional problem? Can it be avoided?

After PM tabled the Budget 2014 in late October 2013, Moody's released a statement in November - Moody's changes outlook for Malaysia's A3 rating to positive from stable

Moody's Investors Service has today affirmed Malaysia's government bond and issuer ratings at A3. The outlook has been changed to positive from stable. The change in the outlook was driven by:

1) Improved prospects for fiscal consolidation and reform; and

2) Continued macroeconomic stability in the face of external headwinds.

If Government did not remove subsidies, I wonder what will happen to our ratings. What will Moody's, Fitch etc say? Don't forget ratings will affect not just the Government but cost of doing business as a whole in Malaysia. Akhirnya siapa kena teruk? Rakyat lah!

I am sure there are methods to tackle cost of living if subsidies are removed - such as toll, electricity and fuel. We should wait and see. This is a Government by the people and for the people.

Remember when some if not all of you complained about leakages and cronies benefiting from subsidies or Government money? 

When subsidy rationalization was done on fuel any others, didn't PM increase BR1M quantum and to more households?

I think PM wasn't joking or trying to buy time when trains carried these ads below. He was serious. Hey, the man doesn't talk much like the Kajang guy but doesn't mean he's not working or he doesn't care... 

Allow me to share with you some articles I found online after using Google with the keywords 'melbourne toll rates increased'.

On 3 Dec 2008: Melbourne tolls up 64 per cent
  • Toll prices on Melbourne’s CityLink Tollway have risen by 64 per cent in the nine years since it opened
  • The road will remain tolled until 2034

On 6 June 2013: Drivers face toll increase on CityLink and EastLink

On 10 Oct 2013: Airportlink tolls rise 20 per cent despite moderate increase in traffic levels

On 31 Dec 2013: Up and up go costs for 2014
  • changes are a result of the congestion levy – a tax on specified long-stay city car parking spaces – being increased by the state government
  • Public transport fares will also increase from January 1, and for the first time motorcyclists will have to pay to use CityLink.
  • The Essential Services Commission said water bills in some Melbourne households will increases more than $220 a year. Increases for Yarra Valley Water and South East Water customers will range from $167 to $222 a year.
On 1 Jan 2014: Tolls to increase on four Sydney motorways

Despite all these, Australia is still ...well ... Australia. In fact, many Malaysians are in Melbourne, Sydney and Perth. Annually many Malaysians go there for holiday, education, migration or business.

So, macam mana? Should we ask Pakatan Rakyat to setup political parties in Australia too? Shouldn't be a problem. We can call it the Australian Move. Outback Move pun boleh lah.