Highway Tolls: Malaysians still prisoners to monopoly capitalism

A lousy deal for Malaysians

Malaysians were treated to four days of toll free highway travel over the Hari Raya holiday period, while very quietly toll concessions periods are being extended between 6-10 years.

This leaves Malaysian motorists with the reality they will have to continue paying tolls for up to a generation longer, even though Pakatan Harapan had pledged many times to end these toll concessions.

Backroom deals to extend monopolies?

Amanat Lebuhraya Rakyat Bhd (ALR) has made an offer to takeover four urban toll highways, KESAS, Smart, Litrak, and Sprint. This is a very opaque backroom deal over a utility which should be a public asset.

What is even more alarming is the whole deal is based totally upon borrowings (SUKUK), thus creating a very risky gearing ratio, which could lead to future liquidity problems for the concessionaire, particularly if there is an economic downturn.

As a consequence, toll concessions will now be extended out further, where ALR’s own website states, “Under our ALR structure, the more traffic there is on our highways, the shorter the concessions will be”.

The original philosophy behind tolls like PLUS was to collect tolls to pay back the original capital used to build the highway, and cover highway maintenance. Tolls were never meant to be permanent. It was originally under government control, but privatised.

In 2019, the then Pakatan Harapan government promised to end the tolls in stages, with staggered toll rates. Highways would be free between 11pm to 5 am daily. There would be a 30 percent discount off peak hours, where users would pay existing rates during peak hours. Then, at a suitable time tolls would be ABOLISHED.

Although toll rates have been promised to be frozen, this is only a current intention, which can change if economic circumstances require any change.

The result of being let down by the current government, which initiated this deal very quickly, is that Klang valley residents will continue to pay hefty tools for the foreseeable future.

This leaves all Malaysians prisoners of toll monopolies for generations to come.

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