~ By Neville Spykerman
KUALA LUMPUR, Jan 6- Petaling Jaya Utara Member of Parliament Tony Pua said today that PLUS, the concession holder for the North-South Expressway stands to make a staggering RM25 billion in profits, in the next 20-years.
Pua, who spoke to reporters after scrutinising declassified toll concession agreements at the Works Ministry here, said PLUS made a profit of RM1.2 billion last year and the amount will increase annually till the concession ends, in 2038.
“Under the agreement the concessionaire has all to gain and nearly nothing to lose.”
Pua, who was at the Works Ministry, with Serdang MP Teo Nie Ching and Kampung Tungku Assemblyman Lau Weng San, said PLUS is also exempted from paying taxes on its profits.
As such, he said DAP was justified in objecting to the privatisation of PLUS to United Engineers Malaysia (UEM) in 1988.
“It was a hot issue, which was used as one of the justifications by the Government to detained 16 DAP national leaders, including Lim Kit Siang and Karpal Singh, under the ISA, during Operation Lalang.”
Teo, who got a first look at the concession agreement this morning describe it as a ‘profit guaranteed’ contract, which favours the concessionaire.
Under the agreement, the company can impose higher toll charges if traffic volume is less than what is projected, while the government will have to provide compensation if it objects.
She said the original 30-year-concession, signed in 1988, had already been extended further by 20-years, as a form of compensation.
Teo said terms in a supplementary agreement, signed in 1999, made it virtually impossible for the government take over the concession.
“Besides having to pay the cost of construction, which was just RM5.94 billion, and any outstanding loans owed by the company, the Government would be forced to pay an amount equal to future profits.”
Teo questioned the Government’s rationale in entering into the agreement in the first place.
“Why privatize the highway, when they could have built it and run it themselves.”
Meanwhile Pua also dismissed assertions by Works Minister Datuk Mohd Zin Mohamed yesterday that buying back some of the concessions, such as Lebuhraya Damansara-Puchong (LDP), would be too expensive.
He said the LDP was constructed at a cost of only RM1.327 billion but to date the company had received RM630 million in compensation for not raising toll charges and would continue to receive RM75 million annually.
“The numbers are stark and it is obvious that it would be better for the Government to buy back the concession rather than continuing to pay compensation.”
Article taken from The Malaysian Insider.