‘Stop lopsided toll agreements’

(NST) The government should not use traffic volume and bank loan guarantees if it decides to privatise the management of the second Penang Bridge.

Chief Minister Lim Guan Eng said the guarantees should not be incorporated into an agreement with any concessionaire.

Commenting on the agreement for the existing bridge with Mekar Idaman Sdn Bhd, he said it was a lopsided agreement, which benefited the company.

According to the agreement, Mekar Idaman can increase the toll rate by two per cent annually after five years of the deal being signed.

If the government refuses to approve an increment in toll rates, it has to compensate Mekar Idaman for the loss based on estimated traffic flow on the bridge.
"This is why there should be no profit guarantees in future concessionaire agreements.

"The government should be the authority setting the toll rates and they (the rates) must be fair," he said after revealing parts of the Mekar Idaman concessionaire agreement, which was made public for the first time on Monday.

The agreement, signed in September 1993, ends in May 2018.

Lim also urged the government to consider buying over highways such as the North-South Expressway and the first Penang Bridge from the present concessionaires.

"What is the logic of only one company benefiting compared with 27 million Malaysians at large?

"It is better for the government to earn the profits."