The most lop-sided toll agreement in the world
Eric See-To
Another item in the Penang Tunnel project that raises eyebrows is the toll concession agreement granted by the Penang State Govt to the Tunnel SPV which allows the SPV to collect toll for 30 years.
In a normal toll concession agreement, the concession company would have to finance the construction the infrastructure project by itself and then collect tolls to recover its investment and make a profit.
However in the case of the Penang Tunnel agreement, the Penang Govt is fully paying the SPV for the construction cost of the Tunnel but they still allow the company to collect tolls for 30 years – which would make this the most lop-sided toll agreement in the world.
The SPV would be able to make money from the construction of the Tunnel, make money by developing the prime seaside state land given as payment and make even more money collecting tolls for 30 years.
Essentially – make money, make more money and make even more money.
Taking aside Pakatan’s so-called promise that they are against tolls, the Penang Chief Minister’s answer why the SPV is still allowed to collect 30 years toll despite being fully paid to construct the tunnel is mystifying.
“He said if there were no toll charges, everyone would use the tunnel instead of the two Penang bridges, where toll was collected.
“The Federal Government will go crazy if we do not collect toll. We will be accused of sabotaging the bridges and might even be taken to court.”
If you think Lim Guan Eng was joking, here is his official reason written in his open letter to the Consumer Association of Penang.
“The state government agreed to a toll for only 30 years as we did not want to go to a state of war with the Federal government by not charging toll, as then the Federal government will have legal grounds to stop the tunnel project by claiming that we are deliberately sabotaging the toll collection for the 2nd Bridge. That is the reason why the state government has fixed the toll rate for the tunnel at the same rate as the 2nd Bridge.”
http://www.malaysiakini.com/letters/224533
This is like saying that a Private Hospital will have a right to sue a Public hospital for giving free treatment.
There is nothing to stop a govt from giving a cheaper or free alternative to existing toll roads. The Penang CM’s reason makes no sense at all.
In early 2016 under heavy pressure from our BNSC Director Datuk Seri Abdul Rahman Dahlan, the Penang Chief Minister then said they will consider changing the Tunnel to a bridge without toll.
However, this effort is half-hearted at best as he simply wrote a 2 page letter to the Works Minister “asking for approval” without any supporting documents and refused to submit any supporting documents despite being repeatedly asked for more than 1 1/2 years.
