Tony Pua insists motorists will benefit from 18% discount in toll charges for next 38 years

(FMT) – DAP’s Tony Pua has hit out at MCA president Wee Ka Siong and former prime minister Najib Razak over their claims on the government’s decision regarding PLUS Malaysia Bhd’s tolls.

The government has decided against selling PLUS to the private sector and it will remain with its two owners — Khazanah, which owns 51% through UEM Group, and the Employees Provident Fund (EPF), which owns 49%.

The company’s concession, which was supposed to end in 2038, will be extended by 20 years to 2058. Toll rates will be reduced by 18% from this year, with no hikes for the next 38 years.

Wee, Pua said, had claimed that EPF contributors will bear most of the costs for the 18% toll discounts in the form of low dividends.

But Pua said the government’s plan was a win-win formula as highway users would enjoy an 18% discount on current rates for the remainder of the concession and Putrajaya would no longer be required to compensate PLUS for freezing toll rates.

This, he said, would save the government at least RM26 billion which could be channelled to welfare and development programmes.

“Most importantly, the equity value of PLUS shareholders, Khazanah Nasional and EPF are fully protected in the restructured deal,” said Pua, who is Finance Minister Lim Guan Eng’s political secretary.

“This will be achieved via the issuance of debt securities to Khazanah and EPF by PLUS, which will be financed via the discounted toll collections.”

Pua said this would ensure that the dividends to be paid by EPF to its contributors would not be affected by the PLUS restructuring exercise.

Pua also challenged Wee to publicly apologise to the PH government for making false accusations which he said would be evident when the respective parties disclose the details of the restructuring scheme in due course.

He then trained his guns on Najib over the former finance minister’s claim that the total toll paid over the new proposed extended concession would be more than the scheme which he structured in 2011.

“He argued that a person who spends RM400 per year on toll will spend RM7,200 for the lifetime of the existing concession as compared to RM12,464 under the new scheme.

“He had tried to deceive Malaysians by failing to incorporate two key points.”

Pua said Najib had failed to take into account that existing toll rates would be increased by 5% every three years until the end of the concession period, which meant that the same person would have to fork out RM9,700, and not RM7,200.

Secondly, Pua said, Najib equated the value of RM1 in 2058 to be the same as the value of RM1 today in 2020.

Any comparison of value across different time periods, Pua said, must take into account the net present value (NPV) and not the nominal value.

“Using a 5% interest rate as a benchmark, the same toll user will pay a NPV total of RM5,581 under the new scheme, compared to RM6,010 under the existing concession agreement.

“This means that Malaysian highway users still pay 7.1% less, even if the toll concession has been extended by 20 years.”

Pua called on Wee and Najib to stop spinning the issue and attacking the PH government with “bad mathematics and false accusations”.