By : Tony Pua
Earlier this week, MCA president Datuk Seri Wee Ka Siong alleged that Employees Provident Fund (EPF) contributors will bear most of the cost of the cut in PLUS toll fares in the form of low dividends. He argued that Khazanah Nasional Berhad and EPF, the toll operators’ only shareholders, will post lower dividends because the 18 per cent reduction announced by the government would hit profits.
I can only tell the MCA President that just because Barisan Nasional (BN) was not able to, or does not know how to restructure the toll for the benefit of the people, it doesn’t mean that Pakatan Harapan (PH) doesn’t.
The Cabinet has approved the restructuring plan precisely because it comprises a win-win-win formula, which I had emphasized in my earlier statements:
(i) highway users will be able to enjoy 18% discount on the current toll rates for the remainder of the concession without any increase in future toll rates; this contrasts against BN restructuring schemes where the concessions are extended but toll rates continue to increase between 5% to 10% every 3 years;
(ii) the Government will no longer be required to compensate PLUS for freezing or reducing toll rates, saving at least RM26 billion which can be channelled towards Malaysian all over the country, including Sabah and Sarawak, in terms of welfare and development programmes; and
(iii) most importantly, the equity value of PLUS shareholders – Khazanah and EPF are fully protected in the restructured deal. 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. This will ensure that the dividends to be paid by EPF to its contributors will not be impaired by the PLUS restructuring exercise.
Datuk Seri Wee Ka Siong may call me a liar and may not believe my earlier statements. But let me challenge him to publicly apologise to the PH government for making false accusations against us, when the respective parties disclose the details of the restructuring scheme in due course. Will the MCA President have the honesty to do so when the time comes?
Or will he twist and turn like the former Prime Minister Dato’ Seri Najib Razak in defending BN’s failed promises to reduce toll rates?
Najib tried to score political points by arguing that the total toll paid over the new proposed extended concession will 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, when the person will spend RM12,464 under the new scheme.
He had tried to deceive Malaysians by failing to incorporate two key points.
Firstly, he failed to take into account that the existing toll rates will be increased by 5% every 3 years until the end of the concession period, which means that the same person will have to fork out RM9,700, and not RM7,200.
Secondly, he equated the value of RM1 in 2058 to be the same as the value of RM1 today in 2020. Perhaps then, Najib could lend me RM10,000 today, and I will pay him back exactly RM10,000 back in 2058?
Any comparison of value across different time periods 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 the 20 years.
Therefore, I’d like to call on these BN leaders who have failed the rakyat in creating extortionary toll concessions in Malaysia to stop trying to spin their failure by attacking the PH government with bad mathematics and false accusations.
The PH government is committed towards fulfilling our manifesto promises and have successfully reduced the cost of living for ordinary Malaysians, without burdening the government with higher debt and ensuring that our economy continues to get stronger with a clean, prudent and responsible government.
Tony Pua is Political Secretary to Minister of Finance and Member of Parliament for Damansara. The views expressed here are those of the author/contributor and do not necessarily represent the views of Buletin TTKM – Editor