Yes that is what I read in the paper today. Here is the Star
- KEuro unit gets nod to build RM7b Banting-Taiping highway
- 64.2%-owned subsidiary West Coast Expressway Sdn Bhd (WCE)
- 316km highway between Banting, Selangor and Taiping, Perak
- estimated cost of RM7.07bil.
- approval letter from the Public Private Partnership Unit of the Prime Minister’s Department for the project
- comes with a 60-year concession.
- 224km, of the highway will be tolled, while 92km will be toll-free.
- To enhance the viability of the project, Government would extend support loan of RM2.24bil, commencing in 2013 at an interest rate of 4% a year,
- and an interest subsidy of up to 3% from commercial loans for a period of 22 years.
- toll revenue in excess of an agreed traffic volume would be shared on a 70:30 basis between the Government and WCE until the full settlement of the loan, after which the ratio would be adjusted to 30:70.
- land acquisition cost of up to RM980mil would be borne by the Government
Wow! A 60 year toll concession? I will be 112 years old when this concession comes to an end. Of course if it is further extended then I will be even older. As far as I am concerned, as a road user and taxpayer, the Goverment might just as well grant them Freehold status over the highway. Or do a "Nga Kor Ming" and give them a 999 year concession. It makes no difference.
What the dickens is the Public Private Partnership Unit? Members only ke? How do I get in?
Folks, we really have to get away from awarding 30 year concessions, 25 year concessions and such even for 'maintenance' contracts. And a 60 year concession is definitely too much.
Why should a company that services and maintains cars (sometimes by 'outsourcing' it to the Chinaman car mechanic) be given a 'service and maintenance contract' for 20 years or 30 years? Tiga tahun cukuplah. Bukan semua kereta dia service sendiri pun. If you give contracts like that, nenek tua pun boleh buat.
The 'outsourcing' mechanic can charge the nenek tua RM100. The nenek tua charges the Gomen RM200 and pockets the RM100 difference. That is not even business. The nenek tua will simply throw away her crutches and settle down permanently in a brand new wheel chair, crippled for life. With this type of easy money, any capacity she had at all will be destroyed completely.
Let me share some other thoughts on this. Any economic enterprise that the human being may undertake must have a payback period. Here is some copy paste -
"Payback period in capital budgeting refers to the period of time required for the return on an investment to "repay" the sum of the original investment. For example, a $1000 investment which returned $500 per year would have a two year payback period. The time value of money is not taken into account. Payback period intuitively measures how long something takes to "pay for itself." All else being equal, shorter payback periods are preferable to longer payback periods".
It is generally accepted that a fast moving nasi lemak stall can have a payback period of just a few hours. The kakak or makcik invests say RM100 in fish, chicken, veges, etc. Plus her RM35.00 plastic table and some plastic containers. She sells her nasi lemak from 6:30 am till 10:00 am and makes RM270.00 in sales. Her untung (gross) is RM135.00. She has paid back her entire investment in just three and a half hours. That is a very good business.
For a factory producing metal parts, furniture, textiles etc the payback period can be longer. Three years is not impossible. Seven years is possible. Going beyond 10 years is not attractive. Few businessmen want to start a factory where they have to wait 10 years to get their money back (they may not be alive in 10 years). These are all rule of thumb ok, I know there are many of you number crunchers out there.
Other economic projects like bridges, dams, airports and highways have much longer payback periods. The rate of return on infrastructure projects like roads and airports may be only 2% or 4% per year. Why? They are high cost investments - you have to pour and pour tons of concrete, cement, tar and stuff but the annual "revenues" generated are little compared to the total cost.
Infrastructure projects may take 20 years or 25 years to payback the investment and also to make a decent profit. That is why infrasructure investments are usually undertaken by Governments. The private sector has little stomach for such long term investments - unless there are massive subsidies thrown in - like in this road project.
But a 60 year concession is a tad too long especially for a toll road project - anywhere on the surface of the earth. Please note that the Government's interest rate subsidy for their commercial loans is only granted for 22 years - meaning the entire commercial loan may be repaid in 22 years or less. This also means that the payback period must also be less than 22 years. So why extend the concession for 60 years? When it was first awarded, even the much longer and super duper North South Hiway concession did not go to 30 years.
For this project the Government is giving a support loan of RM2.24 Billion at 4%. Wow. Then another interest subsidy of 3% from commercial loans for 22 years !! Cool.
1% of RM1.0 Billion is RM10.0 million. 3% of RM1.0 billion is RM30.0 Million. Katakanlah they borrow RM2.0 billion commercial loans from the banks. This means the Gomen must pay RM60.0 million a year in interest subsidy. For 22 years it will add up to about RM 1.32 Billion (plus minus).
Then the Government will also undertake the land acquisition cost - thats another RM980.0 million.
So RM2.24 Billion support loan + RM980 million land acquisition + say RM1.3 Billion interest subsidy adds up to over RM4.0 billion in Government support over 22 years. And on top of that, the public will have to pay toll for 60 years.
The project costs RM7.0 Billion - why not the Government just build the highway by itself? The Government is already committing about RM4.0 Billion worth of money. The Government can easily borrow the balance RM3.0 billion and complete the project, with no toll burden on the public. Even Khazanah Nasional can borrow RM3.0 billion over one weekend.
The Government can repay the Bond in whatever time frame that is suitable. Please comment intelligently folks. I know for a FACT too many people in Government do not understand these things too well.
24 comments:
If I am not mistaken, this project started during MB-KT time or I could be mistaken.
I am sure bloggers would dig out 'wo/men' behind this ... soon.
Or we need to wait for the Australian to tell us what went wrong here ?
Again !!!!!!!!!!
Pak Tuan,
ini pandangan saya dari perspektif yang lain.
seringkali lebuh raya bertol dianggap sebagai satu DOSA kerajaan terhadap rakyat. saya tak tahu mengapa? sedangkan hanya mereka yang menggunakannya sahaja yang perlu membayar. jadi seorang yg tinggal di Jerantut tidak perlu membayar utk pergi ke Temerloh kerana tidak ada kemudahan lebuh raya di situ.
sebagai contoh, jika ingin pergi ke PD, kita punya pilihan sama ada membayar tol utk lebuh raya Sban-PD atau menggunakan jalan negeri atau lebih dikenali sebagai jalan lama, yg juga membolehkan kita sampai ke PD.
ramai yg anggap lebuh raya adalah HAK yang perlu diberikan oleh kerajaan kepada rakyat. tetapi bukankah kerajaan telah menyediakan Jalan Persekutuan atau juga dikenali sebagai `jalan lama' sejak sekian lama kepada rakyat.
jalan lama itulah yang memberikan kita gambaran jelas mengenai keupayaan kerajaan memberikan HAK JALAN RAYA kepada rakyat.
adalah tidak adil untuk membandingkan `jalan lama' dgn jalan bertol kerana perkhidmatan jalan bertol dibayar TUNAI oleh pengguna sedangkan `jalan lama' masih bergantung kepada CUKAI PENDAPATAN dan LAIN2 CUKAI yd dikutip oleh kerajaan drpd rakyat.
dengan bayaran TUNAI itulah pengendali jalan berbayar menyelenggarakan jalan mereka dengan begitu HEBAT sekali sedangkan kerajaan tidak boleh menggunakan begitu banyak wang pembayar cukai utk menandingi kehebatan tersebut.
(nota kecil: setiap kali pelawat luar negara mahu melihat standard tandas awam di negara ini, kerajaan akan membawa mereka melihat tandas di LEBUH RAYA UTARA-SELATAN sebagai penanda aras. siapa yg bayar untuk mencantikkan tandas ini? sudah tentulah pengguna yang membayar tol).
ada pula pihak yg kata, jika mereka jd kerajaan, mereka akan mengambil alih semua lebuh raya dan dijadikan jalan PERCUMA.
aduh...enaknya janji itu, tetapi benarkah ada jalan PERCUMA?
setiap jalan raya mesti diselenggara. ia memerlukan WANG dan bukan AIR LIUR. dan bukan sedikit wang yg perlu dibelanja utk itu. satu lubang kecil memerlukan ribuan ringgit utk ditampal.
jika wang tidak dikutip dari pengguna bermakna KERAJAAN yg perlu mengeluarkan wang itu. wang kerajaan datang dari mana? dari langit!!!!!
yg paling ideal ialah, kita perlu ada lebuh raya hebat dan pada masa yang sama kita ada `jalan lama' yg masih membolehkan kita sampai ke destinasi.
melalui kaedah ini, kerajaan tidak akan terbeban utk mengenakan cukai pendapatan yg tinggi terhadap rakyat atau menaikkan segala macam cukai kerana kos menyelanggara jalan bukannya murah...
This is the thing tuan Syed.
When we at the 'lower rank' are trying so hard to buy back the people's confidence towards the government, we have all these 'epic cartoon' news in our way.
Your suggestion that the government to build the highway themselve seems doable, but how about maintenance wise?
To the gomen, enough lah with all this 'economicomic' stories. With all this decision style still going around, more 'inexplicable wealth' will be created.
Jangan la tunggu sampai hilang tongkat brader.
Tuan Syed,
Should we continue to elect the management team to manage Malaysia at the expense of the Rakyat?
Anon 3:20 Salam Tuan. Lojik itu susah kita nak terima. Kalau begitu kita juga perlu bandingkan jalan tanah merah dulu dgn jalan tar. Kerajaan juga yg buka jalan tanah (laterite road). Kemudian Kerajaan juga yg buat jalan tar. Tidak ada tol utk jalan tar - berbanding dgn jalan laterit.
Samada jalan tol atau tidak tol, samada K'jaan sendiri yg buat atau swasta yg buat - sudah pasti 100%, pengguna yg kena bayar. Rakyat negara yg kena bayar. Kita yg kena bayar.
Untuk buat jalan, pada hari ini setiap meter persegi tarmac kosnya sekitar RM30. Simen satu beg 50 kilo harganya RM17.
Samada K'jaan buat, swasta buat, jln tol atau tidak bertol - pengguna jalan / pembayar cukai / rakyat negara yg kena tanggung. One way or another kia yg bayar utk semua ini.
Sebenarnya bagi rakyat marhaen tidak ada beza - kita juga yg kena bayar. Kalau jalan tol, duit keluar secara langsung dpd kocek kita. Kalau K'jaan yg bayar - duit kita juga yg keluar tetapi secara indirect melalui bayaran cukai kpd K'jaan.
Bagi kita dari segi siapa kena bayar - it really makes no difference - kita yg bayar.
Cuma bezanya yg besar how much do we have to pay? Jika K'jaan buat - niatnya utk jaga kepentingan dan kebajikan rakyat. Jika swasta buat, niatnya utk mengaut keuntungan maksimum dpd belanja yg minimum. Itulah bezanya yg besar.
SAA
this is sweet heart deal for the parties concerned, of course the breakeven period is shorter than 60 years but they want to milk the cow while there is milk left.
This is highway robbery.
Do remember that this looting contract is awarded by a Govt and PM you consistently support. Why?
dpp
we are all of 1 Race, the Human Race
This is a very good subject to discuss. But i think we should expand this into the current highway concession that exist. How much they really made from toll collection and how much more hutang that they have to pay to either bank or gomen. I dont rally mind paying the toll, but ONLY for the sake of doing the maintenance and improvement of the highway road/facilities condition.
Nie tak, untung sampai berbilion ringgit, quality jalan tak seberapa, and as "tuan tanah" say is correct, kite jugak laa yang kene bayar. Kite jugak laa yang tanggung kesusahan atas kemudahan highway nie....
Mugkinkah hanya atau jika dan bila Melayu jatuh miskin, mungkin akan ada kesedaran pada orang Melayu untuk menolak kerajaan yang mengerjakan rakyat daripada mendahulikan rakyat.
Hi Syed,
Seriously this is not a big issue.
Lots of things can happen in 60 years.
It took 24 years for mobile phone to evolve from DynaTAC 8000x (first mobile phone) to iPhone (released in 2007). The current mobile phone now is more powerful than my computer back in 2000. Technology is growing exponentially.
Please see this youtube video. A hover car developed in Israel by Israelis.
http://www.youtube.com/watch?v=HN5jTvsx4J4&feature=fvst
It may look awkward now, but give it time, this may be our next day to day vehicle. We don't even take into account the evolving technology of aeroplane, ship and train.
While everything around the world is evolving, this 60 years concession remain static and stagnant. In the future, people don't need the highway anymore, and the nature will consume it back as nobody can afford to maintain it in the future.
Mr Sayeed,
Di Malaysia ni kaLau nak jadi kayawan kena pandai cari peluang dapat hak sebagai concessionaire.
Tengoklah Robert Kwok kayaraya dengan konsesi gulanya yg rakyat Malaysia bayar sejak tahun 60'an sehingga Felda ambil alih baru baru ni. Robert Kwok tu apa sangat pun peniaga beras aje! Jadi ikon usahawan cina beb! pada hal meniaga monopoli.
Sama jugak A.Krishna pemegang konsesi telekomunikasi dan jugak YTL (4G).
Tapi sekor Melayu atau mamak pun tak ada yg jadi concessionaire.
Dulu ada Tajudin Ramli(Celcom), depa nyahkan nya, ada halim saad(PLUS) depa rampas haknya. Sekarang mungkin Syed Mokhtar tapi saya kurang pasti konsesi apa.
Kenapa orang cina india aje yg dapat konsesi bertahun tahun sampai jadi trillionaire.
Aliran tunai Konsesi tu pulak di biayai oleh rakyat malaysia yang kebanyakan nya orang melayu yang makan gaji. Kenapa pegawai pegawai melayu biarkan perkara ni berleluasa dulu dulu.
Cara puak puak ni uruskan konsesi tu nenek tua yg hang kaitkan pun boleh jadi kaya raya sayeed.Macam Robert Kwok tu bertahun tahun pegang konsesi gula yang orang melayu suka dan sampai dia buat hartalah di negara Cina can luar negara. Betul lah puak ni "Thick face black heart"
Mungkin K.Europlus serupa dan sesiapa yang bijaksana bagi kelulusan tu (mungkin pegawai pegawai melayu) memang ada udang di sebalik batu.
Tak pulak puak puak pembangkang melalakkan hal ni. Kenapa Lim kit siang tak melenting macam kes UEM dulu dulu. Mungkin ynag kemudikan konsesi ni puak dan bangsa dia kot.
Syed: This project started at the time of Mike Tyson. He gave the West Coast Expressway to Chan Ah Chye, who then proceeded to sell parts of it, at premiums of course, to various parties. No one wanted it, the banks refused to finance it, and the deal died several times. The deal is not doable because the ridership numbers are inflated by ****** while the construction costs are inflated. Whether it is 60 years or 30 years, it will be a government bailout exercise. Trust me, I know the inside story, and the taxpayers will ultimately have to bear the burden of the bailout. Godfather
I may not know about the whole deal, but I think I know a thing or two about highway concession. Among other things considered is the multiplier effect or spin-off economy that will be generated along the highways, i.e. land value appreciates and such.
Before I go further, don't label me as government's cybertrooper. I just happen to have friends working in PPPU or also known as UKAS.
Land acquisition has always been by government under the 1960 land act.
The cost factor takes into account the cash flow projection of the business model. Things like highway maintenance, and also the construction cost per km that averages from RM15 mil to 20 mil. Maintenance cost also factor in inflation rate which, you as businessman also know, increases every year.
I was informed too, that government cannot function like a business entity where it may only consider the profitability of the highway. They have to look at other factors too like how the locals can benefit from the highway.
Among other things considered is that, it wouldn't be fair for certain group of people who reside, say, in west coast of the peninsular to enjoy dual-lane high grade free highway when they are not the only one who pay taxes.
Of course, Syed, we can argue on and on about government's excuse. Your argument may have some merit, and theirs may have it too.
Just like you, I too want to know how does it end up till 60 years. I did a few research and found out that many recently concluded highway concession (from 15 years ago until now) last around 30 years. These are shorter inter-city highways. PLUS contract was negotiated and built some 20 years ago. PLUS is an inter-state highway. Banting-Taiping shares similar traits as PLUS.
How they arrived at that 60 years, only the parties involved can explain. The thing is, are they willing to share their cash flow and traffic projection?
Every time you take the highway to some destination , you always say " Thank you AYAHANDA Tun mahathir for building the roads "
What you fail to understand is that we the rakyat will be paying toll till 2050 and beyond on Plus highwyas.
Total cost of PLUS - RM 10 Billion
Total collection of toll revenue - Annual RM 2 Billion x 40 years = RM 80 BILLION ( Not adjusted for inflation )
PLUS just raised RM 36 Billion in a sukuk offering recently
So due to the great genius of your God like Ayahanda Tun Mahathir the Rakyat are being majorly ripped off for the next forty years.
Look at Thailand . They have an amazing world class highway around the whole country and it is FREE.
Its time for you Tuan Syed to take a good look at yourself in the mirror and stop eulogising about how great your Ayanhanda Tun Mahathir is. Tun Mahathir is a thief and criminal who should be charged in court for teh massive corruption pepetrated on all Malaysians
I have lost all respect for you Tuan Syed. You are another lap dog for Tun Mahathir the man who single handedly has destroyed Malaysia for the next ten generations.
Anon 9:37 my bank helped finance the NS Hiway too. I went on site visits with my colleague who was handling the file.
It was a good deal for the banks as well. The concession was NOT for 60 years. The original cost was RM2.0 billion - in the early 90s.
I am well aware of all the sukuk and fund raising and shifting assets that is going on now. Dont twist things around and blame Tun Dr Mahathir. He retired in 2003 - nine years ago.
Dont forget - this is an Islamic country and it was a Third World country. It is also a multi racial ctry with too many diferences and divergences.
Those are all major, major handicaps. Yet, Dr M was able to mould a modern nation with what he had. You can look at other Islamic countries and other Third World countries. Few have done better.
We were and still are NOT a nation of very clever people. I would like to say other things, but it wont be polite. Dr Mahathir took all these - the clever, the not so clever, the duds, the spuds, the sparks and the stars and used us all to build this nation into something quite unimaginable in a short space of 22 years.
The Singapore LRT had a major crisis recently. Our Putra trains are running driverless for almost 14 years now. There have been no major hitches.
Dr M has not destroyed the nation for 10 generations. He took whatever he could find in this country (the duds and all, including ppl like you) and created our modern Malaysia. That by itself is a great achievement.
When foreigners (esp Westerners) see modern M'sia and then they see us they wonder 'You guys built all this by yourself?' No we did not. We had Dr Mahathir to guide us.
During the Asian Financial Crisis, Dr M steered us thru a great storm with minimal casualty. In other countries ppl were committing suicide. Some countries have not fully recovered until today.
For us now, there is no turning back. But do not be so sure about our future. Dr M is no more in charge. He is retired nine years already.
You dont know what kind of dungguism will appear on the horizon. You have no other choice - you will have to grow up. Dr M will not be here to save you.
SAA
Anon 9:37 my bank helped finance the NS Hiway too. I went on site visits with my colleague who was handling the file.
It was a good deal for the banks as well. The concession was NOT for 60 years. The original cost was RM2.0 billion - in the early 90s.
I am well aware of all the sukuk and fund raising and shifting assets that is going on now. Dont twist things around and blame Tun Dr Mahathir. He retired in 2003 - nine years ago.
Dont forget - this is an Islamic country and it was a Third World country. It is also a multi racial ctry with too many diferences and divergences.
Those are all major, major handicaps. Yet, Dr M was able to mould a modern nation with what he had. You can look at other Islamic countries and other Third World countries. Few have done better.
We were and still are NOT a nation of very clever people. I would like to say other things, but it wont be polite. Dr Mahathir took all these - the clever, the not so clever, the duds, the spuds, the sparks and the stars and used us all to build this nation into something quite unimaginable in a short space of 22 years.
The Singapore LRT had a major crisis recently. Our Putra trains are running driverless for almost 14 years now. There have been no major hitches.
Dr M has not destroyed the nation for 10 generations. He took whatever he could find in this country (the duds and all, including ppl like you) and created our modern Malaysia. That by itself is a great achievement.
When foreigners (esp Westerners) see modern M'sia and then they see us they wonder 'You guys built all this by yourself?' No we did not. We had Dr Mahathir to guide us.
During the Asian Financial Crisis, Dr M steered us thru a great storm with minimal casualty. In other countries ppl were committing suicide. Some countries have not fully recovered until today.
For us now, there is no turning back. But do not be so sure about our future. Dr M is no more in charge. He is retired nine years already.
You dont know what kind of dungguism will appear on the horizon. You have no other choice - you will have to grow up. Dr M will not be here to save you.
SAA
Adakah ini Ali Hamsa punya angkara?
I agree with you... there are some in the Government who does not understand these things. Just follow previous precedents blindly to make their judgement.
For me this is a blatant abuse of the PPI concept. We see the success of NS Highway and try to emulate the success. However unscrupulous people use this success for their own advantage and sold this concept to the dungus in government who follow blindly without thinking of values and benefits.
I'm surprised that only you are talking about this in the blogsphere... where are your other comrades? Aren't they aware that this is also a form of corruption?
U know why its 60years syed?
There are pockets which will benefiit for at least another generation.
The malays who thought of this project are not business people but are merely those wanting to make money at the easiest opportunity.
Federal highway should not be tolled.
Ldp should not be tolled.
So who's pocket is going to be full.
The malay politicians, always looking for some shit trip to screw others to make money.
All this proctection is being abused.
And to anon 3:20,
Did u take a bad acid trip or something? Explain ldp and federal highway.
U add lanes and u charge people? Werent those roads already there?
Tuan Syed,
If there was a transparent and competitive toll concession selection and award process that identified who the beneficial owners are, we would go a long way towards protecting the rakyat's interest, avoiding conflicts of interest and not providing fodder to the (bankrupt) opposition who thrive on the slightest hint of scandal. It also would limit us being exposed to morons like Anon 9:37 PM...May the Almighty help us if the Opposition ever extends its role in governance...its ranks are filled with the stupidity of folks like Anon 9:37 PM.
Dear Anon 9:37 PM,if you've ever tried to manage a group of people with diverse and opposing interests you would have realized how hard it is to achieve and keep alignment. No one needs to place YAB Tun Dr M on a pedestal, his record speaks for itself. God only knows the underlying issues and constraints and trade-offs he had to face when making his choices. No one is perfect...travel the world, see the pathetic state the majority of the countries are in. Sure we could have done better...but very, very, very few leaders have done what Tun Dr M has. We owe him a debt of gratitude.
Folks - the barbarians are at the gates...don't let them in. There is no such thing as the "Malaysia for Malaysians" that they claim. These are the folks that quietly claim that this land never belonged to anyone...a land without people, disparate kingdoms, paying tribute to Emperors in China...and we have folks abetting this so they get to Putrajaya...puppets on the seat of government. Please unite, get ready for the pilihan raya, influence our leaders to make the right choices, do something, every day, even in a small way. Never ever give up...it matters.
1. The community that would be mostly affected by land acquisition is Melayus landowners. As said, the Govt will responsible to pay for land acquisition. Why make the govt the party responsible ? Because govt able to pay peanuts to Melayu villagers landowners. Siapa miskin dulu ?
2. Later, the orang kampung Melayus will have to pay toll to use the highway, which the land previously belong to them. The money govt pay to them is used later to pay toll over the years.
Siapa pandai ? Govt.
Siapa rugi ? Orang Melayu.
Siapa untung ? Chinese businessmen.
Wonder why PM Najib didnt make this anouncement, surely this is ETP thingy...or they just testing the market and if people object PM Najib come out and deny ...hmm! This is the government of today
BEFORE THE CONTRACT EXPIRED, I MYSELF ALREADY EXPIRED LOH !
FIRST IN THE WORLD TO HAVE 60 YEAR CONTRACT !!
NEXT TIME CHANGE IT TO ONE CENTURY CONTRACT !!
Dear Sayeed,
In Malaysia, the sons and some cronies would had commited suicide if not because the father used our epf monies and the petronas monies to rescue them.
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