With the sharp incline of highway toll rates due to take effect this Thursday, analysts from Hong Leong Investment Bank (HLIB) have weighed in on the matter, suggesting that the latest round of toll hikes will have little impact on the earnings of most highway concessionaires.
In a report by The Edge Markets, it’s said that highway concessionaires involved were already on the receiving end of their stipulated rates in accordance with the “rates contained in the concession agreements, via compensation from the government.”
This is based on a note provided by HLIB, which says, “in essence, the hikes merely transfer the burden of the toll, which was previously shared between motorists and the government, solely to the motorists.
“Cash flows of concessionaires will nonetheless be eased as they no longer have to wait for compensation to be paid,” the HLIB note concluded.
That analysts also reiterated that it has been seven years since the last major toll hike, and that it was only last year that the government had paid RM559 million to compensate highway concessionaires in an attempt to avoid a rate hike as determined by the concession agreement. This time around, it looks like the balance of burden is being passed on to motorists instead.
With that being the case, HLIB also speculates that with the recent toll rate hike, traffic volume in the effected areas are expected to decrease, with fewer motorist expected to willingly pay the considerable prices.
The HLIB note elaborated on that point, saying that, “based on the experience from past hikes, our simple back of the envelop calculation suggests that every 10% toll rate increase would result to a 1% drop in traffic volume.
“However, given that the hike this time around is more widespread, the price elasticity of motorists could be higher,” it concluded.
Yesterday and today, we brought you widespread coverage of the 17 highways that will endure new toll rates this Thursday, with increases ranging from RM0.20 to RM2.30.
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So let me get this straight.
Govt enters into a one-sided unfavourable contract with Highway Concessionaires, which is protected by the Official Secrets Acts (dont ask me why).
But its the Rakyat that have to bear the burden?
Thanks BN!
“But its the Rakyat that have to bear the burden?”
Unfortunately the answer is YES!
They will start to promise to reduce the rate during the next G.E. campaign in 3 years time to fool Klang Valley folks once again loh.
Kerajaan BN sayang anda, toll naik semua salah LGE
So the full package is here:
1. Get a Proton, support local part providers (some called cronies)
2. Send to garage often for repair
3. Pump often for short journey
4. Break down often waiting for tow truck
5. Pass through toll and pay expensive rate
End of the day: You contribute so much money to Malaysia economy, bravo!
The funny thing is when you check some of the operator, mostly it directly or indirectly owned by gov.
Prolintas – PNB
PLUS – UEM – Khazanah
KESAS – State, PNB
Easy, more money to gov also
they were analysts who dont drive..
Wondering if there is any thorough study before implementation. Cost of living goes up with GST and value of Ringgit shrunken. Government should reduce income tax with introduction of GST. Increasing toll means pushing the cost of transportation higher where it will eventually transfer the cost to consumers. No better alternative public transport. Yet, LRT fares are going up too! That means some of those who can’t meet ends in KL may have to move out to another state! Pushing some to its limit may turn to crime for quick gain. More snatch thieves, robberies, kidnapping, frauds, etc.
Meanwhile our resident policeman only busy as keyboard warrior or minum kopi.
Higher income tax soon?
all naik.. only rain turun..
So the BN analysts said it was ok? Illegitimate govt.
It is called BIG DAYLIGHT ROBBERY.After GE 2013,you still prefer to get ”DELAYED ROBBERY IN 2015?”
SHAMBOLIC,RECALCITRANT…..
IF NOTHING IS DONE,Bolehland will become another Zimbabwe.
Higher toll rates, less idiots on the road. Also those who can only afford to ride motorcycles but use cars for glamour reasons will think twice now. What’s the point if you cannot afford to own the car, pump minimal petrol and then cause major traffic crawl when your car dies in the middle of the road? Next up: raise petrol prices!
We should consider abolishing the road tax system for KL, since most KL ppl already use tolled roads daily. it should be one or the other. After all, most roads cmaintenance come under the purview of Dewan bandar or some local council. so why are we payinf multiple times for the use of roads ? In many countries with the exception of Singapore, tolled roads are rarely used in cities. its used more for intercity express.
If we approach this logically and methodically we can get some answers. Please ask your MP why this is so. If not dont vote for him or her !!!!!