More news on rail network developments from the tabling of Budget 2024 today. The upcoming LRT project for the state of Penang has been estimated to cost in the region of RM10 billion, according to plans by the Penang state government through a PPP (public-private partnership).
The LRT project is part of the Penang Transport Master Plan (PTMP) that will connect Komtar and Bayan Lepas with 23 stations along the 26.8 km line. The rail line project was also revealed in 2016 to include a Georgetown-Butterworth LRT line that will connect the island with the mainland, along with a tram system in Georgetown as well as a few monorail lines.
In May, transport minister Anthony Loke said that the federal government has made a decision in principle to implement the Penang LRT project.
Yes, it’s happening. Malaysian finance minister and prime minister Datuk Seri Anwar Ibrahim briefly mentioned in the tabling of Budget 2024 today that the federal government will start using electric vehicles (EVs) as official cars. Vellfire to Tesla – would you consider that an upgrade or downgrade?
It was not explicitly explained whether this would only apply to sitting ministers or to lower government positions as well, but it would be safe to assume it will start from the top down. Currently, Malaysian ministers are provided the use of Toyota Vellfires as official cars, which will presumably be swapped for new Teslas.
It’s also rather fortunate that there is no longer a restriction limiting the use of strictly locally-assembled or CKD models as official cars, as that would mean our PM will soon be rolling around in a brand new Mercedes-Benz EQS!
Now, the number of stations has gone back up to 25, with the government announcing that it has agreed to continue the construction of five of the six LRT3 stations that were previously deferred.
The stations that have been reinstated to the route are Tropicana (previously Lien Hoe), Temasya, Raja Muda (Sirim), Bukit Raja and Bandar Botanik. The sixth location, a planned 2 km tunnel, including an underground station at Persiaran Hishamuddin in Shah Alam, remains cancelled.
The construction of these five stations is estimated to cost RM5.3 billion, as indicated by prime minister Datuk Seri Anwar Ibrahim in his Budget 2024 speech earlier this evening.
In 2018, the RM31.65 billion project saw its costs reduced by almost half (to RM16.63 billion) with the dropping of the six stations, among other things. Back then, the transport ministry stated that the cost reduction would have no impact on performance and capability.
The construction and maintenance of roads in Malaysia has been given an allocation in Budget 2024, as announced by prime minister and finance minister Datuk Seri Anwar Ibrahim.
A sum of RM2.8 billion has been allocated for the maintenance of federal roads and bridges, of which RM300 million is allocated for G1 to G4 contractors. State governments should utilise the RM5.4 billion that has been allocated for the Malaysian Road Records Information System (MARRIS) to be ensure that state roads are in the best possible condition for the people’s benefit, Anwar said.
Meanwhile, a sum of RM1.63 billion has been allocated for the building and upgrading of rural roads, while RM134 million has been allocated for the installation of some 60,000 street lamps, as well as for the maintenance of more than 500,000 existing street lamps.
There will also be RM57 million allocated across 115 projects, of which 54 projects will be for the construction and upgrading of bridges in the country. As of August, there have been 4,100 roads with potholes that have been identified and repaired.
For lighting, RM100 million has been allocated for the maintenance of street lights including the replacement of existing lights with LED units that will save up to 60% on electricity, while RM50 million have been earmarked for the same purpose for areas under local authorities across the country.
As part of Malaysia’s Budget 2024, the government will continue to bear the cost of the B2 motorcycle licence test fee for 40,000 youth from underprivileged families under the MyLesen scheme. The licence test fee cost for e-hailing and taxi licences, dubbed MyPSV, will also be borne by the government under this incentive to help the B40 group.
A part of government income generated from the issuance of special number plates will be allocated for this, amongst other measures to reduce the financial burden of those in the B40 category. With an eye to road safety, Prime Minister Datuk Seri Anwar Ibrahim also said 100,000 helmets will be given to under privileged families.
The helmets will include those in child sizes to help reduce the injury rate amongst Malaysian motorcyclists. In Budget 2023, Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz announced the abolition of the Public Service Vehicle (PSV) and B2 motorcycle licence test fee.
More EV update from Budget 2024. Malaysian finance minister and prime minister Datuk Seri Anwar Ibrahim announced that Prasarana Malaysia will acquire 150 electric buses and build three bus depots to support the LRT3 project, at a cost of RM600 million.
Interestingly, just this very week, transport minister Anthony Loke told the Dewan Rakyat that electric buses are “too expensive” for the Malaysian government. Costs for purchasing EV buses are double that of conventional buses, and that “if it were possible, we would want all bus fleets to be EV bus fleets,” he said.
Also, Rapid Bus (a subsidiary of Prasarana) recently announced its target of having 30% of its fleet being fully electric by 2030, onwards to 100% EV buses by 2050. The company aims to start with an EV bus fleet of 4% for 2024, and up to 100 units by 2026.
How the 150 new electric buses announced in Budget 2024 will fit this plan remains to be seen.
In an effort to improve the public fast charging infrastructure in the country, prime minster Datuk Seri Anwar Ibrahim said that leading companies are set to invest more than RM170 million to install 180 EV charging stations. In his Budget 2024 speech earlier today, he stated that the companies are Tenaga Nasional (TNB), Gentari and Tesla Malaysia.
No details on deployment timeframe or where they will be set up, but it is almost certain that the PM is talking about DC fast charging locations, based on the cost involved in the total set-up. Right now, there are 1,246 operational public charging points in the country, of which 239 are DC fast chargers.
At present, TNB has four DC charging points in operation, but has indicated that it plans to have 37 such locations in place by 2025. Meanwhile, Gentari presently has 34 DC charging points in operation, part of its network of more than 170 chargers across the country.
As for Tesla, the company is expanding its Supercharger charging network, which kicked off with the introduction of the Pavilion KL site. Back in July, a total of 12 locations were listed, including the recently launched Supercharger site at Sunway Big Box in Iskandar Puteri, Johor Bahru.
The government of Malaysia has announced that service tax will increase from the 6% rate at present to 8% next year. This will apply to vehicle servicing in terms of labour charges, which will will increase as a result, but not the parts used in the course of servicing.
As such, the increase to 8% service tax applied to labour charges will likely result in higher overall vehicle servicing costs when the new rate applies next year.
While the increase in service tax will be applied in a broader scope, it will however not be applied to services for food and beverage, telecommunications, vehicle parking and logistics, as announced by finance minister and prime minister Datuk Seri Anwar Ibrahim.
A RM2,400 rebate under the Electric Motorcycle Usage Incentive Scheme will be given under the 2024 Budget. This was announced by prime minister Datuk Seri Anwar Ibrahim in his budget speech this evening.
The incentive is intended for those earning RM120,000 and below annually. This is a government aim to promote electric motorcycles among the B40 income group as part of Budget 2024.
In Malaysia, the e-bike market is centered around urban scooters in the RM10,000 range such as the Yinson GreenTech RydeEV using the Oyika battery swapping system with leasing plans starting from RM250 per month. Other offerings include Blueshark with prices starting from RM7,190 and TailG Ebixon priced between RM9,000 and RM15,000.
Additionally, RM600 million will be allocated to construct three bus depots and purchase 150 electric buses. More good news for those in the Malaysian electric vehicle (EV) eco-system as the tax exemption of up to RM2,500 for expenses on EV charging for four years and tax reduction for EV rentals for two years will continue.
The government has announced that it will introduce a targeted diesel subsidy in phases. This was announced by prime minister Datuk Seri Anwar Ibrahim in his Budget 2024 speech this evening.
According to the PM, subsidised diesel prices will continue to be enjoyed by selected users such as goods transport and logistics companies, while other users will be charged a higher price. With that approach, the government will be able to reduce subsidy leakage and at the same time, reduce the impact on the price of goods for the people.
Anwar said that the current subsidised diesel price, which is set at RM2.15 per litre, would be RM3.75 per litre at market price. As such, the government is bearing RM1.60 for each litre of diesel sold, or around RM1.5 billion ringgit in total.
He said that according to consumption data, subsidised diesel sales in Malaysian have increased by up to 40% since 2019, while the number of vehicles using diesel only increased by less than 3%, leading to the possibility of serious smuggling activities due to the low price of diesel in the country.
No timeframe was mentioned as to when the targeted subsidy would be introduced, but the government has previously stated that it would start doing so with diesel, and it would do so next year.
With private diesel users expected to pay up to RM3.75 per litre for unsubsidised diesel, the days of pickup trucks being lifestyle vehicles (as evident by model launches such as the Ford Ranger Raptor Diesel and Toyota Hilux GR Sport) might just be over, with owners likely to shift over to petrol SUVs instead.
Malaysia’s Budget 2024 (Bajet 2024) is being tabled by finance minister and prime minister Datuk Seri Anwar Ibrahim in parliament. As with past editions of the Budget, we will be monitoring his speech for any matters related to the automotive and transport sectors.
Among the key talking points this year has been the targeted subsidy programme, which the government expects to implement early next year, with its timeframe based on the scheduled launch of the Pangkalan Data Utama (PADU) socio-economic database this November.
The same, too, was granted for locally-assembled (CKD) EVs. Originally set to run until December 31, 2025, it has been extended by two years to December 31, 2027.
In addition to automotive sector-related points, we will also be watching for news related to public transport and infrastructure. Live updates will be posted here, so stay tuned.
LIVE UPDATE POINTS
Diesel subsidy will move from blanket to targeted, in phases
Move is to reduce serious leakage, smuggling
Current market price is RM3.75 per litre, subsidy is RM1.60 per litre
Goods vehicles/logistics to continue enjoying subsidy, others to pay higher price
Malaysia’s Budget 2024 will be tabled this Friday, October 13 at 4pm by finance minister and prime minister Datuk Seri Anwar Ibrahim, and as with previous editions of the Budget, we will be monitoring his speech for any matters related to the automotive and transport sector.
The retabled Budget 2023 – which followed the original tabling of Budget 2023 by the previous administration – notably extended the excise duty and sales tax exemption for locally assembled (CKD) EVs until December 31, 2027, or two years further on from the original deadline that was December 31, 2025.
This also applied to the import tax exemption for components used in the local assembly of EVs in Malaysia, which similarly has been extended by two years to December 31, 2027 from its original end-2025 deadline.
Carried over in the retabled Budget 2023 from the original tabling the year before is the 100% income tax exemption for the years of assessment from 2023 to 2032, for manufacturers of EV charging equipment. These manufacturers will also be offered 100% investment tax allowance (Elaun Cukai Pelaburan) for a period of five years.
Also announced for the retabled Budget 2023 were the absorbing of license test costs, the continuation of the My50 public transport subscription passes, road network projects, maintaining of electricity tariffs (for no additional cost impact for charging an EV at home), road lighting infrastructure, reduction in MRT3 development cost, and airport upgrades.
