Wednesday, January 14, 2009

Concession agreements – what happened to motorists' interests?

Whenever a new toll highway was announced, the BN government promised motorists would get smoother rides and faster travel times in return for paying toll.

These promises were never codified in the concession agreements. All the concessions we have viewed so far do not contain any service level agreements. The concession agreements essentially give the concession-holders the right to collect toll in return for constructing the highways.

But what about the main purpose of these highways: convenience for motorists? There are no service level agreements for the concession holders to comply with. So you and I are now stuck in traffic jams, pay toll and get stuck in jams again, and there appears to be nothing we can do.

We paid the toll. The toll fee is supposed to buy us a product - smooth travel. The concession-holders did not deliver the product (smooth travel) to us, even though we have paid. Quite clearly this is an injustice. The BN government should step in to redress this state-of-affairs.

Unfortunately there is no scope within the concession agreements to demand compensation. But the government can apply moral-suasion and appeal to the concessionaires to behave as good corporate citizens. Here's the logic:

1)It is clear traffic on the toll highways is well above expectations. The number of cars using the highways far exceeds the concessionaires projections. The highways were not built to carry so much traffic. That's why we have to endure traffic jams.
2)Because the traffic is above expectations, the toll companies must be collecting far more revenue than they expected.
3)This excess revenue does not “belong” to the toll companies. They have not provided the expected service – smooth traffic flows – in return to motorists.
4)This excess revenue should either be: (a) returned to motorists in the form of toll discounts (lower toll rates x above-expected traffic flows = same revenue as projected by the concessionaires) or my preferred alternative: (b) collected by the government and used to improve public transport. Of course, if (b) is done, there must be transparency in the total funds collected and how they are actually used.

Do you agree? If you do, write to the Works Minister and and make the above suggestions.


Anonymous said...

There is always traffic JAM after the toll booths (LDP/Sprint) during peak hours.

Pay and still get STUCK...

Anonymous said...

Not all highways are profitable, SILK or the Kajang Highway for one has been having difficulties paying its bond interest. It was not difficult to have predicted its destiny given the lack of catchment areas along SILK. But why did private company still went ahead to build such a road? It was the initial construction profit that they are after. Who cares about motorists or bond holders? Not the concession holders, not the government. We only have ourselves to help us. Do whatever you can, protest, plan and time your route, make noise, whatever...

Sans said...

2 interesting articles I have come across.

Article 1

The article above (last paragraph on the 2nd has more details), indicates there is a network of companies in Malaysia aiding Iran to get banned US technology.

Article 2

In a rather longish article in the New York Times, I came across a reference to a Malaysia company, the Malaysian Smelting Co. this is a company listed on the KLSE but it looks like the majority shareholders are Singaporeans.

The relevant page is below.

on the 2nd last paragraph on this page, it implies that Malaysian Smelting Company is buying Tin from international brokers who source from the conflict zone in Congo.

the exact extract is :-

The flights land in Goma, the provincial capital, where other middlemen buy and process the ore for export. Alexis Makabuza’s Global Mining Company is one of these buyers. Amid the sorting and cleaning equipment of his rudimentary processing plant sit dozens of barrels of tin ore. On each is stenciled the address of Malaysian Smelting Company Berhad, a major tin smelter. Mr. Makabuza said he sold to the company via a minerals broker.

Further reference to Malaysian companies buying tin from warlords in the Congo is here from the BBC

The extract from the BBC article is below :-

Located predominantly in India, China, Malaysia and Thailand, these smelters sell tin to component manufacturers.

So while Malaysian Smelting Co buys from an international broker, it can request that they not source from Congo. If you read the entire article you will realise that buying these ore’s are only lining the pockets of these warlords and destabilising the country.

I e-mailed the company but they have not replied. I would have not replied too in similar circumstances.

Anonymous said...

is that all you can suggest - write to the minister??? What good will that do? the letters will either be ignored or a response that it will be looked into and that will be the last you hear!

Can you think of sometime else to suggest - it is easy to say what is wrong - coorecting it is very difficult.

Chi-Chang said...

To "Anonymous" on writing to the minister: Well, if you'd like to do more, come and join us! We can always use additional help.
Writing to the Minister can be effective because it shows the public really takes the issue seriously and supports our stance.
Right now, the Minister/BN can still dismiss our DAP comments as just the jibes of an opposition party.
But they can't say that if, say, 2 million letters end up in his office!