It is projected from late 2011, 3 years from now, the Johor Bahru Causeway toll will jump sharply to more than 200%. Yes, that means being 2 times the current toll fees. This toll fees will be revised every three years until it is more than 500%.

What that apparently happened, is that a very special contract has been awarded to a conglomerated linked to the ruling Umno party. This special contract is to build an 8km partially elevated expressway linking the Customs, Immigration and Quarantine Complex (CIQ) at the Causeway.

Least of all reasons, the contract awarded is RM1.2 billion, which translated to RM150 million per kilometre to build. Wow. That is a really high cost! However, the more controversial aspect is that, the awarded contract stated that tolls will be levied on all vehicles crossing into Malaysia from the Causeway, and not just the users of the proposed road stated in the contract. It feels unreasonable to layman, that they have to pay for something that they did not use. However, that is not the end of the story. This toll will be start at RM6.20 for passenger vehicles and RM12.40 for lorries (more than 200%), which will be raised to a peak of RM14.60 for passenger vehicles and RM29.20 for lorries (more than 500%).

So, what will the impact be? Firstly, as 75% of affected passenger cars are Singapore registered cars, the Singapore registered cars owners will be the most affected. This means that the number of trips by Singaporean will be reduced in a certain extend, especially for those who visited Malaysia to take the opportunity of the cheaper foodstuffs and goods. This in turn will reduce the Malaysian businesses’ earnings.

Secondly, the majority of the lorries using the Causeway are part of the supply chain to export foodstuffs and goods to Singapore. This toll will indirectly increase the cost of export, which means either the Singapore business have to pay more, or if they have a cheaper source, they will bring their business elsewhere, thus affecting the Malaysia export businesses.

KUALA LUMPUR – THE Malaysian government has awarded a RM1.2 billion (S$500 million) contract for a road on the fringes of Johor Baru to a conglomerate linked to the ruling Umno party, a project analysts say will surely attract close scrutiny because it will be funded by sharply taxing vehicles using the Causeway linking Malaysia and Singapore.

Documents reviewed by The Straits Times show that publicly listed MRCB secured the government project in June last year to build an 8km partially elevated expressway linking the Customs, Immigration and Quarantine Complex (CIQ) at the Causeway with the southernmost end of the North-South Expressway.

The contract, which its promoters say will alleviate congestion in Johor Baru city, also features a potentially controversial 34-year toll concession for MRCB, a diversified investment holding company that has interests in property development, infrastructure and engineering services.

Under the contract awarded, tolls would not be levied for users of the proposed dual three-lane carriageway, but rather on all vehicles crossing into Malaysia from the Causeway.

A senior MRCB executive who confirmed the project awarded by the government told The Straits Times that toll collection will begin once the expressway is completed sometime in late 2011.

Based on information contained in an advisory to potential investors for the project, the toll charges will range from RM6.20 for passenger vehicles entering Malaysia to RM12.40 for lorries.

The rates will be raised every three years, and will peak at RM14.60 for passenger vehicles and RM29.20 for lorries, the documents showed.

Currently, vehicles using the Causeway pay a nominal fee. Passenger vehicles entering Malaysia are charged a toll of RM2.90, and lorries, RM5.50. The Singapore Government imposes a charge of S$1.20 for passenger vehicles and S$2.60 for lorries.

The proposal to impose new toll charges in Johor will hit Singaporeans the most.

The document on the bond issue prepared by MRCB bankers stated that the Causeway currently serves ’69 million person trips annually, which is significant compared to the 20 million passengers at the Kuala Lumpur International Airport’.

The document issued by CIMB Investment Bank and HSBC Malaysia also stated that about 75 per cent of the passenger cars crossing the Causeway are Singapore-registered vehicles.

It is not clear whether Malaysia’s plan to impose toll charges on the Causeway would provoke a similar reaction from Singapore.

But in February, Singapore raised rates at the Second Link, which a Land Transport Authority spokesman said were ‘pegged to those set by Malaysia’.

The Causeway and the Second Link, which connects Tuas and Johor’s Gelang Patah, are the two land links between Malaysia and Singapore.

The 1,056m Causeway is the preferred route because it takes vehicles directly into Johor Baru, and the toll charges there are lower compared with those at the Second Link.

The heavy traffic is a major cause of congestion in Johor Baru.

But the huge cost of the new elevated expressway to alleviate the situation is raising eyebrows.

At a price tag of RM1.2 billion, it will cost roughly RM150 million per kilometre to build, according to bankers and analysts.

ljlopez@sph.com.sg

Article obtained from straitstimes.com on 19th June 2008



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