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http://www.starproperty.my/PropertyScene/PropertyNews/9896/0/0
Toll abolished on one stretch, no rates hike on two highways
PUTRAJAYA: Toll for the Salak to Taman Connaught stretch of the East-West Link Expressway is set to be abolished by May, Datuk Seri Najib Tun Razak announced.
The Prime Minister also announced that the toll rates for the Kuala Lumpur-Karak Expressway and East Coast Expressway Phase One would not be increased for the next five years.
He said the decisions were made following a review of transportation costs, including restructuring the toll charges and to ease the people’s burden.
He also added that no compensation would be paid to the concessionaires of the three highways.
“In line with the 1Malaysia spirit, People First, Performance Now, I have asked toll concessionaires to carry out a review of the respective toll charges to help the Government prosper the country and lessen the burden of the people.
“Taking up the Government’s call, two corporate figures who are also major shareholders of a toll concessionaire, came forward with a toll restructuring proposal through the acquisition of assets, which will benefit the people,” he told a press conference at his office here yesterday.
Also present was Works Minister Datuk Shaziman Abu Mansor
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An early nice Chinese New Year surprise for the toll hating Chinese community before Tenang by-election?
MTD Capital Berhad operates the above 2 tolled highway until 2032 with another one (not acquired by the directors in this exercise) until 2018.
Below is a screen shot of the letter of offer, announced by MTD Capital Berhad in Corporate Announcement section of the Bursa's website as required by the listing requirements.
According the the offer above, the 2 directors via a Special Purpose Vehicle will pay MTD RM3.525 billion in cash to buy the 2 concessions. I get a bit worried whenever I see the term SPV and any government linked initiative in the same article. Not sure why.
The question is, how is this SPV (i.e. entirely new company, starting from zero) going to raise the RM3.525 billion? Is it from bank loan guaranteed by government? Government loan? EPF investment? Khazanah contribution? Either way, the rakyat is going to finance this either via tax money or hard earned deposits with commercial banks. It looks unlikely that some rich entrepreneur came up with the cash elsewhere.
The challenge nowadays is to achieve more with less resource; not achieve less with more resource committed. So is this a good deal for the people as the Prime Minister indicated?
This is tricky as I do not have all the relevant details. According to MTD Capital Berhad's 2009 audited accounts, 3 tolls gave them a profit before finance charges and tax of RM143.8 million
Now this RM143.8 million is from 3 toll highways but in the absence of the breakdown per highway, I took the offer purchase price of RM3.525 billion for 2 highway toll concessions and divided by total profit earned by 3 concessions.
Lo and behold, it is about 24 1/2 years, calculating from 2011 onwards, it covers profits up to 2035 while the 2 concessions will end July and December 2032. 3 years extra.
Those who understand financial terminology knows what I am saying - I do not have MTD's WACC nor cash flow projection to do a proper discounting.
From tax payers' point of view, why can't Najib administration negotiate better? By paying off immediately, the termination of business risk and immediate cash inflow would worth a huge discount from MTD. If Rakyat Diutamakan surely the most powerful prime minister can play a bit of hard ball and carrot & stick to part with lesser money? He has proven to be a smooth political plotter elsewhere.
Although the article mentioned no increase for 5 years, there is no further details about whether the length of concession will remain the same or otherwise, nor what will happen from the 6th year onwards.
Furthermore, who are the shareholders of the SPV? To whom the profits arising from future toll be going to? Does the SPV have concrete cost management and reduction programme? Is there going to be open tender by the SPV to obtain the best offers from vying contractors to maintain the highway?
I won't be jumping with un-tolled joy until the untold parts are clear to me.
Malaysians are expected to owe another RM90 billion from debts raised in 2011 alone; the years and years of accumulated debts as at 2008 alone was already RM213 billion.
In 2011, Najib's administration will almost double our debts and subject us to more foreign exchange risks. The loans are for infrastructure and property projects - not a whimper about healthcare, human capital development, education .... the soft skills so vital nowadays and Malaysians so lack of it nowadays.
When Najib gleefully announced his election budget for 2011, I wondered where the heck the money is going to come from, given the declining oil revenue and foreign as well as local investments; the apparent answer now, bluntly and without apology, shrinks my balls.
I do not know if the "projects" will generate enough revenue to repay the principals and interest and have enough crumbs for the rakyat to feed on. Who are going to rent the Menara Warisan Merdeka? Will KLCC become another Menara Dayabumi ghost building? Will the other commercial buildings owned by Malaysians be deprived of its existing tenants? Simple questions and no answers.
What I do know is that tax payers' money which could be used for hospitals, subsidy on food and medical supply, schools, street lighting, flood preventation, crime fighting, living expenses assistance to the handicap and aged will be forgone.
What I do not know is who are the financial service professionals that will earn a lot of fees from organising the loans? 
What will the rakyat get? According to Dr Kua Kia Soong in his writing entitled "Defence Ministry on a spending spree", RM1 billion can built 100 hospitals or 1,000 new schools or 10,000 new homes. So next year when the government borrows on average almost twice a month to raise RM90 billion, we will forgo 9,000 hospitals, 90,000 new schools or just 900,000 new homes. And we have people waiting for months just to have an appointment with public hospitals.
I know Najib did some lab studies on the ETP, NEM and what not. I did a low budget lab on my own. I asked a kindly old lady who should be more knowledgeable than me.
I asked her, "madam, what would you say to me if I were to borrow in your name without your consent, spend it on something that would not benefit you but you will just spend years and years of your life paying the debt off and not getting your medicines, better quality food and other necessitites of life."
The result of my lab study is as follows:
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Ok we Malaysians can be numbed to the occassional idiotic Wakil Rakyats like Bung Mokhtar, Ibrahim Ali who really come up with insults of intelligence, but the above statement comes from the Deputy Prime Minister cum Education Minister. He is suppose to the the one in charge if the Prime Minister is incapitated or not in Malaysia. He is also suppose to be heading the education system in Malaysia.
Fine, going back to Barisan Nasional having the experience and whatever, it is interesting to note that the DPM's background included the following:
http://zakiahnaim.blogspot.com/2009/03/tan-sri-muhyiddin-yasin.html
ANGGOTA PENTADIRAN KERAJAAN / JOHOR DAN PERSEKUTUAN:
4. Menteri Besar Johor (Mulai 13 Ogos 1986 hingga 6 Mei 1995).
5. Menteri Belia dan Sukan (Mulai 7 Mei 1995 hingga 13 Disember 1999).
6. Menteri Perdagangan Dalam Negeri dan Hal-Ehwal Pengguna(Mulai 14 Disember 1999 hingga 12 Januari 2004).
7. Menteri Pertanian (Mulai 13 Januari 2004 hingga 21 Mac 2004).
8. Menteri Pertanian dan Industri Asas Tani 22 Mac 2004 hingga 2008).
9. Kementerian Perdagangan Antarabangsa dan Industri(Mulai 19 Mac 2008 hingga sekarang).
The ones I highlight in bold suggested that he should have experience in commercial, industry, finance, investors and international relationships. He should be a well-groomed, with loads of experience gained from office paid by the tax payers of Malaysia.
He has a moral and professional responsibility to utilise his experience and his position to make life better for Malaysians and I fail to see how dismissing international opinion can serve Malaysians' purpose.
Most commonfolks can utter the sentence that "cusotmer is always right" and whether he agrees or disagree with PERC , what is important is how the international community evaluate the report.
If the rakyat feeding him have to put up with daily conflicts and human relationship issues while making ends meet and paying taxes, what is so special about Muhyddin that he can be arrogant enough to offend people that could help create jobs and employment opportunities in Malaysia?
The DPM, secured in his source of livelihood, now has his words back to haunt Malaysians in general with these 2 famous statistic now.
While FDI in whole of SEA has dropped, Malaysia's >80% decline suggest the decrease is not only due to cyclical reasons. We account for less than 5% of the total share in SEA and we lost out to Indonesia and Thailand by more than 4 and 5 times respectively.
We have the better grasp of English, a more investor friendly set of investments rules and tax legislation compared to those 2, longer tradition of opening up our shores for large scale modern international business and under the Najib/Muhyddin administration, our track record has regressed significantly and is here for all to see.
Mahatirism with its controlled press and strangulation of dissent has given birth to generations of politicans incapable of responding to intellectual challenge and a fallacy now that international press can be ridiculed and dismissed as easily as local sources. Look at the recent actions against Roket, Suara KeAdilan and Harakah
"People First and Performance Now" sounds extremely hollow and akin to rallying call of a used car salesman.
With the price increase thrown in? Undilah Kerajaaan Barisan Nasional
