By Rosli Khan
It is perplexing that toll highways, initially constructed to alleviate congestion, are sold based on projections of greater congestion in the future.
A recent report that a toll highway concession holder is exploring the sale of its asset, valued at several billion ringgit, has reignited debate over the privatisation of Malaysia’s highways.
While such a sale may align with typical corporate strategies, it raises questions about the broader implications of the privatised highway infrastructure.
Concession holders tend to leverage rising traffic volumes to justify a high sale price – adding to the burden car users who face daily congestion around the Klang Valley have to bear.
It is perplexing that highways, initially constructed to alleviate traffic congestion, are now being sold for profit based on future projections of even greater congestion.
Early exits, inflated valuations
Critics argue that highway privatisation often enables private entities to reap substantial profits by exiting their investments early, often on the back of significant valuations of the asset while potentially sidestepping the original concession terms.
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This approach, often facilitated by financial advisers, tends to prioritise short-term private gains over public welfare.
In some cases, highways concessions are restructured before they are bought by new entities. Their new owners often approach the government to request either an increase in toll rates or an extended concession period.
The government has in the past often agreed to such requests, extending concession periods to the detriment of highway users.
This practice reveals loopholes in regulatory oversight by bodies such as the Malaysian Highway Authority (LLM), and the works and finance ministries.
Calls for reform
Critics want these authorities to do more to close regulatory gaps, with many calling for reforms to curb practices that tend to otherwise go unchecked. Fiercer critics have even called for the abolition of toll highways.
The issues surrounding highway concessions reflect broader inefficiencies and possible corruption within the public sector, a priority for the current government, although little appears to have been done to correct them.
Observers warn of systemic issues across ministries and departments, where leakages and corrupt practices flourish amid ineffective oversight.
Meaningful policy reform is needed immediately if Malaysia aims to curb potential misconduct and improve transparency, especially where public funds intersect with private interests.
Without such reform, Malaysia risks remaining ensnared in a cycle where public policies and resources benefit private companies at the expense of the people.
Opaque operating structure
Highway concession agreements, currently shielded from public scrutiny by the Official Secrets Act 1972 (OSA), create a hazy environment that enables questionable practices.
Making these agreements public could ensure transparency and accountability – key components of effective policy.
Keeping these contracts confidential only creates an opaque operating structure which facilitates backdoor deals that put profits over the interests of the public.
The government must not shirk its duty to protect public resources and interests.
Without drastic regulatory changes, Malaysians will continue to bear the costs of inflated tolls, corporate profiteering and political neglect, perpetuating a culture of impunity under the guise of progress.
The government cannot continue down this path; it must dismantle flawed highway privatisation policies immediately.
As a first step, all toll concession agreements covered by the OSA should be declassified. – Free Malaysia Today
Rosli Khan, a traffic planning consultant, has a masters in transport planning and a PhD in transport economics from Cranfield University in England.
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