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Toll hike in M'sia is too much, too soon: experts

Publication Date : 18-12-2013

 

The anticipated toll hike in Malaysia is coming too soon after the hike in electricity tariff and increases in the prices of sugar and fuel, say economists.

The speculated rise of between 0.50 ringgit (US$0.15) and 2 ringgit in toll rates, coupled with other price hikes, would impinge on the quality of life.

The hike, which will take effect next month, will affect 15 highways.

Malaysian Rating Corporation (Marc) chief economist Nor Zahidi Alias said the main concern was that a slew of increases were being imposed at about the same time.

“Sugar and fuel prices have gone up and the electricity tariff hike will take effect soon. This will cause an upward pressure on consumer prices.

“Such a development is likely to limit the pace of consumer spending,” he said.

RAM Holdings group chief economist Dr Yeah Kim Leng said there were other solutions available to the government, including extending the tenure of concession agreements as compensation.

“The government could lengthen the term of the agreements or ask the toll operators to space out the hikes,” he said. He warned that the sudden hike could result in a sharp escalation in the cost of living, which would be detrimental to the economy.

“Besides damage to the economy, there might also be widespread social repercussions. The cost of goods and services will go up,” he said.

Yeah said it was unfair to raise toll charges for congested highways.

“Operators should only raise rates if what they are making is below the set targets,” he said, adding that the hike might encourage those living “at the margins” to take public transport.

But even that may not be a cheap option with public transport operators also affected by the electricity tariff and fuel price increase.

RapidKL bus operator Prasarana Negara Bhd said the fuel price increase had raised monthly operational costs by 600,000 ringgit. It also pays 61,000 ringgit in toll charges each month.

A spokesman said they do not know how badly the proposed toll increase would affect them.

The proposed electricity tariff hike will see their costs go up by 9 million ringgit anually from the current 55 million ringgit to 60 million ringgit a year.

CIMB economic research head Lee Heng Guie said the hike would negatively impact those in the transport industry, including bus operators.

“It will definitely increase the cost of living,” he said.

*US$1 = 3.25 ringgit

 

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