KUALA LUMPUR - Motorists, brace yourself for this: Toll rates are likely to increase within a month!

According to a note by Maybank Investment Bank on Wednesday,  toll charges for 10 highways in the peninsula  are due for review this month.

The toll revisions have already been delayed by one year.

“The toll revisions may be tabled in the upcoming Cabinet meeting, but we expect a decision only by end January or early February,” the research house said.

Among the highways involved are the North-South Expressway (managed by PLUS Expressways Bhd) and the Sprint Highway (Litrak-Gamuda).

Tough decision on toll rates

Analysts told The Star that the Government faces a tough decision on toll rates as it seeks a balance between allowing for an increase and absorbing the costs in its upcoming review.

There is a growing likelihood that some of the increase in charges might be passed on to consumers as the Government tries to trim its budget deficit, they said.

Obviously, increasing toll rates would be a very unpopular move and there were other options at the Government’s disposal, said the analysts.

Three parties involved

Concession agreements could be prolonged so that current toll rates could be capped or the Government could absorb the debts of the concessionaires, pay them a one-off cash sum and “force” them to lower the rates, so that the consumer benefits.

“Either way, these involve three parties – the consumer, the toll concessionaires and the Government. Not all will benefit, something’s got to give,”  said OSK Research analyst  Jeremy Goh.

He said toll rates might be raised to keep the budget deficit in check given the recent move to cut sugar subsidies that would likely save the Government millions of ringgit.

A Kenanga Research analyst agreed with him.

Once and for all

“It could be that it (the Government) will just bite the bullet and raise the rates once and for all, so that it doesn’t need to continue subsidies,” said another analyst.

Zainudin A Kadir, group chief executive of Projek Lintasan Kota Holdings Sdn Bhd (Prolintas), which operates the Ampang-Kuala Lumpur elevated highway, one of the highways whose toll rates are up for review, said the company had not received any decision from the Government.

Malaysia’s budget deficit grew to 7.4% of gross domestic product (GDP) last year, a 22-year high.

The projection of a lower budget deficit of 5.6% of this year’s GDP is based on the ability to save on operating expenses and reduce subsidies. - Malaysian Mirror