Dr Koh Tsu Koon discloses secret of Penang bridge toll charges remains unchanged for 30 years
By Chen Yun Qing
Sin Chew Daily, 14 October, 2015
(Penang, 13 October) While highway concessionaires are announcing the revision of toll charges, the Penang Bridge has remained its toll rate for the last 30 years. What is the secret?
The key people who know about the secret include former Penang Chief Minister Tan Sri Koh Tsu Koon. When interviewed by Sin Chew Daily, he revealed after the bridge was privatized, through negotiation with the Federal Government and concessionaire, commuters are allowed to use the bridge without paying for the increase in toll charges.
Penang Bridge was completed in 1985. The bridge came under the jurisdiction of Federal Government. When he was the Penang Chief Minister (since 1990), he learned about the privatization of the bridge.
“I found out details about the privatization from the then Finance Minister Tun Daim. I was told the increase of the toll charges for the bridge would be 6% each year. The rates would be adjusted every three years. This means the increase is about 20% for three years.”
“Based on the 25-year exclusive contract, the toll charges would ultimately be increased to RM40.”
Increasing number of cars why need to make more profit
Dr Koh said the Penang Barisan Nasional lost 14 state seats in 1990 General Elections. Penang Barisan Nasional could lose all the seats with such privatization model.
“I opposed it strongly. I also related to the then Prime Minister Tun Dr Mahathir when the number of vehicles crossing the bridge is increasing rapidly, why need to make more profit?”
His suggestion then was that if there was a need to revise the charges, the margin of increase should be based on inflation rate. If the inflation rate is 2%, and toll rate is revised every five years, the toll rate of the bridge would only be RM14 after 30 years.
After a round of discussion between the Federal Government and concessionaire, the exclusive contract was then sealed.
Negotiate with Federal Government three times to extend tenure of collection for no increase in toll charges
Dr Koh said the concessionaire had planned to increase toll charges in 1998. It was during financial crisis and he reflected to the Federal Government that the concessionaire should not be revising toll charges when people were facing difficulties. Concessionaire was making profit then.
After Federal Government’s negotiation with concessionaire, toll rates remained unchanged.
Another round of adjustment was supposed to be in 2003. Dr Koh said the 911 terrorist attacks in 2001 had affected the electronics industry throughout the world. The economy of Penang faced similar crisis. Based on the SARS incident in 2003, he made similar request to the Federal Government to maintain toll charges.
“The third adjustment of toll charges is to be done in 2008. In 2007, I told the Federal Government that General Election was around the corner and hoped the authorities to take into consideration of people’s lives by not increasing toll charges.”
After General Elections in 2008, Dr Koh stepped down. Toll charges did not increased too. He believed the Penang Bridge was the only privatized highway where its rate remained for 30 years.
News information indicated that the RM7 of toll charges for Penang Bridge remain unchanged but the concessionaire – North South Expressway was granted the permission to extend the exclusive contract to 2038.