KUALA LUMPUR (May 7, 2008): The Works Ministry will spend the next three months to review all 22 highway concession agreements to prevent toll increases without justification, an issue that renews itself everytime a toll adjustment is on the card.

Its minister Datuk Mohd Zin Mohamed said there was a new clause in the agreements for toll review mechanism that disallowed the concessionaires from raising toll without justification.

He said before the toll rate could be adjusted, the traffic volume, operation and maintenance cost of a highway must be studied thoroughly.

"The government understands the burden of the people in having to pay toll. So we will be reviewing the concessionaires' agreements based on the traffic volume, toll fee charged and the concession period; comparing the income with operation and maintenance cost," he told reporters in Parliament House lobby today.

Mohd Zin said the ministry will also review the new concessionaires that had yet to operate.

Asked if toll may be reduced after the review, he said: "That is one of the possibilities. We are also looking at the highways' future values to see whether they can be re-financed to cut down the people's burden. I have asked the Malaysian Highway Board and traffic and financial experts to see whether this will benefit the people."

Mohd Zin was elaborating on his reply in the Dewan Rakyat to a question from PJ Utara MP Tony Pua who wanted to know the cumulative revenue and profit of the toll concessionnaires and whether the government was taking steps to re-negotiate aspects of the agreements that burdened the people.

The minister said to date the concessionnaires had a cumulative revenue of RM27.6 billion and cumulative profits of RM3.5 billion, adding that the revenue was used to service debt, and pay for maintenance and operations. 

Mohd Zin also said not all highway concessions were profitable, adding that seven suffered losses and the ministry wanted to find out the cause of the losses and how they could overcome this.

To a question, he said toll adjustments were scheduled every three years but the government must approve any increase.

"This is already an obligation in the agreement, so the government will make the (compensation) payment in cash or allow the profits made to be offset or prolong the concession period.

"Of the total RM38 billion in compensation (paid to concessionnaires), cash disbursement is only RM1.8 billion," he said.

On zones that caused traffic congestion in some parts of a highway, he said one way to overcome the problem was to create multiflow lanes which used infra-red and microchip as the backbone.

He said the system could also be included in the intelligent traffic system, which enabled the authorities to monitor the traffic volume and provide value-added services.