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Sunday, 6 December 2015

Why did the 823km PLUS North-South highway have tolls and the 2200km Pan-Borneo Highway doesn't?

The North-South Highway was planned by the govt in 1977. The Malaysian Highway Authority then started construction in 1980, before Tun Mahathir became Prime Minister in July 1981.

(This essentially means that the North-South Highway was not actually a creation of Tun Mahathir despite Tun M taking credit for it. All Tun M did was to privatize it to certain interest groups)

Between 1980 and 1985, the MHA managed to complete the construction of several phases of the project amounting to the total length of 366 kilometer or 41% out of the proposed 823 kilometer highway at a total cost of RM3.2 Billion of govt funds.

In 1986, the entire project was transferred to the then UMNO-crony Halim Saad's UEM group even though it was M despite the fact that UEM’s offer was the most expensive, requires the highest amount of government’s financial support and has minimum revenue, currency and interest rate protection by the govt (see table) and also despite the fact that it has no experience whatsoever.

On top of that, the existing 366km already built using govt money was injected into the now completely privately owned PLUS. And they were allowed to collect tolls from these existing roads (built using govt funds) from us to pay to complete the remaining 500km - a task which they eventually completed but at a 70% cost over-run and two years late.

The government even funded PLUS half of the initial budget of RM3.5billion via a govt support loan.

Thanks to this dodgy Tun M deal, we ended up having to pay 30 years of toll and having to foot the bill of a 10% every 3 years toll increase - which govt had to pay PLUS if the toll rate was not allowed to increase.

All that for a NS Highway that govt and the rakyat pretty much funded PLUS to build and continue to collect even more money from us. This is equally as bad as the rip-off take-or-pay YTL IPP concession Tun M gave that has now expired and not renewed.

Thankfully in 2011, Najib's Govt took over full ownership of PLUS from private hands, restructured the agreement and avoid future toll increases. Now that 51% is owned by Govt and 49% is owned by EPF, at least the govt and the EPF account holders benefit from PLUS. Cronys must not be happy with this.

Yet again, like in the IPP, water concessions and Proton case - Tun M created the problem, Najib had to solve it.

Compare this to Najib's Pan-Borneo highway project where 2,239 km of road will be built and it will be completely toll-free.

Roads that already exist will be upgraded to highway quality and missing links built. Construction has already started on three sections since March 2015 and the entire highway will be fully completed just 8 years later by 2023 and fully owned by govt.

It is a valid question to ask why a 800km highway project in densely populated peninsular has such punishing toll rate while a 2200km highway in sparsely populated and punishing terrains of Sarawak will be toll-free.

I wonder if Najib was the one who built the 800km NS highway instead of Tun M then, would we be enjoying toll-free NSE travel today.

Epilogue: On top of being filthy rich from projects such as these, UEM's ex-owner Halim Saad was also paid compensation of an additional RM165 million in 2003 by Tun M's govt.

But not satisfied, Halim sued govt in 2013- claiming Tun M and company cheated him  -  asking for an additional RM1.8 billion in compensation (he lost the case in July 2015).

Note: I think it is high-time that Najib looks at the rest of these unfair highway concessions awarded during Tun M's time and restructure them the way that PLUS was restructured and forever stop any toll increases.

After reading this, I am not sure if Tun M loyalist would still be so proud of this NS Highway project.


  1. Fix deposit la. That also un don't knpw.

  2. Amazing facts!!! Mind boggling!!!