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Economists on comparison between highways in Peninsular and Borneo

KUALA LUMPUR – Dec 7, 2015: Local economists contacted by The Mole today for comments on a posting by prominent blogger Lim Sian See explained the reasons why it is toll free in the soon-to-be built Pan Borneo Highway and not so for the North-South Highway.

Lim, who wrote at “LSSReport” had produced an analysis comparing the construction of North-South Highway and Pan Borneo Highway, where the blogger had lauded the construction of the latter.

In the blog posting, the blogger had criticised the methods used by former prime minister Tun Dr Mahathir Mohamad to build the North-South Highway by imposing a question, “why did the 823km PLUS Expressways North-South Highway have tolls and the 2200km Pan-Borneo Highway doesn’t?”

The blogger wrote that the North-South Highway had caused continuous discomfort to the people due to its dubious construction planning in the first place.

The blogger illustrated that the building of the highway, which was done during the premiership of Dr Mahathir had involved a massive cost of building due to a “dodgy” business deal.

“The construction of the highway was started in 1980 by the Malaysian Highway Authority (MHA). Between 1980 and 1985, the MHA managed to complete the construction of several phases of the project amounting to the total length of 366 kilometres (KM) out of the proposed 823KM highway, at a total cost of RM3.2 billion of government funds.

“In 1986, the entire project was transferred to the UEM group despite the fact that its offer was the most expensive, requires the highest amount of government’s financial support. UEM’s offer also has minimum revenue, currency and interest rate protection by the government, while it has no experience of constructing a highway at that time.

“On top of that, the existing 366KM built by using government’s money was then injected into the now privately owned PLUS. And they were allowed to collect tolls from these existing roads from us (the people) to pay to complete the remaining 500KM. Not to mention that they finally completed the task at a 70 per cent cost over-run and two years late.

“Eventually, we ended up having to pay 30 years of toll and having to foot the bill of a 10 per cent every three years toll increase. In fact the government had to pay PLUS if the toll rate was not allowed to increase,” the blogger wrote.

Lim further wrote that, compared to the North-South Highway, the Pan Borneo Highway involves some 2,200KM stretch of existing road, while it being toll-free.

“Roads that are already existed will be upgraded to highway quality and missing links will be built. Construction has already started on three sections since March this year, and the entire highway will be fully completed just eight years later by 2023,” the blogger wrote.

Lim added that it is then “valid to question” the reason of imposing toll rate at an 800KM highway project at a densely populated peninsular, compared to one in Borneo.

Institute of Strategic and International Studies (ISIS) senior analyst Ahmad Rafdi Endut told The Mole that he agreed with Lim’s assertions that it was the right move not to impose tolls along the Pan Borneo Highway.

He said this was because the construction of the highway is actually cheaper than the North-South Highway as it only engrossed the use of current government land, which does not incur any land issues.

“Pan Borneo Highway is different compared to the existing North-South Highway. The construction of the Borneo Island expressway only involves the current alignment or road stretch which is owned by the government.

“Basically, the government upgrades the stretch and build several links and bridges; hence, the construction cost is lower. This is the reason why the government can offer a toll-free highway to the people there,” he added.

Commenting on the maintenance cost of the Pan Borneo Highway that may entails in the future, Rafdi opined that the people will not be affected, as such maintenance expenditure is to be fully borne by the government.

In regards to the claim that North-South Highway had been constructed based on a “dodgy” deal and was rather costly, Rafdi explained that such a cost was unavoidable at that point of time.

“When the highway was planned in early 1980s, the country was having financial concern, aside of not having enough technological capacity to build a highway. In fact, we also faced land issues, where we need to go through land acquisition process involving various parties.

“The government, at that time had to resort to partnership with private company in order to face such hurdles, while the overall cost had reached about RM4 billion.

“Thus, we need to understand that both of these highways are subjected to different circumstances, and it is unfair to simply compare the constructions of the highways,” he added.

Another economist, Professor Dr Zulkifli Senteri of Binary University opined that comparison between the highways made by the blogger is only a politically-driven effort to discredit Dr Mahathir.

He insisted that the people are directly benefiting from Dr Mahathir’s previous projects, namely the North-South-Highway and even Putrajaya, despite the criticisms posted on social media which he described as attempts to “demonise Tun’s efforts”.

“Here in the peninsular, we witness the problems facing Barisan Nasional-led government. We know that BN is hoping on the people of Sabah and Sarawak to back them up in the future.

“Hence, I see the construction of the Pan Borneo Highway as merely a strategy to gain political mileage. Such comparison is nothing and should not be given attention at all,” he added.

Nevertheless, Zulkifli agreed that the Pan Borneo Highway is needed by the people of Sabah and Sarawak.

“Aside of connecting the people of Borneo from one place to another, the highway construction is hoped to spur economic development along the road, where there should be the creation of job opportunities, as well as small business opportunities for the people,” he added.



About the author

Amira Nutfah Zulkifli

Amira Nutfah Zulkifli

A budding journalist. Aside of struggling to understand Malaysian political scenario, she is inspired to study and fight for women's emancipation. Above the rest; she simply loves her nation.