jump to navigation

Tolls: Mabuhay ang Philippines! February 27, 2007

Posted by elizabethwong in Current Affairs, Economy, Malaysia, Southeast Asia.
trackback

One of the questions put to Works Minister Samy Vellu on Feb 25, 2007 (NST, pp 7) was the following:-

Q: Are you looking at other countries for better methods of doing it (this author’s note:- i.e.tabulating toll figures)?
A: We can’t go to other countries as they are all very costly. We are cheaper. They’ll come to us now. (laughs)

Look no further Mr Minister.

The toll operators of the North Luzon Expressway (NLEX) in February this year decided to REDUCE toll rates by as much as 10%, after it took over the 83.7 km expressway from the Philippines government a year ago.

The operators have a USD 371 million budget (a little over RM 1 billion), which was used to:-

  1. Construct additional 138 new lane-kilometres, thus easing traffic by more than a 100% (from 2200 vehicles per lane per hour on both directions to 1000 vehicles).
  2. Resurface 100% of all the roads
  3. Add 4 new interchanges
  4. Upgrade the existing 10 interchanges
  5. Construct a new flyover
  6. Widened 26 exits
  7. Build 4 new toll plazas
  8. Expand existing toll plazas
    (Ref., see Philippines National Inquirer, 14 Feb 2007, pp B2-4)

The reduced rate adjustments came after considering the company’s toll-fee formula, as well as the peso’s strong performance in the foreign-exchange market and the increased consumer price index.

The company believed that the reduction would give more reasons for people to use its roads, despite they had to service the loans which were dollar-based.

Now let’s get back to Malaysia.

This is in stark contrast to, say the Malaysian toll operators of the LDP, who increased the rates regardless, based on a ‘secret formula’ and a time-table, in spite of a strong performance of the ringgit in the foreign exchange and a higher rate of inflation.

Worse still, the LDP, according to the Minister in the interview, “(D)id not make any money.” The RM 80 million was only ‘paper profit’ and the 5 interchanges to ease traffic congestion generated a bill of more than RM 400 million.

Dare we even mention the ‘revelation’ by Samy that it appears in these desperate days, Ah Longs (aka loan sharks) are seemingly more reasonable than local financial institutions:-

“See, you borrow RM 1 billion, you pay back RM 1.2 billion as interest. So the cost becomes RM 2.2 billion. In 15 years, the cost becomes higher.”

(NST, Feb 25, 2007, pp.7)

IMHO, I think we should start consulting the Filipino toll operators (pay ‘em well for good advice!). If we’re actually paying RM 1.2 billion interest for a billion borrowed, then a refresher course in Business Administration, Banking and Finance.

(Maraming Salamat to JerryWho and Tunasings who carried back the news clipping!)

About these ads

Comments»

1. Rikey® - February 27, 2007

1,000,000 = 1,200,000 = 120% interest rate
now tell me which bank charges this? not even world bank!
they should had gone to an Islamic Bank …. hahahaha

2. claire the cathttp://elizabethwong.wordpress.com/2007/02/27/mabuhay-ang-philippines/#comments - February 28, 2007

interesting observation…maraming salamat sa comparison. di ko alam malaki pala ang difference sa pagtutok sa isyu ng toll rates between your country and mine. kaso, wala kasing tohttp://elizabethwong.wordpress.com/2007/02/27/mabuhay-ang-philippines/#comments
Tolls: Mabuhay ang Philippines! « elizabeth wonglls dito sa davao. :-)

3. claire the cat - February 28, 2007

interesting observation… maraming salamat sa comparison. di ko alam malaki pala ang difference sa pagtutok sa isyu ng toll rates between your country and mine. kaso, wala kasing tolls dito sa davao. don’t know if that’s a good sign or not. :-)

4. sam - February 28, 2007

if finance makes sense here… we could have been the financial hub already…

5. yh - February 28, 2007

“rm80 million profit not profit coz it is paper and not cash profit” i have posted in “a voice” debunking this. this mr samy is talking nonsense. ask him to take finance 101 before he opens his mouth again on tolls. by the way, if he wants to continue talking such nonsense, do that in sungei siput. at least, the people there do not have to pay any tolls and probably can stomach such bullshit better.

6. elizabethwong - February 28, 2007

claire,
eh? di ba?
(slowly finishing my quota of tagalog words)

7. planet69 - March 1, 2007

erm, my dear …
the North Luzon Expressway toll operators increased the toll fees way too high back in 2005, therefore the reduction this year is not exactly a christmas gift!

http://www.trapik.com/newsfeature.asp?newsNum=1226

http://www.mb.com.ph/issues/2005/04/10/MTNN2005041032350.html


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 43 other followers

%d bloggers like this: