MEX Highway earning significant profits while the rakyat will have to pay higher tolls under this BN government

Media Statement by Dr. Ong Kian Ming, Member of Parliament for Serdang and Assistant National Director for Political Education for the DAP, on the 31st of March 2018

In a reply from the Minister of Works yesterday to my parliamentary question on the amount of toll receipts collected by the MEX Highway concessionaire in 2016 and 2017 at the Seri Kembangan exit, it was stated that the total amount of toll receipts collected was RM16.4 million in 2016 and RM19.8 million in 2017.

The Seri Kembangan interchange for the MEX Highway was opened in early January 2016 with a toll rate of RM2.20 for cars heading to and from KL. At the toll rate of RM2.20, this means that the daily traffic for the Seri Kembangan interchange was 20,422 vehicles in 2016 and 24,734 vehicles in 2017. This number is projected to increase in the future.

The cost of the building this interchange is approximately RM112 million out of which the government provided RM20 million to acquire the land.[1] In other words, the concession holder only had to pay RM90 million. Based on the toll receipts for 2016 and 2017 and assuming a continued uptrend in the toll receipts, it is likely that MEX will be able to recoup back the cost of construction within 6 to 7 years.

MEX also managed to negotiate an extension in its concession agreement from 33 years (from 2004 to 2037) to 41 (from 2004 to 2045) as a result of building the Seri Kembangan Interchange. This extension is patently unfair to toll users especially since the costs of constructing the interchange can be recouped in 6 to 7 years while the toll users using the Seri Kembangan interchange have to pay the toll until 2045! This means a significantly larger amount of profits for the MEX highway concessionaire, MAJU Holdings.

This toll arrangement is even more unfair when we consider that the next toll hike for the Seri Kembangan exchange is scheduled for 2018 and the projected hike will increase the toll rate from RM2.20 to RM3.10 and to RM4.30 from 2023 all the way to 2045!

In summary, MEX only has to spend approximately RM90 million of its own money to build this new interchange for the right to collect toll receipts at Seri Kembangan for 29 years (2016 to 2045) which is estimated to total between RM1 billion to RM1.5 billion! What a great Return on Investment (ROI) for MEX but at the expense of toll users!