KUALA LUMPUR (Oct 24): PKR lawmaker Rafizi Ramli has questioned the need for the  government to allocate RM3.91 billion in financial aid to the concessionaires of the East Klang Valley Expressway (EKVE) and the Sungai Besi-Ulu Kelang Elevated Expressway (SUKE).

It is “ridiculous” for the government to provide the money to the two concessionaires to build the highways and then allow them to collect toll, after the construction is completed, he told a press conference at the Parliament lobby today.

“We urge the government to disclose the concession agreement for EKVE and SUKE,” said Rafizi. “How can the government use public money to build the highways, and collect toll from the people when the highways are usable.”

The Pandan MP said he had on Oct 18, asked the works ministry to provide details of the concession for EKVE, SUKE and the Serdang-Kinrara-Putrajaya Expressway (SKIP), including the value, concession period and financial assistance in the form of soft loans and grants from  2008 to 2028.

In response, the ministry said while the EKVE and SUKE concession agreements have been signed, the SKIP agreement has not yet been finalised.

For EKVE, the ministry paid up to RM360 million for land acquisition, along with a soft loan of up to RM635 million, at an interest rate of 4% a year.

SUKE on the other hand, received land acquisition aid of up to RM1.14 billion, and a soft loan of up to RM1.78 billion, with 4% annual interest rate.

Rafizi pointed out that the 4% interest rate are comparable to the coupon rate for conventional Malaysian Government Securities.

Today, Bank Negara Malaysia’s data shows that 10-year MGS with November 2026 maturity has a coupon rate of 3.9%, while 3-year MGS’s rate is 3.76%.

“At a time when the budgeted expenditure for the people has to be reduce drastically, Datuk Seri Najib Razak maintained an allocation of RM3.91 billion for the two highway concessionaires, which is equivalent to 12% from the RM32 billion supplies and services expenditure allocation under Budget 2017,” said Rafizi.

In its written reply, the ministry had explained that the government provides financial aid to highway concessionaires to support the affordability of such a project, in order to maintain its commercial viability.

“This is because execution of these highway projects will results in positive impact multiplier effect to social economy development,” the ministry said.