31 August, 2009

Delicate Issues Regarding Highway Financing

One of the ways to enable highways to be built is through toll collection. Another option is to use money funded by the government which is apparently too much for the government to sustain. As for the toll collection, the collected fund will be used by the concessionaires to pay back the respective banks for lending them the money to construct the highways.

As agreed with the bank, the toll concessionaires have to increase the toll rate annually in order to enable them paying back the bank within the stipulated time frame. The road users usually against the increase in toll collection due to the apparent reasons that road users only wanted to enjoy travelling along the highway without thinking about the financing of the highways. In this case, the road users have a choice of either paying the high toll cost and enjoying the smooth travel along the highways or they can use the existing Federal Funded roads where they don't have to pay any tolls. However, the road users have to endure longer travelling time and slightly lower level of service along the federally funded road. But, problems arising when road users forget about their choices and insisted that they have the absolute right to use the toll facilities and demanding that the toll of the facilities should be made affordable. There are about 22 toll concession holders in Malaysia.

In order to resolve this dilemma, the Malaysian Government is undergoing a study on the possibility of the Government to take over all toll road in the country. The motive of the study is to create a system to provide comfort for the people and without burdening them further with the increase in toll cost.

However, the government must take into consideration its long-term financial capability to meet the required needs to sustain the service in the future. To read more about the complication of the highway financing issues refer to this article.

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