The completion of the Penang Bridge in 1985 marked a chapter in the history of Penang. It greatly facilitated transportation between Penang Island and Seberang Prai (previously “Province Wellesley”) and contributed tremendously to Penang’s economic growth.

Throughout the years, the Penang Bridge has become an issue for “political wrestling” amongst the various parties and leaders. It started in 1969 with Dr Lim Chong Eu who courageously put the building of the bridge as the centerpiece of Gerakan’s 1969 Election Manifesto and was given the mandate as the Second Chief Minister (CM). Dr Koh Tsu Koon who took over in 1990 as the Third CM worked relentlessly to postpone toll increase and succeeded in convincing the Federal Government to approve and start the Second Bridge construction, before he stepped down in 2008. Then, Lim Guan Eng from DAP as the Fourth CM has since 2008 used the Second Bridge construction and toll increase issue for several political “shows”.

Any toll increase will affect the body polity of Penang and become a “sensitive” political issue to political leaders in government, both federal and state. Gerakan4U (G4U) held a special interview with the former CM Tan Sri Dr Koh Tsu Koon (KTK) to understand why there has been no toll increase for the past 25 years was achieved and prospect for the future.

G4U What is the significance of Penang Bridge to the people of Penang and to you personally, as a Penangite?

KTK A bridge linking Penang Island to the Mainland has been a long term wish of the people of Penang and the major commitment in Gerakan’s General Elections manifesto in 1969. With the people’s mandate, the Gerakan-led Penang State Government (SG) under Dr Lim Chong Eu worked closely with the Federal Government (FG) to promote economic development and to build the bridge. By the late 70’s, the design and preparatory process was initiated and construction began in 1982.

For me personally, my entry into politics as an MP candidate in the 1982 General Elections coincided with the launching of Penang Bridge’s construction. As an MP, I was privileged to join Penangites, to witness the opening of the bridge in 1985.

Since then, the bridge has contributed greatly to the economic growth and social integration of the state. It has become an icon for Penang’s progress and was incorporated into the state emblem.

As the bridge was financed by a Yen loan from Japan undertaken by the FG, the toll rate of RM7.00 for a car paid directly to the government was considered reasonable and acceptable, as it was not a big increase from the ferry fare at that time.

G4U The FG decided to privatise the bridge to the UEM Group in 1993. As the CM at that time, what was your response?

KTK The moment I knew about the privatisation proposal in 1992, I rushed to Kuala Lumpur to get the full picture from the then Finance Minister (Tun Daim Zainuddin). I was concerned that privatization might burden the people of Penang with high toll rate increases, just like the North South Highway.

I was told that even after seven (7) years of toll collection, the debt borne by the FG actually became higher because of the increasing strength of the Japanese Yen. Hence, the proposal to sell the bridge to UEM as concessionaire to repay the entire loan.

In answer to my query, the toll rate was proposed to increase every three (3) years at a compounded interest rate of six (6) per cent per annum, similar to the North-South Highway toll formula. It would exceed RM40.00 at the end of 30 years!! (see table).

In response to my strong protest, the FG then proposed to reduce the toll from RM7.00 to RM5.00, but maintained the formula of increase. I also found this unacceptable because it would still increase to RM30.00 in 30 years’ time.

I then gathered information about the current and potential traffic volume increase projections to show substantial revenue gain by the bridge company and used this to convince the FG. After a few rounds of negotiations, the FG agreed to maintain the RM7 toll but to reduce the increase period to every five (5) years at only two (2) per cent per annum which was effectively less than the Consumer Price Index (CPI) increase. By this formula, the toll would reach only RM12.70 at the end of 30 years (see table).

G4U Why was your effort not publicised and publicly known?

KTK Admittedly, at that time, I was more focused on getting the best deal for the people of Penang. My concern was not political publicity for myself. Anyway, when the agreed toll formula was announced, it was widely accepted without any protest, even from the opposition.

Now, in hind sight, some friends suggested that I should have engineered a “political show,” with the FG announcing the original “high increase” formula, then with me publicly protesting and eventually succeeding in lowering the toll rate increase, thus becoming a “hero”. But I really did not see it from such a political angle. I sincerely believe that it is the duty of the government elected by the people to do the best for the people and not to politicise for the sake of publicity.

G4U Even with this rather low toll rate increase formula, you managed to postpone the toll increase three (3) times since 1993 until now. How did you achieve that?

KTK According to the Concessionaire Agreement, the first increase to RM7.70 should have come in 1998, five (5) years after 1993. However, Malaysia was hit by the 1997 – 1998 Asian Financial Crisis. Hence, I used this as the major argument to convince the FG not to increase the toll rate, so as not to further burden the people during such a difficult time. Moreover, I managed to show that the actual traffic volume increase exceeded what was projected, hence giving additional revenue to the concessionaire.

The next scheduled increase to RM8.50 came in 2003. We were again in the midst of an economically difficult period, with tourism and trade being hit by the aftermath of the September 11 incident, the Bali bombings and the SARS epidemic, while our manufacturing sector also suffered from the global electronics industry decline in 2001. Hence, I again used the economic argument, supported further by traffic volume increase, to postpone the bridge toll increase.

On both occasions, the then Prime Minister Dato’ Seri Dr Mahathir and Works Minister Dato’ Seri Samy Vellu were supportive. The toll was again scheduled to increase in 2008 to RM9.40. Just as I was about to present our case to FG again, the General Elections was called in March, and hence negotiation did not proceed, but the toll remained at RM7.00 till now.

G4U So, the bridge toll has not increased since 1985 until today, ie, for 25 years! Why was this not well known to the people of Penang?

KTK Well, as there was no increase, there was no announcement. We also did not explain to the public the negotiations that went on behind the scene, not to talk about dramatizing it. Conversely, if there were an increase, it would have made very sensational headlines in the news.

But, surely, the people of Penang, especially daily commuters, knew that they have been paying the same toll all these years, although some may have taken it for granted. Nonetheless, this could perhaps one of the reasons that the people of Penang continued to support the Barisan Nasional government led by me in the 1995, 1999 and 2004 General Elections.

G4U Recently, the DAP MP from Bukit Bendera, Liew Chin Tong, received a reply to his question in Parliament that tolls for the second bridge and the first bridge would be standardised. Had the government confirmed the new toll at RM9.40?

KTK That was the proposal by the bridge concessionaire company. In their argument, as toll increases have been postponed three (3) times and remained unchanged for 17 years since 1993, the concessionaire agreement actually allowed toll increase, or else the FG is required to subsidise the loss of revenue suffered by the concessionaire company.

However, I recently impressed upon the Prime Minister (PM) that we really need to take a very close look at the actual revenue and expenditure by the concessionaire company over the years, as well as the Second Bridge’s projected revenue, before we can formulate a long-term strategy, notwithstanding the conditions in the concession agreement.

G4U The present Pakatan Rakyat government of Penang objected to the toll increase. What should the present Penang CM do? Are you willing to help?

KTK Strictly speaking, negotiating with the FG in the interest of the Penang people should be the duty of the present CM, as I have done so during my 18 years as the CM. However, rather than presenting convincing viable alternatives to the FG based on facts and figures, the present CM chose the easy way out, by politicizing and dramatizing this issue, calling for toll abolition and attacking the FG and the BN, just as he has been doing on other issues.

Of course, I am willing do what I can to help the people of Penang, especially since the present CM seems not to be prepared to face and handle this issue in a professional manner. In fact, I have actually found a workable solution which will not put a heavy burden on bridge users. Based on my proposed concept to the PM, the Works Minister (Shaziman) is now working on a new formula involving both bridges.

Ends

by Editorial Desk
Gerakan4U Bulletin Sept 2010 / Vol.4