Petaling Jaya Utara MP says taxpayers should not be made to compensate ERL for its declining business.
The DAP man said according to ERL’s initial schedule for fare hikes, ticket prices should currently stand at RM74 instead of RM55.
Prices should increase again in 2019 to RM97, and again in 2024 to RM126.
However, Pua added, the government had rejected ERL’s last three scheduled fare hikes, with Deputy Transport Minister Abd Aziz Kaprawi saying in the Dewan Rakyat on Wednesday that the concession extension was compensation.
“ERL had previously demanded RM2.9 billion in compensation from the government due to its inability to raise fares based on its initial schedule.
“However, the auditor-general’s report found that ERL’s revenue was between 11.5% and 13.7% of its projected revenues. Hence why should taxpayers compensate ERL for revenues which were outrageously inflated anyway?” he said in a statement today.
Pua, who is also DAP national publicity secretary, said the government should instead allow the fare hikes to take place should ERL decide to implement them.
“The government should call ERL’s bluff and allow them to proceed to raise its fares.
“If ERL does so, and collapses financially due to the lack of passengers, the government has the right under the concession agreement to take back its service.
“However, if ERL chooses not to hike its fares despite being allowed to do so by the government, then the taxpayers will be absolved of any obligations to compensate ERL.”
Pua said ERL was already struggling with low ridership due to the last increase in ticket price, from RM35 to RM55, and the ample competition in transport service availability to both KLIA and the Kuala Lumpur International Airport 2 (klia2).
“The same journey using GrabCar or Uber ride service will cost RM65 and approximately RM75 respectively. If the rides are shared, then the fares are significantly cheaper than ERL,” he added.
Noting that the ERL concession was awarded in 1999 through direct negotiation with the ERLSB, whose largest shareholder is the YTL Group, Pua asked if the government’s rejection of the fare hikes was an honest attempt to protect the people or a “masked attempt to bail out ERL and save a crony-linked company”.
“By choosing to extend ERLSB’s concession, the government is helping ensure that those lopsided terms continue,” he said.
He said since 2002, ERL had made RM741 million from seemingly lucrative terms, including a fee of RM5 and RM1 for every international and domestic traveller using KLIA or klia2, regardless of whether they use the ERL service.
“However, now that business apparently isn’t so good, why should taxpayers step in to bail out the company shareholders?”
On Wednesday, Aziz told Parliament that the government was extending the concession period for the ERL service by 30 years.
The original concession period was meant to expire in 2029.
Aziz said ERL had sustained a cumulative loss of RM661.34 million after tax since 2002, and that the rail service had also previously suffered losses for six consecutive years, between 2009 and 2014.
Aziz added that since the ERL began operating, it has had an average of 5.4 million passengers a year, and in 2015, he noted a 20% increase compared with the previous number of 11.03 million passengers.
“However, a fare increase from RM35 to RM55 in 2016 resulted in a drop in the number of passengers by 19% to 8.9 million,” he added.
ERL concession extended 30 years
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