Published November 19, 2008

KL moves could dent support for opposition

Petrol, rice prices, night toll rates cut; highway documents declassified

By S JAYASANKARAN
IN KUALA LUMPUR

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The Malaysian government announced a series of populist measures on Monday and yesterday that are likely to be welcomed by the public and further erode the chances of the opposition wooing enough defectors from the ruling National Front coalition to form the next government.

Clearer picture: All highway operators except Maju have agreed to have their deals revealed for public inspection

On Monday, Domestic Trade and Consumer Affairs Minister Shahrir Samad announced a 7 per cent reduction in the price of petrol to RM2 (S$0.85) a litre. The price of lower-quality rice was also reduced, by 5-10 per cent. And a request by bus operators to raise fares 100 per cent was denied. Finally, toll rates will drop 10 per cent for drivers who use major highways between midnight and 7am.

In addition, the government has agreed to a long-standing request by the opposition and special interest groups that concession agreements with highway operators be declassified.

Works Minister Mohamad Zin Mohamad said yesterday that all operators except Maju Holdings have agreed to have their contracts revealed for public inspection. Maju operates a dedicated highway between Kuala Lumpur and Putrajaya, Malaysia's administrative capital.

The moves illustrate the government's growing awareness that public disquiet can no longer be dismissed as it once was. Public anger over rising fuel and food prices was a major reason for the National Front's sharp electoral reversal in the March 8 general election.

Meanwhile, the declassification of highway documents signals a government move towards greater transparency. Previously, it claimed the agreements were official secrets, amid claims that many of the contracts were lopsided in favour of the contractor and therefore against public interest.

Economists will not be dismayed by the reduction in petrol prices, as it will have no impact on the budget deficit. On the contrary, Mr Shahrir said that at RM2 a litre, the government is no longer subsidising petrol and, in fact, is taxing the public to the tune of an estimated RM10 billion a year if global oil prices stay around US$55 a barrel. This explains how an extra RM7 billion of spending in the 2009 Budget will be financed.

Malaysian pump prices are still the cheapest in the region. Malaysians pay US$0.53 a litre, while Sri Lankans pay US$1.02 and the Chinese pay US$0.70.

On the declassification of highway agreements, Mr Mohamad Zin said this will happen no later than Jan 1, 2009 and is proceeding because all highway operators except Maju have agreed to disclosure. He said he is unsure whether Maju refused to comply or has simply been tardy with its reply.