Works Minister: “Tunnel is most lopsided agreement Malaysia has seen”.
Fadillah also asked why the undersea tunnel would begin only in 2023 when the project was awarded in 2013.
He said it was unusual for a government to award a project that would only begin some 10 years later, as the environmental situation and land use might change by then.
Fadillah said the Penang government might be overpaying for construction costs by giving up prime land based on today’s value, as the project would only take place in the future.
“Given the fast appreciation in value of prime Penang land seen over the past decade, it is not unreasonable to suggest that the cost of land given as payment by the time the tunnel finishes construction in the year 2037 would have doubled or tripled in value,” he said.
Fadillah said the toll collection concession agreement was the “most lopsided agreement Malaysia has seen”.
He said the company in charge had been given 30 years to collect tolls, despite benefiting from the appreciating cost of the prime land and construction profits.
“This is unlike the standard concession agreements where the toll concession company funds the construction cost of the highway or tunnel and, upon completion, collects toll to repay its borrowings and make a profit,” he said.