KUALA LUMPUR, Nov 17 — Putrajaya should allow the operator of the Express Rail Link (ERL) its contractual fare increases rather lengthening the contract tenure, said DAP’s Tony Pua.
Criticising the government for extending the concession of Expressrail Link Sdn Bhd for another 30 years from 2029 in lieu of higher fares, the Petaling Jaya Utara MP alleged the move to be a bailout of the firm.
“The government should call ERL’s bluff and allow them to proceed to raise its fares.
“If ERL does so, and collapse financially due to the lack of passengers, the government has the right under the concession agreement to take back its service,” Pua said in a statement today.
Pua said the ERL previously sought RM2.9 billion in compensation for retaining fare prices, but noted that a federal audit suggested that the firm would not have been able to earn the sum through fares.
Citing the Auditor-General’s report, he noted that Expressrail Link was only making 13.7 per cent of its projected revenue.
“Now that business apparently isn’t so good, why should taxpayers step in now to bail out the company shareholders?” Pua questioned.
The DAP national publicity chief then said the firm should be allowed to increase its fares as stipulated in its concession agreement, predicting that it would not dare do so for fear of losing even more ridership.
He said that the situation meant Putrajaya neither has to extend the contract or compensate the firm, but simply honour the “lopsided” agreement sealed by the Mahathir administration.
Deputy Transport Minister Datuk Abd Aziz Kaprawi told Parliament that the government will extend the ERL concession to 2059 in order to maintain current fares.
The current ERL fare is RM54 and is meant to rise to RM97 in 2019, and to RM126 in 2024.