Digest on Malaysian News

The government is quite good in playing some ploy to deceive the rakyat (that's us). I'm short of calling the government as a con artist. Anyway, government ministers are also quite good in giving excuses, reasons and in-direct information.

From the snippet below, according to Transport Minister Datuk Seri Ong Tee Keat, if RM51 airport tax is collected from an international flight, RM5 is allocated to ERL (owned by YTL Corporation). That's roughly about 10% share. The airport tax is meant for the government who is the servant to the rakyat.

Ong Tee Keat also revealed that in 2008, RM292 million airport taxes were collected from KLIA (he didn't says how much were collected from foreigners). Based on the 10% allocated given to ERL, that would amount to about RM29.2 million. RM29.2 million given for free YTL. Of course, Ong Tee Keat has reminded us that it is the "concession" money.

Wonder how much YTL refunded back to their kaki in the government. Only in Malaysia.




From MalaysianInsider

Fly or ride, or neither, taxpayers still pay ERL

By Shannon Teoh

KUALA LUMPUR, Feb 24 – Malaysians have been subsidising the Express Rail Link (ERL) service since last April, it was revealed in Parliament today

Transport Minister Datuk Seri Ong Tee Keat said that YTL Corporation’s ERL Sdn Bhd, the operator of the high-speed rail service from here to the Kuala Lumpur International Airport, had been indirectly subsidised since last April because the company is unable to cover costs due to poor sales.

Answering a question from PKR’s Azmin Ali, the minister said that under a concession agreement for the rail service, Malaysia Airports Holdings Berhad (MAHB), the operator of KLIA, is required to pay ERL a portion of service charges it levies on all passengers.

But since April 1 last year, the finance ministry has been reimbursing MAHB for the money it pays ERL.

Ong said this arrangement was a result of a restructuring exercise in MAHB under a “marginal cost support scheme.”

He did not, however, reveal how much has been paid indirectly to ERL under the scheme.

Ong told Parliament that ERL was not being given any allocation from airport taxes, but under the concession agreement, an allocation from passenger service charges levied by MAHB was due to ERL since 2002.

“For example, if RM51 is collected from an international flight, RM5 is allocated to ERL,” he said.

Later, he told reporters that the Finance Ministry has been reimbursing this amount to MAHB since April 2008 but insisted that “ERL gets no monetary support from the government.”

However, the fact that the government-linked company is reimbursed for whatever it pays ERL by the government, effectively makes it an indirect subsidy.

Ong justified the allocation to ERL by pointing out that there had been a massive capital outlay to operate the rail line but that ticket sales “cannot cover the cost of the outlay and maintenance.”

He added that the allocation was agreed upon based on projected traffic before the ERL had begun operations.

“With the inception of the low-cost carrier terminal two years ago, (ERL) takings have further deteriorated,” he said.

Ong also revealed that the government has collected RM1.86 billion in airport taxes since 2004.

In 2008, RM446.4 million was collected, with RM292 million from KLIA.

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