I wonder if the EPU is taking a holistic view of the matter of privatised highways in Malaysia having completed the first phase of its study.
I imagine that a holistic approach will encompass more than the mere restructuring of toll rates.
The study should also earnestly consider a takeover of all toll concessions by the Malaysian Government. The existing toll concessions are clearly inappropriate since it provides financial benefits to a few corporations and poses an escalating pricing burden on road users. Roads are, in economic terms, public goods. This has, correctly, become a political hot potato simply because it affects road users who happen to be voters.
I was quietly interested to read the media report that the Prime Minister/Minister of Finance 1 has indicated that the Malaysian Government may return to the international bond market by issuing sovereign bonds.
It is obvious that the present thinking of the Malaysian financial planners is to raise sovereign bonds for generic fiscal funding. That will immediately be equated with the funding of the fiscal deficit. There is no doubt that there will be many detractors for this policy imperative.
I wish to reiterate a matter that I have blogged about several times, that is, the takeover of toll roads by the Malaysian Government which is to be funded by the issuance of sovereign bonds.
The raising of funds via the issuance of sovereign bonds to facilitate the Malaysian Government's takeover of the toll roads makes eminent financial and political sense.
The raising of funds via the issuance of sovereign bonds to facilitate the Malaysian Government's funding of its massive fiscal deficit is, on the other hand, a political hot potato.