Pic: AP.

Car owners, businesses face heavy tolls as governments engage in tit-for-tat price hikes

On July 1, the Land Transport Authority (LTA) in Singapore announced that vehicle entry permits for foreign registered cars and goods vehicles were to be increased. The price hikes, which were introduced Friday, are only in effect during specific hours when traffic is at its heaviest. According to the authority, such reviews of foreign vehicle entry fees are to “ensure that the cost of owning and using a foreign registered vehicle in Singapore is commensurate with that of owning and using a Singapore-registered vehicle”.

The news was greeted with anger across the causeway in Malaysia. In what has been seen as a tit-for-tat move, the Menteri Besar of Johor, Datuk Seri Mohamed Khaled Nordin, sent a request to the Federal government to raise the Vehicle Entry Permit in Johor for Singapore-owned vehicles. Discussions on raising the levy had been made in the past in Malaysia, but the decision was scrapped as it was thought that a higher levy would deter Singaporean from driving north to Johor. Johor state, particularly Johor Bahru city, is a popular weekend destination for Singaporeans, who make a valuable contribution to the economy in many areas.

On July 16, Malaysian PM Najib Razak announced that the Federal government had approved Khaled’s request and would raise the Vehicle Entry Permit (VEP) for vehicles entering Johor. The Malaysian leader added that a portion of the extra funds would be channelled back to Johor.

In a separate briefing the same day, the Deputy Transport Minister Datuk Abdul Aziz Kaaprawi said that the VEP would only be applied to Singapore-owned cars, arguing that Singapore is only imposing a VEP charge on Malaysian vehicles and not other countries.

Two days later, in response to media queries a spokesperson for the Singapore Ministry of Transport, expressed concern that Singaporean vehicles were being targeted because of the state-specific ruling. Khaled Nordin asked for acceptance from foreigners, particularly Singaporeans, “We have allocated about RM100 million to maintain roads in Johor, not only for locals but also for foreigners as well… As such, they should jointly share to fund the cost of road maintenance”.

In what came as a surprise to many, the Malaysian Highway Authority (LLM) announced later last month that toll fees at the Bangunan Sultan Iskandar Customs, Immigration and Quarantine (CIQ) Complex in Johor Baru, linking Singapore to Malaysia, would increase for all Class 1 to 5 vehicles by 400%. Only motorcycles were exempt. This move was heavily protested by businesses. Many goods (particularly food) enter Singapore daily from Malaysia. The businesses argued that such a move would drive up the cost of doing business. Observers noted that the cost would eventually be passed on to the end consumer on both sides of the causeway. The director-general of the LLM explained that “the new toll rate at the CIQ is according to the facilities and services enjoyed by users going through the complex from the Eastern Dispersal Link (EDL) Expressway.”

The EDL is a privatisation project specially aimed at improving the prospects of Malaysia’s Iskandar development project.

Supporting the director-general, the Menteri Besar added that, “When we enter Singapore, besides the VEP, we also pay tolls and when we are in the city, there are more tolls… So, the toll is a way for any country to control the increasing usage of vehicles.” The tolls within the city that Menteri Besar referred to were the Electronic Road Pricing (ERP) system in Singapore used to control road usage within the city area. The toll imposed by the Johor State Government specifically targets user who enter Johor from Singapore.

This toll is separate from the VEP.

This decision was panned by politicians on both sides of the political divide in the Johor State Assembly. According to the Malaysian Insider, opposition DAP MP Liew Chin Tong said that, “All these hardships are imposed because the cronies have to be paid for the highway and other projects they built. It is totally unacceptable.” Ruling UMNO MP Datuk Nur Jazlan Mohamed criticised the decision, saying, “I don’t understand the rationale for the toll hike that is clearly going to burden the people in Johor who work in Singapore, when they still have to go through heavy traffic on a daily basis”

The back and forth between the two transport authorities continues. The Singaporean LTA issued a statement saying, “if there is indeed a new toll, or an increase in toll charges, at the Causeway, the Singapore Government will match the new toll and increase in toll charges in due course.”

Singapore’s VEP hike came into effect Friday, prompting a mini-strike by Malaysian bus drivers who refused to cross over to Singapore so as not to pay the toll and VEP fees. Malaysia’s Work’s Ministry has denied a strike. In a statement to a reporter from Channel NewsAsia the Ministry wrote that “there was no strike by bus drivers at the Customs, Immigration and Quarantine (CIQ) this morning… What happened was a small commotion caused by the refusal of two bus drivers to pay the toll imposed at the CIQ.”

Although relations between Singapore and Malaysia have been thorny in the past, the two countries have been cooperating well under their current leaders on projects such as a proposed high-speed rail line from Singapore to Kuala Lumpur. Singapore, however, is often a convenient punching bag for Malaysian politicians trying to score political points with their electorate.

The Menteri Besar of Johor had been under fire recently for failing to stop a move by the Sultan of Johor from a land grab move. The move was ultimately prevented by former Prime Minister Mahathir Mohamad. Criticisms of Nordin came from many quarters, claiming that he was a weak leader, prompting Nordin to respond on Facebook defending himself, “I also know that there are parties who say that I am unable to advise and control the Sultan, especially in land administrative matters. This is not true.”

In the recently concluded Malaysian General Elections in 2013, the once ‘safe’ fixed deposit state of Johor saw a relatively large swing away from the ruling government to the opposition. The opposition coalition Pakatan Rakyat won 18 out of 56 seats (the ruling Barisan Nasional won 38 seats) up from six in the previous election. The main winner was the Democratic Action Party (DAP), which won 13 out of the 18 seats for the opposition.

The DAP was made up of the remnants of the ruling PAP in Singapore who decided to remain in Malaysia after Singapore was ejected from the Federation.

Tweets from Nordin show exactly why politics has reared its head in policy, with him attacking DAP members for being agents from Singapore. In turn, opposition politicians are demanding apologies for insinuations regarding their pro-Singapore stand.

What is notable is the relative silence of the Singaporean leaders, particularly the Prime Minister and the Transport Minister. One would reckon they know that the issue has since ceased to be about policy but about politics.

As ever, when politicians play politics with policy, people suffer.