Causeway toll ‘tit-for-tat’ will hurt Malaysia more than Singapore, The Economist says

Despite protests by transport companies and frequent commuters of the Causeway, Malaysia raised the toll fees for cars leaving the country at its southern gateway in August with taxis paying RM8.20 for a round-trip while heavy good vehicles are charged RM33.30. — File pic
Despite protests by transport companies and frequent commuters of the Causeway, Malaysia raised the toll fees for cars leaving the country at its southern gateway in August with taxis paying RM8.20 for a round-trip while heavy good vehicles are charged RM33.30. — File pic

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KUALA LUMPUR, Oct 24 ― Malaysia has more to lose in the “tit-for-tat” Causeway toll fee hike than Singapore, The Economist said in its latest print edition, pointing out that the bridge road between the two Southeast nations accounts for roughly half of this country's foreign visitors.

The London-based international current affairs news weekly also pointed out that the higher rates hurts the pockets of Malaysians travelling across the Causeway for work.

To make things worse, The Economist noted that Johor lawmakers are now also threatening an additional levy on Singaporean drivers in Malaysia.

“Malaysia has most to lose from the tit-for-tat,” the weekly said in an article in its latest print edition.

Despite protests by transport companies and frequent commuters of the Causeway, Malaysia raised the toll fees for cars leaving the country at its southern gateway in August with taxis paying RM8.20 for a round-trip while heavy good vehicles are charged RM33.30.

The Singapore Land Transport Authority then announced in September that it would match Malaysia's prices on the oldest bridge linking the two countries that were once part of the same federation, adding that it would revise the rates if and when Malaysia does.

Johor's lawmakers have sounded warning bells over the hike, noting that the 470 per cent increase will pose a strain on small traders, besides hitting Malaysia's tourism and the Iskandar development region, which is heavily reliant on its closeness to Singapore for investments.

“The Iskandar Development Region... is as good as gone. There will definitely be an impact on the national economy,” Kluang MP Liew Chin Tong said recently.

The Economist agreed the toll hikes would affect Johor's burgeoning Iskandar region, noting that early optimism in the returns from the economic zone is already fading amid the looming housing glut.

“Malaysia has poured money and effort into Iskandar,” the weekly said.

By developing the economic zone, which spans an area about three times the size of Singapore, The Economist said Putrajaya had hoped to “snag a little more of the magic dust” from its rich neighbour.

The plan worked for a time, the weekly said, noting that rich Singaporeans were happy at having a cheaper option to park their investments.

“Until recently, Iskandar’s cheap condominiums seemed like good bets when Singapore’s own property prices were shooting up.

“Singapore hopes factories can move to Johor, freeing up space and resources for higher-value businesses,” The Economist said.

Malaysians in the meantime, it said, continued to commute daily from Johor, reporting to jobs across the Causeway where they could earn in Singaporean currency.

But housebuilding in Iskandar has now outpaced job creation, The Economist said, a phenomenon that observers have agreed will soon result in a property glut.

Citing Malaysian data, Singapore’s main newspaper Straits Times reported recently that there are 118,191 homes under construction in Johor, and another 168,371 planned as at the fourth quarter of last year.

Adding to fears of the looming oversupply of homes, The Economist pointed out that the suspension of corporate-ownership rules that favour the Malays, Malaysia's ethnic majority, in Iskandar has also angered the locals.

Their grievances, the weekly said, cannot be ignored, particularly as the ruling Barisan Nasional (BN) government had lost significant numbers to the opposition during the last general election.

“At present the costs are manageable,” The Economist wrote in reference to the Causeway toll prices, quoting a taxi driver on the Causeway.

“But what will happen next year?” it asked.

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