VEP- Trying to understand the decisions

The VEP and Toll fees hike is turning into another mini crisis or pain among the transport operators and travelers on both sides of the causeway. When one hiked the other party also wants to hike. It can be Singapore first or Malaysia first, doesn’t matter. If Malaysia does it, Singapore’s standard reaction will be, we will match the hike.

For the party who made the first move, one can quite safely deduce that they must have done some homework, some analysis on the numbers and the reasons for hike. Let’s hazard a guess on the reasons why LTA decided on the fee hike. The first point is likely that the govt needs money and someone was told to look for more revenue sources. Can the CPF issue be a factor where some changes will take place to return some money to the people to appease them? A second reason is to relate the cost of driving on our roads with comparatively higher COEs that the Singaporeans are paying. A third reason, too many vehicles on the road and a need to limit foreign vehicles coming in. But this third reason is contrary to the need for economic growth, to have more economic activities, more people and vehicles in the island. Raising fees would definitely lead to lesser vehicles coming here if they could avoid it, lesser Malaysians driving in for leisure, and lesser Malaysians shopping here and thus affecting the Great Singapore Sale. Oh, GSS is over already I think.

A fourth reason, would this affect those Singaporeans buying properties or setting up factories at Iskandar? What kind of impact? Likely to be negative, but is it good or bad for Singapore?

LTA must have played with the different combinations on what would be the desired fee hike and the acceptable consequences. So lesser vehicles, lesser people coming in are acceptable trade offs for the increased in revenue. And if the Malaysians retaliate by raising fees on their side, even lesser vehicles and people coming in, but with a corresponding match in toll fee hike, the increased in revenue is good.

What would be the motivating factors for the Malaysians to do so? The first is political. KNN anyhow raise VEP to make Malaysian vehicles pay more. Must hit back to show them we cannot be makan or bullied. Another reason, well, using the political excuse will be popular with the people, but better still, can raise revenue also. This is like killing two birds with one stone. Can tekan the Singapore govt and appease the Malaysians. Got balls!. The third reason, or haven’t thought of, what if this leads to lesser Singaporeans coming into Malaysia? Would it affect the tourist dollar, would it affect the sales of properties at Iskandar and the bigger plan of turning Iskandar into a shining pearl? What about the ordinary Malaysians crossing over to work and the children taking public transport to schools? This last question going to be susah.

What both sides must have thought through would be the likely effect of choking up the causeway and the second link. People, goods and money will not flow so smoothly through these two links. It would definitely affect the economy the wrong way. It is like throwing a spanner in the works by both sides.

Why would the two govts want to do these things? In Singapore’s case, boh lui is a likely to be a big factor. For the Malaysians, it is like trying to fight a battle only to lose a war.

Kopi Level - Green