Budget 2020 - What’s in stock for the Malaysia transport and auto sector?

MANILA: Lim Guan Eng, the finance minister of Malaysia, tabled the Budget 2020 known as Bajet 2020 on October 11th. The budget didn’t directly benefit the potential car buyers as there was no reduction in taxes impacting the price of new cars. However, a slew of other announcements made during the budget will affect the transport industry as a whole positively.

18% discount on toll charges

Plus Malaysia, the largest highway concessionaire of the country, will provide a minimum of 18% discounts on toll charges from 2020, and it will apply to all its highways. As a result of this, the highway user will save up to RM 1.13 billion during 2020 and 43 billion through the entire concession period until 2038.

Second Penang Bridge toll reduced

As a part of the budget, the toll charges of the Second Penang Bridge (Jambatan Sultan Abdul Halim Muadzam Shah) reduced from RM 8.50 to RM 7. The new toll charges will be applicable from January 1st, 2020.

Jambatan Kedua Sdn Bhd (JKSB) is the concessionaire of the Second Penang Bridge. In 2017, it collected toll from 1.97 million vehicles, 32.4% up from 2016. The total toll collection in 2017 stood around RM 38.64 million, which was 29.5% up from the previous year.

Meanwhile, motorcyclists will not be charged for using the Second Link to Singapore and both Penang bridges.

Four Klang Valley highways to be taken over by the government

The Finance minister, Lim Guan Eng, announced that the government would take over four Klang Valley highways. These include Damansara-Puchong Expressway (LDP), Shah Alam Expressway (KESAS), SMART Tunnel (SMART), and Sprint Expressway (SPRINT).

 

Users will enjoy up to 30% discount on the toll charges during peak hours, and it will be free during off-peak hours. The exact timing and implementation details will be revealed shortly. Users will save nearly RM 180 million in a year and RM 2 billion over the entire concession period.

The government will have to invest around RM 6.2 billion for taking over these four Klang Valley highways.

Kad95 fuel subsidy card arrives

The Malaysian government also introduced a Kad95 fuel subsidy card. It will be provided to people with household income not more than RM 4,000 and who are also devoided of Bantuan Sara Hidup (BSH) for some reason.

Only one vehicle per recipient is eligible to get this fuel subsidy card. The rate of the subsidy will be a maximum of RM 30 for a car and RM 12 for a bike. After every four months, the government will reimburse the subsidy (RM 120 for cars, RM 48 for bikes).

In order to be eligible, the engine displacement of the cars has to be 1,600 cc or below, while for ten years old cars, there is no limitations on displacement. On the other hand, the engine displacement for the motorcycles must be 150 cc. For over 150 cc, the bikes have to be seven years or above.

RM1 billion to upgrade Malaysian rural roads

The finance minister also informed that the government would provide around RM 1 billion to upgrade the rural roads in Malaysia. It includes RM 326 million for the Sabah and RM 224 million for the Sarawak. Further, the Pan-Borneo highway would also be completed.

Moreover, the federal government would set aside around RM 4.85 billion of funds from MARRIS (Malaysia Road Record Information System) and disburse the same to state governments to upgrade and maintain roads.

There were some other announcements as well e.g., implementation of B20 biodiesel, funds for pilot projects on autonomous vehicles, etc. We will have to wait to be sure whether the Budget 2020 benefit the Malaysian automobile market in the long run or not.

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