Photo of Causeway from BTInvest

Amid the raising of toll charges, the only winners are the governments of both Singapore and Malaysia. After Singapore announced the raising of toll charges by a further S$6.50 yesterday (Jan 16), the Malaysian government responded voicing no opposition and simply said that they “respect” Singapore’s decision.

Come February 15, a Malaysian car will pay RRC S$6.40 (RM20), Singapore Vehicle Entry Permit (VEP) of S$35 (RM109.30) and Singapore checkpoints toll fares (for both ways) S$6.50 (RM20.30). With toll charges going up to S$48.90 excluding ERP tolls, a Malaysian might as well travel by budget airline Air Asia for a faster and better transit experience.

The two toll charges implemented by both sides are netting hundreds of millions in taxes for both government, in exchange for zero infrastructural improvement work done for the overcrowded custom. According to Singapore’s Land Transport Authority, for the 51 days between Nov 1 and Dec 20 last year, Malaysia netted S$4.5 million in road charges.

While citizens of both countries who frequently use the border are the only losers, the greater sucker are Singaporeans due to the higher exchange rate and its reliance on Malaysian imports and labour. As the Sing dollar is now trading at more than three times the strength of the ringgit, Malaysians are already unlikely to travel to Singapore for leisure. Malaysians who transit the bridges to work in Singapore will see no point in earning a Singapore wage only to pay exorbitant transport costs. Given the increased investments and developments in Johor, more would likely move back to Malaysia resulting in a manpower shortage in Singapore. Singapore’s security firm, Certis Cisco, has already complained on the lack of manpower even from Malaysia and are now looking at Taiwan for new hires.

Singapore is also highly reliant on Malaysia as a hinterland for food supplies. As most distributor transport vehicles are Malaysian-registered due to high costs of car ownership in Singapore, food prices are likely to see an increase as businesses pass on the higher costs to consumers. Most Singapore companies also rely on Malaysia’s manufacturers for material supply and goods import, the increase in freight charges are likely to worsen the already-high cost environment in Singapore. Malaysian workers, mostly semi-skilled contractors like carpenters and skilled workers in the construction trade, will also likely increase labour costs to compensate for the increase in transport.