7 April 2015
Plan to ban lorries on Causeway, VEP will affect business: SMEs
SINGAPORE: From August, foreign vehicles entering Malaysia are expected to start paying a vehicle entry permit (VEP). At RM20 each, this will add pressure on the profit margins for small- and medium-sized businesses (SMEs) in Singapore.
"We don't think the impact will be very big on the bottom-line of the company, but it does have some impact that will affect the cost and ultimately, this will increase the raw material costs and operational costs that will pass on to consumers at the end of the day," said Mr Eric Tan, Executive Council Member at the Association of Small and Medium Enterprises (ASME).
To add to the margin squeeze, there are plans by Johor to ban heavy vehicles from using the Causeway. This will hit businesses that rely on daily deliveries from across the border: Toll charges on the Second Link are also more expensive than on the Causeway by at least double, and using the Tuas Second Link could also add to transportation time.
Said President of the Johor Lorry Operators’ Association Anthony Tan: "In the lorry transportation operations, it will have an efficiency impact on us. If we are forced to use the Second Link to travel to Singapore, and I have goods that's supposed to be delivered to Woodlands, I would have to go to Second Link, go through Jurong and up to the north of Singapore again. This will ultimately have a longer journey and longer travelling time. On the toll charges itself, Second Link toll charges are at least 100 per cent more expensive than the current ‘first link’ toll charges."
The ban aims to help ease congestion at the Causeway while the construction of a proposed rapid transit system (RTS) linking Johor Baru and Singapore is underway.
Members of the Johor Lorry Operators Association operate 3,000 trucks that ply daily between Johor and Singapore. It says having the same toll charges for both checkpoints might help to ease the traffic woes.
ASME expects food manufacturing, furniture, and certain sub-sectors within the construction industry to be most affected by the proposed ban.