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    Jul 30, 2014

    For some, hikes may exact a significant toll

    WHILE a hike in toll charges on both sides of the Causeway will undoubtedly make that shopping trip to Johor less appealing, the impact may be more widespread.

    Singaporean firms which have set up shop across the border to take advantage of lower labour and operating costs may find themselves passing on the new charges to consumers, and property buyers may also take a step back from investing in Iskandar.

    The hike will also affect a significant number of Singaporeans who reside in Johor Baru and make the daily cross-border commute for work and school.

    Reports suggest that Malaysia's Works Ministry will increase toll charges for all vehicles, except motorcycles, travelling from Singapore to Johor through the Checkpoint at the Causeway.

    A new Causeway toll for all vehicles travelling from Johor to Singapore will be implemented alongside the hike. Both will reportedly kick in on Friday.

    SLP International research head Nicholas Mak said that while the toll increases in themselves will be a "minor irritation" to Singaporean home investors in Malaysia, the bigger question some may ask is whether there will be more of such policy shifts in the future.

    Buying sentiments could be affected, as investors may see the toll hikes as just the "thin end of the wedge" for more policy risks facing foreign buyers of Malaysian properties, Mr Mak added.

    Alluding to the 1998 Clob saga, during which Malaysian shares owned by Singaporeans became frozen and illiquid, Mr Mak said such sudden policy shifts can dent investor confidence.

    Now the two countries wanted to work together. "And yet it's more expensive to travel between them," he said.

    Based on reports, the increase could mean a tripling of the current RM2.90 (S$1.15) to RM9.70 (S$3.80) in toll paid by drivers of private vehicles going from Singapore to Malaysia via the Causeway.

    A new toll of RM6.80 will also be levied when returning to Singapore from Johor.

    The changes in toll charges are independent of a reported RM50 (S$19.60) Malaysia announced it would impose on all foreign-registered vehicles entering Johor.

    Singapore has said that it will match any increase in toll charges or new tolls.

    For businesses that depend on cross-border goods movements, the toll increases may mean higher logistics costs that will be passed on to consumers or business customers, said Kurt Wee, president of the Association of Small and Medium Enterprises.

    The Iskandar region, often cited as a relocation destination for Singapore firms looking for a cheaper cost environment, may become a "less attractive proposition" now, Mr Wee noted.

    He said that there are also many Malaysian businessmen who live in Singapore and they, too, will be affected.

    For Singaporean Fahmi Rais, 46, who lives in Johor and commutes across the border daily, the toll increases will dent his disposable income.

    Mr Fahmi, who owns a cafe in Johor, said that as travelling between Singapore and Malaysia - whether for work or eduction - has become a "bread and butter" necessity, people will just have to swallow the increase.

    The former vice-president of the Johor-Singapore Community Care Association said there may be over 5,000 Singaporean families residing in Johor. They like the lower cost of living. For many, this cost is poised to rise.