Local SMEs see little impact from Causeway road charge

Local companies with operations in Malaysia have shrugged off the the RM20 ($6.60) levy being slapped on Singapore-registered cars crossing the Causeway.
Local companies with operations in Malaysia have shrugged off the the RM20 ($6.60) levy being slapped on Singapore-registered cars crossing the Causeway.PHOTO: ST FILE

Local companies with operations in Malaysia have shrugged off the the RM20 ($6.60) levy being slapped on Singapore-registered cars crossing the Causeway.

Companies that The Straits Times spoke to said that the road charge that came into effect on Tuesday is manageable as their Malaysian businesses do not require a large fleet of Singapore-registered vehicles to enter Malaysia.

Mr Albert Ang, chief executive of anti-corrosion coating company AGV Group, drives to Malaysia frequently to visit an associate plant in Pasir Gudang. "The plant hires almost entirely locals and I go there maybe once every two weeks. The additional charge is a bit of a nuisance for sure, but it has hardly a major impact on our expenses," he said.

Mr Ken Ngan, managing director of GLE Logistics, which has an office in Klang, said: "To begin with, Singapore-registered vehicles cannot be used for commercial services in Malaysia."

Commercial vehicles can enter Malaysia without paying the levy, but buses and heavy vehicles from Singapore must apply for a commercial licence at Johor's Road Transport Department. It is a process involving physical form submissions, vehicle inspections and monthly road taxes, according to Malaysia's Foreign Affairs Ministry website.

"We outsource our Malaysian services and I travel there maybe four times a year for meetings, so it's not really an issue for us," said Mr Ngan.

Mr Kurt Wee, president of Singapore's Association of Small and Medium Enterprises, said that these moves should not discourage companies from expanding into Malaysia. "Obviously, at times like this when businesses are facing headwinds, any cost increase is not welcome. But I think Malaysia is still an opportunity for our SMEs," said Mr Wee, who travels to Malaysia every week. "Our similarity in cultural traits means that expanding into Malaysia should be easier compared with other regional markets."

Companies must always learn to navigate the changes in overseas markets, Mr Ang said. "But even when you include all the policy costs, having a business operation there is still much cheaper compared with Singapore."

A version of this article appeared in the print edition of The Straits Times on November 03, 2016, with the headline 'Local SMEs see little impact from Causeway road charge'. Print Edition | Subscribe