KUALA LUMPUR: The government’s proposed RM6.2 billion acquisition of four highways in the Klang Valley through the issuance of bonds is a “win-win solution” as it will result in savings of at least RM5.3 billion in compensation to the operators for freezing toll hikes.
In a statement today, Finance Minister Lim Guan Eng said the total compensation savings would be between RM5.25 billion and RM6.50 billion.
On June 22, the Federal Government made a conditional offer, subject to Cabinet approval, to acquire four toll highways — the Damansara-Puchong Highway (LDP), Sistem Penyuraian Trafik KL Barat (SPRINT), Shah Alam Expressway (Kesas) and the Stormwater Management and Road Tunnel (SMART) — for RM6.2 billion.
Lim disclosed that the compensation savings would be RM1.92 billion – RM2.24 billion for LDP, RM1.57 billion – RM2.04 billion for SPRINT, RM1.08 billion – RM1.19 billion for Kesas, and RM671 million – RM1.03 billion for SMART.
The government has offered to pay RM2.47 billion for LDP (concession expiring 2030), RM1.98 billion for SPRINT (2031-2034), RM1.38 billion for Kesas (after a five-year concession extension to 2028 approved by the previous government) and RM369 million for SMART (2042).
According to Lim, the government cannot afford to fork out RM18 billion in compensation for the highways not to collect toll charges due to legacy issues from the previous government leading to financial constraints.
“The proposed acquisition cost of RM6.2 billion will be funded by a bond issuance that is fully financed, and paid for from the collection of congestion charges. This compares with having to pay RM18 billion in compensation for the highways to not collect any toll charges,“ he said.
He reiterated that highway users would also benefit by paying congestion charges, a reduction from the current toll charges, hence saving up to RM180 million annually.
“In principle, the government will give discounts of up to 30% for hours outside of peak periods and free travel during off-peak periods,“ he said.
Another reason for acquiring the highways, Lim said, was that the concession period would not be lengthened but would expire in accordance with the existing concession agreements.
“Thirdly, upon expiry, the congestion charges will be further reduced significantly to cover only the operating and maintenance costs, without any profit element,“ he said.
He noted that the conditional offers, when approved by the shareholders and creditors of the four highway concessionaires, were still subject to Cabinet approval.
“This was clearly stated in my statement on June 22, 2019, after the in-principle approval was first granted by Cabinet on Feb 27, 2019, as well as Prime Minister Tun Dr Mahathir Mohamad approving the conditional offer on June 20, 2019.
“Let me reiterate that the conditional offer is made after due diligence by professional banking consultants, in line with fulfilling the commitment by the Pakatan Harapan government in its electoral manifesto, to take over highway concessions and gradually reduce toll rates to ease the burden on the people,“ said Lim. — Bernama
