Gov’t to take over four highways for RM6.2 bln

Gov’t to take over four highways for RM6.2 bln

KUALA LUMPUR: The Ministry of Finance (MoF) has formally issued offer letters to four toll concessionaires with an enterprise value of RM6.2 billion to buy over four highways.

The four tolled highway concessions in which Gamuda Bhd has a significant stake are Damansara-Puchong Highway (LDP), Sistem Penyuraian Trafik KL Barat (Sprint), Shah Alam Expressway (Kesas) and the Stormwater Management and Road Tunnel (SMART).

The breakdown of the offer prices are LDP for RM2.47 billion, Sprint (RM1.98 billion), Kesas (RM1.38 billion) and SMART (RM369 million).

Finance Minister Lim Guan Eng said the completion of the offer was subject to due diligence, the requisite shareholders’ and creditors’ approval for each concessionaire and the final approval by the Cabinet.

“If the acquisition process of these highways is successful, the government will acquire the highway concessionaires on Dec 31, 2019, through a special purpose vehicle (SPV), wholly-owned by the Minister of Finance (Incorporated),” he said, in a statement today.

The SPV will finance the offer of RM6.2 billion by way of bond issuance.

Lim said under the new congestion charge system that was previously announced, commuters using these four highways would save as much as RM180 million per annum, and these savings will go straight into the disposable income of Malaysian households.

The congestion charge model follows a variable pricing structure which depends on the time of the day. In principle, the government would give discounts of up to 30% for hours outside of peak periods and free travel during off-peak periods.

“In addition, the maximum congestion charge would be capped at the current toll rate in order to not cause further burden to the commuters. The final structure of the congestion charge will be studied and refined in further detail before being implemented on Jan 1, 2020,” he said.

The acquisition of these highways would also directly save taxpayers from having to pay compensations of more than RM5.3 billion to toll concessionaires in order to freeze toll rate hikes until the end of the respective concession periods.