By NG MIN SHEN / Pic By MUHD AMIN NAHARUL
THE abolishment of fee collection at four toll gates in Malaysia is expected to have minimal impact on the operators, as they will be compensated by the government either in cash or in kind.
An industry expert who spoke to The Malaysian Reserve (TMR) said the decision to abolish tolls at select highway points will not affect PLUS Malaysia Bhd greatly as they will be compensated by the government.
“Any fall in revenue from the ceased toll collections will be made up for by either compensation in cash from the government, or a concession extension elsewhere,” the expert said.
Prime Minister Datuk Seri Mohd Najib Razak last Friday announced that toll collection will cease at Batu Tiga and Sungai Rasau, Selangor; Bukit Kayu Hitam, Kedah; and the Eastern Dispersal Link (EDL), Johor, effective Jan 1, 2018.
PLUS owns and operates the Batu Tiga, Sungai Rasau and Bukit Kayu Hitam toll plazas, while Malaysian Resources Corp Bhd (MRCB) is the concessionaire and owner of the EDL.
As it is, PLUS as the highway concessionaire runs the largest network in Malaysia with 94 tolls nationwide.
“The terminated toll collection points are also possibly recording small flows compared to the bulk of PLUS’ operations, so with adjustments elsewhere, the losses to be incurred will be made up for or minimised,” the expert said.
PLUS’ highway operations include the New Klang Valley Expressway, North-South Expressway, Federal Highway Route 2, Seremban-Port Dickson Highway, North-South Expressway Central Link, Malaysia-Singapore Second Link, Butterworth-Kulim Expressway and the Penang Bridge. All of its concessions end in December 2038.
Khazanah Nasional Bhd owned UEM Group Bhd has a 51% stake in the highway operator, while the remaining 49% is held by the Employees Provident Fund (EPF).
Meanwhile, independent economist Azrul Azwar Ahmad Tajudin said the loss of toll collection from the three toll plazas will impact PLUS.
The quantum of the losses would depend on the size of the three tolls’ contribution to PLUS’ entire revenue base, which remains undisclosed.
“There will definitely be some form of compensation, maybe by extending the concession for other toll gates.
“Either way, there has to be something because the terms and conditions in the concession agreement are such that if the toll operator has to suffer from a revenue loss, the government will have to compensate in whatever form,” he told TMR.
MRCB is also expected to be compensated for the loss of income from the decision as it is bearing the debt burden for the highway, which was constructed at a cost of RM1 billion.
Its infrastructure and concession business, comprising the EDL in Johor, generated revenue of RM112 million in 2016, as per its latest annual report.
Listed on Bursa Malaysia, the company’s largest shareholder is EPF with a 33.91% stake as at end-March 2017.
While it appears definite that the operators will be compensated for their losses, the question that remains is the form of remuneration.
Last Friday, after the toll decision was announced during the tabling of Budget 2018, Second Finance Minister Datuk Seri Johari Abdul Ghani said the government would not compensate the toll operators in cash, but would look into extending the concession tenure of other existing toll plazas operated by PLUS.
On Sunday, Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi said the government will pay compensation for the remaining 20 years of the contract, as the toll abolishment in 2018 is 20 years ahead of the end date.
He said the agreement for the concession is up to 2038, thus the government will pay compensation for the early abolishment — subject to the existing agreement signed between the government and PLUS.
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