Govt to pay RM2.2b to PLUS to remove tolls from Jan 1

Johari says compensation to be spread out over 20 years for toll collections at Federal Highway and Bukit Kayu Hitam

By P PREM KUMAR / Pic By AFIF ABD HALIM

The government needs to pay highway operator PLUS Malaysia Bhd a total of RM2.2 billion in compensations for removing toll collections at the Federal Highway and Bukit Kayu Hitam from Jan 1, 2018.

Finance Minister II Datuk Seri Johari Abdul Ghani said the total payment will be spread out in 20 equal payments over 20 years.

“We will not pay one-off, it would be a payment every year to PLUS,” he told The Malaysian Reserve yesterday.

The government will pay PLUS RM102 million a year for removing two toll collections on the Federal Highway in the Klang Valley and another RM8 million a year for removing the toll booths at Bukit Kayu Hitam, Kedah, on the North-South Expressway.

Johari said the compensation was due to PLUS holding a concession until 2038 for the Federal Highway and the North-South Expressway.

As the compensation amount was fixed in the agreement, Johari said the government is negotiating with PLUS for possible discounts.

“We are negotiating with PLUS for discounts because the RM102 million is based on estimated revenue loss for removing the tolls,” he said.

During the tabling of the 2018 budget last month, Prime Minister Datuk Seri Mohd Najib Razak announced the removal of the toll collections at Batu Tiga and Sungai Rasau along the Federal Highway.

Apart from that, the Bukit Kayu Hitam toll and the Eastern Dispersal Link in Johor will also be abolished in January 2018.

Johari said the compensation to PLUS is apt because the government has taken over their assets and toll collections.

“Furthermore, it is for the benefit of the people and road users,” he said.

Johari stressed that the government is obligated to absorb the losses incurred by PLUS, as it was the government’s decision to cease toll collections ahead of the concession period.

The minister dismissed claims that the compensation was a form of bail out for PLUS.

“It is definitely not a bailout. Why [would] the government want to bail out a company which has a concession agreement to collect tolls?” he asked.

PLUS is owned by UEM Group Bhd, which in return is owned by Khazanah Nasional Bhd.