by NUR HAZIQAH A MALEK/ pic by TMR
Highway users are expected to save as much as RM180 million annually from the acquisition of four highway concessionaires by the government, said Finance Minister Lim Guan Eng.
According to Lim, highway users will be able to save from paying the congestion charges, which is reduced from the current toll charges.
“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 in a statement yesterday.
Lim also addressed on why the concessions should be acquired for RM6.2 billion immediately when the expiry dates are between nine to 23 years from now.
“Clearly the immediate rationale will be that highway users will pay a reduced congestion charge that can save them RM180 million per year,” he said.
The government has made a RM6.2 billion bid to take over the Kesas Holdings Bhd, Sistem Penyuraian Trafik KL Barat Holdings Sdn Bhd (Sprint) and Syarikat Mengurus Air Banjir Dan Terowong Sdn Bhd (Smart) concessionaires.
The acquisition will be funded by a fully-financed bond issuance, which will be refunded from the congestion charges’ collection.
Lim said due to the inherited nature of the previous administration that caused the current financial constraints, the government cannot afford to spend RM18 billion.
“By issuing the RM6.2 billion bond at no cost to the federal government, there is a win-win solution because of the savings of at least RM5.3 billion in compensation to the four highways for freezing toll hikes,” he said.
In total, the compensation savings range between RM5.25 million to RM6.50 million against the acquisition cost of RM6.20 billion.
He also added that the concessions’ periods will not be extended but will expire in accordance to the existing agreements and that upon expiry, congestion charges will be further reduced significantly to cover only highway operational and maintenance costs, without elements of profit.
“The conditional offers, when approved by the shareholders and creditors of the four highway concessionaires, are still subject to Cabinet approval,” he said.
Lim also emphasised that the conditional offer made by professional banking consultants are in line with fulfilling the Pakatan Harapan government’s commitment in its manifesto to take over highway concessions and gradually reduce toll rates.
It was reported previously that this move by the government would be expected due to the slightly lower takeover bid price and interest expense against highways with longer remaining concession years.
On June 21, Litrak has received RM2.75bil takeover offer from the government to acquire all shares in the company and its 50% stake in Sprint.
MoF Inc also made an offer to Gamuda Bhd, the major stakeholder of all four highways, to acquire its stakes in Kesas, Smart and Sprint, which currently stands at 44% stake in Litrak, a 50% stake in Sprint, a 70% stake in Kesas and a 50% stake in Smart.