How is it possible for the concession that was awarded at a total tender price of RM3.4b in 1998 and was supposed to end in 2018, still has a debt of RM30b, the tycoon queries
by ASILA JALIL/ pic by TMR
TAN Sri Halim Saad yesterday questioned PLUS Malaysia Bhd’s unpaid debt of RM30.2 billion despite the tender price for the concession awarded to UEM Group Bhd/PLUS in 1988 being RM3.4 billion.
In a letter to The Malaysian Reserve, the tycoon who recently tabled a RM5.2 billion bid for Khazanah Nasional Bhd’s entire stake in PLUS continued to ask about the debt settlement of the highway concession holder.
“How is it possible for the concession that was awarded at a total tender price of RM3.4 billion in 1998 and was supposed to end in 2018, still has a debt of RM30.2 billion in 2019. Datuk Azman of PLUS did not clarify this,” he said in the letter.
Halim was asked to respond to PLUS’ clarifications on misleading reports about the highway operator’s debt and operational efficiency.
Halim also questioned how PLUS only repaid RM700 million of debt out of the total RM30.2 billion between 2012 and 2018 when the toll collection amounted to RM24.5 billion or more.
He said these questions were not answered by PLUS MD Datuk Azman Ismail.
“I do not see any increase or acquisition of new assets, or reduction in liabilities. PLUS’ tax expense was RM476 million in 2010 (RM438 million in 2009), but nothing was recorded during the year 2012 to 2018.
“According to RAM Study in 2001, PLUS should pay RM1 billion in taxes annually,” he said, adding that it was a mind-boggling question as to where the money had gone to.
Halim said the government has an outstanding guarantee of RM11 billion for a loan that will expire in the last year of the concession operation — 2038.
“Should the money be used to at least reduce the government’s exposure,” he said.
Halim, who is former executive chairman of Renong, the predecessor of UEM Group, submitted the bid to buy Khazanah’s 51% stake in PLUS in an offer letter dated Oct 11, 2019. The offer letter was sent to Works Minister Baru Bian.
He had also proposed a 25% discount on toll rates and for the concession period to end as per status quo — December 2038.
Responding to the debt of RM16.5 billion, Halim said PLUS-related debts were secured against PLUS cashflow and the non-PLUS debts were also secured against the PLUS cashflow and other UEM/Renong assets.
“The RAM Report (Rating Agency Consultancy Services) dated May 2001 has stated that the value of the assets exceeded liabilities by RM2.26 million,” Halim said. The letter also enclosed adjusted report by RAM.
“I do not want to comment on PLUS business, but I wish to point that operating expenses at RM1.33 million per km per year are high,” Halim said.
(The article has been edited for correctness and clarity based on the feedback from related stakeholders.)