A ‘firm decision’ by Putrajaya will determine the next course of action on the largest highway concessionaries’ destiny
by AFIQ AZIZ/ pic by BERNAMA
THE Works Ministry will let the Cabinet decide on the future of PLUS Malaysia Bhd — the country’s biggest highway concessionaries — would either be sold or remain status quo.
Works Minister Baru Bian (picture) said while the ministry is the custodian of the toll concessions, only a “firm decision” by Putrajaya would determine the next course of action on the fate of PLUS, an issue that has been dragged for almost five months now.
“We want to be a responsible government and would consider all options. Under the Pakatan Harapan (PH) government, we will make considerations for all stakeholders and strive to achieve the best value and balance for all parties, especially the people,” he told The Malaysian Reserve (TMR) in a text reply.
In its general election manifesto last year, PH had promised to review all highway concession agreements and renegotiate the terms to takeover the concessions with the ultimate view of abolishing tolls gradually.
This has resulted in many conglomerates and a tycoon expressing their interest in buying out PLUS highways. The concession period of the highways are expected to end by December 2038.
Baru, however, said that as part of a “responsible government”, the ministry would articulate all options cautiously, since the decision would directly involve the wellbeing of the people.
PLUS concessionaires are the NorthSouth Expressway, Second Link Expressway, Penang Bridge, North-South Expressway Central Link, Butterworth-Kulim Expressway and Seremban-Port Dickson Highway.
Khazanah Nasional Bhd owns a 51% stake in PLUS, while the Employees Provident Fund holds the remaining 49%.
The state-owned fund acquired the stake in a complex deal worth RM32 billion in 2011 — among the largest corporate deal in the country’s history.
In July, Maju Holdings Sdn Bhd, controlled by businessman Tan Sri Abu Sahid Mohamed, was said to have made a fresh proposal to take over PLUS.
Abu Sahid’s company first made an offer in 2017, by committing RM3.5 billion and assuming the concessionaires’ debts of about RM30 billion.
In August, Baru confirmed that the ministry had received Maju Holdings’ proposal and was evaluating its merits and feasibility.
Maju Holdings then revised its bid by including greater toll discounts of up to 36%, while forgoing the RM2.7 billion owed by the government to PLUS.
Several bidders have then come forward to run for the acquisition race. Widad Business Group Sdn Bhd recently raised its offer by 77% from RM3 billion to RM5.3 billion for the total shareholding in PLUS.
Widad also included a compensation waiver of RM3.04 billion and debt assumption of RM30 billion, bringing the total enterprise value to RM38.3 billion.
Earlier, tycoon Tan Sri Halim Saad had proposed to buy Khazanah’s 51% stake in PLUS for RM5.2 billion, according to an offer letter dated Oct 11, 2019.
Halim had also proposed a 25% discount on toll rates and for the concession period to end as per status quo. His proposal remained the highest based on the 51% stake of PLUS.
A Hong Kong-based private-equity firm RRJ Capital also made a RM3.5 billion bid to acquire PLUS.
The company offered toll discounts of up to 30% based on new cars’ price tags and plans to demolish toll booths to ease traffic congestion.
A recent TMR report stated that the Finance Ministry is believed to be eyeing for Khazanah’s majority stake in PLUS, as a solution to prevent the nation’s strategic asset from falling into the hands of private companies.
Quoting sources, the report said the proposed acquisition would be brought to the Cabinet for deliberation soon.
However on Tuesday, Prime Minister (PM) Tun Dr Mahathir Mohamad was quoted as saying in a Bernama report that Khazanah would be the current best choice for the government to manage the toll concession company and resolve its debts.
“(However), if there are offers by other people (willing) to take over the debts of up to RM30 billion, then it is a good thing,” Dr Mahathir said.
Meanwhile, PM economic advisor Dr Muhammed Abdul Khalid had opposed the government’s consideration on acquiring PLUS as he believes the takeover of major highways to abolish tolls will not significantly benefit the bottom 40% income group.
“The Cabinet has yet to make any decision on PLUS, so I will not comment any further on this,” Baru said, without any further comment.