PLUS fate to be decided next week

Lim says the final decision must be a ‘triple win’ which would meet expectations


THE Cabinet is expected to decide on the future of the country’s largest highway operator PLUS Malaysia Bhd next week, as any delays would balloon the already huge government’s compensation charges.

Finance Minister Lim Guan Eng said Putrajaya’s decision to freeze toll hikes at 21 highways this year had amounted to RM972.75 million in compensation payments.

“We need to come up with a decision quickly as the clock is ticking and the compensation keeps mounting. The decision on PLUS would be a precursor to see how we can reduce toll rates as part of our efforts to fulfil our election promises as stated in the manifesto.

“It will be a progressive removal (of tolls). We want to show that there is progress, which is why this will be an important first step,” Lim said in Putrajaya yesterday.

He added that the final decision must be a “triple win” which would meet the expectations of the government, highway owners Khazanah Nasional Bhd and the Employees Provident Fund (EPF), as well as road users.

“The people should win by getting reduced toll rates of at least 18%. Khazanah and the EPF must not lose out by getting a fair value for their investment. Otherwise, their portfolio will depreciate and that will have an impact on ordinary Malaysians.

“Finally, for the country, we must not be subjected to an increase in our debt burden. The decision should be made in accordance with the principle that there should be no privatisation of profits and socialisation of losses to look after national interests,” Lim said.

At the Budget 2020 presentation, Lim announced a reduction of toll rates by at least 18% on all PLUS highways — a move which would result in savings of up to RM1.13 billion in 2020 for road users and RM43 billion over the entire concession period until 2038.

The government has so far confirmed that it received five purchase offers on PLUS, including a proposal from Khazanah. The sovereign wealth fund is currently the biggest shareholder in PLUS with a 51% stake, with the EPF holding the remaining 49% stake.

In October, Khazanah MD Datuk Shahril Ridza Ridzuan said the sovereign wealth fund was not interested in selling PLUS as suitors, whom he did not identify, were offering a much lower price than the expressway toll firm’s real value.

“They want to take money from us by paying us basically a substandard price and using that difference in value to offer a discount. You should offer the fair market price. If you want to offer a discount, that is up to you. It should be from your profit, not from us,” he said in an interview on TV3.

The government’s target to cut spending and eliminate tolls has attracted interests from private entities seeking to cash in on longterm steady returns. Despite a debt load of over RM30 billion, PLUS continued to record solid profits of RM21.35 million to RM62.39 million from 2011 to 2016.

Besides Khazanah, the four bidders are tycoon Tan Sri Halim Saad, construction company Widad Business Group Sdn Bhd, equity firm RJJ Capital and conglomerate Maju Holdings Bhd. Widad’s revised RM5.3 billion cash offer in late October made it the highest bidder for the toll-road operator.

Prime Minister Tun Dr Mahathir Mohamad said earlier there were no “attractive offers” made on PLUS as they did not give a promising prospect on the company. Dr Mahathir said buyers must have the capacity to keep PLUS on a profitable path, given its RM30 billion debt.