The decision includes an extension of the concession by 20 years and the reduction of toll road rates by 18% set to take effect this year
by ALIFAH ZAINUDDIN / pic by MUHD AMIN NAHARUL
PRIME Minister (PM) Tun Dr Mahathir Mohamad confirms the Cabinet’s decision to maintain status quo on the ownership of PLUS Malaysia Bhd by declining offers to take the company private.
Khazanah Nasional Bhd and the Employees Provident Fund (EPF) remain the owners of the country’s largest highway operator. The decision included an extension of the concession by 20 years and the reduction of toll road rates by 18% set to take effect this year, Dr Mahathir said.
“We (Cabinet) have studied all the bids made by the private sector and also by Khazanah. In the end, we decided that the best is not to sell PLUS to anybody, but maintain it with Khazanah and EPF, so they will have to reduce the toll rate by 18%.
“But please remember that the 18% is fixed at today’s rate, which means that in 20 years’ time, the toll rates will be very, very low,” Dr Mahathir told reporters after the launch of Tenaga Nasional Bhd’s (TNB) Balai Islam Complex in Kuala Lumpur yesterday.
The sovereign wealth fund is currently the biggest shareholder in PLUS with a 51% stake, while the pension fund holds the remaining 49% interest. The Cabinet decision marks a significant first step towards realising the government’s election promise of cutting toll rates.
Putrajaya had received four offers for the company since July last year from private entities seeking to cash in on long-term 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.
The suitors included tycoon Tan Sri Halim Saad, construction company Widad Business Group Sdn Bhd, equity firm RJJ Capital and conglomerate Maju Holdings Sdn Bhd. Halim’s revised proposal in December, said to be a 30% increase from his initial RM5.2 billion cash offer, made it the highest bidder for PLUS.
Interested parties continued to make an offer despite Khazanah MD Datuk Shahril Ridza Ridzuan’s insistence that the fund had no interest in selling the toll road operator. Khazanah and EPF took over PLUS for RM33 billion in what was the country’s largest corporate takeover in 2011.
Shahril Ridza previously described the offers as unsolicited and undervalued, while Dr Mahathir — who is also chairman of Khazanah — said they were too low.
Meanwhile, local think-tank Institute for Democracy and Economic Affairs lauded the government’s decision not to sell PLUS. Its CEO Ali Salman said the announcement would end months of speculation surrounding the fate of the highway concessionaire. Ali, however, called for a clear framework on reforms involving government-linked companies (GLCs) to encourage policy clarity and certainty.
“The framework should also fully consider the implications of GLC reforms, which may entail asset sales to the broader socioeconomic dynamics,” he said in a statement.
Speculations about the sale of national assets, including PLUS, he said, have given rise to concerns about transparency and governance which do not inspire public confidence.