PLUS, EPF members are more important than self-image in a pool of water

The govt has decided to maintain the current ownership structure of PLUS

Pic By TMR File

THE PLUS Malaysia Bhd takeover saga has finally been put to rest. The government had pulled the plug on any sale prospects of its prized asset — a concession company that owns and manages 1,200km of highway in total or a distance that is equivalent to lining up 266,666 standard cars in a single file.

Many had targeted the cash-minting concession, especially the super-rich. The government had decided to maintain the current ownership structure of PLUS.

Khazanah Nasional Bhd and the Employees Provident Fund (EPF) get to keep their stakes, the concession agreement has been extended by 20 years and toll rates will be reduced by 18% effective next month.

The rates will remain in force until the end of the concession.

Khazanah continues to hold on to its 51% stake while the pension fund, which has over 14.3 million members who largely use the highway, get to keep a cash-generating business.

Takeover offers for PLUS are nothing new. In October 2017, the then government rejected a bid from Maju Holdings Sdn Bhd in a deal said to be worth over RM30 billion.

Tan Sri Halim Saad, who was the architect behind the project, had been eyeing the crown jewel since PLUS and UEM Group Bhd were taken from him by Khazanah in what was dubbed as an arm-twisting deal. Halim definitely has an axe to grind with Khazanah for the right or wrong reasons.

Maju’s executive chairman Tan Sri Abu Sahid Mohamed (picture) had his guns out blazing after he was left at the altar again after his latest proposal was sent into the shredder.

The millionaire believed the government’s move to keep the highways is short of being brilliant.

Many people fall in love with their reflection in a pool of water like the young Narcissus from ancient Greek mythology. But life is larger than a puddle of water.

Clearly, the interest in PLUS is not about the daily cash collection or the concession period.

The money in PLUS is in the maintenance of these massive road infrastructure.

Resurfacing a four-lane highway could cost US$1.25 million (RM5.13 million) for every kilometre. Some put the estimate for resurfacing one sq m could be more than RM55.

That is just for one sq m or the size of three 60cm x 60cm tiles.

Imagine a 1,200km road network and the money to be made in 30 years. One can be an instant millionaire with enough loose change for the grandchildren to enjoy.

Critics had also been loud to sway public opinion over the government’s decision. Many pulled out their dust-gathering calculators to do the maths.

A RM10 saving for a trip from Alor Setar to Jalan Duta to some is a small chain, not even enough to pay for a pack of cigarettes. But how many people travel daily from Kedah to Kuala Lumpur?

A daily commuter who fork out RM6 a day for PLUS tolls to travel to work would enjoy RM272 a year annual saving or enough to pay for 130.8 litres of RON95. But these calculations are just academics.

Just like how the PLUS asset saw its debts ballooned to the current RM30 billion, an answer which still evades the public’s eyes. Was the asset used as collateral to get a bigger loan and used for other projects?

The challenge now is on PLUS to generate sufficient revenues to be profitable, pay its massive debts, maintain the highways without any toll increase until 2058, taking into account inflationary pressures.

There is also the interest of more than 14 million EPF members who part their statutory deductions to the pension fund. They also expect some returns.

That will be the most challenging part for PLUS and the rest, beating a dead horse will not get one anywhere.

Mohamad Azlan Jaafar is the editor in-chief at The Malaysian Reserve