No toll hikes on 4 highways as ALR offers takeover

This is following the restructuring exercise for the highways


THE government will not impose rate hikes on tolls following the restructuring exercise on four highway concession companies in the Klang Valley.

Prime Minister (PM) Datuk Seri Ismail Sabri Yaakob said the rates would not increase until the end of the concession and will save concession payments from Jan 1, 2022.

Read more: New private entity offers to take over four Klang Valley highways

“The net savings on the toll subsidy payments for all four highways is estimated to be at least RM4.3 billion,” he said in a statement yesterday.

The PM said the government had agreed on the restructuring exercise for the highways after conducting a thorough study on all aspects which includes burden to users, the government’s obligation in line with the concession agreement as well as the government’s burden.

The four concession companies are Kesas Sdn Bhd, which manages Kesas highway; Syarikat Mengurus Air Banjir dan Terowong Sdn Bhd which manages the SMART tunnel; Sistem Penyuraian Trafik KL Barat Sdn Bhd, which manages Sprint highway; and Lingkaran Trans Kota Sdn Bhd, which manages the Damansara-Puchong Expressway (LDP).

Read more: Proposal on highway concessionaire takeover to be tabled mid-Dec

Ismail Sabri said the move is a continuous effort by the government to ensure the nation is not burdened, especially by the hike in toll rates as the one outlined in the concession agreement.

The savings can be utilised for other infrastructure developments in the country and other facilities that should be prioritised for the betterment of the people, the PM said.

“The restructuring will be in line with the government’s principles and objectives which are to reduce the burden of Malaysia Family and to not incur financial implication to the government.

In 2019, the Finance Ministry under the Pakatan Harapan (PH) government announced that it would take over the toll concessionaires for the four highways in a bid to reduce the burden on road users, as well as to fulfil the coalition’s promises.

The breakdown of the offer price is RM2.47 billion (LDP), RM1.98 billion (Sprint), RM1.38 billion (Kesas) and RM369 million (SMART).

Separately, Works Minister Datuk Seri Fadillah Yusof said a new private entity, Amanat Lebuhraya Rakyat Bhd (ALR), is offering to buy the four aforementioned concession companies and the toll rates will not be increased until the end of the concession period.

“The government will also ensure that ALR needs to absorb all existing staff serving under the four relevant concessions. As such, there is no dismissal issue in relation to this structuring proposal,” he said in a press conference yesterday.

Read more: Khazanah confirms proposal on highway takeover

“Therefore, the job status of all workers under this concession is guaranteed,” he added.

Noting the query on what is happening to the previous proposal by the PH government, Fadilah said the proposal would mean that the government has to pay more than RM6 billion.

“We have studied the previous decisions and with this agreed restructuring, it will not involve the government paying any fees to the concessionaires,” he said.

“A private company named ALR chaired by Tan Sri Azlan Mohd Zainol where all the shareholders’ shares are not-for-profit, has offered to buy 100% of all four concession companies,” he said.

Through this restructuring, Fadillah said there will be no more profit-oriented shareholders while the existing shareholders — the Employees Provident Fund, Retirement Fund Inc, Permodalan Nasional Bhd and Lembaga Tabung Haji will get an early return of investment.

“To help ALR achieve the objectives of its establishment, the government has agreed to extend the concession period to Kesas, LDP, Sprint and SMART in exchange for not raising toll rates.

“However, the extension of this concession period is not the exclusive right of the concession company and is subject to the number of traffic as well as analysis by the government from time to time,” Fadillah said further.

He said the government will also have to honour its obligations under the existing concession agreement as failure to do so will give a negative image to investors.

“This restructuring is also in line with the privatisation policy where private companies are still operating and maintaining the highway,” he said.