More highway concession companies will be involved in talks on restructuring aimed at easing the financial burden of the people and the government, says Works Minister Fadillah Yusof.
He said the government welcomed private companies to take over highway concessionaires for this purpose.
“The government welcomes the private sector to come forward with such terms, where concession companies will hand back highways to the government once they have settled their debts. This will be a relief to the people.
“… there will be negotiations on restructuring involving other highway concessions after this,” he told a special media conference in Kuala Lumpur today.
Earlier today, Prime Minister Ismail Sabri Yaakob announced that the government had agreed with the proposed restructuring of four concessionaries including Kesas Sdn Bhd, which manages the Shah Alam highway (Kesas) and Syarikat Mengurus Air Banjir dan Terowong Sdn Bhd, which manages Sistem Pengurusan Air Banjir dan Terowong (SMART).
The other two involved in the restructuring are Sistem Penyuraian Trafik KL Barat Sdn Bhd, which manages Lebuhraya Skim Penyuraian Trafik Kuala Lumpur Barat (SPRINT), and Lingkaran Trans Kota Sdn Bhd, which manages the Damasara-Puchong Highway (LDP).
Following private company Amanat Lebuhraya Rakyat Bhd’s (ALR) takeover of these companies, the toll rates for the highways managed by them will not increase but will remain unchanged until the end of the concession periods.
The restructuring will also save the government from paying compensation from Jan 1, 2022 until the end of the concession periods and give net savings in toll subsidy payments estimated at not less than RM4.3 billion.
Fadillah however said that the effective date of the takeover had yet to be finalised.
He said the restructuring would involve an extension of the concession period for three of the companies but that SMART would have its concession shortened.
“However, an extension of the concession period is not the exclusive right of the concession company and is subject to traffic volumes and monitoring by the government from time to time,” he added.
Fadillah said with this restructuring method, there would no longer be any profit-oriented shareholders involving returns to shareholders in whatever forms including dividends.
He said the government could not neglect its obligations in the existing concession agreements as it would give a negative image to investors and affect interest to invest in the country.
“This is in line with the privatisation policy where private companies are still responsible for managing operations and maintaining these highways,” he said, adding that ALR is required to absorb all existing employees of the four concessionaires.
He said the government would not incur any expenditure for the takeover transactions and was not giving any guarantees for financing by ALR to undertake the restructuring of the four concession companies.
The government likewise will not have to bear any maintenance and operation costs following the restructuring of Kesas, LDP, SPRINT and SMART, he added.