Economists have described the proposed acquisition of four toll concessionaires by Amanat Lebuhraya Rakyat Bhd (ALR) as a win-win situation as it will save on government expenditure in order to purchase the tolls as well as compensation payments to prevent an increase in toll rate.
The four concessionaires – Kesas, LDP, SPRINT and SMART – have an aggregate value of RM5.48 billion.
Ahmed Razman Abdul Latiff of the Putra Business School said two of the concessions would be extended while the other two would be reduced.
“Through ownership by ALR, the concessions will expire during the same period so that they can be given to the Malaysian Highway Authority (LLM) at once and not in stages,” he said.
However, he said there was no guarantee that toll would no longer be necessary after the end of the concession period.
“We think that after the end of the 11-year concession period we won’t have to pay toll, but we don’t know yet how LLM will want to generate revenue for the maintenance of the four highways once it takes over,” he told MalaysiaNow.
He said it was possible that road users would have to continue paying toll albeit at a very low rate to cover such costs.
Putrajaya reportedly had to pay compensation of RM1.51 billion to highway concessionaires for freezing toll hikes nationwide.
Economic analyst Barjoyai Bardai said the takeover was a combination of many things.
“It might include some bailout elements as the current operators also complain about a drastic drop in highway use due to the MRT,” Barjoyai, of Universiti Tun Abdul Razak, told MalaysiaNow.
However, he also described it as a blessing in disguise as the operators were now willing to negotiate down from the original offer by the Pakatan Harapan government, from over RM6 billion to RM5 billion.
He added that the acquisition would be a testing ground for individuals to come forward to bid with no intention of making a profit.
On the concession period which is approaching its end, Barjoyai said eight years was a long time for a toll concession.
The new operator, ALR, will only accept toll payments with minimal operating and maintenance costs.
Razman meanwhile said the issue was how ALR could obtain financing through the issuance of sukuk which is not guaranteed by the government — a move which the private company was recently reported as making.
“An explanation will be needed of how ALR wants to buy if sukuk is not guaranteed by the government — to what extent will that convince sukuk buyers?”
Barjoyai meanwhile said the net proceeds from the collection of toll could be used to pay for the RM5 billion acquisition, with payments made in stages.
“The entire cost can be settled before the concession period expires,” he said. “The concessions will only be extended for the required period if the toll collection is insufficient.”
He added that new concessionaires need to be monitored to ensure that there is no abuse of power through the payment of excessive remuneration or unnecessary costs during the concession period.
To avoid biased terms, he said, MPs could act as representatives to ensure that the terms are made in favour of the people.
“This is a test case for the model,” he said. “We can extend the model on reversing many other privatised institutions and activities nationwide.”