Works Ministry report shoots down highway takeover

The Malaysian Insight The Malaysian Insight Updated 6 years ago · Published on 26 Jun 2019 7:00AM · 4 Comments

Putrajaya is making a RM6.2 billion bid to take over four tolled highways in the Klang Valley. – The Malaysian Insight file pic, June 26, 2019.

A WORKS Ministry study on tolled highways nationwide does not recommend Putrajaya taking over four highway concessionaires currently owned by Gamuda Bhd, said a source.

“The ministry’s report doesn’t recommend that (takeover),” the source told The Malaysian Insight.

The study instead recommends alternative mechanisms to reduce the burden of tolls on highway commuters but declined to reveal further details.

The Malaysian Insight learnt that the study was handed over to the Prime Minister’s Department on June 13.

Works Minister Baru Bian was reported yesterday to have said that the study has been presented to the cabinet, with a decision expected to be made in a few weeks.

The study was commissioned last December after the Works Ministry was given the mandate to recommend a solution to resolve the issue of tolls.

Finance Minister Lim Guan Eng said last week that Putrajaya made a RM6.2 billion bid to take over four tolled highways in the Klang Valley, in a move to fulfil its election pledge to reduce the cost of living by removing toll roads, or at least reducing the fees faced by road users.

Finance Minister Lim Guan Eng says taking over four tolled highways will save RM5.3 billion in compensation. – The Malaysian Insight pic by Hasnoor Hussain, June 26, 2019.

The four highways, operated by units of listed infrastructure company Gamuda, are Lebuhraya Damansara-Puchong (LDP), Sistem Penyuraian Trafik KL Barat (SPRINT), Lebuhraya Shah Alam (Kesas) and Smart Tunnel.

The toll concessionaires have agreements in their contracts to raise toll fees every few years over the course of the 20-year to 30-year concessions, failing which the government would have to compensate them.

Taking over the four highways would save taxpayers RM5.3 billion in compensation to the concessionaires, Lim said.

The takeover will be financed through a special purpose vehicle (SPV) company under the Minister of Finance (MoF). The SPV will issue bonds to pay for the highway concessions.

The Malaysian Insight also learnt that MoF made the bid with the guarantee of an investment bank, which has been appointed as advisers to the ministry.

It is believed that MoF had given instructions for the investment bank to speed up its report, which was only submitted after the Works Ministry study was handed over to the prime minister a fortnight ago. – June 26, 2019.

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Comments

  • At least the Government is workking on it for the rakyat

    Posted 6 years ago by SY L · Reply

  • Why can't the Work Dept report forwarded to MOF for consideration? Should further terminate some Napoleons in Work Ministry if they refuse to work as a team. Starts with the Works Ministry Secretary General, for all u know a fleet of the senior officers are Umno supporters.

    Posted 6 years ago by James Wong · Reply

  • Doesnt look good on this PH government. Shouldnt MOF and Works ministry agree to it before the announcement is made. Baru Bian should work together as a team.

    Posted 6 years ago by Elyse Gim · Reply

  • The reporting is ambigious. Works minister dont agree or a source say so and who is the source.

    Posted 6 years ago by S L · Reply