THE government will not bail out the two highway concessionaires facing bankruptcy in Johor, Works Minister Fadillah Yusoff said today.

But the government is looking into the problems faced by Johor Baru Eastern Dispersal Link Expressway (EDL) and Senai Desaru Expressway, he said.

“We have to look into the issues they are facing. Some highways are affected because of the government decision to introduce toll charges and vehicle entry permits. Singapore reacted and this affected EDL which links to the republic.

 “The volume of vehicles using the expressway has dropped tremendously,” he said after attending the groundbreaking ceremony for the overhead motorcycle bridge in Jalan 222, Petaling Jaya today. 

Fadillah was commenting on reports that the two concessionaires had sought the government’s help to take over the management of their companies.

He said the Senai Desaru Expressway was also facing the problem of insufficient vehicles plying the route.

“We have to study and conduct a due diligence to look into their problems and decide whether we want to take over the highways and get another company to manage it to mitigate the losses.”

“Previously, the government had assisted concessionaire Shapadu with its highway in Klang when it was having problems.

“The government then let another company manage the highway. 

“The income for the highway is based on a projection of traffic volume. If toll collection is insufficient, they will not be able to maintain the highway.” 

He said both companies were still maintaining the highways despite incurring losses.

It was reported that there are four types of concession agreements.

Fadillah said the first generation agreement did not side with the government since they were new to the methods and the terms when the document was signed and formulated.

The first generation agreements favoured highway concessionaires.

Fadillah said the next three generations of agreements had been improved with the inclusion of a provision on the abolishment of an automatic increase in toll rates annually. – June 15, 2017.