PUTRAJAYA will not pay to acquire four highways from Gamuda Berhad as the RM6.2 billion will be self-financed through the collection of the proposed congestion charge, said political secretary to the finance minister Tony Pua today.

Pua said claims that the government is taking on unnecessary debt with the acquisition were untrue as it is not debt the government will bear.

“There needs to be a distinction between debt which the government will ultimately have to bear, versus debt which will be self-financed.

“While a designated special purpose vehicle (SPV) would be raising a RM6.2 billion debt to finance the acquisition of the four concessionaires, the RM6.2 billion will be entirely self-financed via the collection of proposed congestion charges.

“This means that the government would not need to fork out a single sen to pay for the acquisition of these highways,” he said in a statement.

Pua’s statement today was aimed at rebutting five points of criticism since the Finance Ministry announced the acquisition of four highway concessionaires last month.

They are the Lebuhraya Damansara-Puching (LDP), Sistem Penyuraian Trafik KL Barat (Sprint), Lebuhraya Shah Alam (Kesas) and Smart Tunnel (Smart).

“There appears to be still critics and certain unnamed experts who opposed to the exercise based on flawed logic and arguments,” said Pua, who is also Petaling Jaya Utara MP.

He also addressed claims that it was cheaper for Putrajaya to pay the highway concessionaires compensation to freeze toll rates than to acquire them.

The RM5.3 billion in compensation that was already stated by Finance Minister Lim Guan Eng would be saved while the self-financed acquisition meant the government did not have to pay.

“The simple mathematics will conclude that it is vastly cheaper for the government to acquire the highways than to pay compensation, since the acquisition cost of RM6.2 billion is self-financed.

“On the other hand, if the toll rates are merely frozen, these concessionaires will collect at least RM5.3 billion in compensation from the government.”

Pua also cited the same argument to dismiss claims that it was better to let concessions run their course as some of them would expire soon, and that the acquisitions were to bail out loss-making highways.

Lastly, to claims that Gamuda had been allowed to rake all its profits upfront, he said Putrajaya’s offer had to let Gamuda realise some of its future profits now.

“Otherwise, what incentive do they have to become ‘willing sellers’?”

He said critics should look at the “future profits” that will be shared between the concessionaire shareholders, the government which would no longer have to pay compensation for frozen toll rates, and highway users who would save on toll by paying reduced congestion charges.

“The government will save at least RM5.3 billion, which would otherwise have gone into the concessionaires’ bottom-line.

“The highway users, will save up to RM180 million per annum from reduced congestion charges, or approximately RM2 billion over the respective concession periods.

“The reason why the government and the highway users are able to benefit is because the ‘future profit’ of these highways are shared,” he said. – July 6, 2019.