PUTRAJAYA’S proposal to remove toll roads in the Klang Valley by buying out four highway concessionaires would need further discussions, said Economic Action Council member Jomo Kwame Sundaram.

“As far as toll is concerned, I think we have to have a good discussion of it. But this is not the place to have a good discussion of it,” the prominent economist told reporters after speaking at a panel discussion on food security in Kuala Lumpur, hosted by Khazanah Research Institute (KRI).

The KRI special adviser was asked on his views on the toll removal proposal as well on the relaunch of the East Coast Rail Link (ECRL), which he has previously opposed due to its price tag.

“I think these are things which are very important. I have to bring them up… I’ve raised these issues. You know my views on ECRL,” he said.

Political secretary to the finance minister, Tony Pua, said last month that the government would not need to fork out a single sen to pay for the acquisition of four highway concessionaires, as the RM6.2 billion purchase consideration will be entirely self-financed via the collection of proposed congestion fees.

He said the acquisition, opposed by some critics, would also not increase the government’s debt burden because a designated special purpose vehicle would be raising the RM6.2 billion to finance the purchase of the concessionaires.

The four highways are the Damansara-Puchong Highway (LDP), System Penyuraian Trafik KL Barat (Sprint), Shah Alam Expressway (Kesas) and the Stormwater Management and Road Tunnel (Smart).

Pua said an offer was made on June 21, and has since received the acceptance from the Board of Directors of Gamuda Bhd and the respective toll concession companies. The exercise is currently awaiting further approval of the concession shareholders, as well as the final cabinet approval prior to a successful completion.

He said through this acquisition exercise, future profits will be shared between the concessionaire shareholders, the government – via elimination of compensation payments – and highway users, via reduced congestion charges.

The government will save at least RM5.3 billion, which would otherwise have gone into the concessionaires’ bottom-line, and the highway users will save up to RM180 million per annum from reduced congestion charges, or approximately RM2 billion over the respective concession periods.

Meanwhile, the ECRL was relaunched on July 25 by the Transport Ministry. After being put on hold since July, last year, the project was revived after Malaysian Rail Link Sdn Bhd and China Communications Construction Company Ltd (CCCC) signed a supplementary agreement in Beijing in April, this year.

Under the new deal, the project’s development cost was brought down from RM66 billion to RM44 billion and the previous 688km line was also shortened by 40km.

Jomo, who is also a member of the Council of Eminent Persons, has previously called for the project to be scrapped.

“The project will not develop the East Coast, so (aborting the ECRL) will not mean neglecting the East Coast. It’s a trick used by certain parties to save for a fake project,” he told reporters in January, this year.

“From the time it was drawn up, the project was meant to rake in profits and wealth for certain quarters, perhaps with the aim of covering up 1MDB’s fraud and losses.” – August 2, 2019.