THE rakyat aren’t just sick and tired of hearing about Covid and the increasing cost of living.

They are sick and tired of the desperate excuses made for all those acts the government claims it is doing in the interests of the rakyat.

You cannot fool all the people all the time, but you can fool all the people some of the time and some of the people all the time.

This is the strategy politicians follow to enchant, entice and entrap the gullible.

Previously, in March 2012, the then government abolished the RM1 toll at the Batu 9 toll plaza heading to Kuala Lumpur on one direction and the 90 sen toll at the Batu 11 toll plaza heading to Kajang on the opposite side of the highway.

This news sent the rakyat into a euphoric spin, thanking the government for its people first policies.

In 2018, the then Barisan Nasional government abolished tolls at two places in Selangor just four months before the general election, apparently in an attempt to wrest back control of the state from Pakatan Harapan.

It was toll-free at the highly lucrative Batu Tiga toll in Shah Alam and at Sungai Rasah but as it turned out, voters once again overwhelmingly returned PH to power with BN actually losing seats.

Ever since the privatisation of highways 30-plus years ago, paying toll has become a Malaysian way of life.

The original rationale for privatisation was to ease the pressure on public coffers. Billions in compensation have been paid to the concessionaires all these years.

This happens whenever the government decides against the contractual toll increase, as provided for under the concession agreements.

Even though the agreements are classified under the Official Secrets Act (OSA), it is believed that there would normally be a mandatory toll hike every three years.

Freezing such a hike was aimed at appeasing highway users when a general election was round the corner.

Is the takeover by Amanat Lebuhraya Rakyat Bhd (ALR Bhd) sustainable?

The government has promised that ALR will not be allowed to raise tolls until the end of the existing concessions for the four highways.

In which case, how does ALR expect to service its loan obligations to finance the acquisition and maintain these highways?

Presently, these four concessions are controlled by Gamuda, a large conglomerate which has the requisite expertise and efficiency in building and managing public works and short-term financing.

Many regard the concessionaires as money-printing machines, given the ever-increasing volume of traffic.

It is public perception that these concessionaires are laughing all the way to the bank.

Based on the reported earnings of most of the concessionaires for toll highways across the country filed with the Companies Commission of Malaysia, it appears that this perception is true.

If so, the logical question is why does Gamuda want to sell its concessions to a newly set up and unknown company with no track record in managing toll roads except for two of the five directors in this company?

Is it because they have been informed that the concessions would not be extended upon expiry or it wants to exit completely from owning and managing toll roads?

Nothing from their corporate website and forecast of the future direction of the group indicates so i.e they are exiting from owning and managing toll roads.

Following the announcement, a spokesman from Gamuda publicly claimed that the key differences between a previous PH government proposal and the offer from ALR are in the price and the government’s exposure.

PH proposed the government acquire the highways directly for RM6.2 billion and have the funding on its own balance sheet, while ALR’s RM5.48 billion offer keeps the deal off government books.

The spokesman further claimed that there will be a shortening of the concession periods as ALR is obligated to redeem its sukuk bonds as soon as it can, returning ownership of the concessions to the government after.

ALR’s website states that the company’s board of directors, who are also its shareholders, have full fiduciary duty to the company’s capital providers.

ALR is a newly incorporated company with no businesses and assets. As there were no disclosures as to how ALR will be paying for the acquisition, it is assumed that it will raise a sukuk bond – this was also confirmed by the spokesman for Gamuda – just like Digital Nasional Berhad.

In which case, the bond holders will insist on a guarantee from ALR, in addition to the cash generated from the tolls collected.

Yes, the five initial directors are people who have reached the pinnacle of their career in the corporate world but do they have the financial means to provide the guarantees?

Or will their guarantees will be supplemented by a guarantee from the government of Malaysia?

It will be a surprise if ALR can secure a credit rating from rating agencies just based on the cashflow, the existing tenure of the concessions and a personal guarantee from the directors.

It is hard to fathom that the bond holders who will be forking out RM5 billion for ALR to acquire the highways are sufficiently satisfied with just these guarantees.

It will be harder to believe that these directors, who have passed the peak of their career, are now willing to provide a personal guarantee to the bond holders for this project deemed a not for profit project.

Thus, the claim by the spokesman for Gamuda that this acquisition by ALR has no recourse to the government at all appears to enchant the gullible rakyat.

The claim by ALR that it aims to redeem its funding as soon as possible, upon which it will hand back the highways to the government and shorten the concession period – is fallacious.

It is obvious that until and unless the concessions are extended for another 20 years further to their existing date, ALR is definitely not in a position to redeem its sukuk bond early, just based on the existing tenure of these concessions.

An extension was confirmed subtly in a statement by Works Minister Fadillah Yusof subsequent to the announcement by Prime Minister Ismail Sabri Yaakob without mentioning the extended tenure.

In response to the claim by the spokesman for Gamuda, who said that this deal is the most viable solution, it is still the taxpayers that will end up footing the bill.

Any compensation by the government means using taxpayers’ money to do so. This takeover doesn’t make sense from an economic or financial standpoint.

On the surface, it looked like a sweet deal for the rakyat but this is a misconception. With this deal, it now means that you and I will have pay toll on these highways for a long time beyond the existing concession period.

The rakyat are not fools but just simpletons who trust the leaders and are thus misled with policy actions that are unanticipated.

Like pumpkins in the water, one pops up while you try to hold down the other. The government cannot continuously claim they are doing it for the rakyat when it is not. One day, this claim will be proven false. – April 24, 2022.

* FLK reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.