Abolish toll collection by 2016
Pathmawathy SubramaniamPublished: Feb 25, 2009 7:47 AM | Updated: Feb 26, 2009 2:25 AM
The opposition party's Ops Restore team - which aims to restructure toll rates and equity - said the exercise will result in RM14 billion in savings and more, which can then be spent on the development of infrastructure, without having to further increase the national budget deficit.
DAP parliamentarians today called on the government to completely take over highway concessionaire, Plus Expressway Bhd, and to abolish toll collection in the country by the year 2016.
The opposition party's Ops Restore team - which aims to restructure toll rates and equity - said the exercise will result in RM14 billion in savings and more, which can then be spent on the development of infrastructure, without having to further increase the national budget deficit.
The team, comprising Tony Pua (Petaling Jaya Utara), Teo Nie Ching (Serdang), Charles Santiago (Klang), Lim Lip Eng (Segambut) and Lim Guan Eng's economic advisor Teh Chi-Chang was set up after the Works Ministry declassified highway concession agreements between the government and the nation's highway operators.
Pua also today asked the Works Ministry to make public the compensation promised to the concessionaires for the abolition of the New Pantai Expressway (NPE) and Sungei Besi tolls two weeks ago.
"Although we are thankful to the government, the joy of taking away these tolls may be short-lived if the compensation involved negates any savings.
"This proposal was developed after a series of discussions with legal experts, investment bankers and the general public. It is a comprehensive, practical and creative programme to return highways to the people at the least possible cost and shortest time possible without compromising the integrity of the financial market," added Pua.
According to Pua, the finance ministry's investment arm Khazanah which owns 65 percent of Plus, should acquire all shares belonging to minority shareholders with a generous 15 percent premium at RM3.30 per share, costing RM5.25 billion.
Protection for minority shareholders
The acquisition would also ensure that minority shareholders are protected as Plus shares are currently priced at RM2.88 each on the Bursa Malaysia stock exchange.
"The cost of the acquisition added to Plus's RM8.5 billion net debt will amount to RM13.75 billion," said Teh.
"This cost will be funded by issuing government bonds at three percent interest (or less), costing RM413 million per annum and over a six-year period, the total repayment will amount to RM16.2 billion."
Teh, who was formerly director of research for Citibank Asia-Pacific, said Plus should be able to generate RM20 billion at least in positive cash flow in the next six years without further hikes in toll rates.
"Therefore by 2015, the government can completely repay the bonds and still have RM3.8 billion in excess which could be used to build a better public transportation system throughout the country," said Teh.
Pua, who is also Petaling Jaya Utara MP, said the proposal was timely and would "fit perfectly with the upcoming mini-budget by the finance minister".
"The reduced toll rates and its subsequent abolition will substantially reduce the cost of doing business in Malaysia, increase logistic efficiencies and ultimately make Malaysian companies more globally competitive," said Pua.
The opposition party's Ops Restore team - which aims to restructure toll rates and equity - said the exercise will result in RM14 billion in savings and more, which can then be spent on the development of infrastructure, without having to further increase the national budget deficit.
The team, comprising Tony Pua (Petaling Jaya Utara), Teo Nie Ching (Serdang), Charles Santiago (Klang), Lim Lip Eng (Segambut) and Lim Guan Eng's economic advisor Teh Chi-Chang was set up after the Works Ministry declassified highway concession agreements between the government and the nation's highway operators.Pua also today asked the Works Ministry to make public the compensation promised to the concessionaires for the abolition of the New Pantai Expressway (NPE) and Sungei Besi tolls two weeks ago.
"Although we are thankful to the government, the joy of taking away these tolls may be short-lived if the compensation involved negates any savings.
"This proposal was developed after a series of discussions with legal experts, investment bankers and the general public. It is a comprehensive, practical and creative programme to return highways to the people at the least possible cost and shortest time possible without compromising the integrity of the financial market," added Pua.
According to Pua, the finance ministry's investment arm Khazanah which owns 65 percent of Plus, should acquire all shares belonging to minority shareholders with a generous 15 percent premium at RM3.30 per share, costing RM5.25 billion.
Protection for minority shareholders
The acquisition would also ensure that minority shareholders are protected as Plus shares are currently priced at RM2.88 each on the Bursa Malaysia stock exchange.
"The cost of the acquisition added to Plus's RM8.5 billion net debt will amount to RM13.75 billion," said Teh.
"This cost will be funded by issuing government bonds at three percent interest (or less), costing RM413 million per annum and over a six-year period, the total repayment will amount to RM16.2 billion."Teh, who was formerly director of research for Citibank Asia-Pacific, said Plus should be able to generate RM20 billion at least in positive cash flow in the next six years without further hikes in toll rates.
"Therefore by 2015, the government can completely repay the bonds and still have RM3.8 billion in excess which could be used to build a better public transportation system throughout the country," said Teh.
Pua, who is also Petaling Jaya Utara MP, said the proposal was timely and would "fit perfectly with the upcoming mini-budget by the finance minister".
"The reduced toll rates and its subsequent abolition will substantially reduce the cost of doing business in Malaysia, increase logistic efficiencies and ultimately make Malaysian companies more globally competitive," said Pua.
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