Government may privatise toll concessionaires, needs RM55 billion to take over all debt obligations – report

Government may privatise toll concessionaires, needs RM55 billion to take over all debt obligations – report

In its GE14 manifesto, the ruling government Pakatan Harapan promised a gradual abolishment of tolls over the next five years. According to the New Straits Times, privatisation seems like a probable outcome for listed toll operators, but only if the government decides to completely abolish tolls.

If carried out, the privatisation deal will be one of the country’s largest corporate exercises, costing billions of ringgit covering assets and liabilities. MIDF (Malaysian Industrial Development Finance) Research head Redza Rahman said the listed toll operators whose business was only involved in managing toll operations, may be taken private after the government took over their debt obligations and paid the necessary compensation.

“For listed companies whose sole business is largely on toll concessions, it looks like a privatisation exercise would be best. But for others, where concession is one of their business segments, I reckon the other segments would be around to contribute to the companies,” he told NST Business.

In 2011, the former Barisan Nasional government privatised Plus Highways for RM23 billion, and it apparently rationalised toll collection and prevented unnecessary hikes in toll charges.

Government may privatise toll concessionaires, needs RM55 billion to take over all debt obligations – report

Redza said privatisation requires heavy funding, including the penalty for early debt retirement unless the government can negotiate for roll-over of these debts onto new debts to be issued by the government. Apparently, the government needs to fork out RM55 billion to take over all the toll operators’ debt obligations, and this excludes compensation.

Listed toll concessionaire companies include IJM Corp, WCE Holdings, Taliworks Corp, Ahmad Zaki Resources, Gamuda, Bina Puri Holdings, Ekovest, Lingkaran Trans Kota Holdings (Litrak, largely owned by Gamuda) and Malaysian Resources Corp. Litrak is the only listed company that generates revenue from toll collection.

Stock market analyst Nazarry Rosli said the decision to abolish toll will likely lead to privatisation through government takeover. He said the government will need to assess the value of all these toll operators before making a decision for acquisition. “Once decided, then the challenge would be getting at the acquisition price that will be accepted by all these toll operators’ shareholders,” he said.

As of now, uncertainty lingers among toll operators, because the government has yet to make any decision on whether to remove toll entirely or in stages. However, Council of Eminent Persons, Tun Daim Zainuddin said in a report by The Edge that shareholders of toll concessionaires have “plenty of cash” to cushion the impact from a reduction or elimination of tolls.

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Comments

  • toll is better on May 28, 2018 at 5:26 pm

    in malaysia i support tolled roads, simply for maintenance, upkeep, upgrades and etc…

    and it’s pay per use…
    only thing is, there is not much alternative roads that is free to use, and we are kind of forced to use it, ie, entering puchong

    Like or Dislike: Thumb up 36 Thumb down 7
  • Tido oh Tido on May 28, 2018 at 5:28 pm

    Tolls have been a conjob from day one. Malaysia is a super rich country and has the most natural resources than any country in the world. If there was no songlap and plundering by the previous Government, there is enough wealth in the country to have toll-less roads.

    Corruption had gone out of control. People were not taking in the millions but in the billions. Calculate that with tons of corrupted individuals…..RM52 bil is nothing.

    Once we clean up the country, there will be so much of money to be shared equally amongst everyone. Like I said, we are one of the wealthiest countries in the world if corruption and stealing is curbed

    Like or Dislike: Thumb up 34 Thumb down 49
    • If Najib shares some of his wealth, will it be enough?

      Like or Dislike: Thumb up 1 Thumb down 3
    • Panorama on May 29, 2018 at 5:55 am

      I skip your comment after “Msia has most the most natural resources than any other country in the world”. Try reading something ‘international’ not propaganda.

      Like or Dislike: Thumb up 2 Thumb down 2
    • kzm (Member) on May 29, 2018 at 11:23 am

      u should ask TDM n DSAI.. why built toll road as most toll road with unfair term n condition come from their era

      Like or Dislike: Thumb up 5 Thumb down 0
    • Rightwinger on May 29, 2018 at 3:49 pm

      You really are a commie at heart.

      Like or Dislike: Thumb up 1 Thumb down 0
  • Here we go again. Not like Najib didn’t warn us this will happen. Orz!

    Like or Dislike: Thumb up 45 Thumb down 26
  • Petoron Sagu on May 28, 2018 at 7:32 pm

    There u go….. As predicted… Goes to the cronies again. Back to square one….

    Like or Dislike: Thumb up 40 Thumb down 4
  • Jimmy on May 28, 2018 at 10:46 pm

    There are better ways to deal with toll issues; privatisation is simpler but possibly painful in the long run.
    In short, don’t do it.

    Like or Dislike: Thumb up 0 Thumb down 0
  • I suggest that we pay 100 ringgit every year for maintenance of the road ,R n R, speed summons ect . If not using much that year the amount can be carry for next year. Upgrade every toll booth with good system information so the public can be aware of any needs for payment. This could make good citizens and as well as responsibility.

    Like or Dislike: Thumb up 0 Thumb down 2
  • tabogen on May 29, 2018 at 10:33 am

    HARAPAN.. harapan ku musnah… easy to make promise but when it comes to doing it.. need lah 5 years to study.. after that another 5 years to plan.. then it will take 5 more years to do it… end of it we already pay 15 years worth or tolls. there is is saying.. “dengar boleh percaya jangan lagi”. good luck malaysian

    Like or Dislike: Thumb up 4 Thumb down 2
  • Hsr 90 billion abolish toll 55billion. Save 35billion. Enough for many more new highways.

    Like or Dislike: Thumb up 1 Thumb down 1
  • spendwisely on May 29, 2018 at 4:07 pm

    1. Tax Holiday
    2. Subsidies petrol
    3. Abolish toll at RM55b??

    How much then have to spend to maintain these roads in future? We all know JKR is hopeless. If there is emergency on higway, who do we call? And most importantly, not all toll highways are profitable, do govn bail out these companies now?

    And government debt now is RM1 trillion!!

    Instead, governmet should spend money wisely to improve public infrastructure like transport system, improve road safety etc. Leave the toll road to be managed by private companies, but negotiate the terms if it is loopsided.

    Like or Dislike: Thumb up 1 Thumb down 2
  • Dari rakyat on May 29, 2018 at 8:06 pm

    Kerajaan amik alih la…lebuh raya baguih kna ada…kalau dah krjaan takde duit….dan nak tolong rakyat…amik tol skit dah la…utk bayar utang negara…lpas tu…no tol laaaa. Jangan buang pekerja ,depa mau hidup jugakkk

    Like or Dislike: Thumb up 1 Thumb down 0
    • Shamsul on Jun 06, 2018 at 9:06 pm

      Oleh rakyat utk rakyatlah!. Bagilah EPF take over lagi bagi. Bair EPF take over utk 999 tahun. Gomen boleh keluar duit utk 49% dan EPF 51%. Kan Petronas ada funds. Kasi 10 tahun tax free utk EPF buat boleh duit. Lain2 GLC pun boleh disalur utk control oleh EPF. Cara2 ini terbaik utk distribute kekayaan ke rakyat2 jelata. Susah ke utk paham semua ini???.

      Like or Dislike: Thumb up 0 Thumb down 0
  • Happy man on May 30, 2018 at 9:45 am

    I am happy that Malaysians can freely drive along all roads in Malaysia without spending money for unnessary traffic jams. Within 5 years all tolls are free. Nice. We are very fortunate to have a government who is really care about the peoples problem and keeping their promise isnt an easy task. Looking forward to this good news. 5 years is not that long though.

    Like or Dislike: Thumb up 0 Thumb down 2
  • TollsR'Us on May 30, 2018 at 11:57 am

    They don’t need to necessary abolished all tolls immediately, I will be happy if they cut the toll rates by 50% that will save us a lot of money and if they can pay to abolish the tolls in the future that will be great.

    Like or Dislike: Thumb up 2 Thumb down 0
  • Subsidize toll for those who are qualified or under specific business. Doest’t mean you need to subsidized everything. Previous government subsidized everything under the sun without validate if the user qualifies for it, which in turn lead to misused of people’s money.

    Like or Dislike: Thumb up 0 Thumb down 1
  • Be fair to rural folks on Jun 01, 2018 at 12:46 am

    Abolishing toll is unfair to the folks staying in less developed areas. Buying out toll concessions will mainly benefit only the city folks staying in the Klang Valley. But some rural areas don’t even have basic infrastructure such as roads, electricity, clean water or proper sanitation. The RM55bil is better spent on making sure every rakyat has access to these basic infrastructure and improving the JKR or local council roads which are poorly maintained throughout the country.

    Like or Dislike: Thumb up 0 Thumb down 0
 

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