Following yesterday’s announcement that Amanat Lebuhraya Rakyat (ALR) is offering to acquire the shares of four highway concessionaires linked to Gamuda, senior works minister Datuk Seri Fadillah Yusof said that more of such restructuring deals with highway operators are in the pipeline.

“The government welcomes the private sector to come forward with such terms, where concession companies will hand back highways to the government once they have settled their debts. This will be a relief to the people. There will be negotiations on restructuring involving other highway concessions after this,” he said yesterday, reported by Bernama.

Yesterday, prime minister Datuk Seri Ismail Sabri Yaakob announced that toll rates on highways operated by four concessionaires – Kesas, Smart Tunnel, Sprint and LDP – will not be raised until the end of their concession period, and this will be done via restructuring of the four companies.

This “restructuring” involves ALR – described as a private, not-for-profit company mandated to assist the government with this deal – offering to acquire the shares of all four concessionaires, which have a total enterprise value of RM5.48 billion, according to Gamuda.

It is said that this move will save the government at least RM4.3 billion in subsidies, to be paid from January 1 this year until the end of the concession periods. The net result for motorists is that there will be no toll fare hike till the end of the concession periods, which will be extended as a result of this deal (all except for Smart Tunnel, which will be shortened).

Fadillah said that there’s no expenditure for the government in this deal, and there’s also no government guarantees for financing by ALR to takeover the concessionaires. He added that with this restructuring method, there would no longer be any profit-oriented shareholders looking at returns and dividends. ALR is also required to absorb all existing employees of the four concessionaires.

Current equity structure of the four highway concessionaires – graphic by The Edge

So, who is this charitable white knight called ALR? In May 2021, The Edge reported that Gamuda was in talks to sell four of its highway concessions to a private highway trust, an independent entity funded entirely by private debt capital markets.

“We also affirm that the proposal involves keeping the current toll rates unchanged with no further increases, with a short concession extension in order to fully recuse the government from paying any compensation (as is legally required of them as per the current concession agreements) for keeping the toll rates as they currently are, for the entire proposal period,” Gamuda said then.

“In our proposal, the government would have no stake nor interest in the buying entity, and therefore need not spend any of its own monies in the acquisition and further, need not provide any government guarantee,” it added.

If all this sounds familiar, back in 2019, the then Pakatan Harapan government offered RM6.2 billion to acquire the same four toll concessionaires linked with Gamuda. The difference now is that the government has managed to not spend any money on the deal, and does not have to maintain and operate the highways.