Amanat Lebuhraya Rakyat’s proposal to acquire four highway concessionaires in the Klang Valley will see the concession period get extended slightly, but at no increase in cost to the public.
According to a new report by The Malay Mail, ALR said the takeover – which has a total enterprise value of RM5.48 billion – aims to minimise the duration of the extension before returning the concessions back to Putrajaya. ALR also said its shareholders do not require any equity return and are not entitled to dividends. This improves cash flow, too.
“As a consequence, there is no need to prolong the concession period once all of ALR’s debts have been fully repaid. Notably, as the existing vendors of the concession companies are commercial entities in nature, such a ‘non-profit’ orientation is not viable under the current ownership structure. Hence, the proposal is for ALR to acquire the concession companies,” ALR said in a statement.
It also emphasised its independence of both the government and existing shareholders of the four concessionaires, adding that ALR does not have any political affiliations. ALR shareholders and board of directors include Tan Sri Azlan Mohd Zainol, Datuk Idrose Mohamed, Datuk Soam Heng Choon, Datuk Dr Nirmala Menon and Datuk Mohamed Sharil Tarmizi.
“With humility, we hope that our collective track record in the public and private sector would be a testament to our affirmations above and our sincere intentions to facilitate the toll restructuring for the benefit of all stakeholders involved,” it added.
On April 4, ALR made a conditional offer to acquire four highway concessionaires in the Klang Valley, those being Kesas Sdn Bhd (Kesas Expressway), Syarikat Mengurus Air Banjir dan Terowong Sdn Bhd (SMART Tunnel), Sistem Penyuraian Trafik KL Barat Sdn Bhd (SPRINT Expressway), and Lingkaran Trans Kota Sdn Bhd (Damansara-Puchong Expressway or LDP). The offer remains open for acceptance until April 30, 2022.
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Kesas’ concession is set to expire in 2028, LDP in 2030, SPRINT between 2031 and 2034, and SMART in 2042.
Is this a good deal? I don’t think so. This is just another project to make money at the people’s expense. This is a cash cow for any company. Of course, there will be a lot of takers. Look at how Plus expanded the highway for certain segments and increased the concession period ridiculously .
All those datelines are in liew of concession being allowed to hike toll rates as per contract. Being disallowed to raise that, they will surely extend the concession deadlines anyway. Similarly Plus have to extend the concession to make money, otherwise how you can so good get 6.1% returns in your EPF when every other investment is in red?
Is it a good deal? Not if your a shareholder of ALR as this venture is not for profit. For the rakyat, yes it is a chance of a lifetime. Either ways, extension of concession will happen regardless, but via ALR it is to pay for the highway and not pay for shareholder benefits.
Loser = Rakyat,FACT.
Taken for a long ,costly ride= Rakyat,FACT.
There is no free lunch= FACT.
Minimum 30 years. Should be Yayasan Akal Budi taking over like in one of reader’s comment.
Anyone could take over, as long as they have the financial miens and honour the terms of agreement not to seek profit. Do not be like a someone that promised a lot but abrogated it.
If the extension is really minimum, you would have already mentioned until when.
The extension dates are variable as not all will have the same debt levels and throughfare. But finance experts opined that a mere 4 more additional years from original concession dates. Mind you, these are dependent on the concession allowed to hike toll rates as per agreed contract so in all likelihood, the original concessions would still get extended anyways. At least with ALR, we know the extensions are not for profit and merely to buy out the concession agreements plus shareholder compensation. The length of extension is simply to pay of the debt of buyout.
One way that can help to reduce such debt would be for Selangor Government who owns parts shares in 2 highways to give them up for free. That would reduce the take over price and thus reduce the extension period. Can Selangor PH Government do that for rakyat sakes?
Will a BN hopeful government commit to doing what you suggest? There’s an election coming and all I hear are crickets.
Tenkiu gomen good idea! Syukur….