KUALA LUMPUR (April 4): The government may extend the concession period for three out of four Klang Valley highways involved in the proposed restructuring through Amanat Lebuhraya Rakyat Bhd (ALR) in exchange for no increase in toll charges, said Senior Minister (Works) Datuk Seri Fadillah Yusof.
ALR, a private entity, on Monday (April 4) proposed to take over 100% of four Klang Valley highway concessionaires. This is part of the government’s plan to restructure the concessions with no increase in toll charges, without having to pay compensation payments for the restructuring.
The concessionaires are 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 [LDP]).
At a press conference following the announcement on Monday (April 4), Fadillah said the concession period extension is not the exclusive right of the concession companies, and that the renewed concession period will depend on traffic flow of each highway involved.
"The extension is not automatic. For three highways [Kesas, SPRINT and LDP], the concession will be extended for five to 10 years, while [concession for] the SMART tunnel may be shortened, depending on the traffic data that will be reviewed from time to time,” Fadillah said.
The minister did not specify the potential shortened concession period for the SMART Tunnel.
"The expressways will be returned to the government after the financial obligations [to the lenders and investors of the concessionaires] are met," the minister added.
"Users of these highways will no longer have to worry about a possible increase in tolls, nor will the government have to use the people's tax revenues to pay compensation to concessionaires," he said.
The SPRINT Expressway has three toll booths, with the concession ending between 2031 and 2034. The KESAS concession ends in 2028, while that for Damansara-Puchong ends on Aug 15, 2030. Meanwhile, the SMART tunnel has the longest remaining concession period until 2042.
It is unclear who the shareholders of ALR are, although Fadillah said in a separate statement that they are not-for-profit shareholders, hence there will be no more profit returns required to be channelled out, such as in the form of dividends.
Fadillah added that the government will not incur any costs for this model. The government is also not guaranteeing ALR’s funding for this proposed restructuring, nor is the government required to bear any maintenance or operating costs for this restructuring, the statement added.
“Existing shareholders [of the concessionaires], including the Employees Provident Fund (EPF), Kumpulan Wang Amanah Persaraan (Diperbadankan) (KWAP), Permodalan Nasional Bhd (PNB) and Lembaga Tabung Haji, will receive a return on their investment sooner than they should,” the statement said.
"With the proposed restructuring, there will be no further increases in toll rates until the end of the concession period for the four affected highways, contrary to the provisions of the original concession agreement that provided for regular increases in toll rates for the highways for five or seven years, depending on the concession agreement.
"With the implementation of this restructuring, the government will be able to save on compensation from Jan 1, 2022, until the end of the concession period," he added.
Earlier, Prime Minister Datuk Seri Ismail Sabri Yaakob said in a statement that the net savings from the toll subsidies from the proposed restructuring of the four highway concessionaires is estimated at RM4.3 billion.
"The savings can be used for national infrastructure development programmes and other facilities that should be prioritised for the well-being of Keluarga Malaysia. The restructuring is undertaken in line with the government's principles and main objective, that is to reduce the burden of Keluarga Malaysia and not have financial implications for the government," Ismail Sabri said.