'Highway trusts' to halve toll charges?

Restructure highway concessions into highway trusts, and list them on Bursa Malaysia, in order to halve toll charges?

A corporate proposal says this model could reduce toll charges by as much as 50%, following the example of real estate investment trusts (REITS).

But this would enable the finite-life concession model, to become a perpetual licensing regime to benefit investors forever. 

The Edge reports that the highway trust can even be taken private once public finances improve. PLUS Malaysia Bhd (PMB) is cited as a natural candidate, as the government has significant influence over it. 

Owned 51% by the UEM Group, which a unit of sovereign fund Khazanah Nasional Bhd, the remaining 49% is owned by the Emoployees Provident Fund (EPF). 

The largest highway concessionare has enjoyed tax exempt status since 2011, and expressways owned by Projek Lintasan Kota Holdings Sdn Bhd (Prolintas), Gamuda Bhd, and IJM Bhd are also singled out in the proposal, as having the biggest impact on urban commuters. 

The plan would also require the government to take over the capital expenditure (capex) and maintenance expenses of the expressways, while also providing tax-exempt status for the concession returns, allowing the government direct oversight of maintenance quality. 

In the proposal, it is said that based on reported financial, assuming cost of heavy repairs and capes may cost Putrajaya RM897 million, which is 35.7% higher than the RM661 million that has been previously paid to concessionaires for deferring scheduled toll rate increases, but the RM236 million shortfall would be offset by the expected increase in compensation. 

"Our estimates suggest that this (assumption of capex and heavy repairs) is neutral to the government from a cash perspective," the proposal is quoted as saying, by the publication.