RM5.3b in savings with highway takeover – Guan Eng

KUALA LUMPUR (Feb 26): The acquisition of four existing highways from Gamuda Bhd will save the government RM5.3 billion  from having to pay compensation to the toll concessionaire as toll rate hikes will be frozen until the end of the respective concession periods.

The four highways involved are Lebuhraya Damansara Puchong (LDP), Sistem Penyuraian Trafik KL Barat (SPRINT), Lebuhraya Shah Alam (KESAS) and SMART Tunnel (SMART).

Finance Minister Lim Guan Eng said as a percentage of the urban toll roads market (excluding highways operated by PLUS Malaysia Bhd), the market share of the four highways based on the toll revenue collected is around 48%.

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In a statement today, Guan Eng said the proposed acquisition of these highways is a win-win-win solution for all involved as commuters save up to RM180 million per year with reduced traffic jam during peak hours.

Any surplus collection will also go towards financing the upgrade and maintenance of our public transport system, he added.

"The government expects the acquisition exercise of the four highways will take up to six months to fulfil legal, regulatory and financial requirements," said Guan Eng.

Last Saturday, Prime Minister Tun Dr Mahathir Mohamad announced that the government has commenced talks with Gamuda to negotiate the acquisition of four highway concessions in which the company has a majority stake.

Upon the successful acquisition of these four highways, the government will abolish the existing toll mechanism and replace it with a new “congestion charge” model.

"Under the new model, the congestion charge follows a variable pricing structure which depends on the time of the day. This new model will help to ease traffic congestion during the peak periods by encouraging commuters to plan and shift their commute to the less congested hours," said Guan Eng.

He said initial projections estimate that commuters will save as much as RM180 million per year immediately with the switch from toll to congestion charge.

"Collection of the congestion charge will be sufficient to service the debt arising from the acquisition, as well as to finance the operation and maintenance costs of the highways without requiring additional budget allocation by ministry of finance," he added. — theedgemarkets.com

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