We refer to the letter Absolutely no excuse to raise toll rates .

The simplistic arguments put forth by the writer do not reflect the true picture as profit does not translate directly into cash generation. Firstly, the profit after tax of RM1.185billion includes non-cash element for toll compensation of RM0.6 billion. Secondly, there are other cash flow items which are not accounted for in the income statement, which include payment of capital expenditure and repayment of loan principal.

Furthermore, the cash balance of RM2.85billion is inclusive of reserve for loan repayments amounting to RM1 billion. This reserve is one of the requirements under the loan agreement and is restricted in use. In the concession business, the repayment of loans is commonly matched against the long concession period. The cash balance must take into account the repayment of debt obligations in the future years. For your information, PEB Group’s total borrowings stood at RM11billion as at end 2009.

In addition, we are also required to adhere to financial covenants under the loan agreement in ensuring that the debt-servicing ability remains intact whilst preserving the high AAA bond rating for most of our borrowings.

The writer should also realise that about 35% of toll collections are ploughed back into activities and initiatives that benefit the highway users. In 2009 alone, RM443 million was spent on highway maintenance (inclusive of pavement structural overlays, slope rehabilitation, structural strengthening of bridges, etc), RM137 million on expressway and facilities upgrading including the enhancement of Rest and Service Areas and lay-bys, as well as about RM20 million being given out as toll discounts.

Despite the rising costs for both operating and capital expenditure due to the increase in cost of raw materials or as a general outcome of inflation, we will continue to spend significant amounts to improve our facilities and preserve our assets for the comfort and safety of our users.

We also wish to highlight that PLUS Expressways is a public-listed company where 55 percent of our stake is held directly and indirectly by Khazanah and another 28 percent is held by government-related investment institutions such as EPF, KWAP, LTAT and PNB/Amanah Saham of which the members are the general public. Naturally, investors which also include foreign, retail and minority shareholders expect decent returns from their investments.

It is therefore essential for a company to realise profitability for dividend distribution to its shareholders who have invested their money in the company. For 2009, PLUS paid a total of RM800 million as dividends to shareholders.

Plus also wishes to highlight that the North-South Expressway (NSE) is an alternative mode of road travel providing users with the option to travel on a smooth and comfortable journey. Almost 99 percent of the NSE is served with toll free federal roads running almost parallel to its alignment and these roads are constantly being upgraded by the Government. The rakyat therefore has the option to use the NSE and pay toll or use the federal roads which are free.

It has been and will continue to be our priority to provide a quality alternative travel route for motorists and to ensure a safe, convenient and comfortable journey for our users at all times.

The writer is general manager, Corporate Communications, Plus.